Exhibit (13)

                          Qualified Properties 80, L.P.

                        1998 Annual Report to Unitholders
<PAGE>

--------------------------------------------------------------------------------
                          QUALIFIED PROPERTIES 80, L.P.
--------------------------------------------------------------------------------



     Qualified Properties 80, L.P., is a limited partnership formed in 1981
     to acquire, operate and hold for investment commercial real estate.
     The Partnership's two remaining properties, 889 Ridgelake Office
     Building and 959 Ridgeway Office Building, are both located in
     Memphis, Tennessee in close proximity to Interstate 240. The 889
     Ridgelake Office Building is a multi-tenanted, three-story building,
     containing 104,720 rentable square feet. The 959 Ridgeway Office
     Building is a multi-tenanted, two-story building, containing 32,771
     rentable square feet. Provided below is a comparison of lease levels
     at the properties as of December 31, 1998 and 1997.



                                                            Percentage
                                                              Leased
     Property                          Location         1998          1997
     --------                          --------         ----          ----
     959 Ridgeway Office Building      Memphis, TN       63%           63%
     889 Ridgelake Office Building     Memphis, TN      100%          100%



                                    Contents

                1  Message to Investors

                3  Consolidated Financial Statements

                6  Notes to the Consolidated Financial Statements

               11  Report of Independent Auditors

               12  Net Asset Valuation
<PAGE>
1


--------------------------------------------------------------------------------
                              MESSAGE TO INVESTORS
--------------------------------------------------------------------------------


We are pleased to present the 1998 Annual Report for Qualified Properties 80,
L.P. (the "Partnership"). Included in this report is an update on the operations
and marketing of the Partnership's remaining properties, 889 Ridgelake Office
Building and 959 Ridgeway Office Building. Also included are financial
highlights and the Partnership's audited financial statements for the year ended
December 31, 1998.

Marketing Update
As previously reported, we are actively marketing the Partnership's remaining
properties for sale and have engaged a real estate brokerage firm to assist in
our marketing efforts. We are pleased to report that the Partnership has
executed a letter of intent with the joint venture partner to purchase both
properties and is currently negotiating a purchase and sale agreement. While we
currently anticipate that the properties will be sold during the first half of
1999, there can be no assurance that the sales will occur within this time
frame. Once the properties are sold, we will distribute the net proceeds,
together with the Partnership's remaining cash reserves (after payment of, or
provision for, the Partnership's liabilities and expenses) and subsequently
dissolve the Partnership.

Leasing Update
889 Ridgelake Office Building - During 1998, one tenant vacated its space
totaling 2,215 square feet and we subsequently re-leased the space. We also
executed one lease renewal totaling 6,000 square feet. As a result, as of
year-end 1998, the property's occupancy was 100%, unchanged from a year earlier.
Two leases totaling 14,621 square feet are scheduled to expire during 1999,
representing 16.5% of the property's leasable area.

959 Ridgeway Office Building - There was no leasing activity at the property
during the year and the property's 63% occupancy rate remained unchanged from
year-end 1997. We continue to actively market the property's vacant space. There
are no scheduled lease expirations in 1999.

Memphis Market Update
The Memphis office market continued to perform well during 1998. In particular,
the East Memphis submarket where both properties are located, remains one of the
strongest areas for growth with a vacancy rate for the year ending December 31,
1998 of 6.3% compared to 7.2% in 1997. New construction has been strong in the
East Memphis submarket, with 417,000 square feet delivered in 1998. Demand has
kept pace with this new supply, and rental rates have risen.

Cash Distributions
On April 7, 1998, the Partnership paid a special cash distribution totaling
$261.45 per Unit to Limited Partners representing the net proceeds from the sale
of the Stevens Creek Office Building in February 1998. Since inception, the
Partnership has paid total cash distributions of $813.25 per original $500 Unit,
including $425.45 per Unit in return of capital payments which have reduced the
size of each Unit from $500 to $74.55.

Financial Highlights
Provided below is a review of Partnership operations for the year ended December
31st of the indicated years:

<TABLE>
<CAPTION>
                                                        1998          1997
      --------------------------------------------------------------------
      <S>                                         <C>           <C>       
      Total Income                                $2,153,130    $3,502,577
      Property Operating Expenses                    998,730     1,915,443
      Net Income                                   6,012,382     1,693,288
      Net Cash provided by Operating Activities      324,507       954,925
      --------------------------------------------------------------------
</TABLE>

   o  Total income and property operating expenses decreased due to the sale of
      Swenson Business Park - Building A and Stevens Creek Office Building in
      November 1997 and February 1998, respectively.
<PAGE>
2

   o  The increase in net income is primarily attributable to the $7,829,940
      gain on the sale of Stevens Creek Office Building.

   o  The decrease in net cash provided by operating activities is primarily
      attributable to a decrease in total income as a result of the sale of two
      properties.

