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

                                    FORM 10-K405

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

      For the fiscal year ended           December 31, 1997
                                ------------------------------------------------

                                       OR

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

     For the transition period from ______________ to_____________

     Commission file number  0-9783


                        McNEIL REAL ESTATE FUND XI, LTD.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         California                                94-2669577
--------------------------------------------------------------------------------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                    Identification No.)


             13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
--------------------------------------------------------------------------------
            (Address of principal executive offices)         (Zip code)

Registrant's telephone number, including area code      (972)  448-5800
                                                   -----------------------------

Securities registered pursuant to Section 12(b) of the Act:  None
----------------------------------------------------------   ---------

Securities registered pursuant to Section 12(g) of the Act:  Limited partnership
                                                             units
----------------------------------------------------------   -------------------

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,  and (2) has been subject to such filing  requirements
for the past 90 days. Yes X No
                         ---  ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

159,500  of the  registrant's  159,813  limited  partnership  units  are held by
non-affiliates  of this registrant.  The aggregate market value of units held by
non-affiliates  is not determinable  since there is no public trading market for
limited  partnership  units  and  transfers  of units  are  subject  to  certain
restrictions.

Documents Incorporated by Reference:        See Item 14, Page 35

                                TOTAL OF 38 PAGES
<PAGE>
                                     PART I
ITEM 1.   BUSINESS
-------   --------

ORGANIZATION
------------

McNeil Real Estate Fund XI, Ltd. (the  "Partnership") was organized June 2, 1980
as a limited  partnership under the provisions of the California Uniform Limited
Partnership Act. The general partner of the Partnership is McNeil Partners, L.P.
(the "General Partner"), a Delaware limited partnership,  an affiliate of Robert
A. McNeil  ("McNeil").  The  Partnership  is governed by an amended and restated
partnership  agreement of limited  partnership  dated August 6, 1991, as amended
(the  "Amended  Partnership  Agreement").  Prior  to  August  6,  1991,  Pacific
Investors  Corporation (the prior "Corporate General  Partner"),  a wholly-owned
subsidiary of Southmark Corporation  ("Southmark"),  and McNeil were the general
partners  of the  Partnership,  which was  governed by an  agreement  of limited
partnership dated June 2, 1980 (the "Original Partnership Agreement") as amended
August 29, 1980. The principal place of business for the Partnership and for the
General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

On  September  18,  1980,  a  Registration  Statement  on Form S-11 was declared
effective by the  Securities  and Exchange  Commission  whereby the  Partnership
offered for sale $80,000,000 of limited  partnership units ("Units").  The Units
represent equity interests in the Partnership and entitle the holders thereof to
participate in certain  allocations and  distributions of the  Partnership.  The
sale of Units closed on June 1, 1981,  with 160,000  Units sold at $500 each, or
gross  proceeds of  $80,000,000 to the  Partnership.  In addition,  the original
general  partners  purchased a total of 140 Units for $70,000.  During the years
1993 through 1995, 327 Units were rescinded leaving 159,813 Units outstanding as
of December 31, 1997.

SOUTHMARK BANKRUPTCY AND CHANGE IN GENERAL PARTNER
--------------------------------------------------

On July 14, 1989,  Southmark filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. Neither the Partnership,  McNeil nor the
Corporate   General   Partner   were   included  in  the   filing.   Southmark's
reorganization  plan became  effective  August 10, 1990. Under the plan, most of
Southmark's  assets,  which  included  Southmark's  interests  in the  Corporate
General Partner, were sold or liquidated for the benefit of creditors.

In  accordance  with  Southmark's  reorganization  plan,  Southmark,  McNeil and
various of their affiliates  entered into an asset purchase agreement on October
12, 1990,  providing for, among other things,  the transfer of control to McNeil
or his affiliates of 34 limited partnerships  (including the Partnership) in the
Southmark portfolio.


<PAGE>

On February 14,  1991,  pursuant to the asset  purchase  agreement as amended on
that date: (a) an affiliate of McNeil purchased the Corporate  General Partner's
economic  interest in the  Partnership;  (b) McNeil became the managing  general
partner of the Partnership  pursuant to an agreement with the Corporate  General
Partner that delegated  management  authority to McNeil;  (c) McNeil Real Estate
Management,  Inc.  ("McREMI"),  an  affiliate  of  McNeil,  acquired  the assets
relating to the property management and partnership  administrative  business of
Southmark  and its  affiliates  and commenced  management  of the  Partnership's
properties  pursuant  to an  assignment  of  the  existing  property  management
agreements from the Southmark affiliates;  and (d) the General Partner purchased
the  short-term,  unsecured  loan  owing  from the  Partnership  to a  Southmark
affiliate in the amount of $2,645,950. The unsecured loan has now been settled.

On August 6,  1991,  the  limited  partners  approved a  restructuring  proposal
providing for (i) the  replacement of the Corporate  General  Partner and McNeil
with  the  General  Partner;  (ii)  the  adoption  of  the  Amended  Partnership
Agreement, which substantially alters the provisions of the Original Partnership
Agreement  relating  to,  among other  things,  compensation,  reimbursement  of
expenses, and voting rights; and (iii) the approval of a new property management
agreement with McREMI, the Partnership's property manager.

The  Amended   Partnership   Agreement  provides  for  a  Management   Incentive
Distribution ("MID") to replace all other forms of general partner compensation,
other  than  property  management  fees and  reimbursements  of  certain  costs.
Additional  Units  may be  issued  in  connection  with the  payment  of the MID
pursuant  to  the  Amended  Partnership  Agreement.  See  Item  8  -  Note  2  -
"Transactions  with  Affiliates."  For  a  discussion  of  the  methodology  for
calculating and  distributing the MID, see Item 13 - Certain  Relationships  and
Related Transactions.

Settlement of Claims:

During 1990,  the  Partnership  filed claims in the Southmark  bankruptcy in the
amount of $1,180,040.  McNeil also filed claims on behalf of the  Partnership in
an  indeterminate  amount,  some of which  overlapped  in whole or in part  with
claims  filed  by the  Partnership.  No  claims  were  filed  by  McNeil  or the
Partnership on behalf of individual limited partners.

In July 1991, the United States  Bankruptcy  Court for the Northern  District of
Texas,  Dallas Division,  approved an agreement whereby the Partnership  settled
its claims against Southmark.  Under the settlement  agreement,  an affiliate of
McNeil  agreed  to waive on a  dollar-for-dollar  basis an  amount  equal to the
settled claims against affiliate advances owed by the Partnership, which at June
30, 1991, were in excess of the amount of the claim.  The reduction of affiliate
advances  resulted  in an  extraordinary  gain  on  extinguishment  of  debt  of
$1,180,040 in 1991.

CURRENT OPERATIONS
------------------

General:

The Partnership is engaged in real estate  activities,  including the ownership,
operation  and  management  of  residential  real  estate and other real  estate
related   assets.   At  December  31,   1997,   the   Partnership   owned  eight
income-producing properties as described in Item 2 - Properties.


<PAGE>
The  Partnership  does not directly  employ any  personnel.  The  Partnership is
managed by the General Partner,  and, in accordance with the Amended Partnership
Agreement,  the  Partnership  reimburses  affiliates of the General  Partner for
certain cost incurred by affiliates  of the General  Partner in connection  with
the  management  of  the  Partnership's   business.  See  Item  8  -  Note  2  -
"Transactions with Affiliates."

The business of the Partnership to date has involved only one industry  segment.
See Item 8 - Financial Statements and Supplementary Data. The Partnership has no
foreign operations. The business of the Partnership is not seasonal.

Business Plan:

Pursuant  to the  Partnership's  previously  announced  liquidation  plans,  the
Partnership  has recently  retained  PaineWebber,  Incorporated as its exclusive
financial  advisor  to  explore  alternatives  to  maximize  the  value  of  the
Partnership.  The  alternatives  being  considered by the  Partnership  include,
without limitation,  a transaction in which limited partnership interests in the
Partnership  are converted into cash. The General  Partner of the Partnership or
entities or persons  affiliated with the General Partner will not be involved as
a purchaser in any of the transactions  contemplated above. Any transaction will
be subject to certain conditions  including (i) approval by the limited partners
of the Partnership, and (ii) receipt of an opinion from an independent financial
advisory  firm  as  to  the  fairness  of  the  consideration  received  by  the
Partnership  pursuant to such  transaction.  Finally,  there can be no assurance
that any transaction will be consummated, or as to the terms thereof.

The Partnership has placed Rock Creek  Apartments and The Park Apartments on the
market for sale effective October 1, 1996 and August 1, 1997, respectively.  The
Partnership has received an offer from an unaffiliated buyer for the purchase of
The Park  Apartments for $4.9 million and is currently  evaluating the terms and
conditions of this offer.

Competitive Conditions:

Since the  principal  business of the  Partnership  is to own and  operate  real
estate,  the Partnership is subject to all of the risks incident to ownership of
real estate and interests  therein,  many of which relate to the  illiquidity of
this type of  investment.  These  risks  include  changes  in  general  or local
economic conditions,  changes in supply or demand for competing properties in an
area,  changes in interest rates and  availability  of permanent  mortgage funds
which  may  render  the  sale  or  refinancing   of  a  property   difficult  or
unattractive, changes in real estate and zoning laws, increases in real property
tax rates and Federal or local  economic or rent  controls.  The  illiquidity of
real estate  investments  generally  impairs the ability of the  Partnership  to
respond  promptly  to  changed  circumstances.  The  Partnership  competes  with
numerous established companies, private investors (including foreign investors),
real estate investment trusts,  limited partnerships and other entities (many of
which have greater  resources than the Partnership) in connection with the sale,
financing  and  leasing  of  properties.  The  impact  of  these  risks  on  the
Partnership,   including   losses  from  operations  and   foreclosures  of  the
Partnership's  properties,  is described in Item 7 - Management's Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations.  See  Item 2 -
Properties  for  discussion  of  competitive  conditions  at  the  Partnership's
properties.




<PAGE>
Forward-Looking Information:

Within this document,  certain  statements are made as to the expected occupancy
trends,  financial  condition,  results  of  operations,  and cash  flows of the
Partnership  for periods after  December 31, 1997.  All of these  statements are
forward-looking  statements  made pursuant to the safe harbor  provisions of the
Private  Securities  Litigation  Reform Act of 1995.  These  statements  are not
historical  and  involve  risks  and  uncertainties.  The  Partnership's  actual
occupancy trends, financial condition, results of operations, and cash flows for
future  periods may differ  materially  due to several  factors.  These  factors
include,  but are not limited to, the  Partnership's  ability to control  costs,
make necessary  capital  improvements,  negotiate  sales or  refinancings of its
properties and respond to changing economic and competitive factors.

Environmental Matters :

The environmental  laws of the federal government and of certain state and local
governments  impose  liability  on current  property  owners for the clean-up of
hazardous and toxic substances discharged on the property. This liability may be
imposed  without  regard  to the  timing,  cause or person  responsible  for the
release of such substances onto the property.  The Partnership  could be subject
to such liability in the event that it owns properties having such environmental
problems.  The Partnership has no knowledge of any pending claims or proceedings
regarding such environmental problems.

Other Information:

In August 1995, High River Limited  Partnership,  a Delaware limited partnership
controlled by Carl C. Icahn ("High River") made an  unsolicited  tender offer to
purchase from holders of Units up to approximately  45% of the outstanding Units
of the Partnership for a purchase price of $63 per Unit. In September 1996, High
River made  another  unsolicited  tender  offer to  purchase  any and all of the
outstanding  Units of the  Partnership for a purchase price of $104.50 per unit.
In  addition  High River  made  unsolicited  tender  offers  for  certain  other
partnerships controlled by the General Partner. The Partnership recommended that
the  limited  partners  reject  the  tender  offers  made  with  respect  to the
Partnership and not tender their Units.  The General Partner believes that as of
January  31,  1998,  High  River  has  purchased  approximately  11.65%  of  the
outstanding  Units  pursuant to the tender offers.  In addition,  all litigation
filed by High River,  Mr. Icahn and his affiliates in connection with the tender
offers have been dismissed without prejudice.

