<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10 - K


                     Annual Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

  For the fiscal year ended December 31, 1996   Commission File No.: 2-80756


                          INDEPRO PROPERTY FUND I, L.P.
             (Exact name of registrant as specified in its charter)


                       600 Dresher Road, Horsham, PA 19044
              (Address of principal executive offices and zip code)

          DELAWARE                                      51-0265801
(State or other jurisdiction of         (IRS Employer Identification No.)
 incorporation organization)

                                 (215) 956-0400
              (Registrant's telephone number, including area code)

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing for the
past 90 days.

                      YES ___X___               NO _______


There is no public market for the Limited Partnership Interests. Non-affiliates
hold 23,579 Limited Partnership Interests as of March 1, 1997







<PAGE>


                                     PART I
Item 1.  Business
-----------------

General

Indepro Property Fund I, L.P. ( the "Registrant" or "Partnership") is a public
limited partnership formed on May 28, 1982 under the Revised Uniform Limited
Partnership Act of the State of Delaware to invest in improved income-producing
real property. Indepro Property Fund I, Corp., a Delaware Corporation, the
General Partner of the Registrant (the "General Partner"), is wholly-owned by
Indepro Corp., a Delaware Corporation, (the "Advisor"). The General Partner and
Advisor are indirect, wholly-owned subsidiaries of The Penn Mutual Life
Insurance Company ("Penn Mutual").


The Registrant sold $15,000,000 of limited partnership interests (30,000 Limited
Partnership Units) to the public from March 16, 1983 through June 1, 1983
pursuant to a Registration Statement on Form S-11 under the Securities Act of
1933 (Registration No. 2-80756). From 1987 to 1989, the General Partner
purchased 6,421 Limited Partnership Units (see Item 5). The Registrant is
engaged solely in the business of real estate investment having used the net
offering proceeds to acquire real property investments (see Item 2). The
Registrant's sole remaining property is the Brunswick Hotel located in
Lancaster, Pennsylvania. The General Partner is actively marketing the Hotel for
sale. In accordance with the Partnership Agreement, the Partnership is expected
to dissolve upon the sale of the Brunswick Hotel, unless all or a portion of the
purchase price is payable on a deferred basis. For more information regarding
the Registrant's operations, see Item 7 "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

 Sources of Business

A portion of the business at the Brunswick Hotel is generated from bus tours
visiting the various tourist attractions in the Lancaster, Pennsylvania area.
The majority of the tour business occurs in the summer months and again in
October when the foliage in the area begins to change colors. Tour groups
accounted for 5,566 of the 59,341 room nights sold in 1996 and 4,737 of the
60,373 room nights sold in 1995 at the hotel.


The U.S. Government is the largest user of room nights at the Brunswick Hotel
and provides the majority of the revenues generated by the property. The Office
of Personnel Management (OPM) and the U.S. Army are the primary government
agencies contracting for business with the Brunswick Hotel and each agency
provides a substantial number of room nights annually. In June, 1996, OPM
notified the General Partner it would not be renewing its contract effective
June, 1998. See Item 7 "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a discussion of the U.S. Government
business and a summary of room nights occupied by the U.S. Government for the
three year period ending December 31, 1996.

The Brunswick Hotel property also includes an adjacent conference center. Prior
to 1991, this space was primarily a retail mall. In 1991, the Hotel converted
the majority of the mall to office and conference space. Hotel room night
charges generally include a provision for the use of the office and conference
space. The Hotel does not separately charge customers for these facilities in
most cases. The remaining mall retail space does not generate revenues that are
significant to the operations of the Hotel.


Competition

The Brunswick Hotel is subject to competition from other comparable properties
in its real estate market. For further information regarding the property and
comparisons with the area market, see Item 2 "Property". The hotel business
continues to suffer from a general oversupply of properties nationwide, although
occupancy levels and average daily rates have improved nationally over the past
year. The Lancaster, Pennsylvania market where the Brunswick Hotel is located
has not escaped this problem on a local basis. The Partnership believes the
Hotel's rental rates for the tourist and corporate markets are competitive with
the rates of surrounding facilities. For government business the Hotel competes
through better service because of the availability of upgraded meeting and
conference facilities, and a willingness to provide lower competitive pricing
alternatives to major governmental users of hotel room nights. Due to the
government business, the Brunswick Hotel has been able to maintain above market
occupancy levels in recent years, although at a below market average daily rate.
Because of OPM's determination not to renew its contract effective June 1998,
the current year's operating results are unlikely to continue. For additional
information on the competition and on government business, see Items 2 and 7.

Employees

The officers and employees of the General Partner and affiliates perform
services for the Registrant. The Registrant does not have any full or part-time
employees engaged in its operations.

                                       2
<PAGE>
                                     PART I

Item 2. Property
----------------

At December 31, 1996, the Registrant owned the property described below. This
real property holding is subject to a mortgage encumbrance (see Notes 3 and 5 to
the Consolidated Financial Statements).

Location                                Description of Property
                                       -------------------------

Lancaster, Pennsylvania...........      Brunswick Hotel and Conference Center:
                                        A 227 guest room hotel and office/
                                        conference center containing
                                        approximately 40,000 square feet
                                        located on approximately 1 acre.



The following is a listing of quarterly average occupancy rates for the
Partnership's investment in the Brunswick Hotel for the year ended December 31,
1996:


                                         03/96     06/96      09/96     12/96

Brunswick Hotel and Conference Center    61.7%     81.0%      82.6%     66.9%


The following is a listing of occupancy rates for the Partnership's investments
for the years:
<TABLE>
<CAPTION>


                                    1996              1995             1994            1993             1992
                                    ----              ----             ----            ----             ----
                                Occ     Avg       Occ     Avg      Occ      Avg     Occ     Avg      Occ     Avg
           Property            Rate     Rate     Rate    Rate     Rate     Rate    Rate     Rate    Rate     Rate
                               ----     ----     ----    ----     ----     ----    ----     ----    ----     ----
<S>                            <C>      <C>      <C>      <C>     <C>      <C>     <C>      <C>     <C>      <C>
Lincoln Oaks Apartments (a)     N/A      N/A      N/A     N/A      N/A       N/A    98%      $436    92%      $420
Brunswick Hotel and
  Conference Center (b)         73%     48.17     75%    $47.62    75%    $46.78    76%    $46.13    63%    $45.47

</TABLE>

   (a) End of year occupancy rates. Average rates are the monthly rental rates
       for an unfurnished apartment. Lincoln Oaks Apartments were sold on June
       22, 1994.

   (b) Average occupancy rates.  Rates represent average daily room rates.

The following summarizes the latest occupancy rates and average daily rates for
the Registrant's property in comparison with the area market:

<TABLE>
<CAPTION>

                                             Average
                                Occupancy   Occupancy
                                 Rate at     Rate in       Rooms at      Average Daily    Average Daily
           Property             Property       Area        Property    Rate at Property   Rate in Area
           --------             --------    ---------      --------    ----------------   -------------


<S>                                <C>        <C>           <C>           <C>               <C>

Brunswick Hotel                    73%         63%           227            $ 48.17          $ 68.63
   Lancaster, PA  (1)

</TABLE>

     (1) Brunswick Hotel information is based on hotel operating statements.
         Area information is based on information obtained from a report
         published by Smith Travel Research. All information is as of December
         31, 1996.

                                       3
<PAGE>



                                     PART I


Item 3.  Legal Proceedings
--------------------------


As of December 31, 1996, the Registrant was not a party to any pending legal
proceeding. However, Hotel Brunswick, Inc. and Indepro Property Fund I, Corp.
had been named as defendants in a complaint filed November 16, 1995 by Elwood
Corbett, Plaintiff. On November 27, 1993, the Plaintiff was a non-paying guest
at the Hotel who had received a complimentary room as a bus driver for a group
of visitors to the property from New York. The complaint alleged that the
Plaintiff slipped and fell in his guest room and further alleged that the
Defendants were liable for failure to provide adequate safety measures. In
January 1997, this claim was settled for a nominal amount.



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

No matters were submitted to a vote of the Registrant's partners during the year
ended December 31, 1996.





                                       4
<PAGE>


                                     PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
        Matters
-------------------------------------------------------------------------
There has not been a public market for the Limited Partnership Interests since
inception, and it is not anticipated that a public market for these interests
will develop. On August 10, 1989, August 3, 1988 and July 30, 1987, the General
Partner made presentment offers available to the Limited Partners, which offered
each year to purchase up to 25% of the Limited Partnership Units outstanding. On
the above-mentioned dates, the General Partner gave notice to the Limited
Partners of the Presentment Value of their units approximating 85% of the amount
which would have been distributable per unit to the Limited Partners assuming
that the Partnership had sold all of its properties for their fair market value
and had distributed the net sale proceeds in accordance with the Partnership
Agreement. Each Limited Partner was able to sell all or any part of his units to
the General Partner if the General Partner was notified in writing within 60
days after the date of the presentment notice. The following table summarizes
the results of these offers.

<TABLE>
<CAPTION>



                                                                              Number of
                                                      Number of Units         Investors         Date of         Aggregate
Date of Offer     Expiration Date     Offer Price         Tendered         Tendering Units      Purchase     Purchase Price
-------------     ---------------     -----------         --------         ---------------      --------     --------------
<S>                <C>                <C>              <C>                 <C>                  <C>          <C>

   8/10/89             9/29/89       $    325.32              1,235                   60        10/12/89        $  401,770
   8/03/88             9/30/88       $    312.98              1,913                   64        10/13/88        $  598,731
   7/30/87             9/28/87       $    316.66              3,273                   99        10/12/87        $1,036,428
                                                              -----                  ---                        -----------
                                                              6,421                  223                        $2,036,929
                                                              =====                  ===                        ==========

</TABLE>

As of December 31, 1996, there were 874 holders of record of partnership
interests in the Registrant not including the General Partner's interest. The
General Partner does not currently intend, nor is it obligated to make any
future presentment offers available to the Limited Partners.


A return of capital distribution was made in 1989 upon the sale of LaMancha
Apartments. This distribution amounted to $16.92 per unit. In addition, a return
of capital distribution was made on July 28, 1994 following the sale of Lincoln
Oaks Apartments. This distribution amounted to $97.38 per unit.