General Information
We will keep you updated with respect to the potential sales of the
Partnership's remaining two properties. In the interim, questions regarding the
Partnership should be directed to your Financial Consultant or Partnership
Investor Services. All requests for a change of address or transfer should be
submitted in writing to the Partnership's administrative agent at P.O. Box 7090,
Troy, MI 48007-7090. Partnership Investor Services can be reached at (617)
342-4225, and the Partnership's administrative agent can be reached at (248)
637-7900.

Very truly yours,

QP80 Real Estate Services Inc.              Hogan Stanton Investment, Inc.
General Partner                             General Partner of HS Advisors, Ltd.



Michael T. Marron                           Mark P. Mikuta
President                                   President

March 30, 1999
<PAGE>
3

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
                                                     At December 31,   At December 31,
                                                               1998              1997
-------------------------------------------------------------------------------------
<S>                                                     <C>               <C>        
Assets Real estate, at cost:
  Land                                                  $        --       $ 1,348,365
  Buildings and improvements                                     --        10,562,735
                                                        -----------------------------
                                                                 --        11,911,100
  Less accumulated depreciation                                  --        (6,516,375)
                                                        -----------------------------
                                                                 --         5,394,725
Real estate assets held for disposition                   5,605,771         7,359,706
Cash and cash equivalents                                 1,938,059         1,023,370
Restricted cash                                              77,510            50,567
Prepaid expenses, net of accumulated amortization
  of $132,997 in 1997                                        10,225           205,922
Rent and other receivables                                    3,523               439
Deferred rent receivable                                         --           113,664
-------------------------------------------------------------------------------------
      Total Assets                                      $ 7,635,088       $14,148,393
=====================================================================================
Liabilities and Partners' Capital (Deficit)
Liabilities:
  Accounts payable and accrued expenses                 $   269,259       $   220,073
  Due to affiliates                                          11,946             4,922
  Security deposits payable                                      --            60,521
  Mortgage note payable                                   3,832,621         3,930,621
                                                        -----------------------------
      Total Liabilities                                   4,113,826         4,216,137
                                                        -----------------------------
Minority interest                                         1,120,945            13,865
Partners' Capital (Deficit):
  General Partners                                         (225,429)         (156,069)
  Limited Partners (51,234 units outstanding)             2,625,746        10,074,460
                                                        -----------------------------
      Total Partners' Capital                             2,400,317         9,918,391
-------------------------------------------------------------------------------------
      Total Liabilities and Partners' Capital           $ 7,635,088       $14,148,393
=====================================================================================
</TABLE>


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
For the years ended December 31, 1998, 1997 and 1996
                                              General         Limited
                                             Partners        Partners           Total
-------------------------------------------------------------------------------------
<S>                                         <C>          <C>             <C>         
Balance at December 31, 1995                $(123,029)   $ 12,725,437    $ 12,602,408
Net income                                     25,476         234,153         259,629
Distributions                                 (36,803)     (1,803,437)     (1,840,240)
-------------------------------------------------------------------------------------
Balance at December 31, 1996                 (134,356)     11,156,153      11,021,797
Net income                                      8,345       1,684,943       1,693,288
Distributions                                 (30,058)     (2,766,636)     (2,796,694)
-------------------------------------------------------------------------------------
Balance at December 31, 1997                 (156,069)     10,074,460       9,918,391
Net income                                     65,945       5,946,437       6,012,382
Distributions                                (135,305)    (13,395,151)    (13,530,456)
-------------------------------------------------------------------------------------
Balance at December 31, 1998                $(225,429)   $  2,625,746    $  2,400,317
=====================================================================================
</TABLE>