Management  has begun to review its  information  technology  infrastructure  to
identify any systems that could be affected by the year 2000  problem.  The year
2000 problem is the result of computer  programs  being written using two digits
rather  than  four to  define  the  applicable  year.  Any  programs  that  have
time-sensitive  software may recognize a date using "00" as the year 1900 rather
than  the  year  2000.   This  could   result  in  major   systems   failure  or
miscalculations.  The information  systems used by the Partnership for financial
reporting and  significant  accounting  functions  were made year 2000 compliant
during  recent  systems  conversions.  The  Partnership  is in  the  process  of
evaluating the computer systems at the various properties.  The Partnership also
intends to communicate  with  suppliers,  financial  institutions  and others to
coordinate  year 2000 issues.  Management  believes that the  remediation of any
outstanding  year 2000  conversion  issues  will not have a material  or adverse
effect on the Partnership's operations.



<PAGE>
ITEM 2.  PROPERTIES
-------  ----------

The  following  table sets forth the real  estate  investment  portfolio  of the
Partnership  at December 31, 1997.  The buildings and the land on which they are
located  are owned by the  Partnership  in fee,  subject in each case to a first
lien deed of trust as set forth more fully in Item 8 - Note 5 - "Mortgage  Notes
Payable"  and Item 8 - Note 6 - "Mortgage  Note Payable -  Affiliate."  See also
Item 8 - Note 4 - "Real  Estate  Investments"  and  Schedule  III - "Real Estate
Investments and  Accumulated  Depreciation."  In the opinion of management,  the
properties are adequately covered by insurance.

<TABLE>
<CAPTION>
                                            Net Basis                               1997            Date
Property              Description           of Property          Debt           Property Tax      Acquired
--------              -----------         --------------    --------------      ------------      --------
<S>                   <C>                 <C>               <C>                 <C>                 <C>
Acacia Lakes (1)      Apartments
Mesa, AZ              576 units           $    5,931,007    $    8,773,421      $    104,096        5/81

Gentle Gale (2)       Apartments
Galveston, TX         133 units                1,684,759         2,539,656            75,393        5/81

Knollwood (3)         Apartments
Kansas City, MO       315 units                2,949,982         4,379,253            73,924        5/81

Sun Valley (4)        Apartments
Charlotte, NC         311 units                4,254,566         6,451,832           106,764        8/81

Villa Del Rio (5)     Apartments
Jacksonville, FL      444 units                4,133,339         5,442,120           183,301        5/81

The Village (6)       Apartments
Gresham, OR           152 units                1,723,534         2,588,971            83,469        5/81
                                           -------------     -------------       -----------
                                          $   20,677,187    $   30,175,253      $    626,947
                                           =============     =============       ===========


Assets held for sale:

The Park (7)          Apartments
Joplin, MO            192 units           $    1,341,317    $    2,571,755      $     22,144        3/81

Rock Creek            Apartments
Portland, OR          388 units                4,569,548         6,049,641           144,903        2/81
                                           -------------     -------------       -----------
                                          $    5,910,865    $    8,621,396      $    167,047
                                           =============     =============       ===========
</TABLE>

-----------------------------------------
Total:    Apartments  -  2,511 units





<PAGE>
(1)    Acacia  Lakes  Apartments  is  owned  by  Acacia  Lakes  Fund XI  Limited
       Partnership  which is  wholly-owned  by the  Partnership  and the General
       Partner.

(2)    Gentle  Gale  Apartments  is  owned  by  Gentle  Gale  Fund  XI   Limited
       Partnership  which is  wholly-owned  by the  Partnership.

(3)    Knollwood Apartments is owned by Knollwood Fund XI Associates,  a general
       partnership,  which is  wholly-owned  by the  Partnership and the General
       Partner.

(4)    Sun  Valley  Apartments  is owned by Sun  Valley  Fund XI  Associates,  a
       general  partnership,  which is  wholly-owned  by the Partnership and the
       General Partner.

(5)    Villa Del  Rio  Apartments  is  owned  by   Villa Del Rio Fund XI Limited
       Partnership  which is  wholly-owned  by the Partnership.

(6)    The Village Apartments is owned by Village Fund XI Associates,  a limited
       partnership,  which is  wholly-owned  by the  Partnership and the General
       Partner.

(7)    The Park  Apartments is owned by The Park Fund XI  Associates,  a general
       partnership,  which is  wholly-owned  by the  Partnership and the General
       Partner.

The  following  table sets  forth the  properties'  occupancy  rate and rent per
square foot for each of the last five years:

<TABLE>
<CAPTION>
                                        1997           1996            1995            1994         1993
                                    -------------  -------------  --------------  -------------  -----------
<S>                                       <C>             <C>            <C>            <C>             <C>
Acacia Lakes
   Occupancy Rate............             95%             94%            96%            97%             98%
   Rent Per Square Foot......           $7.92           $7.73          $7.44          $6.64           $5.94

Gentle Gale
   Occupancy Rate............             93%             90%            88%            93%             98%
   Rent Per Square Foot......           $7.90           $7.78          $7.86          $7.83           $7.70

Knollwood
   Occupancy Rate............             97%             96%            96%            93%             98%
   Rent Per Square Foot......           $6.06           $5.72          $5.53          $5.17           $4.77

Sun Valley
   Occupancy Rate............             96%             96%            97%            97%             87%
   Rent Per Square Foot......           $7.81           $7.40          $7.12          $6.51           $5.81

Villa Del Rio
   Occupancy Rate............             92%             96%           100%            98%             92%
   Rent Per Square Foot......           $5.76           $5.67          $5.46          $4.98           $4.87

The Village
   Occupancy Rate............             98%             96%           100%           100%             97%
   Rent Per Square Foot......           $8.31           $8.27          $7.96          $7.76           $7.52
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                        1997           1996            1995            1994         1993
                                    -------------  -------------  --------------  -------------  -----------
<S>                                       <C>             <C>            <C>            <C>             <C>
Assets held for sale:

The Park
   Occupancy Rate............             92%             94%            90%            91%             93%
   Rent Per Square Foot......           $6.13           $6.25          $6.18          $6.23           $5.98

Rock Creek
   Occupancy Rate............             94%             95%            99%            94%             98%
   Rent Per Square Foot......           $8.35           $8.27          $7.91          $7.54           $7.25
</TABLE>

Occupancy rate  represents all units leased divided by the total number of units
of the  property  as of  December  31 of the given  year.  Rent per square  foot
represents all revenue, except interest,  derived from the property's operations
divided by the leasable square footage of the property.

Competitive Conditions at Properties
------------------------------------

Acacia Lakes
------------

Due to a  substantial  investment  of  capital  since  1992,  Acacia  Lakes  has
increased  its rent per square foot by 33% over the last five years.  Currently,
the property is slightly  above the average  market  occupancy rate of 94%. Over
the last year, 6,295 multi-family units were added to the Mesa submarket. Strong
employment  growth is expected to add renters to the market and provide positive
absorption. Rental rates at Acacia Lakes are lower than the market rate.

Gentle Gale
-------------

Gentle Gale is located in Galveston, Texas, where the local economy is dependent
upon the University of Texas Medical Branch and tourism. Over the last few years
the economy has been sluggish.  Gentle Gale experienced a slight increase in its
occupancy  rate and is currently at 93%.  Gentle Gale competes  with  properties
that are newer and offer better  amenity  packages.  Rental rates at Gentle Gale
are just below many of their  competitors  in the market.  In 1998 an additional
220 units are going to be added to the already  soft  market.  The  property has
been upgrading the units and offering rental discounts to remain  competitive in
the market.

Knollwood
---------

Knollwood  finished  1997 above the average  market  occupancy  rate of 94%. The
current  rental  rates  for  Knollwood's  townhouses  and one  and  two  bedroom
apartments are comparable to the market rate. Continued capital improvements are
planned to improve the curb appeal and upgrade the  apartments to take advantage
of the strong market conditions.



<PAGE>
Sun Valley
----------

Strong market conditions are beginning to stimulate new developments in the area
surrounding  Sun Valley.  Currently,  3,906 units are under  construction in the
Charlotte market with numerous other projects in the planning stages. The market
began to soften in 1997 and the  continued  heavy  development  will continue to
increase the market  competitiveness in 1998. With the capital improvements made
at the  property  over the last few years,  the  property  has been able to stay
competitive with the newer properties. Sun Valley finished 1997 above the market
average occupancy rate of 94%.

Villa Del Rio
-------------

Villa Del Rio's  occupancy  rate finished 1997 below the market  average of 93%.
The overall  occupancy rate for the  Jacksonville  market has  experienced a two
year low. During 1997,  2,800 units were added to the market with other projects
in the planning stages. Villa Del Rio's advantage over its competitors is design
and  layout of the  property.  All units are  single  story  apartments  and the
property is spread over 25 acres.

The Village
-----------

The Village  finished the year slightly above the Gresham market  occupancy rate
of 96%. The expanding  economy in Portland is beginning to slow after a six year
growth period.  The new construction  over the last couple of years has softened
the market with higher vacancies and rental concessions.  The market rental rate
is  slightly  lower than the rental  rate at The  Village.  The  Village  should
continue to remain competitive in the marketplace.

Assets held for sale:

The Park
--------

The Park is the  largest  apartment  community  in  Joplin,  Missouri  where the
market's average  occupancy rate is 90%. The local economy is expected to remain
stable; however, over the last four years the market has experienced an increase
of 57% in available units. The new units are entering the marketplace with lower
rental rates than The Park. To remain  competitive  in the market,  The Park has
discounted rents.

Rock Creek
----------

Rock Creek  continues  to out  perform the market and  finished  the year at 94%
occupancy.  The Portland market has become saturated with new multi-family units
with the  addition of 2,747 units in 1997.  Over the past few years the property
has been  upgrading  the interiors of the units as well as improving the outside
appearances with landscaping and a renovation of the clubhouse and office. These
enhancements  have allowed the property to remain  competitive in the market and
compete with the new apartments being built in the area.





<PAGE>
ITEM 3.  LEGAL PROCEEDINGS
-------  -----------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except for the following:

James F.  Schofield,  Gerald C. Gillett,  Donna S. Gillett,  Jeffrey  Homburger,
Elizabeth Jung,  Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors,  Inc., McNeil Real Estate Management,  Inc., Robert A. McNeil,
Carole J. McNeil,  McNeil Pacific  Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX,  Ltd.,  McNeil Real  Estate  Fund X, Ltd.,  McNeil Real Estate Fund XI,
Ltd.,  McNeil  Real Estate Fund XII,  Ltd.,  McNeil Real Estate Fund XIV,  Ltd.,
McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P.,  McNeil Real Estate Fund XXII,  L.P.,  McNeil Real Estate
Fund XXIV,  L.P.,  McNeil Real Estate  Fund XXV,  L.P.,  McNeil Real Estate Fund
XXVI, L.P., and McNeil Real Estate Fund XXVII,  L.P., et al. - Superior Court of
the State of California for the County of Los Angeles,  Case No. BC133799 (Class
and Derivative Action Complaint).

The action involves  purported  class and derivative  actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the  "Partnerships").  Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management,  Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their  fiduciary  duties and certain  obligations  under the respective  Amended
Partnership  Agreement.  Plaintiffs  allege that  Defendants  have rendered such
Units highly illiquid and  artificially  depressed the prices that are available
for Units on the resale market.  Plaintiffs also allege that Defendants  engaged
in a course of conduct to prevent the  acquisition  of Units by an  affiliate of
Carl  Icahn  by  disseminating  purportedly  false,  misleading  and  inadequate
information.  Plaintiffs  further allege that Defendants  acted to advance their
own personal  interests at the expense of the Partnerships'  public unit holders
by failing to sell Partnership  properties and failing to make  distributions to
unitholders.

On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs  are suing for breach of  fiduciary  duty,  breach of contract and an
accounting,  alleging,  among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive,  that these fees should
be reduced retroactively and that the respective Amended Partnership  Agreements
governing the Partnerships are invalid.

Defendants  filed a demurrer to the  consolidated  and amended  complaint  and a
motion to strike on February 14, 1997,  seeking to dismiss the  consolidated and
amended complaint in all respects.  A hearing on Defendant's demurrer and motion
to strike  was held on May 5,  1997.  The Court  granted  Defendants'  demurrer,
dismissing  the  consolidated  and  amended  complaint  with leave to amend.  On
October  31,  1997,  the  Plaintiffs  filed a second  consolidated  and  amended
complaint.  Defendants  must  move,  answer or  otherwise  respond to the second
consolidated and amended complaint by June 30, 1998.