Cash distributions from operations, as set forth below, were made to the
Partners of the Registrant during the years ended December 31, 1996 and 1995.
<TABLE>
<CAPTION>

                                                           Per
                                                         Limited
                 Date of              Amount of        Partnership       General Partner 1%
              Distribution          Distribution          Unit           Distributive Share
              ------------          ------------       -----------       ------------------
<S>           <C>                  <C>                 <C>               <C>

                  1995
                -------
                3/13/95            $   227,273           $   7.50        $    2,273
                5/11/95            $   227,273           $   7.50        $    2,273
                5/15/95            $ 1,515,152           $  50.00        $   15,152
                8/18/95            $   227,273           $   7.50        $    2,273
               12/07/95            $   227,273           $   7.50        $    2,273


                  1996
                -------
                3/27/96            $   227,273           $   7.50        $   2,273
                6/10/96            $   227,273           $   7.50        $   2,273
                9/20/96            $   227,273           $   7.50        $   2,273
               12/20/96            $   227,273           $   7.50        $   2,273


</TABLE>


                                       5
<PAGE>


                                     PART II


Item 5.  Market for the Registrant's Common Equity and Related Stockholder
--------------------------------------------------------------------------
Matters (continued)
------------------


The General Partner made one distribution of $227,273 ($7.50 per unit) in March
1997 related to fourth quarter 1996 operations. In addition, it is anticipated
that quarterly distributions will continue at the same level in 1997 subject to
the potential sale of the Brunswick Hotel in 1997. However, the level of
distributions beyond 1997 will be dependent upon the Hotel's success in
replacing the lost OPM business. In accordance with the Partnership agreement,
the Partnership is expected to be dissolved upon the sale of its last remaining
property unless any portion of the purchase price is payable on a deferred
basis.

In 1992, the Commonwealth of Pennsylvania began requiring the withholding of
Pennsylvania state income taxes from distributions to non-Pennsylvania resident
Limited Partners. Therefore, the General Partner withheld estimated Pennsylvania
state income taxes and remitted them to the Commonwealth of Pennsylvania for
1993 through 1996 taxable income. Pennsylvania state income taxes will be
withheld from all future distributions.





                                       6
<PAGE>



Item 6.  Selected Financial Data
--------------------------------
<TABLE>
<CAPTION>

                                                                For the years ended December 31,

                                                1996            1995           1994           1993          1992
                                                ----            ----           ----           ----          ----
<S>                                             <C>             <C>            <C>            <C>           <C>


Gross profit from hotel operations              $2,784,266    $ 2,833,071     $2,815,834     $2,949,701    $2,501,314
Net income                                       1,358,856        775,464      2,144,691        929,068       681,422
  Per Limited Partnership Interest
  outstanding (30,000 units)                            45             26             71             31            22
Ordinary taxable income                            940,944        724,821        971,134        908,603       599,830
  Per Limited Partnership Interest
  outstanding (30,000 units)                            31             24             32             30            20
Section 1231 tax gain                                    -              -      1,903,227              -             -
  Per Limited Partnership Interest
  outstanding (30,000 units)                             -              -             63              -             -
Cash and short term investments                  1,217,068        967,574      2,226,528      2,257,939     1,384,110
Total investment properties, net
  of accumulated depreciation                    5,464,835      5,357,673      5,768,756      5,936,526     5,831,733
Total assets                                     7,080,520      6,718,184      8,531,028     10,477,408     9,706,567
Notes payable and other financing                  461,108        548,686        629,252        703,249       649,152
Distributions to Limited Partners
  from operations                                  900,000      2,400,000      1,125,000        300,000       187,501
  Per Limited Partnership Interest
  outstanding (30,000 units)                            30             80             38             10             6
Distributions to Limited Partners
  from liquidation of joint venture                      -              -      2,921,395              -             -
  Per Limited Partnership Interest
  outstanding (30,000 units)                             -              -             97              -             -

Properties owned on December 31                          1              1              1              2             2

</TABLE>


                                       7
<PAGE>


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

Results of Operations

The Partnership's net income for the year ended December 31, 1996 was
$1,358,856, an increase of $583,392 from 1995. This increase is primarily
attributable to the adoption of Statement of Financial Accounting Standards
121,"Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of." In accordance with this Statement, the Brunswick Hotel and
Conference Center is currently being classified as held for sale, and therefore
the Partnership discontinued recording depreciation effective January 1, 1996.
As a result of lower depreciation expenses, net income increased in 1996 by
$532,455 over 1995 levels. The Partnership's net income for 1995 of $775,464
reflected a decrease of $1,369,227 from 1994, which was attributable to the
effects of the sale of Lincoln Oaks Apartments in 1994. A gain of $1,434,295 was
recognized from this sale in 1994.

Brunswick Hotel and Conference Center
-------------------------------------

The Brunswick Hotel and Conference Center (the Hotel) is a 227 room hotel
located in downtown Lancaster, Pennsylvania. It recently has served three main
client segments which are the U.S. Government, tourist and corporate. Income
attributable to the Brunswick Hotel has fluctuated from $821,400 in 1994 to
$800,252 in 1995 to $1,405,953 in 1996. The increase in income attributable to
the Brunswick Hotel of $605,701 from the year ended December 31, 1995 to the
year ended December 31, 1996 is primarily due to the fact that depreciation has
been discontinued on the Brunswick Hotel, since it is currently being held for
sale. In addition, a refund of approximately $93,000 was received from a
successful appeal of the real estate taxes on the Hotel for years 1989 through
1992. Excluding the effects of the depreciation and the real estate tax refund,
the operations of the Brunswick Hotel decreased by approximately $19,754 from
1995 to 1996. Overall, hotel revenues decreased by $58,190 in 1996 due to a
decline in average occupancy from 74.5% in 1995 to 73.2% in 1996, partially
offset by slightly higher average room rates. In addition, the revenues from the
adjacent mall declined by $36,975 from 1995 to 1996. The Hotel's lease with the
United Artist Theater (which was located in the mall) expired in November 1995
and the operators of the theater did not extend their lease. Lower revenues were
partially offset by lower expenses. Specifically, costs of sales decreased by
$9,435 in 1996 as compared to 1995, as a result of the decline in occupancy. In
addition, other expenses related to operations of the Hotel have decreased by
$48,755 in 1996 in comparison with 1995, primarily due to a decrease in the
incentive management fee expense of $24,760 as a result of the decline in
occupancy at the Hotel and a decrease in state income taxes associated with the
operations of Hotel Brunswick, Inc., a subsidiary of the Partnership. These
taxes decreased due to the ability to use prior year suspended loss
carryforwards in computing the taxes owed.

The decrease in income related to the operations of the Brunswick Hotel and
Conference Center from 1994 to 1995 of $21,148 was primarily attributable to a
slightly lower occupancy rate in 1995 (74.5% in 1995 compared to 75.3% in 1994.)
Revenues in 1995 from the Government business were lower than anticipated due to
the OPM and Army's temporary inability to obtain appropriated funds due to the
federal government shutdown.

The following is a breakdown of occupancy attributable to each major segment,
based on room nights sold for each of the three years in the period ending
December 31:

<TABLE>
<CAPTION>
                                            1996                        1995                          1994

                                        Room Nights                 Room Nights                   Room Nights
                                            Sold           %            Sold           %              Sold             %
                                                          ---                         ---                             ---
<S>                                      <C>              <C>        <C>               <C>        <C>                  <C>

U.S. Government                               35,857      60%            38,785       64%              39,878         65%
Tourist, Corporate and Others                 23,484      40%            21,588       36%              21,135         35%
                                              ------                     -------                       ------
Total Room Nights Sold                        59,341                     60,373                        61,013
</TABLE>

Room nights attributable to the U.S. Government business decreased in 1996 due
to slightly lower attendance at government classes, primarily from the Army.
However, tourist and other room nights increased in 1996, as the General Partner
began positioning the Hotel to attract more non-government business.
Specifically, the Hotel has directly benefited through participation in several
marketing programs. In 1996, the Tourist Bureau of Lancaster began an aggressive
marketing campaign to attract new business to the Lancaster area, including the
establishment of a toll-free reservation number. In addition, the Hotel received
increased room reservations from its affiliation with Lexington Services, a
nationwide hospitality reservation system which also uses a toll-free number.

                                       8
<PAGE>
Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations(Continued)

Results of Operations (Continued)

Brunswick Hotel and Conference Center, continued
------------------------------------------------

Since the late 1980's, the Hotel has faced increased competition for tourist and
corporate business from new hotels in the Lancaster area. In October 1990, the
Partnership contracted with two agencies of the U.S. Government to provide
training facilities and rooms. The Department of Defense (the Army) has
guaranteed a minimum of 11,000 room nights per year of the agreement. The
current agreement grants to the Army two one-year options expiring on September
30, 1998. The first one-year option through September 30, 1997 has been
exercised. The U.S. Army has booked approximately 12,300 room nights for the
fiscal year ended September 30, 1997. The lease may be terminated by the Army at
any time by giving at least sixty days prior written notice, subject to the
guaranty provisions in the lease.

In addition, the U.S. Government's Office of Personnel Management (OPM) had a
contract for the provision of food, rooms and conference facilities for OPM's
training sessions which extended through May, 1996. OPM and the Brunswick Hotel
have entered into a new agreement which commenced May 1, 1996 and expires
September 30, 1997. The initial rate per participant is $74.30 with additional
charges for certain other expenses. The agreement gives OPM four one year
renewal options, with increases in the daily per participant charge based upon
increases in the Consumer Price Index for the Northeast Region. OPM is
anticipated to account for approximately 22,000 room nights for the fiscal year
ended September 30, 1997. In February, 1997, OPM extended its contract from
October 1, 1997 through June 30, 1998.

In October 1995, OPM mailed a solicitation for offers to the Hotel and other
interested parties for a ten year contract which could commence as early as
September, 1997. OPM revised the solicitation for offers in April 1996 from a
term of ten years to fifteen years and also reduced the initial rooms
requirement by twenty percent. The Brunswick Hotel was one of three finalists
selected for bidding on the OPM contract. However, in June 1996, the contract
was awarded to Ken Lowe Management Company which will build a new training
facility with hotel rooms and dining areas on what is now vacant land in
Shepherdstown, West Virginia. In a debriefing session with members of the OPM
Selection Committee, the General Partner and Brunswick Hotel management staff
were told that a new "to be built" facility was the primary reason for choosing
an alternate site. OPM is anticipating the new facility will be complete by
June, 1998 and the General Partner expects to lose the significant business
provided by OPM when the new facility opens. OPM has accounted for approximately
22,000 of the approximately 60,000 total room nights sold at the Hotel annually.
The loss of business associated with the OPM contract will result in a
significant decline in revenues and cash flows unless and until the Brunswick
Hotel can be repositioned to attract other business. This decline is not
expected to occur until early 1998. Elmhurst Hospitality Management Company and
the General Manager of the hotel are pursuing other government agencies as
possible replacements of the OPM business. In fact, management is in the process
of responding to a request for proposals from the Graduate School of the USDA
Career Development Program to provide up to 20,000 room nights per year for
4 years commencing May 1997, although there is no assurance that the General
Partner will be successful in obtaining this business. In addition, the General
Partner will likely increase marketing expenditures in 1997 to attract increased
corporate and tourist business. The General Partner believes it can replace at
least a portion of the lost OPM business in 1998 through these efforts.