See accompanying notes to the consolidated financial statements.
<PAGE>
4

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31,
                                                 1998            1997            1996
-------------------------------------------------------------------------------------
<S>                                       <C>             <C>             <C>        
Income
Rental                                    $ 1,867,782     $ 3,144,174     $ 3,390,655
Interest                                      234,732          19,046          19,441
Other                                          50,616         339,357         403,298
                                          -------------------------------------------
      Total Income                          2,153,130       3,502,577       3,813,394
-------------------------------------------------------------------------------------
Expenses
Property operating                            998,730       1,915,443       1,706,859
Depreciation and amortization                 285,572         563,501       1,240,363
Interest                                      410,815         419,922         426,578
General and administrative                    388,205         253,729         185,101
                                          -------------------------------------------
      Total Expenses                        2,083,322       3,152,595       3,558,901
-------------------------------------------------------------------------------------
Income before minority interest and
  gain on sale of real estate                  69,808         349,982         254,493
Minority interest                          (1,887,366)          6,518           5,136
                                          -------------------------------------------
Income (loss) before gain on sale
of real estate                             (1,817,558)        356,500         259,629
Gain on sale of real estate                 7,829,940       1,336,788              --
-------------------------------------------------------------------------------------
      Net Income                          $ 6,012,382     $ 1,693,288     $   259,629
=====================================================================================
Net Income Allocated:
To the General Partners                   $    65,945     $     8,345     $    25,476
To the Limited Partners                     5,946,437       1,684,943         234,153
-------------------------------------------------------------------------------------
                                          $ 6,012,382     $ 1,693,288     $   259,629
=====================================================================================
Per limited partnership unit
(51,234 outstanding)                         $ 116.06         $ 32.89          $ 4.57
-------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to the consolidated financial statements.
<PAGE>
5

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
                                                 1998            1997            1996
-------------------------------------------------------------------------------------
<S>                                      <C>              <C>             <C>        
Cash Flows From Operating Activities:
Net income                               $  6,012,382     $ 1,693,288     $   259,629
Adjustments to reconcile net income
to net cash provided by operating
activities:
  Depreciation                                259,261         520,953       1,138,181
  Amortization                                 26,311          42,548         102,182
  Gain on sale of real estate              (7,829,940)     (1,336,788)             --
  Minority interest in gain (loss) of
  consolidated venture                      1,887,366          (6,518)         (5,136)
  Increase (decrease) in cash arising
  from changes in operating assets and
  liabilities:
    Restricted cash                           (26,943)        136,670         (71,716)
    Prepaid expenses                           (7,313)        (40,088)       (145,727)
    Rent and other receivables                 (3,084)          1,438          29,581
    Deferred rent receivable                    7,546          16,426         (11,655)
    Accounts payable and accrued
    expenses                                   52,418         (45,736)         80,594
    Prepaid rent                                   --         (15,212)         15,212
    Due to affiliates                           7,024          (4,289)          1,142
    Security deposits payable                 (60,521)         (7,767)             --
                                         --------------------------------------------
Net cash provided by operating
activities                                    324,507         954,925       1,392,287
-------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Proceeds from sale of real estate          15,223,030       2,909,697              --
Additions to real estate                     (224,106)             --        (151,608)
                                         --------------------------------------------
Net cash provided by (used for)
investing activities                       14,998,924       2,909,697        (151,608)
-------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Cash distributions, including
distributions to minority investors       (14,310,742)     (3,136,511)     (1,840,240)
Principal payments on mortgage
note payable                                  (98,000)        (88,272)        (79,510)
                                         --------------------------------------------
Net cash used for financing activities    (14,408,742)     (3,224,783)     (1,919,750)
-------------------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents                          914,689         639,839        (679,071)
Cash and cash equivalents,
beginning of year                           1,023,370         383,531       1,062,602
                                         --------------------------------------------
Cash and cash equivalents,
end of year                              $  1,938,059     $ 1,023,370     $   383,531
=====================================================================================
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest   $    410,815     $   419,922     $   426,578
-------------------------------------------------------------------------------------
Supplemental Disclosure of Non-Cash Investing Activities:
Write off of fully depreciated
tenant improvements                      $         --     $   424,549     $   789,514
-------------------------------------------------------------------------------------

Due to the sale of Swenson Business Park - Building A, deferred rent receivable and
prepaid leasing in the amounts of $40,141, and $35,322 were reflected in the
calculation of gain on sale for year ended 1997.

In connection with the General Partners' intent to sell the properties, real estate
held for investment, deferred rent receivable and prepaid leasing commissions in the
amounts of $5,310,647, $106,118, and $189,006, respectively, were reclassified to
"Real estate assets held for disposition" in 1998. In 1996, a similar transfer was
made in connection with the General Partners' intent to sell Swenson Business Park -
Building A and Stevens Creek Office Building.
-------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to the consolidated financial statements.
<PAGE>
6

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998, 1997 and 1996

1. Organization
Qualified Properties 80, L.P. (the "Partnership") was organized as a Limited
Partnership under the laws of the Commonwealth of Virginia pursuant to a
Certificate and Agreement of Limited Partnership dated and filed January 13,
1981 (the "Partnership Agreement"). The Partnership was formed for the purpose
of investing in and operating certain types of commercial real estate. The
General Partners of the Partnership are QP80 Real Estate Services Inc. ("QP80
Services"), which is an affiliate of Lehman Brothers Inc. (see below) and HS
Advisors, Ltd. ("HS Advisors"), which is an affiliate of Goodman Segar Hogan,
Inc. ("GSH"). The General Partners expect to liquidate the Partnership in 1999.