For a discussion of the Southmark bankruptcy, see Item 1 - Business.


<PAGE>
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------  ---------------------------------------------------

None.
                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP AND RELATED
-------  --------------------------------------------------------------------
         SECURITY HOLDER MATTERS
         -----------------------

 (A)     There is no established  public trading market for limited  partnership
         units, nor is one expected to develop.

(B)      Title of Class                           Number of Record Unit Holders
         --------------                           -----------------------------

         Limited partnership units                7,400 as of January 31, 1998

 (C)     No  distributions  were made to the limited  partners  during  1997  or
         1996.  In the last  week of March  1998,  the  Partnership  distributed
         approximately  $2,000,000 to the limited partners of record at March 1,
         1998. The Partnership  accrued  distributions  of $905,153 and $902,697
         for the benefit of the General Partner for the years ended December 31,
         1997 and 1996,  respectively.  Total distributions of $2,078,468 remain
         unpaid at December  31,  1997.  These  distributions  relate to the MID
         pursuant to the Amended  Partnership  Agreement.  See Item 8 - Note 2 -
         "Transactions  with  Affiliates." See Item 7 - Management's  Discussion
         and Analysis of Financial  Condition  and Results of  Operations  for a
         discussion  of  distributions  and the  likelihood  that  they  will be
         resumed to the limited partners.

ITEM 6.  SELECTED FINANCIAL DATA
-------  -----------------------

The  following  table sets forth a summary  of  certain  financial  data for the
Partnership.  This summary should be read in conjunction with the  Partnership's
financial  statements  and  notes  thereto  appearing  in  Item  8  -  Financial
Statements and Supplementary Data.

<TABLE>
<CAPTION>
Statements of                                               Years Ended December 31,
Operations                              1997           1996            1995           1994           1993
------------------                  -------------  -------------  --------------  -------------  -------------
<S>                                <C>             <C>            <C>             <C>            <C>
Rental revenue.................    $   15,187,999  $  14,855,652  $   14,304,055  $  13,313,091  $  12,527,359
Total revenue..................        15,536,941     15,582,063      14,451,813     13,425,413     12,757,233
Income (loss) before
  extraordinary items..........         1,744,719      1,592,611         307,243       (193,822)    (1,038,150)
Extraordinary items............                 -              -               -              -       (521,380)
Net income (loss)..............         1,744,719      1,592,611         307,243       (193,822)    (1,559,530)

Net income (loss) per limited
  partnership unit:
Income (loss) before
  extraordinary items..........      $       3.61  $        5.03  $         1.83  $       (3.98) $       (6.16)
Extraordinary items............                 -              -               -              -          (3.22)
                                     ------------   ------------   -------------   ------------   ------------
Net income (loss)..............      $       3.61  $        5.03  $         1.83  $       (3.98) $       (9.38)
                                      ===========   ============   =============   ============   ============
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                            As of December 31,
Balance Sheets                          1997           1996            1995           1994           1993
--------------                      -------------  -------------  --------------  -------------  -------------
<S>                                <C>             <C>            <C>            <C>             <C>
Real estate investments, net...    $   20,677,187  $  22,992,254  $   27,251,831 $   27,916,213  $  28,103,619
Assets held for sale...........         5,910,865      4,203,597               -              -              -
Total assets...................        32,369,919     32,592,153      32,508,764     33,355,998     34,963,327
Mortgage notes payable, net....        38,796,649     39,255,045      39,684,440     40,090,432     40,463,926
Partners' deficit..............        (9,793,898)   (10,633,464)    (11,323,378)   (10,759,568)    (9,796,298)
</TABLE>

See Item 7 -  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations.

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

FINANCIAL CONDITION
-------------------

The  Partnership  was formed to  acquire,  operate and  ultimately  dispose of a
portfolio of  income-producing  real  properties.  As of December 31, 1997,  the
Partnership  owned  eight  apartment   properties.   All  of  the  Partnership's
properties are subject to mortgage notes.

RESULTS OF OPERATIONS
---------------------

1997 compared to 1996

Revenue:

Total  Partnership  revenues for 1997  decreased by $45,122 as compared to 1996.
Rental revenue increased  $332,347 or 2%. In 1997, the Partnership  recognized a
gain on  involuntary  conversion of $219,628 for fires at The Park,  The Village
and Knollwood as compared to $598,859 in 1996.

Rental revenue for 1997 was  $15,187,999  as compared to  $14,855,652  for 1996.
This  increase of $332,347 is due to an increase in the rental rates at seven of
the eight Partnership's  properties,  offset by decreases in the occupancy rates
at three of the eight Partnership's properties.

Expenses:

Total Partnership expenses decreased by $197,230 for the year ended December 31,
1997 as compared to 1996. Decreases in depreciation, general and administrative,
and general and  administrative - affiliates were offset by increases in repairs
and maintenance and interest - affiliate.

Interest expense decreased by $249,546 or 7% as compared to the same period last
year. This decrease is due to the November 1996 refinancing of the mortgage note
on The Village with an affiliate mortgage note. As a result of this refinancing,
interest expense - affiliates  increased by $221,118 for the year ended December
31, 1997.

<PAGE>
Depreciation  declined by $289,254 or 12% for the period ended December 31, 1997
as  compared  to the same  period in 1996.  This  decrease is mainly due to Rock
Creek,  which is currently  classified  as an asset held for sale,  for which no
depreciation  has been  recognized  since  October  1,  1996.  The Park was also
classified as an asset held for sale as of August 1, 1997,  and no  depreciation
has been recognized since that date.

Repairs  and  maintenance  expense  increased  by $211,296 or 11% for the period
ended December 31, 1997 compared to the same period in 1996. The increase can be
attributed to increases in service  expenses and the  replacement  of carpeting.
Carpet replacements of $162,461 for three of the Partnership  properties,  which
met the  Partnership's  criteria for  capitalization  in 1996,  were expensed in
1997.

General and administrative expenses decreased $234,637 or 54% for the year ended
December  31,  1997 as  compared  to the same  period  last year.  In 1996,  the
Partnership incurred costs to evaluate and disseminate  information regarding an
unsolicited  tender  offer.  The  decrease  was  slightly  offset by charges for
investor  services,  which  beginning  in 1997,  was  provided  by a third party
vendor.  In 1996,  these costs were paid to an affiliate of the General  Partner
and were included in general and administrative - affiliates.

General and  administrative - affiliates expense decreased by $74,448 or 22% for
1997 as compared to the same period last year due to the  reduction  of overhead
expenses allocable to the Partnership.  Allocated expenses decreased in part due
to investor  services  being  performed by an unrelated  third party in 1997, as
discussed above.

1996 compared to 1995

Revenue:

Total Partnership revenues for 1996 increased by $1,130,250 or 8% as compared to
1995. Rental revenue  increased  $551,597 or 4%, while interest income decreased
$20,206. In 1996, the Partnership recognized a gain on involuntary conversion of
$598,859 as a result of a fire and hail damage at Knollwood Apartments.

Rental revenue for 1996 was  $14,855,652  as compared to  $14,304,055  for 1995.
This  increase of  $551,597 is due to an increase in the rental  rates at all of
the Partnership's properties, offset by decreases in the occupancy rates at five
of the eight Partnership's properties.

Expenses:

Total Partnership expenses decreased by $155,118 for the year ended December 31,
1996 as compared to 1995.  Decreases in other  property  operating  expenses and
general and  administrative - affiliates were offset by increases in repairs and
maintenance and general and administrative expenses.

Repairs and maintenance  expense increased by $203,664 or 12% for the year ended
December  31,  1996  compared to the same period in 1995.  The  increase  can be
attributed to increases in service  expenses and the  replacement  of carpeting.
Carpet  replacements of $282,252 for five of the Partnership's eight properties,
which met the  Partnership's  criteria for  capitalization  based in 1995,  were
expensed in 1996.




<PAGE>
Other property  operating expense for the year ended December 31, 1996 decreased
by  $124,026 or 14% as compared to 1995.  This  decrease is  primarily  due to a
decrease in hazard insurance, with additional decreases in training and seminars
and bad debts in 1996.

General and administrative  expenses increased $38,744 or 10% for the year ended
December 31, 1996 as compared to the same period in 1995. The increase is due to
costs incurred by the  Partnership for the year ended December 1996, to evaluate
and disseminate  information regarding an unsolicited tender offer. See Item 1 -
Business.

General and  administrative - affiliates  expenses decreased $119,084 or 26% for
the year ended  December  31, 1996 as compared to the same period in 1995.  This
decrease  is  due  to  the  reduction  of  overhead  expenses  allocable  to the
Partnership.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

At  December 31, 1997,  the  Partnership  held  cash  and  cash  equivalents  of
$3,045,785,  up $693,906 as compared to 1996.

The Partnership has experienced positive cash flow from operations of $9,461,642
for the three years ended  December  31,  1997.  During  1996,  the  Partnership
received a mortgage loan from affiliates of $2,588,971. The Partnership has also
received  $942,162 in insurance  proceeds for the three years ended December 31,
1997. Over the last three years the Partnership has used cash to fund $5,803,441
in  additions to real estate  investments,  $3,950,822  in  principal  payments,
$13,157 for additions to deferred borrowing costs and $2,178,937 for the payment
of the MID.

The Partnership  generated  $3,703,741  through operating  activities in 1997 as
compared to  $3,412,005  in 1996.  The increase of $291,736 can be attributed to
the  increase in tenant  receipts as a result of the  increased  rental rates at
seven  of the  Partnership's  properties  and a  decrease  in the  cash  paid to
affiliates.

The Partnership  generated  $3,412,005  through operating  activities in 1996 as
compared to $2,345,896 in 1995.  The increase of $1,066,109 can be attributed to
the increase in tenant receipts as a result of the increased rental rates at all
the Partnership's properties and a decrease in the cash paid to affiliates.

The  Partnership has funded  $5,803,441 in additions to real estate  investments
over the last three years ended  December 31, 1997.  These capital  expenditures
are necessary to allow the  Partnership's  aging  properties  to maintain  their
appeal to current and prospective tenants.

Short-term liquidity:

The Partnership expended  considerable  resources during the past three years to
restore its properties to good operating condition. These expenditures have been
necessary  to  maintain  the  competitive  position of the  Partnership's  aging
properties in each of their markets.  The capital  improvements  made during the
past three years have enabled the  Partnership  to increase its rental  revenues
and reduce certain of its repairs and maintenance expenses.  The Partnership has
budgeted an  additional  $1.3 million of capital  improvements  for 1998,  to be
funded from property operations and cash reserves.


<PAGE>
At  December  31,  1997,  the  Partnership  held  cash and cash  equivalents  of
$3,045,785.  The General  Partner  considers  this level of cash  reserves to be
adequate  to  meet  the  Partnership's  operating  needs.  The  General  Partner
anticipates continuing MID payments if the Partnership's  properties continue to
perform as projected.  The General Partner believes that  anticipated  operating
results for 1998 will be sufficient to fund the  Partnership's  budgeted capital
improvements  for 1998 and to repay the  current  portion  of the  Partnership's
mortgage notes.

Long-term liquidity:

For the long-term,  property operations will remain the primary source of funds.
In this  regard,  the General  Partner  expects that the $5.8 million of capital
improvements  made by the  Partnership  during the past  three  years will yield
improved cash flow from property  operations in the future. If the Partnership's
cash position  deteriorates,  the General  Partner may elect to defer certain of
the  capital  improvements,  except  where such  improvements  are  expected  to
increase the competitiveness or marketability of the Partnership's properties.

Pursuant  to the  Partnership's  previously  announced  liquidation  plans,  the
Partnership  has recently  retained  PaineWebber,  Incorporated as its exclusive
financial  advisor  to  explore  alternatives  to  maximize  the  value  of  the
Partnership.  The  alternatives  being  considered by the  Partnership  include,
without limitation,  a transaction in which limited partnership interests in the
Partnership  are converted into cash. The General  Partner of the Partnership or
entities or persons  affiliated with the General Partner will not be involved as
a purchaser in any of the transactions  contemplated above. Any transaction will
be subject to certain conditions  including (i) approval by the limited partners
of the Partnership, and (ii) receipt of an opinion from an independent financial
advisory  firm  as  to  the  fairness  of  the  consideration  received  by  the
Partnership  pursuant to such  transaction.  Finally,  there can be no assurance
that any transaction will be consummated, or as to the terms thereof.