The Brunswick Hotel property also includes an adjacent conference center. Prior
to 1991, this space was primarily a retail mall. In 1991, the Partnership
converted a portion of the upper level Mall to office space for the Army. In
addition, the lower level Mall was converted to additional conference facilities
and office space for the Office of Personnel Management (OPM). Hotel room night
charges generally include a provision for the use of the office and conference
space. The Hotel does not separately charge customers for these facilities in
most cases. The remaining mall retail space does not generate revenues that are
significant to the operations of the Hotel. The Hotel's lease with the adjacent
United Artist Theater expired in November, 1995, and the operators of the
theater did not extend their lease. Annual revenues from the theater of
approximately $41,000 were not significant to the operations of the hotel.

Lincoln Oaks
------------
Lincoln Oaks Apartments (Phase I) in Fort Worth, Texas, was sold on June 22,
1994. Accordingly, no equity income was recognized for the years ended December
31, 1996 and 1995. Equity income for the year ended December 31, 1994 was
$1,413,817, which reflected a gain of $1,434,295 from the sale of the
apartments, partially offset by a loss of $106,620 related to the write off of
the remaining balance of capitalized fees paid in connection with the
acquisition of the Partnership's interest in the joint venture.

                                       9
<PAGE>
Item  7.  Management's Discussion and Analysis of Financial Condition and
--------------------------------------------------------------------------------
Results of Operations (Continued)
---------------------------------


Liquidity and Capital Resources

As of December 31, 1996, the Partnership had cash and cash equivalents totaling
$1,217,068, an increase of $249,494 from the same date of the previous year. The
increase in cash is primarily attributable to the cash provided by operations of
the Brunswick Hotel net of quarterly distributions to limited partners.

Cash provided by operations from the Hotel has decreased in 1996 to $1,291,291
from $1,506,699 in 1995, primarily due to collection of accounts receivable in
1995 related to 1994 business. The cash flow provided by operations of the Hotel
in 1995 reflected an increase of $302,457 from the 1994 cash provided by
operations of $1,204,242, for the same reason. Hotel Brunswick has continued to
generate positive cash flow adequate to meet property operating needs and debt
service. However, the General Partner expects that the termination of the OPM
contract will have a significant impact on the cash flows of the Partnership in
early 1998. This could impact future partner distributions until the Hotel
attracts other business.

In order to remain competitive with the other hotels in the area for business in
the government, corporate and tourist segments, an upgrading of the Hotel began
in 1991 and continued through 1996. These renovations have included upgrades to
most guest rooms, renovations of the lobby and other common areas, and
replacement of the boiler and laundry equipment. During 1993 and 1994, the Hotel
spent approximately $690,000 to install a complete sprinkler system in all guest
rooms and common areas, and to replace bedding, carpet, and other room fixtures.
Approximately $107,000 and $121,000 was spent in 1996 and 1995 for the continued
upgrading of the Hotel rooms. The General Partner expects to make continued
annual capital expenditures at similar levels to keep the Hotel competitively
positioned in the marketplace.

During 1991, the Hotel obtained third party financing in the form of a
promissory note to fund the major renovations to the Hotel and Conference
Center. Approximately $791,443, which includes the $16,000 in loan fees has been
advanced under this note. As of December 31, 1996, the outstanding balance on
the promissory note was $460,728.


The Brunswick Hotel is now the sole remaining property owned by the Partnership.
The General Partner had engaged the Grubb and Ellis Hospitality Group to assist
in the marketing and sale of the Brunswick Hotel. Although several offers have
been submitted from prospective purchasers since the marketing and sale effort
began, most of the prospects have not demonstrated an ability to complete a
purchase and sale transaction to date. In March 1997, the General Partner signed
a letter of intent with a prospective purchaser to sell the Hotel, contingent
upon the performance of certain actions by the purchaser and other conditions.
If a sale agreement is consummated, closing is anticipated within 3 to 4 months.
However, there is no assurance that this letter of intent will result in the
ultimate sale of the property. The General Partner is exploring alternative
marketing ideas for the sale of the Hotel in case the letter of intent does not
result in a sale agreement. The General Partner will not provide any further
extensions of the listing agreement with Grubb and Ellis. Indepro Corporation
(the Advisor) will use the services of Aegis Realty Consultants to provide
professional assistance and recommendations for the consideration of the General
Partner in the management and disposition of the Hotel. In accordance with the
Partnership Agreement, the Partnership is expected to be dissolved upon the sale
of the Brunswick Hotel, unless all or a portion of the purchase price is payable
on a deferred basis.


On June 22, 1994, Lincoln Oaks I, Fort Worth Ltd., (the "Joint Venture"), a
joint venture in which Indepro Property Fund I, L.P. (the "Registrant") had a
50% interest, including certain significant priorities and preferences in the
event of sale, conveyed title to Lincoln Oaks Apartments (Phase I) to South West
Properties, L.P., (the "Purchaser"). Lincoln Oaks Apartments is a 248 unit
garden apartment complex located on approximately 10 acres in Fort Worth, Texas.
In accordance with the joint venture agreement, the net sales proceeds of
$3,193,000 were distributed to the Partnership. The Partnership distributed the
net sales proceeds, less the $90,900 due to the Advisor for its purchase of the
preferred return, and other costs associated with the dissolution of the joint
venture, to the Limited Partners on July 28, 1994 in a distribution of $97.38
per unit.

                                       10
<PAGE>
Item  7.  Management's Discussion and Analysis of Financial Condition and
--------------------------------------------------------------------------------
Results of Operations (Continued)
---------------------------------

Liquidity and Capital Resources (continued)


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

Indepro Property Fund I, L.P. has made four distributions relating to the
operations of the Partnership throughout 1996. Pennsylvania withholding taxes
that were paid by Indepro Property Fund I, L.P. on the partners behalf were
deducted from these distributions. In addition, the General Partner made a
distribution of $227,273 in March 1997 relating to the fourth quarter of 1996.
It is anticipated that quarterly distributions will continue at the same level
in 1997 subject to the potential sale of the Brunswick Hotel in 1997. However,
the level of distributions beyond 1997 will be dependent upon the Hotel's
success in replacing the lost OPM business.

The General Partner is obligated under the terms of the Partnership Agreement to
make a capital contribution upon the Partnership's dissolution in an amount
sufficient to enable the Partnership to pay to each Limited Partner an 8%
non-compounded return on the unrecovered capital contribution of the Limited
Partner, less all distributions of distributable cash and all distributions of
sale or refinancing proceeds in excess of the capital contributions of the
Limited Partner. This guaranteed return is computed from the date of each
Limited Partner's admission to the Partnership. This obligation does not
guarantee to the Limited Partners a return of their capital contributions and is
limited by the available assets of the Partnership and the General Partner. As
of December 31, 1996, the estimated amount of this obligation to the Limited
Partners (excluding the General Partner's Limited Partnership Units) was
approximately $3,087,434. The Partnership had cash of $1,217,068 at December 31,
1996. If the General Partner distributed this cash, the Limited Partners' share
would have been $947,009, which would have reduced the amount of this obligation
to $2,140,425. The General Partner has cash of $2,376,730, demand notes of
$1,400,000, and would have $270,059 of its share of Partnership cash for a total
of $4,046,789 available to satisfy the remaining obligation. This does not
include the value of the General Partner's investment in the Partnership or any
estimated proceeds from disposal of the Brunswick Hotel which would be
distributed to the General Partner. Future operations of the Partnership may
impact the ability of the Partnership and the General Partner to satisfy this
obligation. As discussed above, the Partnership is continuing to pursue the sale
of the Brunswick Hotel, the sole remaining property in the Partnership. If a
desirable sale transaction can be completed, it would be followed by the
dissolution and liquidation of the Partnership.


Inflation

The rate of inflation during the three most recent years has been low. Low rates
of inflation combined with increased market competition generally produce an
environment in which rental rate increases are relatively modest. The Brunswick
Hotel has not experienced significant increases in major expenditures since
inflation has been offset by more effective expense management. In the markets
in which the Brunswick Hotel competes, it is not feasible to pass on all
increasing costs in the form of higher room rates.

In the past, it was assumed that inflation would result in capital appreciation
in investment properties through increases in rental rates and replacement costs
in comparison with new properties. During the term in which the Brunswick Hotel
has been owned by the Partnership, inflation has been modest and capital
appreciation, as a result of inflation, has not occurred.

Item 8.  Consolidated Financial Statements and Supplementary Data
-----------------------------------------------------------------

See Index to Consolidated Financial Statements and Schedules on Page F-1 of Form
10-K.

The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.

                                       11
<PAGE>



                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
                        RECONCILIATION OF INCOME BETWEEN
              CONSOLIDATED FINANCIAL STATEMENTS AND TAX INFORMATION

              For the years ended December 31, 1996, 1995, and 1994

<TABLE>
<CAPTION>

                                                                         1996             1995            1994
                                                                    ---------------   --------------  -------------
<S>                                                                <C>                <C>             <C>

Net income per Consolidated Statements of Income                        $1,358,856         $775,464     $2,144,691
                                                                    ---------------   --------------  -------------

Depreciation deducted for tax purposes less than (in
  excess of ) amounts expensed for consolidated financial
  statement purposes                                                     (361,413)          123,995         53,097


Joint venture tax income (loss) in excess of book income                         -                -        646,810

Income from wholly-owned subsidiary not
  included for tax purposes                                               (44,302)        (179,092)         (6,198)


Loss recognized on write off of Joint Venture
  advisor fee for consolidated financial statement
  purposes in excess of tax loss                                                 -                -         59,106

Loss on write off of other assets recognized for
  consolidated financial statement purposes in excess of                         -           10,720             -
  tax loss

Tax loss on the write off of investment in
  Lincoln Oaks Partnership                                                       -                -        (30,941)

Book/tax bad debt adjustment.  Section 481 holdback
  and specific charge-off differences                                     (12,197)           (6,266)         7,796
                                                                          --------          -------         -----

Total book to tax differences                                            (417,912)          (50,643)       729,670
                                                                      -----------      ------------    -----------

Net income reported on U.S. Partnership Return of Income              $   940,944      $    724,821    $ 2,874,361
                                                                      ===========      ============    ===========

</TABLE>


                                       12
<PAGE>



                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
                   RECONCILIATION OF PARTNERS' CAPITAL BETWEEN
              CONSOLIDATED FINANCIAL STATEMENTS AND TAX INFORMATION

              For the years ended December 31, 1996, 1995 and 1994


<TABLE>
<CAPTION>

                                                                                  Cumulative Net
                                                             Cumulative Fees         Difference
                                           Balances per       Not Deducted            Between
                                           Consolidated      For Income Tax         Consolidated
                                            Financial         Purposes and           Financial         Balance Per
                                            Statements         Excess loss         Statements and      Tax Return
Partners' Capital Account                  Dec. 31 (A)         Transferred        Tax Information       Dec. 31.
-------------------------                  -----------         -----------        ---------------       --------
<S>                                        <C>                 <C>                <C>                   <C>

      1996

Total                                      $   6,381,733      $         28,849      $      (719,276)  $  5,691,306
                                           =============      =================     ===============   ============
General Partner                            $     759,200      $        945,313      $      (952,378)  $    752,135
                                           =============      ================      ===============   ============
Limited Partner                            $   5,622,533      $       (916,464)     $       233,102   $  4,939,171
                                           =============      ================      ===============   ============
Per Limited Partnership Interest (C)       $         187      $            (31)     $             8   $        165
                                           =============      ================      ===============   ============
     1995

Total                                      $   5,931,968      $        28,849       $      (301,364)   $  5,659,453
                                           =============      ===============       ===============    ============
General Partner                            $     754,702      $       945,313       $      (948,201)   $    751,814
                                           =============      ===============       ===============    ============
Limited Partner                            $   5,177,266      $      (916,464)      $       646,837    $  4,907,639
                                           =============      ===============       ===============    ============
Per Limited Partnership Interest (C)       $         173      $           (31)      $            22    $        164
                                           =============      ===============       ===============    ============

      1994

Total                                      $   7,580,746      $        28,849       $      (250,721)   $  7,358,874
                                           =============      ===============       ===============    ============
General Partner                            $     771,190      $       945,313       $      (947,693)   $    768,810
                                           =============      ===============       ===============    ============
Limited Partner                            $   6,809,557      $      (916,464)      $       696,971    $  6,590,064
                                           =============      ===============       ===============    ============
Per Limited Partnership Interest (C)       $         227      $           (31)      $            24    $        220
                                           =============      ===============       ===============    ============
</TABLE>


(A) Per Consolidated Statements of Partners' Capital on Page F-6 of Form 10-K.