On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of its domestic
retail brokerage and asset management businesses to Smith Barney, Harris Upham &
Co. Incorporated ("Smith Barney"). Subsequent to the sale, Shearson Lehman
Brothers Inc. changed its name to Lehman Brothers Inc. The transaction did not
affect the ownership of the General Partners. However, the assets acquired by
Smith Barney included the name "Hutton." Consequently, effective October 22,
1993, Hutton Real Estate Services, Inc., a general partner, changed its name to
QP80 Real Estate Services Inc., and effective August 3, 1995, Hutton/GSH
Qualified Properties 80 L.P. changed its name to Qualified Properties 80, L.P.
to delete any reference to "Hutton."

On the 1st day of August, 1993, GSH transferred all of its leasing, management
and sales operations to Goodman Segar Hogan Hoffler, L.P., a Virginia limited
partnership ("GSHH"). On that date, the leasing, management and sales operations
of a portfolio of properties owned by the principals of Armada/Hoffler ("HK")
were also obtained by GSHH. The General Partner of GSHH is Goodman Segar Hogan
Hoffler, Inc., a Virginia corporation ("GSHH Inc."), which has a one percent
interest in GSHH. The stockholders of GSHH Inc. are GSH with a sixty-two percent
stock interest and H.K. Associates, L.P., an affiliate of HK, with a
thirty-eight percent stock interest. The remaining ninety-nine percent interests
in GSHH are limited partnership interests owned fifty percent by GSH and
forty-nine percent by HK. On September 28, 1998, GSH sold its general partner
and limited partner interests in GSHH to The St. Joe Company, an unaffiliated
company. The transactions did not affect the ownership of the General Partners.

2. Significant Accounting Policies

Consolidation  The consolidated financial statements include the accounts of the
Partnership and its ventures, 889 Ridge Lake Boulevard Partnership, Alpha
Building Associates Joint Venture ("Swenson Business Park - Building A") and
5300 Stevens Creek Boulevard Joint Venture. Intercompany accounts and
transactions between the Partnership and the ventures are eliminated in
consolidation.

Real Estate Investments  Real estate investments, which consist of commercial
buildings, are recorded at cost less accumulated depreciation. Cost includes the
initial purchase price of the property plus closing costs, acquisition and legal
fees, other miscellaneous acquisition costs and capital improvements.

Depreciation is computed using the straight-line method based upon the estimated
useful lives of the respective depreciable properties with the exception of
tenant improvements which are depreciated over the terms of the respective
leases.

Real Estate Assets Held for Disposition  Real estate assets held for disposition
are carried at the lower of carrying value or fair market value less costs to
sell. During the fourth quarter of 1996, Swenson Business Park - Building A and
Stevens Creek Office Building real estate assets were reclassified as held for
disposition and were no longer depreciated. During the third quarter of 1998,
959 Ridgeway Office Building and 889 Ridgelake Office Building real estate
assets were reclassified as held for disposition and were no longer depreciated.
<PAGE>
7

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

Leases  Leases are accounted for as operating leases. Leasing commissions are
amortized over the term of the respective leases and are included in prepaid
expenses, net of accumulated amortization. During 1998, leasing commissions were
reclassified as real estate assets held for disposition and were no longer
amortized.

Deferred Rent Receivable  Deferred rent receivable consists of rental income
which is recognized on a straight-line basis over the term of the respective
leases but will not be received until later periods as a result of rental
concessions. During 1998, deferred rent receivable was reclassified as real
estate assets held for disposition and was no longer amortized.

Accounting for Impairment  In March 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 121 "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("FAS 121"), which requires impairment losses to be recorded on long-lived
assets used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. FAS 121 also addresses the accounting for
long-lived assets that are expected to be disposed of. The Partnership adopted
FAS 121 during the fourth fiscal quarter of 1995.

Fair Value of Financial Instruments  Statement of Financial Accounting Standards
No. 107, "Disclosures about Fair Value of Financial Instruments" ("FAS 107"),
requires that the Partnership disclose the estimated fair values of its
financial instruments. Fair values generally represent estimates of amounts at
which a financial instrument could be exchanged between willing parties in a
current transaction other than in forced liquidation.

Fair value estimates are subjective and are dependent on a number of significant
assumptions based on management's judgment regarding future expected loss
experience, current economic conditions, risk characteristics of various
financial instruments, and other factors. In addition, FAS 107 allows a wide
range of valuation techniques, therefore, comparisons between entities, however
similar, may be difficult.