The Partnership has placed Rock Creek  Apartments and The Park Apartments on the
market for sale effective October 1, 1996 and August 1, 1997, respectively.  The
Partnership has received an offer from an unaffiliated buyer for the purchase of
The Park  Apartments for $4.9 million and is currently  evaluating the terms and
conditions of this offer.

Income allocation and distributions:

Terms  of  the  Amended   Partnership   Agreement  specify  that  income  before
depreciation  is allocated  to the General  Partner to the extent of MID paid in
cash. Depreciation is allocated in the ratio of 95:5 to the limited partners and
the General Partner, respectively. Therefore, for each of the three years in the
period ended December 31, 1997, $1,167,537,  $788,575 and $15,362, respectively,
of net income  was  allocated  to the  General  Partner.  The  limited  partners
received  allocations  of net income of $577,182,  $804,036 and $291,881 for the
three year period ended December 31, 1997, respectively.

With the exception of the MID,  distributions  to partners  have been  suspended
since 1986 as part of the General Partner's policy of maintaining  adequate cash
reserves.  In  light of  improving  property  performance  and  sufficient  cash
reserves,  during the last week of March 1998, the General  Partner  distributed
approximately  $2,000,000  to unit  holders of record as of March 1, 1998.  This
distribution has been made from cash revenues and operations of the Partnership.
The General  Partner  will  continue to monitor  the cash  reserves  and working
capital  needs of the  Partnership  to  determine  when cash flows will  support
additional distributions to the limited partners. A distribution of $905,153 for
the MID has been accrued by the Partnership for the year ended December 31, 1997
for the General Partner.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------- -------------------------------------------

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      Number

INDEX TO FINANCIAL STATEMENTS

Financial Statements:

<S>                                                                                                      <C>
   Report of Independent Public Accountants.......................................                       15

   Balance Sheets at December 31, 1997 and 1996...................................                       16

   Statements of Operations for each of the three years in the period
      ended December 31, 1997.....................................................                       17

   Statements of Partners' Deficit for each of the three years
      in the period ended December 31, 1997.......................................                       18

   Statements of Cash Flows for each of the three years in the period
      ended December 31, 1997.....................................................                       19

   Notes to Financial Statements..................................................                       21

   Financial Statement Schedule -

      Schedule III - Real Estate Investments and Accumulated
         Depreciation.............................................................                       30


</TABLE>







All other  schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.


<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Partners of
McNeil Real Estate Fund XI, Ltd.:

We have audited the  accompanying  balance sheets of McNeil Real Estate Fund XI,
Ltd. (a California  limited  partnership)  as of December 31, 1997 and 1996, and
the related statements of operations,  partners' deficit and cash flows for each
of the three  years in the period  ended  December  31,  1997.  These  financial
statements  and the  schedule  referred to below are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements and the schedule based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of McNeil Real Estate Fund XI,
Ltd. as of December 31, 1997 and 1996, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole.  The  schedule  listed  in the index to
financial  statements is presented for purposes of complying with the Securities
and  Exchange  Commission's  rules  and  is not  part  of  the  basic  financial
statements.  This schedule has been subjected to the auditing procedures applied
in our audits of the basic  financial  statements  and, in our  opinion,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the basic financial statements taken as a whole.


/s/  Arthur Andersen LLP


Dallas, Texas
   March 20, 1998

<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                       ------------------------------------
                                                                            1997                 1996
                                                                       ----------------     ---------------
ASSETS
------

Real estate investments:
<S>                                                                    <C>                  <C>
   Land.....................................................           $     4,407,325      $    4,572,654
   Buildings and improvements...............................                47,211,527          50,600,784
                                                                        --------------       -------------
                                                                            51,618,852          55,173,438
   Less:  Accumulated depreciation..........................               (30,941,665)        (32,181,184)
                                                                        --------------       -------------
                                                                            20,677,187          22,992,254

Assets held for sale........................................                 5,910,865           4,203,597

Cash and cash equivalents...................................                 3,045,785           2,351,879
Cash segregated for security deposits.......................                   413,487             403,949
Accounts receivable.........................................                    40,018             204,542
Prepaid expenses and other assets...........................                   242,961             256,151
Escrow deposits.............................................                   683,785             662,003
Deferred borrowing costs, net of accumulated
   amortization of $677,649 and $515,702 at
   December 31, 1997 and 1996, respectively.................                 1,355,831           1,517,778
                                                                        --------------       -------------
                                                                       $    32,369,919      $   32,592,153
                                                                        ==============       ==============
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------

Mortgage notes payable, net.................................           $    36,207,678      $   36,666,074
Mortgage note payable - affiliate...........................                 2,588,971           2,588,971
Accounts payable............................................                         -              52,886
Accrued interest............................................                   292,766             295,428
Accrued expenses............................................                   382,446             455,857
Deferred gain...............................................                         -             174,656
Payable to affiliates - General Partner.....................                 2,231,389           2,558,338
Security deposits and deferred rental income................                   460,567             433,407
                                                                        --------------       -------------
                                                                            42,163,817          43,225,617
                                                                        --------------       -------------


Partners' deficit:
     Limited partners - 159,813 limited partnership
       units issued and outstanding at December 31,
       1997 and 1996........................................                (3,602,274)         (4,179,456)
     General Partner........................................                (6,191,624)         (6,454,008)
                                                                        --------------       -------------
                                                                            (9,793,898)        (10,633,464)
                                                                        --------------       -------------
                                                                       $    32,369,919      $   32,592,153
                                                                        ==============       =============
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                       1997                1996               1995
                                                   --------------     --------------    ---------------
Revenue:
<S>                                                <C>                <C>               <C>
   Rental revenue..........................        $   15,187,999     $   14,855,652    $    14,304,055
   Interest................................               129,314            127,552            147,758
   Gain on involuntary conversion..........               219,628            598,859                  -
                                                    -------------      -------------     --------------
     Total revenue.........................            15,536,941         15,582,063         14,451,813
                                                    -------------      -------------     --------------

Expenses:
   Interest................................             3,535,009          3,784,555          3,905,403
   Interest - affiliates...................               244,738             23,620                  -
   Depreciation............................             2,083,616          2,372,870          2,484,425
   Property taxes..........................               793,994            787,865            799,717
   Personnel expenses......................             1,808,610          1,716,875          1,722,218
   Repairs and maintenance.................             2,133,196          1,921,900          1,718,236
   Property management fees -
     affiliates............................               752,909            734,247            711,435
   Utilities...............................             1,161,104          1,093,688          1,044,938
   Other property operating expenses.......               809,790            775,491            899,517
   General and administrative..............               197,770            432,407            393,663
   General and administrative -
     affiliates............................               271,486            345,934            465,018
                                                    -------------      -------------     --------------
     Total expenses                                    13,792,222         13,989,452         14,144,570
                                                    -------------      -------------     --------------

Net income.................................        $    1,744,719     $    1,592,611    $       307,243
                                                    =============      =============     ==============

Net income allocable to limited
   partners................................        $      577,182     $      804,036    $       291,881
Net income allocable to General
   Partner.................................             1,167,537            788,575             15,362
                                                    -------------      -------------     --------------
Net income.................................        $    1,744,719     $    1,592,611    $       307,243
                                                    =============      =============     ==============

Net income per limited partnership unit:
   Net income..............................        $         3.61     $         5.03    $          1.83
                                                    =============      =============     ==============

</TABLE>


                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.

                         STATEMENTS OF PARTNERS' DEFICIT

              For the Years Ended December 31, 1997, 1996 and 1995


<TABLE>
<CAPTION>
                                                                                                    Total
                                                     General                 Limited                Partners'
                                                     Partner                 Partners               Deficit
                                                 ----------------        ----------------     -----------------
<S>                                              <C>                     <C>                  <C>
Balance at December 31, 1994..............       $    (5,484,195)        $    (5,275,373)     $    (10,759,568)

Net income................................                15,362                 291,881               307,243

Management Incentive Distribution.........              (871,053)                      -              (871,053)
                                                  --------------          --------------        --------------

Balance at December 31, 1995..............            (6,339,886)             (4,983,492)          (11,323,378)

Net income................................               788,575                 804,036             1,592,611

Management Incentive Distribution.........              (902,697)                      -              (902,697)
                                                  --------------          --------------        --------------

Balance at December 31, 1996..............            (6,454,008)             (4,179,456)          (10,633,464)

Net income................................             1,167,537                 577,182             1,744,719

Management Incentive Distribution.........              (905,153)                      -              (905,153)
                                                  --------------          --------------        --------------

Balance at December 31, 1997..............       $    (6,191,624)        $    (3,602,274)      $    (9,793,898)
                                                  ==============          ==============        ==============
</TABLE>

                 See accompanying notes to financial statements.

<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.

                            STATEMENTS OF CASH FLOWS

                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                             For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                        1997               1996               1995
                                                   ---------------    --------------    ---------------
Cash flows from operating activities:
<S>                                                <C>                <C>               <C>
   Cash received from tenants..............        $   15,197,251     $   14,877,289    $    14,298,528
   Cash paid to suppliers..................            (6,259,909)        (5,836,491)        (5,477,026)
   Cash paid to affiliates.................              (984,779)        (1,369,172)        (2,115,099)
   Interest received.......................               129,314            127,552            147,758
   Interest paid...........................            (3,352,192)        (3,645,580)        (3,676,175)
   Interest paid to affiliates.............              (244,738)           (23,620)                 -
   Property taxes paid.....................              (781,206)          (717,973)          (832,090)
                                                    -------------      -------------     --------------
Net cash provided by operating
   activities..............................             3,703,741          3,412,005          2,345,896
                                                    -------------      -------------     --------------

Cash flows from investing activities:
   Additions to real estate
     investments...........................            (1,516,353)        (2,467,045)        (1,820,043)
   Insurance proceeds from fire............               260,164            681,998                  -
   Insurance proceeds from hail
     damage................................                     -             67,016                  -
                                                    -------------      -------------     --------------
Net cash used in investing activities......            (1,256,189)        (1,718,031)        (1,820,043)
                                                    -------------      -------------     --------------

Cash flows from financing activities:
   Principal payments on mortgage
     notes payable.........................              (481,928)        (3,041,234)          (427,660)
   Deferred borrowing costs paid...........                     -            (13,157)                 -
   Mortgage loan from affiliate............                     -          2,588,971                  -
   Management Incentive Distribution.......            (1,271,718)          (907,219)                 -
                                                    -------------      -------------     --------------
Net cash used in financing activities......            (1,753,646)        (1,372,639)          (427,660)
                                                    -------------      -------------     --------------

Net increase in cash and
     cash equivalents......................               693,906            321,335             98,193

Cash and cash equivalents at
     beginning of year.....................             2,351,879          2,030,544          1,932,351
                                                    -------------      -------------     --------------

Cash and cash equivalents at end
     of year...............................        $    3,045,785     $    2,351,879    $     2,030,544
                                                    =============      =============     ==============
</TABLE>

See discussion of noncash investing and financing activities in Note 7.


                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.

                            STATEMENTS OF CASH FLOWS


              Reconciliation of Net Income to Net Cash Provided by
                              Operating Activities

<TABLE>
<CAPTION>
                                                          For the Years Ended December 31,
                                                       1997               1996               1995
                                                   --------------     --------------    ---------------
<S>                                                <C>                <C>               <C>
Net income.................................        $    1,744,719     $    1,592,611    $       307,243
                                                    -------------      -------------     --------------

Adjustments to reconcile net income
   to net cash provided by operating
   activities:
   Gain on involuntary conversion..........              (219,628)          (598,859)                 -
   Depreciation............................             2,083,616          2,372,870          2,484,425
   Amortization of discounts on
     mortgage notes payable................                23,532             22,868             21,668
   Amortization of deferred borrowing
     costs.................................               161,947            123,008            145,498
   Changes in assets and liabilities:
     Cash segregated for security
       deposits............................                (9,538)           (17,824)           (22,276)
     Accounts receivable...................               (10,132)             1,441             (6,750)
     Prepaid expenses and other
       assets..............................                13,190             20,634             85,124
     Escrow deposits.......................               (21,782)           175,504             79,449
     Accounts payable......................               (52,886)            (9,170)           (50,679)
     Accrued interest......................                (2,662)            (6,901)            62,062
     Accrued expenses......................               (73,411)            (1,127)           138,356
     Payable to affiliates - General
       Partner.............................                39,616           (288,991)          (938,646)
     Security deposits and deferred
       rental income.......................                27,160             25,941             40,422
                                                    -------------      -------------     --------------

         Total adjustments.................             1,959,022          1,819,394          2,038,653
                                                    -------------      -------------     --------------

Net cash provided by operating
   activities..............................        $    3,703,741     $    3,412,005    $     2,345,896
                                                    =============      =============     ==============
</TABLE>
                 See accompanying notes to financial statements.