(B) For further information on 1996, 1995 and 1994, see Reconciliation of Income
    Between Consolidated Financial Statements and Tax Information
    included in Item 8 of Form 10-K on Page 12.

(C) Per interest computations represent amounts divided by the outstanding
    interests (30,000) at the end of the year.

Item 9.  Disagreements on Accounting and Financial Disclosure
-------------------------------------------------------------

There have been no reported disagreements on any matter of accounting principles
or practices or consolidated financial statements disclosures.


                                       13
<PAGE>
                                    PART III

Item 10.  Directors and Executive Officers of the Registrant
------------------------------------------------------------

The names, ages and business experience of the directors and executive officers
of the General Partner of the Registrant as of December 31, 1996 were as
follows:

         Name                Title              Age      Election Date

Ronald M. Pappas      President and Director    54       July 17, 1991
Wayne L. Harris       Vice President            37       December 3, 1991
Laura M. Ritzko       Secretary                 35       October 3, 1996
Ann M. Strootman      Controller                34       December 20, 1991
Richard F. Yoder      Director                  66       July 17, 1991

Ronald M. Pappas:  President  and Director  since  October 27, 1987;
Vice  President of Real Estate and Mortgages for Penn Mutual since 1984.


Wayne L. Harris: Vice President since December 3, 1991; Treasurer from July 17,
1990 to December 3, 1991; served with the Advisor in the following capacities:
Vice President since December 3, 1991; Acquisitions Officer from January 1, 1985
to December 3, 1991; Senior Financial Analyst from July 1, 1984 to January 1,
1985; Financial Analyst from November 16, 1981 to July 1, 1984; Investment
Officer for Penn Mutual since January, 1990.

Laura M. Ritzko: Secretary since October 3, 1996; Secretary of Penn Mutual since
December 13, 1996; Associate Secretary of Penn Mutual from September 20, 1996 to
December 13, 1996; Assistant to the Chief of Staff at Penn Mutual from March 27,
1995 to September 20, 1996; Systems Analyst at Penn Mutual from February 21,
1991 to March 27, 1995.


Ann M. Strootman: Controller since December 20, 1991; Vice President and
Controller for Penn Mutual since February, 1996; Assistant Vice President from
December, 1993 to February, 1996; Director of Investment Accounting from April,
1991 to December, 1993; Audit Manager of Coopers & Lybrand from June, 1988 to
April, 1991.


Richard F. Yoder: Director since June, 1985; previously employed by Penn Mutual
in the following capacities: Executive Vice President of Administration from
January, 1987 to March, 1992 Senior Vice President and Chief Human Resources
Officer from February 24, 1986 to December 31, 1986, Senior Vice President and
Chief Service Officer from December 17, 1984 to February 23, 1986, Vice
President and Chief Service Officer prior thereto.



                                       14
<PAGE>


                                    PART III

Item 11.  Executive Compensation
--------------------------------

The Registrant and General Partner have not and do not propose to compensate the
officers or directors of the General Partner.

The General Partner is entitled to receive a partnership management fee equal to
1% of the Partnership's interest in its properties' annual gross rents and hotel
revenues, not to exceed 2.5% of the Partnership's Distributable Cash (prior to
payment of these fees) in any fiscal year. This fee totaled $22,727, $45,530,
and $28,407, for the years ended December 31, 1996, 1995, and 1994,
respectively.

Item 12.  Security of Certain Beneficial Owners and Management
--------------------------------------------------------------

         (a) No person owns or is known by the Registrant to own beneficially
             more than 5% of the outstanding limited partnership units of the
             Registrant except as set forth below:
<TABLE>
<CAPTION>

                                        Name and Address of                  Amount and Nature of           Percent
        Title of Class                    Beneficial Owner                   Beneficial Ownership          of Class
        --------------                  -------------------                  --------------------          --------
<S>                                      <C>                                 <C>                           <C>

   Limited Partnership Unit        Indepro Property Fund I, Corp.         6,421 Limited Partnership          21.40%
                                          600 Dresher Road                          Units
                                         Horsham, PA 19044
</TABLE>

         (b) The officers and directors of the General Partner do not own any
             limited partnership interests in the Registrant.

         (c) The Registrant does not know of any arrangements the operation of
             which may at a subsequent date result in a change of control in the
             Partnership.

Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

There have been no material transactions with related parties during the year
ended December 31, 1996.

The General Partner is reimbursed for direct expenses related to the
administration of the Partnership. Reimbursements totaled $5,525, $8,224, and
$6,410, for the years ended December 31, 1996, 1995 and 1994, respectively.

The General Partner is entitled to receive a partnership management fee equal to
1% of the Partnership's interest in its properties' annual gross rents and hotel
revenues, not to exceed 2.5% of the Partnership's Distributable Cash (prior to
payment of these fees) in any fiscal year. This fee totaled $22,727, $45,530 and
$28,407 for the years ended December 31, 1996, 1995 and 1994, respectively.



                                       15
<PAGE>

                                     PART IV


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


(a) (1 & 2) See Index to Consolidated Financial Statements and Schedules on
    Page F-1 of  Form 10-K. (3) Exhibits:  None

(b) Reports on Form 8-K: No reports were filed on Form 8-K for the quarter ended
    December 31, 1996.

(c) Exhibits:  None

(d) Consolidated Financial Statement Schedules:  See Index to Consolidated
    Financial Statements and Schedules on Page F-1 of Form 10-K.




                                       16

<PAGE>




                                   SIGNATURES


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


                                        Indepro Property Fund I, L.P.
                                        By: Indepro Property Fund I Corp.,
                                        General Partner


                                        By:/s/ Ronald M. Pappas
                                           -----------------------
                                           Ronald M. Pappas
                                           President


Date:  March 28, 1997
---------------------


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.


         Signature                 Title                          Date

/s/ Ronald M. Pappas       President and Director             March 28, 1997
--------------------       (Chief Executive Officer)
    Ronald M. Pappas


/s/ Wayne L. Harris        Vice President                     March 28, 1997
-------------------
    Wayne L. Harris


/s/ Ann M. Strootman       Controller                         March 28, 1997
--------------------       (Chief Financial Officer)
    Ann M. Strootman


/s/ Richard F. Yoder       Director                           March 28, 1997
--------------------
    Richard F. Yoder


<PAGE>



                          INDEPRO PROPERTY FUND I, L.P.
         INDEX OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES







                                                                   Page Number
                                                                   -----------

CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES OF
INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY

  Reports of Independent Accountants                                F-2 to F-3

  Consolidated Balance Sheets, as of December 31, 1996 and 1995         F-4

  Consolidated Statements of Income, for the years ended
     December 31, 1996, 1995 and 1994                                   F-5

  Consolidated Statements of Partners' Capital for the years
     ended December 31, 1996, 1995 and 1994                             F-6

  Consolidated Statements of Cash Flows, for the years ended
     December 31, 1996, 1995 and 1994                                  F-7

  Notes to Consolidated Financial Statements                       F-8 to F-13

  Schedule II -- Valuation and Qualifying Accounts,
     for the years ended December 31, 1996, 1995 and 1994             F-14

  Schedule III -- Real Estate and Accumulated Depreciation,
     as of December 31, 1996                                          F-15

FINANCIAL STATEMENTS OF LINCOLN OAKS I, FORT WORTH, LTD.

  Financial Statements for the period January 1 through
   October 31, 1994                                              F-16 to F-23

FINANCIAL STATEMENT OF INDEPRO PROPERTY FUND I, CORP

  Report of Independent Accountants                                   F-24
  Balance Sheet as of December 31, 1996                               F-25
  Notes to Balance Sheet                                         F-26 to F-28












                                       F-1


<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Indepro Property Fund I, L.P.


         We have audited the consolidated financial statements and the financial
statement schedules of Indepro Property Fund I, L.P. and Subsidiary (a Delaware
Limited Partnership) listed in the index on page F-1 of this Form 10-K. These
financial statements and financial statement schedules are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedules based on our
audits. We did not audit the income statement of the joint venture in which the
Partnership held a 50% interest (see Note 4). The Partnership's equity in joint
venture income represented 66% of consolidated net income for the year ended
December 31, 1994. The income statement of the joint venture was audited by
other auditors whose report has been furnished to us, and our opinion, insofar
as it relates to the amounts included for the joint venture, is based solely on
the report of the other auditors.


         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 and the report of other auditors
provide a reasonable basis for our opinion.

         In our opinion, based on our audits and the report of other auditors,
the financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Indepro Property Fund I, L.P.
and Subsidiary as of December 31, 1996 and 1995, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1996 in conformity with generally accepted accounting
principles. In addition, in our opinion, the financial statement schedules
referred to above, when considered in relation to the basic financial statements
taken as a whole, present fairly, in all material respects, the information
required to be included therein.


                                              /s/ Coopers & Lybrand, L.L.P.


2400 Eleven Penn Center
Philadelphia, Pennsylvania
February  23, 1997











                                       F-2


<PAGE>

                         Report of Independent Auditors




To the Partners of
         Lincoln Oaks I, Fort Worth, Ltd.:


We have audited the accompanying statements of operations, changes in partners'
capital and cash flows of Lincoln Oaks I, Fort Worth, Ltd., a Texas limited
partnership (the "Partnership"), for the period from January 1, 1994 through
October 31, 1994 (date of Partnership dissolution). 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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Lincoln Oaks
I, Fort Worth, Ltd. for the period from January 1, 1994 through October 31,
1994, in conformity with generally accepted accounting principles.