Cash and Cash Equivalents  Cash and cash equivalents consist of short-term
highly liquid investments which have maturities of three months or less from the
date of purchase. The carrying value approximates fair value because of the
short maturity of these instruments.

Restricted Cash  Restricted cash primarily represents cash held in connection
with future real estate tax payments.

Income Taxes  No provision for income taxes has been made in the consolidated
financial statements of the Partnership since such taxes are the responsibility
of the individual partners rather than of the Partnership.

Use of Estimates  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount 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.

Reclassifications  Certain prior year amounts have been reclassified in order to
conform to the current year's presentation.
<PAGE>
8

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

3. Partnership Agreement
The Partnership Agreement provides that the net cash from operations, as
defined, for each fiscal year will be distributed on a quarterly basis 98% to
the Limited Partners and 2% to the General Partners until each Limited Partner
has received an 8% annual return. Remaining net cash from operations, if any,
will be distributed to the General Partners until they have received 10% of the
aggregate net cash from operations distributed to all partners. Thereafter, any
net cash from operations will be distributed 90% to the Limited Partners and 10%
to the General Partners. Net proceeds from sales or refinancings shall be
distributed 99% to the Limited Partners and 1% to the General Partners until
each Limited Partner has received an amount equal to his adjusted capital
investment, as defined, and a 9% cumulative annual return thereon, reduced by
any net cash from operations actually distributed to such Limited Partner. The
balance of net proceeds will be distributed 85% to the Limited Partners and 15%
to the General Partners.

Losses for any fiscal year shall be allocated 98% to the Limited Partners and 2%
to the General Partners, provided, however, that the deficit balance of the
General Partners' capital account does not exceed the amount they are required
to contribute upon dissolution of the Partnership, as discussed below. Income
for any fiscal year and all gain from sales will be allocated to the General
Partners in an amount equal to the net cash from operations distributed or
distributable to the General Partners for such year, less 1% of the amount of
net cash from operations that exceeds taxable income for such year, if any, and
the balance shall be allocated to the Limited Partners, in accordance with their
unit ownership. If net cash from operations is not distributed or distributable
to the General Partners, any income of the Partnership for such year will be
allocated 99% to the Limited Partners and 1% to the General Partners. In 1998,
income was allocated to the General Partners such that their deficit did not
increase beyond their obligations required by the Partnership Agreement,
discussed below.

Upon the dissolution of the Partnership, the General Partners shall contribute
to the capital of the Partnership, an amount not to exceed 1% of the total
capital contributions made by all the Partners less any prior capital
contributions made by the General Partners, in order to restore the negative
capital accounts of the General Partners. In no event shall the General Partners
be obligated to contribute an amount in excess of any negative balance in their
respective capital accounts.

4. Real Estate Investments
As of December 31, 1998, real estate investments consist of two commercial
office buildings acquired, directly or indirectly, by the Partnership. Purchase
price amounts exclude acquisition fees and other closing costs.

<TABLE>
<CAPTION>
                   Square                     Date                     Purchase
Property Name        Feet    Location     Acquired    Ownership           Price
-------------------------------------------------------------------------------
<S>                <C>       <C>           <C>        <C>            <C>       
959 Ridgeway       29,170    Memphis,      3/11/81    Fee            $1,707,125
Office Building              Tennessee                Simple

889 Ridgelake      94,823    Memphis,      2/01/82    General        $8,062,500
Office Building              Tennessee                Partnership
-------------------------------------------------------------------------------
</TABLE>

The partnership agreement for 889 Ridgelake Boulevard Partnership provides that
all losses, income, net cash from operations and net proceeds from a sale or
refinancing will be allocated 95% to the Partnership and 5% to the coventurer.

On November 10, 1997, the Partnership closed on the sale of Swenson Business
Park Building A. The property was sold for net proceeds of $2.9 million, to an
unaffiliated third party. The transaction resulted in a gain on sale of
approximately $1.3 million, which is reflected in the Partnership's statement of
operations for the year ended December 31, 1997. For the year ended December 31,
1997, Swenson Business Park Building A had income from operations totaling
approximately $61,000.
<PAGE>
9

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

On February 2, 1998, the Partnership closed on the sale of Stevens Creek Office
Building. The property was sold for net proceeds of $15,223,030 to 5300 Stevens
Creek Boulevard Inc. (the "Buyer"), a Delaware Corporation unaffiliated with the
Partnership. The transaction resulted in a gain on sale of $7,829,940, which is
reflected in the Partnership's statement of operations for the year ended
December 31, 1998. The property was reclassified on the Consolidated Balance
Sheet as "Real estate assets held for disposition" during 1996. For the year
ended December 31, 1997, Stevens Creek Office Building had income from
operations totaling approximately $857,000.