<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1997

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------

Organization
-------------

McNeil Real Estate Fund XI, Ltd. (the  "Partnership") was organized June 2, 1980
as a limited  partnership under the provisions of the California Uniform Limited
Partnership Act. The general partner of the Partnership is McNeil Partners, L.P.
(the "General Partner"), a Delaware limited partnership,  an affiliate of Robert
A. McNeil.  The  Partnership is governed by an amended and restated  partnership
agreement of limited  partnership dated August 6, 1991, as amended (the "Amended
Partnership Agreement"). The principal place of business for the Partnership and
for the General  Partner is 13760 Noel Road,  Suite 600,  LB70,  Dallas,  Texas,
75240.

The Partnership is engaged in real estate  activities,  including the ownership,
operation  and  management  of  residential  real  estate and other real  estate
related   assets.   At  December  31,   1997,   the   Partnership   owned  eight
income-producing properties as described in Note 4 - Real Estate Investments.

Pursuant  to the  Partnership's  previously  announced  liquidation  plans,  the
Partnership  has recently  retained  PaineWebber,  Incorporated as its exclusive
financial  advisor  to  explore  alternatives  to  maximize  the  value  of  the
Partnership.  The  alternatives  being  considered by the  Partnership  include,
without limitation,  a transaction in which limited partnership interests in the
Partnership  are converted into cash. The General  Partner of the Partnership or
entities or persons  affiliated with the General Partner will not be involved as
a purchaser in any of the transactions  contemplated above. Any transaction will
be subject to certain conditions  including (i) approval by the limited partners
of the Partnership, and (ii) receipt of an opinion from an independent financial
advisory  firm  as  to  the  fairness  of  the  consideration  received  by  the
Partnership  pursuant to such  transaction.  Finally,  there can be no assurance
that any transaction will be consummated, or as to the terms thereof.

The Partnership has placed Rock Creek  Apartments and The Park Apartments on the
market for sale effective October 1, 1996 and August 1, 1997, respectively.  The
Partnership has received an offer from an unaffiliated buyer for the purchase of
The Park  Apartments for $4.9 million and is currently  evaluating the terms and
conditions of this offer.

Basis of Presentation
---------------------

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles ("GAAP").  The preparation of financial
statements in conformity  with GAAP  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.


<PAGE>
The  Partnership's  financial  statements  include the accounts of the following
listed tier  partnerships  for the years ended December 31, 1997, 1996 and 1995.
These single asset tier  partnerships were formed to accommodate the refinancing
of  the  respective  property.  The  Partnership's  and  the  General  Partner's
ownership  interest in each tier  partnership is detailed below. The Partnership
retains  effective  control  of each tier  partnership.  The  General  Partner's
minority interest is not presented as it is both negative or immaterial.

                                                    % of Ownership Interest
   Tier Partnership                              Partnership     General Partner

   Limited Partnerships:
Acacia Lakes Fund XI Limited Partnership             99%                1%
Gentle Gale Fund XI Limited Partnership*            100                 -
Villa Del Rio XI Limited Partnership*               100                 -
Village Fund XI Associates                           99                 1

   General Partnerships:
Knollwood XI Associates                              99                 1
The Park Fund XI Associates                          99                 1
Sun Valley Fund XI Associates                        99                 1

*  The  general  partner  of  these partnerships is a corporation whose stock is
   100% owned by the Partnership.

Real Estate Investments
-----------------------

Real estate investments are generally stated at the lower of depreciated cost or
fair value. Real estate investments are reviewed for impairment  whenever events
or changes in  circumstances  indicate  that their  carrying  amounts may not be
recoverable.  When the  carrying  value  of a  property  exceeds  the sum of all
estimated  future cash flows, an impairment loss is recognized.  At such time, a
write-down is recorded to reduce the basis of the property to its estimated fair
value.

The  Partnership's  method  of  accounting  for real  estate  investments  is in
accordance with Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" ("SFAS 121"),  which the Partnership  adopted effective January 1, 1996. The
adoption  of  SFAS  121 did  not  have a  material  impact  on the  accompanying
financial statements.

Improvements and betterments are capitalized and expensed  through  depreciation
charges. Repairs and maintenance are charged to operations as incurred.

Assets Held for Sale
--------------------

The  assets  held for sale are stated at the lower of  depreciated  cost or fair
value less costs to sell.  Depreciation  on these assets ceased at the time they
were placed on the market for sale.

Depreciation

Buildings and improvements are depreciated using the  straight-line  method over
the estimated useful lives of the assets, ranging from 3 to 40 years.



<PAGE>
Cash and Cash Equivalents
-------------------------

Cash  and  cash  equivalents  include  cash on hand  and  cash on  deposit  with
financial  institutions  with  original  maturities  of  three  months  or less.
Carrying amounts for cash and cash equivalents approximate fair value.

Escrow Deposits
---------------

The  Partnership is required to maintain  escrow accounts in accordance with the
terms of various  mortgage  indebtedness  agreements.  These escrow accounts are
controlled by the mortgagee and are used for payment of property  taxes,  hazard
insurance,  capital improvements and/or property replacements.  Carrying amounts
for escrow deposits approximate fair value.

Deferred Borrowing Costs
------------------------

Loan fees and other related costs incurred to obtain long-term financing on real
property are  capitalized  and amortized  using a method that  approximates  the
effective  interest method over the terms of the related mortgage notes payable.
Amortization of deferred  borrowing costs is included in interest expense on the
Statements of Operations.

Discounts on Mortgage Notes Payable
-----------------------------------

Discounts on mortgage notes payable are being amortized over the remaining terms
of the related mortgage notes using the effective interest method.  Amortization
of discounts on the mortgage  notes  payable is included in interest  expense on
the Statements of Operations.

Rental Revenue
--------------

The Partnership  leases its residential  properties under  short-term  operating
leases. Lease terms generally are less than one year in duration. Rental revenue
is recognized as earned.

Income Taxes
------------

No provision for Federal  income taxes is necessary in the financial  statements
of the  Partnership  because,  as a  partnership,  it is not  subject to Federal
income tax, and the tax effect of its activities accrues to the partners.

Allocation of Net Income and Net Loss
-------------------------------------

The Amended Partnership Agreement provides for net income of the Partnership for
both  financial  statement and income tax reporting  purposes to be allocated as
indicated  below.  For  allocation  purposes,  net  income  and net  loss of the
Partnership are determined prior to deductions for depreciation:

a)       first,  deductions for  depreciation  shall  be allocated  5%   to  the
         General  Partner and 95% to the limited  partners;

<PAGE>
b)       then,  net income in an amount equal to the  cumulative  amount paid to
         the General Partner for the Management Incentive  Distribution ("MID"),
         for which no  previous  income  allocations  have been  made,  shall be
         allocated to the General Partner;  provided,  however, that if all or a
         portion  of  such  payment  consists  of  limited   partnership   units
         ("Units"),  the  amount of net income  allocated  shall be equal to the
         amount of cash the General Partner would have otherwise received; and

c)       then,  any  remaining net  income  shall   be  allocated to achieve the
         allocation  of  5% to  the  General Partner  and  95%  to  the  limited
         partners.

The Amended  Partnership  Agreement  provides  that net losses,  other than that
arising from a sale or refinancing, shall be allocated 5% to the General Partner
and 95% to the limited partners.

Net losses arising from a sale  or refinancing  shall  be  allocated 1%  to  the
General  Partner and 99% to the limited partners.

Federal  income tax law provides  that the  allocation of loss to a partner will
not be  recognized  unless the  allocation  is in  accordance  with a  partner's
interest in the partnership or the allocation has substantial  economic  effect.
Internal  Revenue  Code Section  704(b) and  accompanying  Treasury  Regulations
establish  criteria for  allocations of Partnership  deductions  attributable to
debt. The  Partnership's  tax allocations for 1997, 1996 and 1995 have been made
in accordance with these provisions.

Distributions
-------------

Pursuant to the  Amended  Partnership  Agreement  and at the  discretion  of the
General  Partner,  distributions  during  each  taxable  year  shall  be made as
follows:

(a)      first, to the General Partner, in an amount equal to the MID; and

(b)      any remaining distributable cash, as defined, shall be distributed 100%
         to the limited partners.

No  distributions  were made to the limited  partners in 1997, 1996 or 1995. The
Partnership  accrued  distributions  of $905,153,  $902,697 and $871,503 for the
benefit of the General  Partner for the years ended December 31, 1997,  1996 and
1995,  respectively.  These  distributions  are the MID  pursuant to the Amended
Partnership  Agreement.  The General Partner has waived the collection  terms of
reimbursable  expenses  and MID,  and has  elected  for the  Partnership  to pay
limited  partner  distributions  before the payment of such amounts.  During the
last week of March  1998,  the  Partnership  plans to  distribute  approximately
$2,000,000 to the limited partners of record at March 1, 1998.

Net Income (Loss) Per Limited Partnership Unit
----------------------------------------------

Net income (loss) per Unit is computed by dividing net income  (loss)  allocated
to the limited partners by the number of Units outstanding. Per Unit information
has been computed based on 159,813 Units outstanding in 1997, 1996 and 1995.




<PAGE>
NOTE 2 - TRANSACTIONS WITH AFFILIATES
-------------------------------------

The  Partnership  pays property  management fees equal to 5% of the gross rental
receipts of the Partnership's properties to McNeil Real Estate Management,  Inc.
("McREMI"),  an  affiliate  of  the  General  Partner,  for  providing  property
management and leasing services.

The  Partnership  reimburses  McREMI  for  its  costs,  including  overhead,  of
administering the Partnership's affairs.

Under terms of the Amended Partnership Agreement,  the Partnership is paying the
MID to the General Partner.  The maximum MID is calculated as 1% of the tangible
asset value of the Partnership.  The maximum MID percentage decreases subsequent
to 1999.  Tangible  asset  value is  determined  by using the  greater of (i) an
amount calculated by applying a capitalization  rate of 9% to the annualized net
operating  income of each property or (ii) a value of $10,000 per apartment unit
for  residential  property to arrive at the property  tangible asset value.  The
property  tangible  asset  value is then  added to the book  value of all  other
assets excluding intangible items.

The MID will be paid to the  extent of the  lesser of the  Partnership's  excess
cash flow as defined,  or net  operating  income,  as defined (the  "Entitlement
Amount"),  and may be paid (i) in cash, unless there is insufficient cash to pay
the  distribution  in which event any unpaid  portion not taken in Units will be
deferred and is payable,  without interest, from the first available cash and/or
(ii) in Units.  A maximum of 50% of the MID may be paid in Units.  The number of
Units  issued in payment  of the MID is based on the  greater of $50 per Unit or
the net  tangible  asset  value per Unit,  as  defined.  No Units were issued in
payment of the MID in 1997, 1996 or 1995.

During  1991,  the  Partnership  amended  its  capitalization  policy  and began
capitalizing  certain costs of improvements and betterments which under policies
of  prior  management  had been  expensed  when  incurred.  The  purpose  of the
amendment was to more properly recognize items which were capital in nature. The
effect of the amendment  standing alone was evaluated at the time the change was
made and  determined  not to be  material  to the  financial  statements  of the
Partnership  in 1991,  nor was it expected  to be  material in any future  year.
However,  the amendment  can have a material  effect on the  calculation  of the
Entitlement   Amount  which  determines  the  amount  of  MID  earned.   Capital
improvements  are  excluded  from cash flow,  as defined.  The  majority of base
period cash flow was measured under the previous  capitalization  policy,  while
incentive  period cash flow is determined  using the amended  policy.  Under the
amended  policy,  more  items  are  capitalized,  and cash flow  increases.  The
amendment of the  capitalization  policy did not  materially  affect the MID for
1997,  1996 or 1995 because the  Entitlement  Amount was  sufficient  to pay MID
notwithstanding the amendment to the capitalization policy.