As discussed in Note 6, on June 22, 1994, the Partnership sold the apartment
property which represented its primary asset and accounted for substantially all
of the Partnership's revenues and expenses. The Partnership was dissolved on
October 31, 1994.


/s/  Ernst & Young LLP


Dallas, Texas
February 9, 1995
















                                       F-3



<PAGE>



                  Indepro Property Fund I, L.P. and Subsidiary
                        (A Delaware Limited Partnership)
                           Consolidated Balance Sheets
                        As of December 31, 1996 and 1995

<TABLE>
<CAPTION>

                                                                                        1996              1995
                                                                                        ----              ----
<S>                                                                                     <C>               <C>
                                             Assets

          Investment in real estate at cost (note 3)                             $    9,142,267         $  9,035,105
          Less:  Accumulated depreciation and amortization                            3,677,432            3,677,432
                                                                                     -----------        -------------
                                                                                      5,464,835            5,357,673

          Cash and cash equivalents                                                   1,217,068              967,574
          Accounts receivable (net of allowance for doubtful
            accounts of $4,467 in 1996 and $16,730 in 1995)                             290,554              293,472
          Prepaid expenses and other assets (net of accumulated
            amortization of $6,750 in 1996 and $4,750 in 1995)                          108,063               99,465
                                                                                      ----------       --------------
                                    Total Assets                                 $    7,080,520        $   6,718,184
                                                                                 ===============       ==============

                         Liabilities and Partners' Capital

          Notes payable                                                          $      460,782        $     536,258
          Capital lease obligation                                                          326               12,428
          Due to general partner and affiliates                                          69,470               45,530
          Accrued liabilities                                                           162,933              187,214
          Advance deposits                                                                5,276                4,786
                                                                                      ----------      ---------------
                                    Total Liabilities
                                                                                        698,787              786,216
                                                                                      ----------      ---------------
          Partners' capital                                                           6,381,733            5,931,968
                                                                                      ----------      ---------------
                         Total liabilities and partners' capital                 $    7,080,520       $    6,718,184
                                                                                 ===============      ===============


</TABLE>



















                   The accompanying notes are an integral part
                    of the consolidated financial statements.


                                       F-4


<PAGE>



                  Indepro Property Fund I, L.P. and Subsidiary
                        (A Delaware Limited Partnership)
                        Consolidated Statements of Income
              For the years ended December 31, 1996, 1995, and 1994


<TABLE>
<CAPTION>
                                                          1996              1995               1994
                                                         -----              -----              ----
<S>                                                      <C>                <C>                <C>

                      Income

Hotel revenues                                         $   4,550,037    $     4,608,277    $     4,673,524
Hotel cost of revenues                                     1,765,771          1,775,206          1,857,690
                                                       -------------    ---------------    ---------------
Gross profit from hotel operations                         2,784,266          2,833,071          2,815,834
Miscellaneous income                                               -                  -                882
Equity income of joint venture                                     -                  -          1,413,817
Investment income                                             40,019             62,346             99,814
                                                       -------------    ---------------    ---------------
Total income                                               2,824,285          2,895,416          4,330,346
                                                       -------------    ---------------    ---------------

                    Expenses

Property operating expenses                            $   1,034,538    $     1,024,048    $     1,031,239


Depreciation and amortization (see note 2)                     2,000            534,348            519,599

Real estate taxes                                            161,540            222,870            213,927
Administrative                                                74,462            107,321             87,727
Repairs and maintenance                                       95,280            105,106            107,200
Insurance                                                     58,211             68,707             54,488
Provision for doubtful accounts                              (3,093)            (2,792)              8,649
Interest expense                                              42,491             49,624             56,207
Write off of other assets                                          -             10,720            106,620
                                                       -------------    ---------------    ---------------
Total expense                                              1,465,429          2,119,952          2,185,656
                                                       -------------    ---------------    ---------------

Net Income                                             $   1,358,856    $       775,464     $    2,144,691
                                                       =============    ===============     ==============

Net income allocated to Limited Partners               $   1,345,267    $       767,710     $    2,123,244


Net income allocated to General Partner                       13,589              7,755             21,447
                                                       -------------    ---------------    ---------------
                                                       $   1,358,856    $       775,464     $    2,144,691
                                                       =============    ===============     ==============

Net income per Limited Partnership
  interests outstanding (30,000)                       $          45    $            26     $           71
                                                       =============    ===============     ==============


</TABLE>






                   The accompanying notes are an integral part
                    of the consolidated financial statements.


                                       F-5


<PAGE>



                  Indepro Property Fund I, L.P. and Subsidiary
                        (A Delaware Limited Partnership)
           Consolidated Statements of Partners' Capital For the years
                     ended December 31, 1996, 1995, and 1994
<TABLE>
<CAPTION>

                                                                                Limited
                                                              General          Partnership
                                                              Partner             Units              Total
                                                              -------          -------------    -----------------
<S>                                                           <C>               <C>                  <C>

Partners' capital at December 31, 1993                      $      790,616    $     8,732,708   $      9,523,324

  Net income                                                        21,447          2,123,244          2,144,691
  Cash distributions from operations                               (11,364)        (1,125,000)        (1,136,364)
  Cash distributions from liquidation of joint venture             (29,509)        (2,921,395)        (2,950,904)
                                                            --------------    ----------------  -----------------

Partners' capital at December 31, 1994                      $      771,190    $     6,809,557   $      7,580,747

  Net income                                                         7,755            767,709            775,464
  Cash distributions from operations                               (24,243)        (2,400,000)        (2,424,243)
                                                            ----------------  ----------------  -----------------

Partners' capital at December 31, 1995                      $      754,702    $     5,177,266   $      5,931,968

  Net income                                                        13,589          1,345,267          1,358,856
  Cash distributions from operations                                (9,091)          (900,000)          (909,091)
                                                            ---------------   ----------------  -----------------

Partners' capital at December 31, 1996                      $      759,200    $     5,622,533   $      6,381,733
                                                            ===============   ================  =================

</TABLE>



























               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                       F-6

<PAGE>



                  Indepro Property Fund I, L.P. and Subsidiary
                        (A Delaware Limited Partnership)
            Consolidated Statements of Cash Flows For the years ended
                        December 31, 1996, 1995, and 1994

<TABLE>
<CAPTION>

                                                                   1996             1995            1994
                                                                   -----            -----           ----
<S>                                                                <C>              <C>             <C>

Cash flows from operating activities:
-------------------------------------

Net Income                                                     $ 1,358,856    $   775,464    $ 2,144,691


 Adjustments to reconcile net income to net cash provided by
  operating activities:

   Depreciation and amortization                                     2,000        534,348        519,599
   Writeoff of other assets                                           --           10,720        106,620


Change in assets and liabilities

  Decrease (increase) in accounts receivable                         2,918        127,752       (117,432)
  Decrease (increase) in prepaid expenses                          (10,598)         2,442          6,122
  Decrease in accrued liabilities                                  (24,281)        (6,894)       (41,203)
  Increase (decrease) in advance deposits                              490         (2,828)            66
  Increase (decrease) in amounts due to general
     partner and affiliates                                         23,940        (73,777)       111,331
                                                               -----------    -----------    -----------
Net cash provided by operating activities                        1,353,325      1,367,228      2,729,794
                                                               -----------    -----------    -----------

Cash flows from investing activities:
-------------------------------------

  Distributions received from joint venture in excess of
     equity in earnings                                               --             --        1,744,464
  Additions to real estate                                        (107,162)      (121,372)      (344,403)
                                                               -----------    -----------    -----------
Net cash provided by (used in) investing activities               (107,162)      (121,372)     1,400,061
                                                               -----------    -----------    -----------

Cash flows from financing activities:
-------------------------------------

  Repayment of notes payable                                       (75,476)       (69,556)       (63,983)
  Repayment of capital lease obligation                            (12,102)       (11,010)       (10,015)
  Distributions to partners from operations                       (909,091)    (2,424,243)    (1,136,364)
  Distributions to partners from sale of Lincoln Oaks                 --             --       (2,950,904)
                                                               -----------    -----------    -----------
Net cash used in financing activities                             (996,669)    (2,504,809)    (4,161,266)
                                                               -----------    -----------    -----------
Net increase (decrease) in cash and cash equivalents               249,494     (1,258,955)       (31,411)

Cash and cash equivalents, beginning of period                     967,574      2,226,528      2,257,939
                                                               -----------    -----------    -----------

Cash and cash equivalents, end of period                       $ 1,217,068    $   967,574    $ 2,226,528
                                                               ===========    ===========    ===========

</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                       F-7


<PAGE>


                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Partnership Organization and Operation:
-------------------------------------------

General

Indepro Property Fund I, L.P. (the "Partnership") was formed on May 28, 1982
under the Revised Uniform Limited Partnership Act of the State of Delaware to
invest in improved income-producing real property. Indepro Property Fund I,
Corp. (The "General Partner"), is wholly-owned by Indepro Corp. (the "Advisor"),
an indirect wholly-owned subsidiary of The Penn Mutual Life Insurance Company
("Penn Mutual"). During 1983, Limited Partners were admitted to the Partnership,
having purchased 30,000 units for an aggregate contribution of $15,000,000
before commissions. The Initial Limited Partner withdrew from the Partnership on
May 1, 1983.

Presentment Offerings

In 1987, 1988 and 1989, the General Partner made presentment offers available to
the Limited Partners whereby each Limited Partner was able to sell all or part
of his units to the General Partner at approximately 85% of the amount that
would be distributable assuming the Partnership sold its properties at fair
value. The Limited Partners tendered 6,421 units to the General Partner for an
aggregate purchase price of $2,036,929. The General Partner does not currently
intend, nor is it obligated to make any future presentment offers to the Limited
Partners.

Other Fees

The General Partner is entitled to receive a partnership management fee equal to
1% of the Partnership's interest in its properties' annual gross rents and hotel
revenues, not to exceed 2.5% of the Partnership's Distributable Cash (prior to
payment of these fees) in any fiscal year. The General Partner is also
reimbursed for direct expenses related to the administration of the Partnership
(see Note 6).

2.  Summary of Significant Accounting Policies:
-----------------------------------------------

Principles of Consolidation

The consolidated financial statements include the accounts of the Partnership
and its wholly-owned subsidiary (Hotel Brunswick, Inc.) which operates the
Brunswick Hotel and Conference Center for the Partnership. All material
intercompany transactions have been eliminated.

Use of Estimates

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

Investments in Real Estate


Effective January 1, 1996 the Partnership adopted 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 No. 121) which requires that
assets which are expected to be disposed of be reported at the lower of their
carrying amount or fair value less cost to sell. The Partnership's remaining
real estate property, the Brunswick Hotel and Conference Center, is currently
being marketed for sale. Accordingly, this property is being reported at its
carrying amount, which is lower than its fair value less cost to sell. The
initial adoption of SFAS No. 121 had no impact on the Partnership's carrying
value of this asset. Also in accordance with SFAS No. 121, the Partnership
discontinued recording depreciation on this asset as of January 1, 1996.