The Joint Venture agreement for 5300 Stevens Creek Boulevard, which owned the
Stevens Creek Office Building, substantially provides that:

i.   Net cash from operations will first be distributed 100% to the Partnership
     until it has received an annual, noncumulative 10 3/8% return on its
     capital contribution, as defined. Secondly, net cash from operations will
     be distributed to the coventurers until they have received an annual amount
     of $207,500. Any remaining net cash from operations will be distributed 50%
     to the Partnership and 50% to the coventurers.

ii.  Net proceeds from a sale or refinancing will be distributed 100% to the
     Partnership until it has received 120.8% of its capital contribution and a
     cumulative return of 10 3/8% on its capital contribution as reduced by any
     prior distributions. The next $2,000,000 of net proceeds will be
     distributed to the coventurers. Any remaining net proceeds will be
     distributed 50% to the Partnership and 50% to the coventurers.

iii. Depreciation will be allocated 40% to the Partnership and 60% to the
     coventurers. Income will be allocated in substantially the same manner as
     net cash from operations. Losses will be allocated 50% to the Partnership
     and 50% to the coventurers.

The Partnership has engaged a real estate broker to assist in selling the
Partnership's two remaining properties, 889 Ridgelake Office Building and 959
Ridgeway Office Building. Accordingly, the Partnership's real estate assets,
deferred rent receivable and prepaid leasing costs were reclassified on the
consolidated balance sheets at December 31, 1998 to "Real estate assets held for
disposition," and the Partnership suspended depreciation and amortization 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." It is currently anticipated that the properties will be sold and the
Partnership liquidated in 1999, however, there can be no assurance that either
property will be sold within this time frame, or that the sales will result in a
particular price.

5. Mortgage Note Payable
The mortgage note payable is collateralized by a first deed of trust on the 889
Ridgelake Office Building and is payable in monthly installments of $42,174
including interest at 10-1/2% through 2014. Annual maturities of the mortgage
note principal over the next five years are:

<TABLE>
<CAPTION>
                    Year                              Amount
                    ----------------------------------------
                    <S>                           <C>       
                    1999                          $  108,800
                    2000                             120,790
                    2001                             134,102
                    2002                             148,880
                    2003                             165,287
                    Thereafter                     3,154,762
                    ----------------------------------------
                    Total                         $3,832,621
                                                  ==========
</TABLE>

Based on the borrowing rates currently available to the Partnership for mortgage
loans with similar terms and average maturities, the fair value of long-term
debt approximates carrying value.
<PAGE>
10

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

6. Rental Income Under Operating Leases

Future minimum rental income to be received on noncancellable operating leases,
as of December 31, 1998 is as follows:

<TABLE>
<CAPTION>
                    Year                              Amount
                    ----------------------------------------
                    <S>                           <C>       
                    1999                          $1,535,380
                    2000                           1,476,199
                    2001                             658,337
                    2002                             392,309
                    2003                              97,407
                    ----------------------------------------
                    Total                         $4,159,632
                                                  ==========
</TABLE>

Generally, leases are for periods of 3 to 6 years and allow for increases in
certain property operating expenses to be passed on to the tenants.

Two tenants at 889 Ridgelake and one tenant at 959 Ridgeway generated rental
revenue in excess of 10% of the Partnership's 1998 consolidated rental revenues.
The rental income from these tenants totaled $720,362, $300,998 and $206,550 or
39%, 16% and 11%, respectively, of the Partnership's consolidated rental
revenue. The leases are scheduled to expire on December 31, 2000, March 31, 2002
and March 31, 2003 and as of December 31, 1998, the tenants are current in their
rental payments. Rental income derived from one of the above tenants in 1997 and
1996 was $723,980 and $717,713, or 23% and 21%, respectively, of the
Partnership's consolidated rental revenues for each year.

7. Transactions with Related Parties
The following is a summary of reimbursable amounts for out-of-pocket expenses
and property management fees earned by the General Partners which are recorded
in general and administrative expense during the years ended December 31, 1998,
1997 and 1996:

<TABLE>
<CAPTION>
                                                    1998        1997        1996
--------------------------------------------------------------------------------
<S>                                              <C>         <C>         <C>    
Reimbursement of out-of-pocket expenses          $   246     $ 1,425     $ 2,757
Property management fees                          34,596      28,715      37,979
--------------------------------------------------------------------------------
                                                 $34,842     $30,140     $40,736
                                                 ===============================
</TABLE>

At December 31, 1998 and 1997, $11,946 and $4,922 were payable to the General
Partners, respectively.