Any  amount  of the MID that is paid to the  General  Partner  in Units  will be
treated as if cash is distributed to the General Partner and is then contributed
to the Partnership by the General Partner. The MID represents a return of equity
to the General Partner for increasing cash flow, as defined,  and accordingly is
treated as a distribution.


<PAGE>
Compensation and  reimbursements  paid or accrued for the benefit of the General
Partner or its affiliates are as follows:
                                             For the Years Ended December 31,
                                          --------------------------------------
                                             1997          1996        1995
                                          -----------  -----------  ------------
Property management fees - affiliates...  $   752,909  $   734,247  $    711,435
Interest - affiliates...................      244,738       23,620             -
Charged to general and
   administrative - affiliates:
   Partnership administration...........      271,486      345,934       465,018
                                           ----------   ----------   -----------
                                          $ 1,269,133  $ 1,103,801  $  1,176,453
                                           ==========   ==========   ===========
Charged to General Partner's deficit:
   MID..................................  $   905,153  $   902,697  $    871,053
                                           ==========   ==========   ===========

Payable to affiliates - General  Partner at December 31, 1997 and 1996 consisted
primarily of accrued property  management fees, MID and cost  reimbursements and
are due and payable from  operations.  In 1997 and 1996,  the  Partnership  paid
$1,271,718  and  $907,219,  respectively,  from cash  reserves  for the MID. The
General  Partner has waived the collection  terms of  reimbursable  expenses and
MID, and has elected for the  Partnership to pay limited  partner  distributions
before the payment of such amounts.

NOTE 3 - TAXABLE INCOME (LOSS)
------------------------------

McNeil Real Estate Fund XI, Ltd. is a partnership  and is not subject to Federal
and state income taxes.  Accordingly,  no  recognition  has been given to income
taxes in the  accompanying  financial  statements of the  Partnership  since the
income or loss of the  Partnership  is to be  included in the tax returns of the
individual  partners.  The  tax  returns  of  the  Partnership  are  subject  to
examination by Federal and state taxing authorities. If such examinations result
in  adjustments  to  distributive  shares of  taxable  income  or loss,  the tax
liability of the partners could be adjusted accordingly.

The Partnership's net assets and liabilities for tax purposes were less than the
net assets and liabilities for financial reporting purposes by $261,840 in 1997,
$831,834 in 1996 and $62,005 in 1995.


<PAGE>

NOTE 4 - REAL ESTATE INVESTMENTS
--------------------------------

The  basis  and  accumulated  depreciation  of  the  Partnership's  real  estate
investments at December 31, 1997 and 1996 are set forth in the following tables:

<TABLE>
<CAPTION>
                                                   Buildings and        Accumulated          Net Book
       1997                         Land           Improvements         Depreciation           Value
       ----                    --------------      --------------     ---------------     ---------------
<S>                            <C>                 <C>                <C>                 <C>
Acacia Lakes
   Mesa, AZ                    $    1,953,090      $   13,280,033     $    (9,302,116)    $     5,931,007
Gentle Gale
   Galveston, TX                      450,155           3,768,457          (2,533,853)          1,684,759
Knollwood
   Kansas City, MO                    330,547           7,257,557          (4,638,122)          2,949,982
Sun Valley
   Charlotte, NC                      562,797           8,654,858          (4,963,089)          4,254,566
Villa Del Rio
   Jacksonville, FL                   636,634           9,760,851          (6,264,146)          4,133,339
The Village
   Gresham, OR                        474,102           4,489,771          (3,240,339)          1,723,534
                                -------------       -------------       -------------       -------------
                               $    4,407,325      $   47,211,527      $  (30,941,665)     $   20,677,187
                                =============       =============       =============       =============

                                                   Buildings and        Accumulated          Net Book
       1996                         Land           Improvements         Depreciation           Value
       ----                    --------------      --------------     ---------------     ---------------
Acacia Lakes                   $    1,953,090      $   13,054,618      $   (8,748,631)     $    6,259,077
Gentle Gale                           450,155           3,685,626          (2,351,872)          1,783,909
Knollwood                             330,547           7,084,066          (4,299,937)          3,114,676
The Park (a)                          165,329           4,354,026          (3,192,577)          1,326,778
Sun Valley                            562,797           8,488,851          (4,619,613)          4,432,035
Villa Del Rio                         636,634           9,540,354          (5,886,698)          4,290,290
The Village                           474,102           4,393,243          (3,081,856)          1,785,489
                                -------------       -------------       -------------       -------------
                               $    4,572,654      $   50,600,784      $  (32,181,184)     $   22,992,254
                                =============       =============       =============       =============
</TABLE>

(a)  Effective August 1, 1997,  management  placed The Park,  located in Joplin,
     Missouri, on the market for sale. Therefore, at December 31, 1997, The Park
     is classified as an asset held for sale at a net book value of  $1,341,317.
     The Partnership  has received an offer from an  unaffiliated  buyer for the
     purchase  of  The  Park  Apartments  for  $4.9  million  and  is  currently
     evaluating the terms and conditions of this offer.

On October 1, 1996, the General Partner placed Rock Creek Apartments, located in
Portland,  Oregon,  on the market for sale.  The property was  classified  as an
asset held for sale at  December  31,  1997 and 1996.  The net book value of the
property  was   $4,569,548  and  $4,203,497  at  December  31,  1997  and  1996,
respectively.



<PAGE>
The results of operations  for the assets held for sale at December 31, 1997 are
$671,919, $263,104 and $26,412 for 1997, 1996 and 1995, respectively. Results of
operations are operating  revenues less operating  expenses  including  interest
expense and depreciation expense.

The Partnership's real estate properties are encumbered by mortgage indebtedness
as discussed in Notes 5 and 6.

NOTE 5 - MORTGAGE NOTES PAYABLE
-------------------------------

The following  table sets forth the mortgage notes payable of the Partnership at
December  31,  1997 and 1996.  All  mortgage  notes are  secured by real  estate
investments or the assets held for sale.

<TABLE>
<CAPTION>
                         Mortgage           Annual      Monthly
                         Lien               Interest    Payments/                       December 31,
Property                 Position    (a)    Rates %     Maturity Date (d)           1997                1996
--------                 ---------------  ----------   -----------------      ---------------     --------------
<S>                      <C>                  <C>      <C>           <C>       <C>               <C>
Acacia Lakes             First                8.700    $   71,069    01/01     $    8,773,421    $     8,858,883
                                                                                -------------     --------------

Gentle Gale (c)          First                8.150        22,327    07/03          2,589,676          2,644,107
                         Discount (b)                                                 (50,020)           (57,508)
                                                                                -------------     --------------
                                                                                    2,539,656          2,586,599
                                                                                -------------     --------------

Knollwood                First                7.750        32,506    05/24          4,379,253          4,427,873
                                                                                -------------     --------------

The Park                 First               10.500        24,021    05/24          2,571,755          2,588,973
                                                                                -------------     --------------

Rock Creek               First               11.875        67,860    02/01          6,049,641          6,139,670
                                                                                -------------     --------------

Sun Valley               First                7.875        48,384    06/24          6,451,832          6,521,362
                                                                                -------------     --------------

Villa Del Rio (c)        First                8.150        47,843    07/03          5,549,306          5,665,944
                         Discount (b)                                                (107,186)          (123,230)
                                                                                -------------     ---------------
                                                                                    5,442,120          5,542,714
                                                                                -------------     --------------

                                                                               $   36,207,678    $    36,666,074
                                                                                =============     ==============
</TABLE>

(a)  The debt is non-recourse to the Partnership.

(b)   Discounts are based on an effective interest rate of 8.62%.



<PAGE>
(c)  Financing was obtained under the terms of a Real Estate Mortgage Investment
     Conduit financing.  The mortgage notes payable are cross-collateralized and
     may not be prepaid in whole or part before July 1998. Any prepayments  made
     during the sixth or seventh  loan years are subject to a Yield  Maintenance
     premium,  as  defined.  Additionally,  the  Partnership  must pay a release
     payment  equal to 25% of the prepaid  balance  which will be applied to the
     remaining mortgage notes in the collateral pool.

(d)   Balloon payments on the mortgage notes are due as follows:

           Property                       Balloon Payment       Date
           --------                       ---------------       ----

        Acacia Lakes                       $ 8,468,000          01/01
        Rock Creek                           5,704,000          02/01
        Gentle Gale                          2,197,000          07/03
        Villa Del Rio                        4,707,000          07/03

Scheduled principal  maturities of the mortgage notes,  before  consideration of
discounts of $157,206, are as follows:

                                            Real Estate      Assets Held
                                            Investments        For Sale
                                           ------------     ------------

        1998....................           $    406,479     $    120,437
        1999....................                440,977          135,252
        2000....................                478,412          151,894
        2001....................              8,865,876        5,732,113
        2002....................                431,266           29,040
        Thereafter..............             17,120,478        2,452,660
                                            -----------       ----------
          Total.................           $ 27,743,488      $ 8,621,396
                                            ===========       ==========

Based on borrowing  rates  currently  available to the  Partnership for mortgage
loans with similar terms and average maturities, the fair value of notes payable
was  approximately  $38,601,000  as of December 31, 1997 and  $36,770,000  as of
December 31, 1996.

NOTE 6 - MORTGAGE NOTE PAYABLE - AFFILIATE
------------------------------------------

The  following  sets  forth  the  mortgage  note  payable  -  affiliate  of  the
Partnership  at December 31, 1997 and 1996.  The mortgage note is secured by the
real estate investment.

<TABLE>
<CAPTION>
                         Mortgage         Annual       Monthly
                         Lien             Interest     Payments/                   December 31,
Property                 Position    (a)  Rates %      Maturity Date            1997            1996
--------                 ---------------  -------    -------------------    -----------     ------------

<S>                      <C>                <C>      <C>           <C>      <C>             <C>
The Village (b)          First              (c)      Variable      11/99    $ 2,588,971     $  2,588,971
                                                                             ==========      ===========
</TABLE>

<PAGE>
(a)   The debt is non-recourse to the Partnership.

(b)  In October 1996, the  Partnership  obtained a mortgage note commitment from
     an  affiliate  of the General  Partner for an amount up to  $2,588,971.  On
     November 25, 1996,  $2,588,971 was funded to the Partnership to pay off the
     mortgage note on The Village.  The Partnership  incurred deferred borrowing
     costs of  $13,157  for the new  mortgage  note  payable,  and the  deferred
     borrowing costs for the old mortgage note payable were written off.

(c)  The note  requires  monthly  payments of  interest  only equal to the prime
     lending  rate plus 1%. At December  31,  1997 and 1996,  the prime rate was
     8.50% and 8.25%, respectively.

Under the terms of the Amended Partnership Agreement, borrowings from affiliates
approximate fair market value.

NOTE 7 - GAIN ON INVOLUNTARY CONVERSION
---------------------------------------

On January 25, 1997, a fire  destroyed  two units at The Park.  The  Partnership
received  $37,624  in  insurance  reimbursements  to cover the cost of  repairs.
Insurance  reimbursements received in excess of the basis of the property damage
were recorded as a $22,630 gain on involuntary conversion.

On  January  20,  1997,  a  fire  destroyed  three  units  at The  Village.  The
Partnership  received $49,552 in insurance  reimbursements  to cover the cost of
repairs.  Insurance  reimbursements  received  in  excess  of the  basis  of the
property damage were recorded as a $24,010 gain on involuntary conversion.

On January 8, 1996, 23,347 square feet of Knollwood Apartments were destroyed by
fire  causing  approximately  $857,000  in  damages.  The  Partnership  received
$681,998 in insurance  reimbursements as of December 31, 1996, to cover the cost
to repair Knollwood. Insurance reimbursements received in excess of the basis of
the property damaged were recorded as a $531,843 gain on involuntary  conversion
during  1996.  In 1997,  the  Partnership  received  an  additional  $172,988 in
insurance  reimbursements,  all of which was  recorded as a gain on  involuntary
conversion.

In 1994, the  Partnership  received  $67,016 in insurance  proceeds to cover the
cost of repairs  caused by a hail storm in August 1994 at Knollwood  Apartments.
The insurance proceeds were placed in escrow until completion of repairs. During
1996, the Partnership completed the repairs, received the proceeds that had been
held in escrow, and recorded a $67,016 gain on the involuntary conversion.