Prior to 1996, the Partnership carried investments in real estate at cost less
accumulated depreciation. Depreciation was computed using the straight-line
method over the estimated useful lives of the assets. A valuation allowance was
provided for assets in cases where the net realizable value was less than the
carrying amount of the assets.

                                       F-8


<PAGE>


                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

2.  Summary of Significant Accounting Policies (Continued):
-----------------------------------------------------------

Investments in Real Estate (continued)

Expenditures which increase the estimated useful lives of assets are
capitalized. Maintenance and repairs are charged to expense when incurred. Upon
the disposition of assets, the related cost and accumulated depreciation are
removed from the respective accounts, and any gain or loss on disposition is
recognized in the Consolidated Statements of Income.

On at least an annual basis, the General Partner prepares an estimate of fair
value of the property. The methodology used is either a discounted cash flow
analysis or a value based on a direct capitalization of net operating income.
This information is used to assist the General Partner in determining the
carrying value of the assets of the Partnership. In addition, the fair value of
assets are reviewed whenever events or changes in circumstances indicate that
the carrying amount of the asset may not be recoverable.

Acquisition Costs on Real Estate Investments

Acquisition costs have been capitalized and are being amortized over the useful
lives of the related investment in real estate.

Income Taxes

Any income or loss affecting the partners' capital accounts is reportable for
federal income tax purposes by the partners; therefore, no provision for income
taxes has been made in the accompanying Consolidated Statements of Income.

Fair Value of Financial Instruments

For instruments such as cash, accounts receivable and payable and other
liabilities, the carrying amount approximates fair value because of their short
maturity. The estimated fair value of the mortgage note payable is $473,255.
The fair value is estimated by discounting the cash flows associated with the
note using an interest rate currently available for similar debt.

Allocation of Profits, Losses and Distributable Cash

Partnership income, loss, and distributable cash are allocated and distributed
1% to the General Partner and 99% to Holders of Limited Partnership Units.

All sale and refinancing proceeds are distributed first, 1% to the General
Partner and 99% to the Holders of Limited Partnership Units until such Holders
have received, together with any prior distributions, an amount equal to a
non-compounded cumulative return of 10% per annum on their adjusted capital
contribution. Second, 1% to the General Partner and 99% to the Holders until
each Holder shall have received an amount equal to their adjusted capital
contributions. Finally, any sale or refinancing proceeds, after payment of
disposition fees to the Advisor, are distributed 85.5% to the Holders of the
Limited Partnership Units, and the remainder (decreased by payments of fees to
a subsidiary of Penn Mutual) to the General Partner.

Income from a sale is allocated based on partners' capital accounts, certain
prior tax incidents and on the amount of sale proceeds received, subject to a
minimum of 1% of taxable income allocated to the General Partner.







                                       F-9


<PAGE>



                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

2.  Summary of Significant Accounting Policies (Continued):
-----------------------------------------------------------

Allocation of Profits, Losses and Distributions Cash (Continued):


Quarterly cash distributions from operations of $6.25 per Limited Partnership
Unit were made to the Limited Partners during 1988 through February 28, 1989.
Subsequent to this date, quarterly distributions were increased to $8.75 per
Limited Partnership Unit through November 30, 1990, after which the
distributions were decreased to $6.25 per Limited Partnership Unit through April
10, 1992. At that time, it was determined by the Managing General Partner to
suspend distributions in the best interest of the Partnership. Distributions of
$5 per unit resumed in the second and third quarters of 1993 and were increased
to $7.50 per unit per quarter for the distributions made in 1994, 1995, and
1996. In addition, an extra distribution of $50.00 per unit was made in 1995
from excess Partnership cash reserves. A cash distribution of $16.92 per Limited
Partnership Unit from the sale proceeds of LaMancha Apartments was made on April
7, 1989 and a cash distribution of $97.38 per Limited Partnership Unit from the
sale of Lincoln Oaks apartments was made on July 28, 1994. For each
distribution, the General Partner was entitled to its 1% distributive share
pursuant to the Partnership Agreement.

The General Partner is obligated under the terms of the Partnership Agreement to
make capital contributions upon the Partnership's dissolution in the amount
necessary to enable the Partnership to pay to each Limited Partner an 8%
non-compounded return on the unrecovered capital contribution of the Limited
Partner, less all distributions of distributable cash and all distributions of
sale or refinancing proceeds in excess of the capital contributions of the
Limited Partner. This guaranteed return is computed from the date of each
Limited Partner's admission to the Partnership. This obligation does not
guarantee to the Limited Partners a return of their capital contributions and is
limited by the available assets of the Partnership and the General Partner.

3.  Investment in Real Estate:
------------------------------

Investment in real estate consists of the following as of December 31, 1996 and
1995:

<TABLE>
<CAPTION>
                                                                                        Building and
                                                                         Land           Improvements           Total
                                                                         ----           ------------           -----
<S>                                                                      <C>            <C>                    <C>

                    1996

                Brunswick Hotel and Conference Center                    $285,000         $8,857,267         $9,142,267
                Less: Accumulated Depreciation                                  -          3,677,432          3,677,432
                                                                       ----------        -----------        -----------

                Total                                                    $285,000         $5,179,835         $5,464,835
                                                                        =========         ==========         ==========

                    1995

                Brunswick Hotel and Conference Center                    $285,000         $8,750,105         $9,035,105
                Less: Accumulated Depreciation                                  -          3,677,432          3,677,432
                                                                         ---------        ----------         ----------

                Total                                                    $285,000         $5,072,673         $5,357,673
                                                                         ========         ==========         ==========
</TABLE>






                                      F-10


<PAGE>



                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

4. Investment in Joint Venture:
-------------------------------

On June 22, 1994, Lincoln Oaks I, Fort Worth Ltd., (the "Joint Venture"), a
joint venture in which Indepro Property Fund I, L.P. (the "Registrant") had a
50% interest, including certain priorities and preferences, conveyed title to
Lincoln Oaks Apartments (Phase I) to South West Properties, L.P., (the
"Purchaser"). The net sales proceeds from the sale of the property amounted to
$3,193,000.

 The total net sales proceeds less amounts retained by the Joint Venture to
 cover estimated costs associated with the dissolution of the Joint Venture were
 distributed to Indepro Property Fund I, L.P. Under the Partnership agreement,
 the net sales proceeds received from the Joint Venture, less $90,900 due to the
 Advisor for its purchase of the preferred return, was distributed to the
 Limited Partners on July 28, 1994 in a distribution of $97.38 per unit.

 Effective with the sale of the Lincoln Oaks I property on June 22, 1994, the
 Partnership's investment in the joint venture was liquidated.

 The Partnership's investment in the Joint Venture was accounted for under the
 equity method. The following is a summary of financial data derived from
 audited financial statements of the Joint Venture for the period from January
 1, to October 31, 1994:


             Revenues                                           $    521,656
             Operating expenses                                      562,612
                                                                ------------
             Net income (loss)                                  $    (40,956)
                                                                ============


             Partnership's equity in net income (loss)          $    (20,478)
                                                                ============

             Gain on sale                                       $  1,524,222
                                                                ============

             Partnership's share of gain on sale                $  1,434,295
                                                                ============


             A summary of changes in the Partnership's investment in Joint
             Venture for the period from January 1, to October 31, 1994:


             Balance, beginning of period                        $1,855,387

             Equity in income from Joint Venture                  1,413,817
             Cash distributions from Joint Venture               (3,249,181)
             Amortization of advisor acquisition fee                 (4,303)
             Loss on liquidation of joint venture                  (106,620)
             Preferred return to Indepro Corp.                       90,900
                                                                 ----------
             Balance, end of period                              $        -
                                                                 ==========



                                      F-11


<PAGE>




                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

5.  Notes Payable:
------------------

The promissory note due to Bank of Lancaster County, N.A. is collateralized by
the Brunswick Hotel and Conference Center. This note has an interest rate of
8.25% and matures in October 2001.

The aggregate amount of required principal payments assuming no additional
advances of principal are as follows as of December 31, 1996:

                                         1997               $ 82,179
                                         1998                 89,322
                                         1999                 97,087
                                         2000                115,108
                                         2001                 77,086
                                                             -------
                                                            $460,782
                                                            ========


6.  Transactions with Affiliates:
---------------------------------

Expenses incurred by the General Partner and affiliates and charged to the
Consolidated Statements of Income for the years ended December 31, 1996, 1995
and 1994 are as follows:

                                                       1996      1995     1994
                                                       ----      ----     ----

  Reimbursement of legal, accounting and other
   expenses to the General Partner or affiliates     $  5,525  $ 8,224  $ 6,410
  General Partner management fee                       22,727   45,530   28,407

7.  Industry Segment Information:
---------------------------------


The Partnership's operations consist exclusively of investment in, and
operations of, income-producing real estate property.


8.  Cash Flow Information:
--------------------------

For purposes of the Consolidated Statements of Cash Flows, the Partnership
considers highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.

Net cash provided by operating activities include interest payments of $42,491,
$49,624 and $56,207, respectively, for the years ended December 31, 1996, 1995
and 1994.










                                      F-12


<PAGE>



                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

9.  Concentration of Credit Risk:
---------------------------------

The Partnership's operations consist of ownership of a hotel located in
Lancaster, Pennsylvania. The Partnership maintains adequate levels of property
and liability insurance for the hotel. The Partnership's hotel customers
primarily include governmental agencies, and to a lesser extent, corporate
travelers and tourists. The Partnership performs credit evaluations of its
customers and generally does not require collateral.

The Partnership invests its excess cash primarily through a major commercial
bank. Cash available in these accounts may at times exceed FDIC insurance
limits.

10. Capital Lease Obligation:
-----------------------------

In May 1992, Indepro Property Fund I, L.P. entered into a five year capital
lease agreement with Town and Country Inc., a wholly-owned subsidiary of Bank of
Lancaster County, N.A., in the amount of $47,782 for computer equipment for the
Brunswick Hotel. Monthly payments are in the amount of $1,604 based on a 9.5%
interest rate. At the end of the five year agreement, Town and Country Inc. will
provide Indepro Property Fund I, L.P. with the title to the equipment free and
clear of all liens, claims and encumbrances of any kind.