8. Reconciliation of Net Income to Taxable Income
Net income reported on the financial statements exceeded taxable income by
$449,200 for the year ended December 31, 1998. Taxable income exceeded net
income reported in the financial statements by $821,656 and $263,337 for the
years ended December 31, 1997 and 1996, respectively. These variances are due to
approximately $550,000 of rental concessions granted in 1988 and differences in
the tax basis versus the financial statement basis of the buildings and
improvements and different methods of recognizing depreciation expense. The
Partnership uses accelerated methods for recognizing depreciation for tax
purposes and the straight-line method for financial statement purposes. In
addition, rental income is recognized when received or receivable for tax
purposes and on a straight-line basis for financial statement purposes.
<PAGE>
11

--------------------------------------------------------------------------------
                         REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------



General and Limited Partners
Qualified Properties 80, L.P.
  and Consolidated Ventures

We have audited the accompanying consolidated balance sheets of Qualified
Properties 80, L.P. and Consolidated Ventures as of December 31, 1998 and 1997,
and the related consolidated statements of operations, partners' capital
(deficit) and cash flows for each of the three years in the period ended
December 31, 1998. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Qualified
Properties 80, L.P. and Consolidated Ventures at December 31, 1998 and 1997, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles.


                                                ERNST & YOUNG LLP

New York, New York
February 5, 1999
<PAGE>
12

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
                               NET ASSET VALUATION
-------------------------------------------------------------------------------------
     Comparison of Acquisition Costs to Estimated Value and Determination of
        Net Asset Value Per $74.55 Unit at December 31, 1998 (Unaudited)

                                             Date of    Acquisition    1998 Estimated
Property                                 Acquisition       Cost (1)         Value (2)
-------------------------------------------------------------------------------------
<S>                                         <C>          <C>              <C>        
959 Ridgeway                                03-11-81     $1,815,517       $ 1,825,000
889 Ridgelake(3)                            02-01-82      3,802,102         3,942,379
                                                         ----------       -----------
                                                         $5,617,619         5,767,379
                                                         ==========
Cash and cash equivalents                                                   1,938,059
Restricted cash                                                                77,510
Rent and other receivables                                                      3,523
Prepaid expenses                                                               10,225
                                                                           ----------
                                                                            7,796,696
Less:
  Total liabilities - net of mortgage note payable                           (281,205)
  Minority interest                                                        (1,120,945)
                                                                          -----------
Partnership Net Asset Value(4)                                            $ 6,394,546
                                                                          ===========
Net Asset Value Allocated:
  Limited Partners                                                        $ 6,330,601
  General Partners                                                             63,945
                                                                          -----------
                                                                          $ 6,394,546
                                                                          ===========
Net Asset Value Per Unit
  (51,234 units outstanding)                                                  $123.56
-------------------------------------------------------------------------------------

<FN>
(1) Purchase price plus General Partners' acquisition fees.

(2) This represents the Partnership's share of the December 31, 1998 estimated
    values for 959 Ridgeway and 889 Ridgelake which were determined by the
    General Partners, with the assistance of the broker engaged to market the
    properties. The Partnership's share of the December 31, 1998 estimated value
    takes into account the allocation provisions of the joint venture agreement
    governing the distribution of sales proceeds for 889 Ridgelake.

(3) The Acquisition Cost and Partnership's share of the December 31, 1998
    estimated values are net of the outstanding mortgage loan balances at the
    time of acquisition and at December 31, 1998, respectively.

(4) The Net Asset Value assumes a hypothetical sale on December 31, 1998 of the
    Partnership's properties at their estimated values and the distribution of
    the net proceeds to Limited Partners in the liquidation of the Partnership.
    Real estate brokerage commissions and other costs associated with selling
    the Partnership's properties are not determinable at this time and as such
    are not included in the calculation. Since the Partnership would incur these
    expenses in the sale of its properties cash available for the distribution
    to the Partners would be less than the Net Asset Value. The current market
    value of the Units may differ substantially from their Net Asset Value.
</FN>
</TABLE>

Limited Partners should note that properties' values are estimated and the
actual values realizable upon sale may be significantly different. The estimated
value does not reflect the actual costs which would be incurred in selling the
properties. As a result of these factors and the illiquid nature of an
investment in Units of the Partnership, the variation between the estimated
value of the Partnership's properties and the price at which Units of the
Partnership could be sold may be significant. Fiduciaries of Limited Partners
which are subject to ERISA or other provisions of law requiring valuations of
Units should consider all relevant factors, including, but not limited to Net
Asset Value per Unit, in determining the fair market value of the investment in
the Partnership for such purposes.
<PAGE>
F-1