NOTE 8 - LEGAL PROCEEDINGS
--------------------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except for the following:

James F.  Schofield,  Gerald C. Gillett,  Donna S. Gillett,  Jeffrey  Homburger,
Elizabeth Jung,  Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors,  Inc., McNeil Real Estate Management,  Inc., Robert A. McNeil,
Carole J. McNeil,  McNeil Pacific  Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX,  Ltd.,  McNeil Real  Estate  Fund X, Ltd.,  McNeil Real Estate Fund XI,
Ltd.,  McNeil  Real Estate Fund XII,  Ltd.,  McNeil Real Estate Fund XIV,  Ltd.,
McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real

<PAGE>
Estate Fund XXI, L.P.,  McNeil Real Estate Fund XXII,  L.P.,  McNeil Real Estate
Fund XXIV,  L.P.,  McNeil Real Estate  Fund XXV,  L.P.,  McNeil Real Estate Fund
XXVI, L.P., and McNeil Real Estate Fund XXVII,  L.P., et al. - Superior Court of
the State of California for the County of Los Angeles,  Case No. BC133799 (Class
and Derivative Action Complaint).

The action involves  purported  class and derivative  actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the  "Partnerships").  Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management,  Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their  fiduciary  duties and certain  obligations  under the respective  Amended
Partnership  Agreement.  Plaintiffs  allege that  Defendants  have rendered such
Units highly illiquid and  artificially  depressed the prices that are available
for Units on the resale market.  Plaintiffs also allege that Defendants  engaged
in a course of conduct to prevent the  acquisition  of Units by an  affiliate of
Carl  Icahn  by  disseminating  purportedly  false,  misleading  and  inadequate
information.  Plaintiffs  further allege that Defendants  acted to advance their
own personal  interests at the expense of the Partnerships'  public unit holders
by failing to sell Partnership  properties and failing to make  distributions to
unitholders.

On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs  are suing for breach of  fiduciary  duty,  breach of contract and an
accounting,  alleging,  among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive,  that these fees should
be reduced retroactively and that the respective Amended Partnership  Agreements
governing the Partnerships are invalid.

Defendants  filed a demurrer to the  consolidated  and amended  complaint  and a
motion to strike on February 14, 1997,  seeking to dismiss the  consolidated and
amended complaint in all respects.  A hearing on Defendant's demurrer and motion
to strike  was held on May 5,  1997.  The Court  granted  Defendants'  demurrer,
dismissing  the  consolidated  and  amended  complaint  with leave to amend.  On
October  31,  1997,  the  Plaintiffs  filed a second  consolidated  and  amended
complaint.  Defendants  must  move,  answer or  otherwise  respond to the second
consolidated and amended complaint by June 30, 1998.

<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1997

<TABLE>
<CAPTION>
                                                                                                       Costs
                                                       Initial Cost (b)           Cumulative        Capitalized
                          Related (b)                         Buildings and      Write-down for     Subsequent
Description               Encumbrances         Land           Improvements      Impairment (d)     To Acquisition
-----------               ----------------   --------------------------------   ---------------   ----------------
APARTMENTS:
<S>                        <C>               <C>               <C>                <C>             <C>
Acacia Lakes
   Mesa, AZ                $    8,773,421    $    1,953,090    $   10,784,729     $          -    $    2,495,304

Gentle Gale
   Galveston, TX                2,539,656           450,155         2,925,081          (21,141)          864,517

Knollwood
   Kansas City, MO              4,379,253           330,547         5,122,225                -         2,135,332

Sun Valley
   Charlotte, NC                6,451,832           562,797         7,056,988                -         1,597,870

Villa Del Rio
   Jacksonville, FL             5,442,120           636,634         7,685,383                -         2,075,468

The Village
   Gresham, OR                  2,588,971           474,102         3,372,567                -         1,117,204
                           --------------    --------------    --------------     ------------     -------------

                          $    30,175,253   $     4,407,325   $    36,946,973    $     (21,141)   $   10,285,695
                           ==============    ==============    ==============     ============     =============

Assets Held for Sale:

Rock Creek (c)
   Portland, OR           $     6,049,641

The Park (c)
   Joplin, MO             $     2,571,755
                           --------------
                          $     8,621,396
                           ==============
</TABLE>

(b) The initial cost and  encumbrances  reflect the present value of future loan
    payments  discounted,  if  appropriate,  at  a  rate  estimated  to  be  the
    prevailing interest rate at the date of acquisition or refinancing.

(c) Asset  held for  sale is  stated at the  lower of  depreciated  cost or fair
    value less costs  to sell.  Depreciation  ceases at the time they are placed
    on the market for sale.

(d) The carrying value of Gentle Gale Apartments was reduced by $21,141 in 1990.

                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1997

<TABLE>
<CAPTION>
                                            Gross Amount at
                                     Which Carried at Close of Period                 Accumulated
                                                 Buildings and                        Depreciation
Description                      Land            Improvements          Total (a)      and Amortization
-----------                   -----------------------------------------------------   -----------------

APARTMENTS:
<S>                           <C>                <C>              <C>                 <C>
Acacia Lakes
   Mesa, AZ                   $    1,953,090     $   13,280,033   $     15,233,123    $   (9,302,116)

Gentle Gale
   Galveston, TX                     450,155          3,768,457          4,218,612        (2,533,853)

Knollwood
   Kansas City, MO                   330,547          7,257,557          7,588,104        (4,638,122)

Sun Valley
   Charlotte, NC                     562,797          8,654,858          9,217,655        (4,963,089)

Villa Del Rio
   Jacksonville, FL                  636,634          9,760,851         10,397,485        (6,264,146)

The Village
   Gresham, OR                       474,102          4,489,771          4,963,873        (3,240,339)
                              --------------     --------------    ---------------     -------------
                             $     4,407,325    $    47,211,527   $     51,618,852    $  (30,941,665)
                              ==============     ==============    ===============     =============

Assets Held for Sale:

Rock Creek (c)
   Portland, OR                                                   $      4,569,548

The Park (c)
   Joplin, MO                                                            1,341,317
                                                                   ---------------
                                                                  $      5,910,865
                                                                   ===============
</TABLE>

(a)  For Federal income tax purposes,  the properties are depreciated over lives
     ranging from 5-27.5 years using ACRS or MACRS  methods.  The aggregate cost
     of real estate  investments for Federal income tax purposes was $74,981,822
     and accumulated depreciation was $60,180,391 at December 31, 1997.

(c)  Asset  held for sale is  stated at the  lower of  depreciated  cost or fair
     value less costs to sell.  Depreciation  ceases at the time they are placed
     on the market for sale.


                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1997


<TABLE>
<CAPTION>

                                 Date of                    Date                Depreciable
Description                   Construction                Acquired              lives (years)
-----------                  --------------               --------              -------------
APARTMENTS:
<S>                             <C>                         <C>                     <C>
Acacia Lakes
   Mesa, AZ                     1980                        05/81                   3-33

Gentle Gale
   Galveston, TX                1980                        05/81                   3-21

Knollwood
   Kansas City, MO              1970                        05/81                   3-29

Sun Valley
   Charlotte, NC                1980                        08/81                   3-40

Villa Del Rio
   Jacksonville, FL             1976                        05/81                   3-40

The Village
   Gresham, OR                  1974                        05/81                   3-30

Assets Held for Sale:

Rock Creek
   Portland, OR                 1975                        02/81

The Park
   Joplin, MO                   1977                        03/81

</TABLE>



                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.

                              Notes to Schedule III

                           Real Estate Investments and
                            Accumulated Depreciation


A  summary  of  activity  for  the  real  estate   investments  and  accumulated
depreciation is as follows:

<TABLE>
<CAPTION>
                                                              For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                        1997               1996               1995
                                                   ---------------    --------------    ---------------

Real estate investments:
<S>                                                <C>                <C>               <C>
Balance at beginning of year...............        $   55,173,438     $   64,347,015    $    62,526,972

Improvements...............................             1,150,402          2,391,036          1,820,043

Reclassification to assets held for sale...            (4,561,586)       (11,110,783)                 -

Replacement of assets......................              (143,402)          (453,830)                 -
                                                    -------------      -------------     --------------

Balance at end of year.....................        $   51,618,852     $   55,173,438    $    64,347,015
                                                    =============      =============     ==============


Accumulated depreciation:

Balance at beginning of year...............        $   32,181,184     $   37,095,184    $    34,610,759

Depreciation...............................             2,083,616          2,372,870          2,484,425

Reclassification to assets held for sale...            (3,220,269)        (6,983,195)                 -

Replacement of assets......................              (102,866)          (303,675)                 -
                                                    -------------      -------------     --------------

Balance at end of year.....................        $   30,941,665     $   32,181,184    $    37,095,184
                                                    =============      =============     ==============


Assets Held for Sale:

Balance at beginning of year...............        $    4,203,597     $            -    $             -

Reclassification to assets held for sale...             1,341,317          4,127,588                  -

Improvements...............................               365,951             76,009                  -
                                                    -------------      -------------     --------------

Balance at end of year.....................        $    5,910,865     $    4,203,597     $            -
                                                    =============      =============      =============
</TABLE>

<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
-------  -----------------------------------------------------------
         AND FINANCIAL DISCLOSURE
         ------------------------

None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------- --------------------------------------------------

Neither the  Partnership  nor the General Partner has any directors or executive
officers.  The names and ages of, as well as the positions held by, the officers
and  directors of McNeil  Investors,  Inc.,  the general  partner of the General
Partner, are as follows:

                                       Other Principal Occupations and Other
Name and Position             Age      Directorships During the Past 5 Years
-----------------             ---      -------------------------------------

Robert A. McNeil,              77       Mr.  McNeil  is also  Chairman  of   the
Chairman of the                         Board and Director of McNeil Real Estate
Board and Director                      Management,  Inc. ("McREMI") which is an
                                        affiliate of the General Partner. He has
                                        held the foregoing  positions  since the
                                        formation  of such  entity in 1990.  Mr.
                                        McNeil  received  his B.A.  degree  from
                                        Stanford  University  in  1942  and  his
                                        L.L.B.  degree from  Stanford Law School
                                        in 1948. He is a member of the State Bar
                                        of  California  and has been involved in
                                        real  estate  financing  since  the late
                                        1940's and in real estate  acquisitions,
                                        syndications  and   dispositions   since
                                        1960. From 1986 until active  operations
                                        of  McREMI  and  McNeil  Partners,  L.P.
                                        began in February 1991, Mr. McNeil was a
                                        private investor. Mr. McNeil is a member
                                        of the International  Board of Directors
                                        of the Salk  Institute,  which  promotes
                                        research in improvements in health care.

Carole J. McNeil               54       Mrs.  McNeil   is    Co-Chairman,   with
Co-Chairman of the                      husband  Robert  A.  McNeil,  of  McNeil
Board                                   Investors,  Inc. Mrs.  McNeil has twenty
                                        years of real  estate  experience,  most
                                        recently as a private investor from 1986
                                        to 1993.  In 1982,  she founded  Ivory &
                                        Associates,  a  commercial  real  estate
                                        brokerage  firm  in San  Francisco,  CA.
                                        Prior to that, she was a commercial real
                                        estate   associate   with  the   Madison
                                        Company and, earlier, a commercial sales
                                        associate  and  analyst  with Marcus and
                                        Millichap  in San  Francisco.  In  1978,
                                        Mrs. McNeil  established Escrow Training
                                        Centers,  California's  first accredited
                                        commercial  training  program  for title
                                        company escrow  officers and real estate
                                        agents   needing   college   credits  to
                                        qualify  for  brokerage  licenses.   She
                                        began  in real  estate  as  Manager  and
                                        Marketing  Director  of Title  Insurance
                                        and  Trust in  Marin  County,  CA.  Mrs.
                                        McNeil serves on the International Board
                                        of Directors of the Salk Institute.
<PAGE>
                                       Other Principal Occupations and Other
Name and Position             Age      Directorships During the Past 5 Years
-----------------             ---      -------------------------------------

Ron K. Taylor                  40       Mr.  Taylor is the  President  and Chief
President and Chief                     Executive  Officer of McNeil Real Estate
Executive Officer                       Management  which is an affiliate of the
                                        General Partner.  Mr. Taylor has been in
                                        this capacity  since the  resignation of
                                        Donald K. Reed on March 4,  1997.  Prior
                                        to       assuming       his      current
                                        responsibilities, Mr. Taylor served as a
                                        Senior  Vice  President  of McREMI.  Mr.
                                        Taylor has been in this  capacity  since
                                        McREMI  commenced  operations  in  1991.
                                        Prior  to  joining  McREMI,  Mr.  Taylor
                                        served as an  Executive  Vice  President
                                        for  a   national   syndication/property
                                        management  firm. In this capacity,  Mr.
                                        Taylor  had the  responsibility  for the
                                        management  and leasing of a  21,000,000
                                        square  foot   portfolio  of  commercial
                                        properties. Mr. Taylor has been actively
                                        involved  in the  real  estate  industry
                                        since 1983.