The following is a schedule by years of future minimum lease payments under this
lease and the present value of the net minimum lease payments as of December 31:




            Future minimum lease payments in  1997                     326
            Less: Amount representing interest                           -
                                                                    ------
            Present value of net minimum lease payments             $  326
                                                                    ======























                                      F-13


<PAGE>


                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              For the years ended December 31, 1996, 1995, and 1994


<TABLE>
<CAPTION>

                                Column A                      Column B         Column C          Column D           Column E
                                --------                      --------         --------          --------           --------
<S>                             <C>                           <C>              <C>               <C>                <C>


                                                              Balance at       Charged to
                                                              Beginning        Costs and                             Balance at
                               Description                     of Year         Expenses         Deductions           End of Year
                               -----------                     -------         --------         ----------           -----------

                                  1996

               Allowance for accounts receivable              $   16,730     $           -       $  12,263         $     4,467
                                                              ============   ==============      ==========        ===========

                                  1995

               Allowance for accounts receivable              $   22,996    $            -       $   6,266         $    16,730
                                                              ============  ==============       ===========      ============

                                  1994

               Allowance for accounts receivable              $   15,200    $       7,796       $        -        $    22,996
                                                           =  ============  ==============      ============      ===========
</TABLE>































                                      F-14


<PAGE>



                  INDEPRO PROPERTY FUND I, L.P. AND SUBSIDIARY
                        (A Delaware Limited Partnership)
              SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION
                             as of December 31, 1996
<TABLE>
<CAPTION>

   Col. A         Col. B                 Col. C                    Col. D                        Col. E
   ------         ------                 ------                    ------                        ------
                                                               Cost Capitalized
                                   Initial Costs to              Subsequent to              Gross Amount at Which
                                      Partnership                 Acquisition               Carried at End of Year
                                 --------------------     ------------------------     -------------------------------
                                |                    |   |                        |   |       Building and            |
                                          Building and                    Carrying             Improvements      Total
Description    Encumbrances      Land     Improvements    Improvements    Costs (b)   Land    Carrying Costs    (c)(d)
-----------    ------------      ----     ------------    ------------    ---------   ----    --------------    ------
<S>            <C>               <C>      <C>             <C>             <C>         <C>     <C>               <C>



Brunswick
Hotel and
Conference
Center 227
guest room
hotel and
office/
conference
center in
Lancaster,
Pennsylvania    (a)           $285,000    $6,282,935      $2,620,170    $ 8,992     $285,000    $8,857,267    $9,142,267


</TABLE>






<TABLE>
<CAPTION>

   Col. A            Col. F          Col. G      Col. H       Col. I
   ------         --------------  ------------  --------   ------------


                                                            Life on which
                                                           Depreciation in
                                                             Latest income
                   Accumulated     Date of       Date       Statement is
Description       Depreciation(c) Construction  Acquired     Computed
-----------       --------------  ------------  --------   --------------
<S>               <C>             <C>           <C>        <C>



Brunswick
Hotel and
Conference
Center 227
guest room
hotel and
office/
conference
center in
Lancaster,                                      January 1,
Pennsylvania       $3,677,432         1970        1987           N/A


</TABLE>


<PAGE>




                              NOTES TO SCHEDULE III

a)  See description of Mortgage Notes Payable in the notes to the consolidated
    financial statements.

b)  Consists of legal fees, appraisal fees, advisor fees, total costs and other
    related professional fees.

c)  Reconciliation of Real Estate
    Balance at beginning of period                       9,035,105
    Additions during period:
      Improvements                                         107,162
                                                         ---------
    Balance at end of period                            $9,142,267
                                                        ==========
    Reconciliation of Accumulated Depreciation
    Balance at beginning of period                       3,677,432
    Depreciation expense for the period                          -
                                                        ----------
    Balance at end of period                            $3,677,432
                                                        ==========

d)  The aggregate cost of land, building and improvements for federal income
    tax purposes is the same as for book purposes.

                                      F-15


<PAGE>





                         Report of Independent Auditors



To the Partners of
         Lincoln Oaks I, Fort Worth, Ltd.:


We have audited the accompanying statements of operations, changes in partners'
capital and cash flows of Lincoln Oaks I, Fort Worth, Ltd., a Texas limited
partnership (the "Partnership"), for the period from January 1, 1994 through
October 31, 1994 (date of Partnership dissolution). 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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Lincoln
Oaks I, Fort Worth, Ltd. for the period from January 1, 1994 through October 31,
1994, in conformity with generally accepted accounting principles.

As discussed in Note 6, on June 22, 1994, the Partnership sold the apartment
property which represented its primary asset and accounted for substantially all
of the Partnership's revenues and expenses. The Partnership was dissolved on
October 31, 1994.


/s/  Ernst & Young LLP


Dallas, Texas
February 9, 1995
















                                      F-16

<PAGE>




                        LINCOLN OAKS I, FORT WORTH, LTD.

                             STATEMENT OF OPERATIONS
          FOR THE PERIOD FROM JANUARY 1, 1994 THROUGH OCTOBER 31, 1994




REVENUES:

     Rental income                                            $      504,870
     Other income                                                     16,786
                                                              --------------
                                                              $      521,656
                                                              --------------

EXPENSES:

     Operations                                               $     291,383
     Interest                                                       105,975
     Real estate taxes                                               67,992
     Depreciation                                                    97,262
                                                              --------------
                                                                    562,612
                                                              --------------

LOSS BEFORE GAIN ON SALE                                            (40,956)

GAIN ON SALE OF PROPERTY                                           1,524,222
                                                              --------------

NET INCOME                                                    $   1,483,266
                                                              ==============

























See accompanying notes.

                                      F-17

<PAGE>






                        LINCOLN OAKS I, FORT WORTH, LTD.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL
          FOR THE PERIOD FROM JANUARY 1, 1994 THROUGH OCTOBER 31, 1994

<TABLE>
<CAPTION>


                                         Managing          Non-Managing
                                         General              General             Limited
                                         Partner              Partner             Partner              Total
                                         -------              -------             -------              -----
<S>                                      <C>               <C>                 <C>               <C>

CAPITAL,
     beginning of period              $   (64,060)          $ 1,835,364        $    (1,310)       $ 1,769,994

LOSS BEFORE GAIN ON
     SALE                                 (20,068)              (20,478)              (410)           (40,956)

GAIN ON SALE OF
     PROPERTY                              88,207             1,434,295              1,720          1,524,222

DISTRIBUTIONS                              (4,079)           (3,249,181)              --           (3,253,260)
                                      -----------           -----------        -----------        -----------

CAPITAL,
     end of period                    $      --             $      --          $      --          $      --
                                      ===========           ===========        ===========        ===========


</TABLE>
























See accompanying notes.
                                      F-18


<PAGE>




                         LINCOLN OAKS I, FORT WORTH, LTD.

                             STATEMENT OF CASH FLOWS
          FOR THE PERIOD FROM JANUARY 1, 1994 THROUGH OCTOBER 31, 1994



CASH FLOWS FROM OPERATING ACTIVITIES:                             $  1,483,266
   Net income

   Adjustments to reconcile net income to net cash provided by operating
      activities:
           Depreciation                                                 97,262
           Gain on sale of property                                 (1,524,222)

   Decrease in assets and liabilities:
           Other assets                                                 19,287
           Due from affiliate                                            2,948
           Accounts payable and accrued expenses                      (162,529)
           Tenant security deposits                                    (18,681)
                                                                    -----------

   Net cash used in operating activities                              (102,669)
                                                                      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property                                               (14,898)
   Net proceeds from the sale of property                            5,434,942
                                                                     ---------

   Net cash provided by investing activities                         5,420,044
                                                                     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Principal payments on mortgage note payable                         (10,733)
   Retirement of mortgage note payable                              (2,253,081)
   Distributions to partners                                        (3,253,260)
                                                                    -----------

   Net cash used in financing activities                            (5,517,074)
                                                                    -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                             (199,699)

CASH AND CASH EQUIVALENTS, beginning of period                         199,699
                                                                      ---------

CASH AND CASH EQUIVALENTS,  end of period                         $          -
                                                                   ===========


Cash paid during the year for interest                            $    125,202
                                                                  =============






See accompanying notes.


                                      F-19

<PAGE>




                        LINCOLN OAKS I, FORT WORTH, LTD.

                          NOTES TO FINANCIAL STATEMENTS
                                OCTOBER 31, 1994



(1)      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

                  Organization -

          Lincoln Oaks I, Fort Worth, Ltd., a Texas limited partnership (the
"Partnership"), was formed November 1, 1982, for the purpose of acquiring,
owning and operating a 248-unit garden apartment property (the "Property") in
Fort Worth, Texas. Lincoln Property Company No. 364, Ltd., a Texas limited
partnership, was the managing general partner.


                  Method of Accounting -

          The accounting records of the Partnership were maintained on the basis
of accounting used for federal income tax reporting purposes. The accompanying
financial statements have been prepared in accordance with generally accepted
accounting principles by use of memorandum entries.


                  Cash and Cash Equivalents -

          For purposes of the Statement of Cash Flows, the Partnership
considered all highly-liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.

                  Revenue Recognition -

          Apartments were leased to individual tenants on short-term (generally
six months)leases at fixed rates. Rental revenue was recognized monthly as
earned.


                  Income Tax Matters -

          No federal taxes are payable by the Partnership and none have been
provided in the accompanying financial statements. The partners are to include
their respective share of Partnership income or loss in their individual tax
returns.


                  Depreciation -

          The buildings and improvements were depreciated on the straight-line
method over estimated useful lives of 5 to 30 years.







                                      F-20

<PAGE>






(2)      TRANSACTIONS WITH AFFILIATES:


               Certain of the Partnership's expenses and other disbursements
incurred in the normal course of business were paid from a central operating
account of an affiliated corporation. The Partnership reimbursed the affiliate
on a regular basis for disbursements made on its behalf. All disbursements were
identified by partnership and the disbursements and reimbursements were
accounted for by the Partnership as due to or due from affiliate. The due from
affiliate of $2,948 at December 31, 1993, was collected by the Partnership in
1994.

          For its services in managing the operations of the Property, Lincoln
Property Co. Texas, Inc., an affiliate of the managing general partner, received
a management fee of $28,261 in 1994, equal to 5% of the project's gross income,
as defined. For its services in providing partnership accounting, audit
assistance and tax return preparation, an affiliate of the managing general
partner received a fee of $7,530 in 1994. Fees for these services are included
in operations expense in the accompanying financial statements.

          In addition, for its services related to the sale of the Property,
Lincoln Eastern Management Corporation, an affiliate of the managing general
partner, received a fee of $16,672 in 1994.


(3)      MORTGAGE NOTE PAYABLE:

          On November 30, 1988, the mortgage note payable was modified to extend
the maturity date from November 1989 to December 1998 and to modify the interest
rate to 10%. Monthly payments of $20,565 were due until December 1998, at which
time all unpaid principal and accrued interest was due. The mortgage note was
retired on June 22, 1994 in conjunction with the sale of the Property.


(4)      PARTNERS' CAPITAL:

                  Participation Percentages -

          In accordance with the partnership agreement, the managing general
partner and limited partner, Lincoln Property Co. No. 364, Ltd., and
non-managing general partner, Indepro Property Fund I, L.P., have participation
percentages of 49%, 1% and 50%, respectively.

                  Capital Contributions -

     At inception of the Partnership, the managing general partner contributed
the apartment property and related liabilities. Initial cash contributions of
$3,925,000 and $100 were made by the non-managing partner and limited partner,
respectively.










                                      F-21

<PAGE>







                  Net Income (Loss) Allocation -

          In accordance with the partnership agreement, net income and net
losses from operations were to be allocated to all partners in proportion to
their respective participation percentages.