QUALIFIED PROPERTIES 80, L.P.
AND CONSOLIDATED VENTURES

Schedule III - Real Estate and Accumulated Depreciation
December 31, 1998

<TABLE>
<CAPTION>
Commercial Property Held for Disposition:         959             889
Consolidated Ventures:                       Ridgeway       Ridgelake           Total
-------------------------------------------------------------------------------------

<S>                                       <C>             <C>             <C>        
Location                                  Memphis, TN     Memphis, TN              na
Construction date                                1977            1980              na
Acquisition date                                  (1)        02-01-82              na
Life on which depreciation in latest
income statement is computed(2)          1 - 25 years    1 - 25 years              na
Encumbrances                              $        --     $ 3,832,621     $ 3,832,621
                                          -------------------------------------------
Initial cost to Partnership:

  Land                                        424,954         923,411       1,348,365
  Buildings and improvements                1,430,576       7,792,436       9,223,012
Costs capitalized subsequent to
acquisition:
  Buildings and improvements                  763,126       1,783,236       2,546,362
  Deferred Rent Receivable                         --         106,118         106,118
  Prepaid Leasing Costs, net                   81,019         107,987         189,006
Retirements(3)                              (346,039)        (685,417)     (1,031,456)
Gross amount at which carried
at close of period(4):
  Land                                    $   424,954     $   923,411     $ 1,348,365
  Buildings and improvements                1,847,663       8,890,255      10,737,918
  Deferred Rent Receivable                         --         106,118         106,118
  Prepaid Leasing Costs, net                   81,019         107,987         189,006
                                          -------------------------------------------
                                          $ 2,353,636     $10,027,771     $12,381,407
                                          -------------------------------------------
Accumulated depreciation(5)               $ 1,121,839     $ 5,653,797     $ 6,775,636
-------------------------------------------------------------------------------------

<FN>
(1) The Partnership acquired its Joint Venture interest on March 11, 1981 and
    subsequently acquired the minority partner's interest on March 1, 1982. The
    Partnership is now the sole owner of the property.
(2) Tenant improvements were depreciated on a straight-line basis over the lives
    of the respective leases.
(3) Retirements are cumulative since acquisition.
(4) For Federal income tax purposes, the basis of land, buildings and
    improvements is $12,820,003.
(5) For Federal income tax purposes, the amount of accumulated depreciation is
    $9,466,278.
</FN>
</TABLE>


A reconciliation of the carrying amount of real estate and accumulated
depreciation for the years ended December 31, 1998, 1997 and 1996 follows:

<TABLE>
<CAPTION>
                                                 1998            1997            1996
-------------------------------------------------------------------------------------
<S>                                      <C>              <C>             <C>        
Real estate investments:
Beginning of year                        $ 22,475,305     $25,383,159     $25,423,462
Additions                                     224,106              --         151,608
Deferred Rent Receivable                      106,118              --         305,518
Prepaid Leasing Costs                         189,006              --         292,085
Retirements                                        --        (424,548)       (789,514)
Dispositions                              (10,613,128)     (2,483,306)             --
                                         --------------------------------------------
End of year                              $ 12,381,407     $22,475,305     $25,383,159
                                         --------------------------------------------

Accumulated depreciation:
Beginning of year                        $  9,720,874     $10,534,868     $10,186,201
Depreciation expense                          259,261         520,953       1,138,181
Retirements                                        --        (424,548)       (789,514)
Dispositions                               (3,204,499)       (910,399)             --
                                         --------------------------------------------
End of year                              $  6,775,636     $ 9,720,874     $10,534,868
-------------------------------------------------------------------------------------
</TABLE>
<PAGE>
F-2



                         Consent of Independent Auditors

      We consent to the incorporation by reference in this Annual Report
      (Form 10-K) of Qualified Properties 80, L.P. of our report dated
      February 5, 1999, included in the 1998 Annual Report of Qualified
      Properties 80, L.P. and Consolidated Ventures.

      Our audit also included the financial statement schedule of Qualified
      Properties 80, L.P. and Consolidated Ventures listed in Item 14(a).
      This schedule is the responsibility of the Partnership's management.
      Our responsibility is to express an opinion based on our audits. In our
      opinion, the financial statement schedule referred to above, when
      considered in relation to the basic financial statements taken as a
      whole, presents fairly in all material respects the information set
      forth therein.


                                                ERNST & YOUNG  LLP

      New York, New York
      February 5, 1999