Each director  shall serve until his successor  shall have been duly elected and
qualified.

ITEM 11.  EXECUTIVE COMPENSATION
--------  ----------------------

No direct  compensation  was paid or payable by the  Partnership to directors or
officers  (since it does not have any  directors or officers) for the year ended
December  31,  1997,  nor was any  direct  compensation  paid or  payable by the
Partnership  to  directors  or officers  of the  general  partner of the General
Partner for the year ended  December 31, 1997. The  Partnership  has no plans to
pay any such remuneration to any directors or officers of the general partner of
the General Partner in the future.

See Item 13 - Certain  Relationships  and  Related  Transactions  for amounts of
compensation and  reimbursements  paid by the Partnership to the General Partner
and its affiliates.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-------- --------------------------------------------------------------

(A)      Security ownership of certain beneficial owners.

         No  individual  or  group,  as  defined  by  Section  13(d)(3)  of  the
         Securities  Exchange  Act of  1934,  known  to the  Partnership  is the
         beneficial  owner of more than 5 percent  of the  Partnership's  Units,
         other than High River  Limited  Partnership,  which owns  18,622  Units
         (approximately 11.65% of the outstanding Units) as of January 31, 1998.
         The business  address for High River Limited  Partnership  is 100 South
         Bedford Road, Mount Kisco, New York 10549.



<PAGE>
(B)      Security ownership of management.

         The  General  Partner and the  officers  and  directors  of its general
         partner,  collectively,  own 313 Units which  represent less than 1% of
         the outstanding Units.

(C)      Change in control.

         None.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------- ----------------------------------------------

Under the terms of the Amended Partnership Agreement,  the Partnership is paying
the MID to the  General  Partner.  The maximum  MID is  calculated  as 1% of the
tangible asset value of the  Partnership.  The maximum MID percentage  decreases
subsequent to 1999.  Tangible  asset value is determined by using the greater of
(i)  an  amount  calculated  by  applying  a  capitalization  rate  of 9% to the
annualized net operating  income of each property or (ii) a value of $10,000 per
apartment unit for residential property to arrive at the property tangible asset
value. The property  tangible asset value is then added to the book value of all
other assets excluding intangible items.

The MID will be paid to the  extent of the  lesser of the  Partnership's  excess
cash flow as defined,  or net  operating  income,  as defined (the  "Entitlement
Amount"),  and may be paid (i) in cash, unless there is insufficient cash to pay
the  distribution  in which event any unpaid  portion not taken in Units will be
deferred and is payable,  without interest, from the first available cash and/or
(ii) in Units.  A maximum of 50% of the MID may be paid in Units.  The number of
Units  issued in payment  of the MID is based on the  greater of $50 per Unit or
the net tangible asset value, as defined.  For the year ended December 31, 1997,
the  Partnership  paid or accrued for the  General  Partner MID in the amount of
$905,153.

Any  amount of the MID which is paid to the  General  Partner  in Units  will be
treated as if cash is distributed to the General Partner and is then contributed
to the Partnership by the General Partner. The MID represents a return of equity
to the General Partner for increasing cash flow, as defined,  and accordingly is
treated as a distribution.

The  Partnership  pays property  management fees equal to 5% of the gross rental
receipts  of the  Partnership's  properties  to McREMI  for  providing  property
management and leasing  services.  Effective  February 14, 1991, the Partnership
began reimbursing McREMI for its costs, including overhead, of administering the
Partnership's  affairs.  For the year ended December 31, 1997,  the  Partnership
paid  or  accrued  for  McREMI  $1,024,395  in  property   management  fees  and
reimbursements.

See  Item 1 -  Business,  Item  7 -  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations,  and  Item  8  -  Note  2  -
"Transactions with Affiliates."

In November 1996, the  Partnership  obtained a loan from McNeil Real Estate Fund
XXVII, L.P., an affiliate of the General Partner, totaling $2,588,971.  The note
is secured by The Village and requires monthly  interest-only  payments equal to
the prime lending rate of Bank of America plus 1% with the principal balance due
November 25,  1999.  Total  interest  expense for this loan was $244,738 for the
year ended December 31, 1997.

<PAGE>
                                     PART IV

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

See accompanying index to financial  statements at Item 8 - Financial Statements
and Supplementary Data.

<TABLE>
<CAPTION>
(A)        Exhibits

           Exhibit
           Number                           Description
           -------                          -----------
          <S>                           <C>
           3.                           Limited Partnership Agreement  (Incorpo-
                                        rated by reference to the Annual  Report
                                        on Form 10-K for the  fiscal  year ended
                                        September 30, 1987).

           3.1                          Amended      and    Restated     Limited
                                        Partnership  Agreement,  dated August 6,
                                        1991  (Incorporated  by reference to the
                                        Quarterly  Report  on Form  10-Q for the
                                        quarter ended June 30, 1991).

           3.2                          Amendment  No. 1 to  the   Amended   and
                                        Restated Partnership Agreement of McNeil
                                        Real Estate Fund XI,  Ltd.,  dated March
                                        28, 1994. (2)

           3.3                          Amendment  No. 2   to  the  Amended  and
                                        Restated Partnership Agreement of McNeil
                                        Real Estate Fund XI,  Ltd.,  dated March
                                        28, 1994. (2)

           10.1                         Deed of Trust Note, dated April 5, 1989,
                                        between Knollwood Fund XI Associates and
                                        American Mortgages, Inc. (1)

           10.2                         Deed of Trust  Note,  dated May 5, 1989,
                                        between  Sun Valley  Fund XI  Associates
                                        and American Mortgages, Inc. (1)

           10.3                         Termination  Agreement,  dated   as   of
                                        August 6, 1991, between The Park Fund XI
                                        Associates  and  McNeil  Partners,  L.P.
                                        regarding  McNeil  Real  Estate Fund XI,
                                        Ltd. (1)

           10.4                         Termination  Agreement,  dated   as   of
                                        August 6, 1991  between  Sun Valley Fund
                                        XI  Associates  and McNeil  Real  Estate
                                        Management, Inc. (1)
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
           Exhibit
           Number                           Description
           -------                          ------------
           <S>                          <C>
           10.5                         Termination  Agreement,  dated   as   of
                                        August 6, 1991,  between  Knollwood Fund
                                        XI  Associates  and McNeil  Real  Estate
                                        Management, Inc. (1)

           10.6                         Termination   Agreement,  dated   as  of
                                        August   6,   1991    among    Southmark
                                        Management    Corporation,     Southmark
                                        Commercial  Management  Company,  McNeil
                                        Real  Estate  Fund XI,  Ltd.  and McNeil
                                        Real  Estate  Fund XI,  Ltd.  and McNeil
                                        Real Estate Management, Inc. (1)

           10.7                         Property   Management  Agreement,  dated
                                        as of August  6,  1991,  between  McNeil
                                        Real  Estate  Fund XI,  Ltd.  and McNeil
                                        Real Estate Management, Inc. (1)

           10.8                         Property   Management  Agreement,  dated
                                        as of August 6, 1991,  between Knollwood
                                        Fund  XI  Associates   and  McNeil  Real
                                        Estate Management, Inc. (1)

           10.9                         Property Management Agreement, dated  as
                                        of August 6,  1991,  between  Sun Valley
                                        Fund  XI  Associates   and  McNeil  Real
                                        Estate Management, Inc. (1)

           10.10                        Property Management Agreement,  dated as
                                        of August 6, 1991  between The Park Fund
                                        XI  Associates  and McNeil  Real  Estate
                                        Management, Inc. (1)

           10.12                        Amendment  of     Property    Management
                                        Agreement,  dated March 5, 1993, between
                                        McNeil Real  Estate  Fund XI,  Ltd.  and
                                        McNeil  Real  Estate  Management,   Inc.
                                        (Incorporated   by  reference,   to  the
                                        Annual Report of McNeil Real Estate Fund
                                        XI, Ltd. (File No. 0-9783), on Form 10-K
                                        for the period ended December 31, 1992)

           10.13                        Loan  Agreement  dated  June  24,  1993,
                                        between  Lexington  Mortgage Company and
                                        McNeil Real Estate Fund XI, Ltd. (2)

           10.14                        Master  Property  Management  Agreement,
                                        dated  as  of  June  24,  1993,  between
                                        McNeil Real Estate Management,  Inc. and
                                        McNeil Real Estate Fund XI, Ltd. (2)

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
           Exhibit
           Number                           Description
           -------                          ------------
           <S>                          <C>
           10.15                        Multifamily   Note,   dated  November 1,
                                        1993   between   Value   Line   Mortgage
                                        Corporation  and  Acacia  Lakes  Fund XI
                                        Limited Partnership. (2)

           10.16                        Modification  of Deed of Trust Note,
                                        dated   December   15,   1993,   between
                                        American  Mortgages,  Inc. and Knollwood
                                        Fund XI Associates. (2)

           10.17                        Modification  of  Deed  of  Trust  Note,
                                        dated   December   20,   1993,   between
                                        American Mortgages,  Inc. and Sun Valley
                                        Fund XI Associates. (2)

           10.18                        Deed of Trust Note, dated April 5, 1989,
                                        between The Park Fund XI Associates  and
                                        American Mortgages, Inc. (3)

           10.19                        Installment  Note,  dated  December  28,
                                        1990, between The State of Oregon Public
                                        Employees'  Retirement  Fund and  McNeil
                                        Real Estate Fund XI, Ltd. (3)

           11.                          Statement  regarding    computation   of
                                        Net   Income    (Loss)    per    limited
                                        partnership  unit (see Item 8 - Note 1 -
                                        "Organization and Summary of Significant
                                        Accounting Policies).

           22.                          List of subsidiaries of the Partnership.
                                        (2)

</TABLE>

                (1)              Incorporated by reference to the Annual  Report
                                 of McNeil Real Estate Fund XI,  Ltd.  (File No.
                                 0-9783),  on  Form 10-K  for  the period  ended
                                 December   31,  1991,  as    filed   with   the
                                 Securities   and     Exchange    Commission  on
                                 March 29, 1992.

                (2)              Incorporated by reference to the Annual  Report
                                 of McNeil Real Estate Fund XI,  Ltd.  (File No.
                                 0-9783),  on Form  10-K  for  the period  ended
                                 December   31,  1993,  as  filed    with    the
                                 Securities    and    Exchange   Commission   on
                                 March 30, 1994.





<PAGE>
                (3)              Incorporated by reference to the Annual  Report
                                 of McNeil Real Estate Fund XI,  Ltd.  (File No.
                                 0-9783),  on Form 10-K  for  the  period  ended
                                 December   31,  1993,  as   filed   with    the
                                 Securities    and   Exchange    Commission   on
                                 March 30, 1995.

           27.                   Financial  Data  Schedule for  the  year  ended
                                 December 31, 1997.


(B)  Reports on Form 8-K.  There  were no  reports on Form 8-K filed  during the
quarter ended December 31, 1997.


<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.
                              A Limited Partnership

                                 SIGNATURE PAGE


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.


                                McNEIL REAL ESTATE FUND XI, LTD.

                                By:  McNeil Partners, L.P., General Partner

                                     By: McNeil Investors, Inc., General Partner



March 31, 1998                       By:  /s/  Robert A. McNeil
--------------                           ---------------------------------------
Date                                      Robert A. McNeil
                                          Chairman of the Board and Director
                                          (Principal Executive Officer)


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




March 31, 1998                       By:  /s/  Ron K. Taylor
--------------                           ---------------------------------------
Date                                      Ron K. Taylor
                                          President and Director of McNeil
                                           Investors, Inc.
                                          (Principal Financial Officer)




March 31, 1998                       By:  /s/  Brandon K. Flaming
--------------                           ---------------------------------------
Date                                      Brandon K. Flaming
                                          Vice President of McNeil
                                           Investors, Inc.
                                          (Principal Accounting Officer)