                  Cash Flow Distributions -

          The Partnership was to make distributions from net cash flow, as
defined, of the Partnership in the following order of priority:


         (a)  To the non-managing general partner, a preferred return
              (cumulative through October 31, 1984) equal to 11.5% per annum of
              its aggregate, outstanding capital balance, as defined; then,

         (b)  To all partners, in accordance with their respective
              participation percentages.


                  Distributions Upon Sale and Dissolution -

          Upon sale of the Partnership's assets and dissolution of the
Partnership, distribution of net sales proceeds, as defined, are to be made in
the following order of priority:

          (a) To creditors, for full payment of debts and liabilities;

          (b) To payment of expenses of liquidation of the Partnership;

          (c) To reserves deemed necessary by the managing general partner for
              any contingent or unforeseen liabilities or obligations of the
              Partnership;

          (d) To the non-managing general partner, in satisfaction of the unpaid
              preferred cumulative return or its unpaid preferred non-cumulative
              return:

          (e) To the non-managing general partner, in reduction of its
              outstanding capital balance, until the capital balance is reduced
              to $0; then

          (f) To the remaining partners in accordance with their respective
              participation percentages.


Distributions of net sales proceeds and net cash flow during 1994 totaled
$3,253,260.











                                      F-22

<PAGE>





(5)   RECONCILIATION OF FINANCIAL INCOME TO TAX INCOME FOR 1994:



    Net income per financial statements                    $      1,483,266

    Excess of depreciation for financial reporting
    purposes over amount reported for tax purposes                    2,438

    Gain on sale of Property reported for tax purposes in
    excess of amount reported for financial reporting
    purposes due to lower tax basis of the property               2,432,184
                                                          -----------------

         Net income per tax return                        $       3,917,888
                                                          =================




(6)   SALE OF PROPERTY AND DISSOLUTION OF PARTNERSHIP:

      On June 22, 1994, the Partnership sold the Property for $5,600,000 and
      retired its mortgage note payable. For financial reporting purposes, a
      gain of $1,524,222 was recognized on the sale. The Partnership was
      dissolved on October 31, 1994.






























                                      F-23

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
Indepro Property Fund I, Corp.:

     We have audited the accompanying balance sheet of Indepro Property Fund I,
Corp. as of December 31, 1996. This financial statement is the responsibility of
the Company's management. Our responsibility is to express an opinion on this
financial statement based on our audit.

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

     In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Indepro Property Fund I, Corp. as
of December 31, 1996 in conformity with generally accepted accounting
principles.





                          /s/ Coopers & Lybrand, L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
March 7, 1997
















                                      F-24


<PAGE>





                         INDEPRO PROPERTY FUND I, CORP.
                                  BALANCE SHEET
                             AS OF DECEMBER 31, 1996




                       Assets



             Cash and cash equivalents                         $     2,376,730
             Prepaid expenses                                            9,730
             Receivable from affiliates                                369,215
                                                               ---------------
               Total Current Assets                                  2,755,675

             Investment in Indepro Property Fund I, L.P.             1,962,610
             Notes receivable from parent                            1,400,000
             Deferred taxes                                            689,629
                                                               ---------------

               Total Assets                                    $     6,807,914
                                                               ===============

                     Liabilities and Stockholder's Equity



             Accounts payable                                  $         4,543
             State taxes payable                                         4,822
             Liability for Guarantee                                 2,140,425
                                                               ---------------
                Total Liabilities                                    2,149,790
                                                               ---------------

             Stockholder's Equity

             Common stock (par value $1.00 per share
               1,000 shares authorized, issued and
               outstanding)                                              1,000
             Paid in capital                                         2,090,277
             Retained earnings                                       2,566,847
                                                               ---------------
                Total Stockholder's Equity                           4,658,124
                                                               ---------------

                Total Liabilities and Stockholder's Equity     $     6,807,914
                                                               ===============









    The accompanying notes are an integral part of the financial statement.


                                      F-25


<PAGE>



                         INDEPRO PROPERTY FUND I, CORP.
                          Notes to Financial Statements


1.  Description of Company:
---------------------------

Indepro Property Fund I, Corp. (the Company or the General Partner) was
incorporated in the State of Delaware on December 24, 1981. The Company was
formed to administer the operations of and act as the General Partner for the
Indepro Property Fund I, L.P. (the Partnership), a public limited partnership
which invests in income-producing real property.

The Company is a wholly-owned subsidiary of Indepro Corp. (the Parent) which is
an indirect, wholly-owned subsidiary of the Penn Mutual Life Insurance Company
(Penn Mutual). The Parent also acts as the Advisor for the Partnership.

2.  Summary of Significant Accounting Policies:
-----------------------------------------------

Cash and Cash Equivalents
Investments with maturities of three months or less when purchased are
considered to be cash equivalents. The Company invests excess funds in
short-term, interest-bearing obligations, including money market mutual funds
sponsored by an affiliate of Penn Mutual. The carrying amount of cash
equivalents approximates fair value due to the short-term maturity of these
investments. The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.

Notes Receivable
Notes receivable from the Parent are payable on demand and are stated at par.
Accrued interest receivable on the notes is recorded when earned and included in
other receivables from affiliates.

Income Taxes

The Company is included in the consolidated federal tax return of Penn Mutual.
All currently payable federal taxes are paid by the Parent on behalf of the
Company and therefore no currently payable federal tax liability is established
by the Company. The Company records all taxes paid on its behalf by the Parent
as additional paid in capital. Any benefits would be recorded as a dividend. The
Company files state tax returns and reflects currently payable state taxes on
the balance sheet in accounts payable.


The Company provides for deferred income taxes to reflect the impact of
temporary differences between the amount of assets and liabilities recognized
for financial reporting purposes and such amounts recognized for tax reporting
purposes. These deferred taxes are measured using the liability method by
applying current tax laws and are analyzed on a periodic basis to determine if
the items are currently reportable for federal income tax purposes. Once these
items are part of the Company's current tax liability or receivable, they are
recorded as additions to or reductions in paid in capital.

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

Investment in Indepro Property Fund I, L.P.
The Company's investment in the Partnership is accounted for under the equity
method.








                                      F-26


<PAGE>



                         INDEPRO PROPERTY FUND I, CORP.
                    Notes to Financial Statements (continued)

3.  Related Party Transactions:
-------------------------------

The Company is reimbursed by the Partnership for direct expenses relating to the
administration of the Partnership. The General Partner is entitled to receive a
partnership management fee equal to 1% of the annual gross rents and hotel
revenues of the Partnership's interest in its properties, not to exceed 2.5% of
the Partnership's Distributable Cash (prior to payment of these fees) in any
fiscal year. Accounts receivable includes $68,258 related to this management
fee.

Notes receivable represents $1,400,000 due on demand from the Parent. Interest
on these notes is payable annually and accrues at the greater of the prime rate
on the preceding payment date plus 1% or the minimum arm's length rate of
interest on the preceding payment date provided for under Section 482 of
Internal Revenue Code of 1954.

The outstanding balance and payment terms for these notes are as follows:

                                                              Principal
                  Interest Payment        Current          Balance as of
                        Date           Interest Rate     December 31, 1996
                  ----------------     -------------     -----------------

                    June 30                   9.25%          $    400,000
                    December 1                9.25%          $  1,000,000

The carrying amount of this receivable approximates fair value.

4.  Investment in Indepro Property Fund I, L.P. (the Partnership):
------------------------------------------------------------------

The Company owns a 1% general partnership interest in the Partnership. In
addition, from 1987 to 1989, the Company purchased 6,421 or 21.4% of the Limited
Partnership Units of the Partnership for an aggregate purchase price of
$2,036,929. These units were purchased through presentment offers whereby the
Company offered to purchase units at approximately 85% of the amount which would
have been distributable to each Limited Partner assuming that the Partnership
had sold all of its properties for their fair market value and had distributed
the net sales proceeds in accordance with the Partnership Agreement. The Company
does not intend, nor is it obligated to make, any future presentment offers to
the Limited Partners.

The Partnership Agreement provides for the allocation and distribution of
Partnership income, loss, and distributable cash as 1% to the General Partner
and 99% to the Limited Partnership Units. All sale and refinancing proceeds are
distributed 1% to the General Partner and 99% to the Limited Partnership Units
until the Limited Partners have received a non-compounded cumulative return of
10% per annum on their adjusted capital contribution. Any additional proceeds
are distributed 85.5% to the Limited Partnership Units and the remainder to the
General Partner.

The Company is obligated, under the terms of the Partnership Agreement, to make
capital contributions to the Partnership upon the Partnership's dissolution in
the amount necessary to enable the Partnership to pay each Limited Partner a
guaranteed 8% non-compounded return on the unrecovered capital contribution of
the Limited Partner. This obligation does not guarantee to the Limited Partners
a return of their capital contributions and is limited by the available assets
of the Partnership and Company. As of December 31, 1996, the estimated amount of
this obligation to the Limited Partners was approximately $3,087,434. The
Partnership had available cash distributable to the Limited Partners of $947,009
at December 31, 1996 which would have reduced this obligation to $2,140,425. The
carrying amount of this liability approximates fair value.

Due to the General Partner's efforts to sell the remaining property in the
Partnership, the guarantee will likely become payable during 1997 upon
termination of the Partnership. Therefore, the liability for the guarantee
through December 31, 1996 was recognized in this financial statement.



                                      F-27


<PAGE>



                         INDEPRO PROPERTY FUND I, CORP.
                    Notes to Financial Statements (continued)

4.  Investment in Indepro Property Fund I, L.P. (the Partnership) (continued):
------------------------------------------------------------------------------

    The following is a summary of financial data for the Partnership as of
December 31, 1996:



      Investments in real estate (net of accumulated
      depreciation and amortization of $3,677,432)                 $5,464,835

      Cash and cash equivalents                                     1,217,068

      Other assets                                                    398,617
                                                                   ----------

                      Total Assets                                $ 7,080,520
                                                                  ===========

      Notes payable                                                   460,782

      Other liabilities                                               238,005
                                                                  -----------

                       Total Liabilities                              698,787

      Partners' Capital                                             6,381,733
                                                                  -----------

         Total Liabilities and Partners' Capital                  $ 7,080,520
                                                                  ===========

5.  Concentration of Credit Risk:
---------------------------------

The Company's operations consist of investments in commercial real estate
through the Partnership. The Partnership's investment in a hotel located in
Lancaster, Pennsylvania primarily caters to U.S. Government Agencies and, to a
lesser extent, tourist and corporate travelers. The Partnership performs credit
evaluations of its customers and generally does not require collateral.

6.  Income Taxes:
-----------------

At December 31, 1996, deferred income taxes recognized in the balance sheet of
$689,629 were comprised of the tax effect of the temporary differences between
the financial statement and tax basis of the Company's investment in the
Partnership and a deferred federal income tax asset on the 8% guarantee to the
Indepro Property Fund I, L.P. Limited Partners.













                                      F-28