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

                                  FORM 10-K

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

                  FOR FISCAL YEAR ENDED: SEPTEMBER 30, 1995

                                      OR

               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                     For the transition period from to .

                       Commission File Number: 0-12087

           PAINE WEBBER INCOME PROPERTIES FIVE LIMITED  PARTNERSHIP
             (Exact name of registrant as specified in its charter)

Delaware                                                    04-2780287
(State of organization)                                 (I.R.S.Employer
                                                       Identification No.)

265 Franklin Street, Boston, Massachusetts                         02110
(Address of principal executive office)                           (Zip Code)

Registrant's telephone number, including area code:  (617) 439-8118

Securities registered pursuant to Section 12(b) of the Act:
                                                      Name of each exchange
Title of each class                                   on which registered

     None                                                   None 

Securities registered pursuant to Section 12(g) of the Act:
                    UNITS OF LIMITED PARTNERSHIP INTEREST
                               (Title of class)

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

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

State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant. Not applicable.
                     DOCUMENTS INCORPORATED BY REFERENCE
Documents                                                   Form 10-K Reference
Prospectus of registrant dated                                 Part IV
May 26, 1983, as supplemented





<PAGE>



           PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

                                1995 FORM 10-K

                              TABLE OF CONTENTS

Part   I
Page

Item  1     Business                                                       I-1

Item  2     Properties                                                     I-2

Item  3     Legal Proceedings                                              I-3

Item  4     Submission of Matters to a Vote of Security Holders            I-3


Part  II

Item  5     Market for the Partnership's Limited Partnership Interests and
               Related Security Holder Matters                            II-1

Item  6     Selected Financial Data                                       II-1

Item  7     Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                  II-2

Item  8     Financial Statements and Supplementary Data                   II-6

Item  9     Changes in and Disagreements with Accountants on Accounting
               and Financial Disclosure                                   II-6


Part III

Item  10    Directors and Executive Officers of the Partnership          III-1

Item  11    Executive Compensation                                       III-3

Item  12    Security Ownership of Certain Beneficial Owners 
            and Management                                               III-3

Item  13    Certain Relationships and Related Transactions               III-3


Part  IV

Item  14    Exhibits, Financial Statement Schedules and Reports 
               on Form 8-K                                                IV-1

Signatures                                                                IV-2

Index to Exhibits                                                         IV-3

Financial Statements and Supplementary Data                        F-1 to F-28


<PAGE>



                                    PART I

Item 1.  Business

      Paine   Webber   Income   Properties   Five   Limited   Partnership   (the
"Partnership") is a limited partnership formed in January 1983 under the Uniform
Limited Partnership Act of the State of Delaware for the purpose of investing in
a diversified  portfolio of existing  income-producing  real  properties such as
apartments,    shopping   centers,   office   buildings,   and   other   similar
income-producing   properties.  The  Partnership  sold  $34,928,000  in  Limited
Partnership  Units (the "Units"),  representing  34,928 units at $1,000 per Unit
from May 26, 1983 to May 25, 1984 pursuant to a Registration  Statement filed on
Form S-11 under the Securities Act of 1933  (Registration No. 2-81537).  Limited
Partners will not be required to make any additional capital contributions.

      As of September 30, 1995,  the  Partnership  owned  interests in operating
investment  properties  through joint venture  partnerships  as set forth in the
following table:

Name of Joint Venture                    Date of
Name and Type of Property                Acquisition          Type of
Location                      Size      of Interest         Ownership (1)

Randallstown Carriage Hill    806         8/30/83    Fee ownership of land and
  Associates and              units                  improvements (through
  Signature Partners, L.L.C.                         joint venture)
Carriage Hill Village Apartments
Randallstown, Maryland

Amarillo Bell Associates      151,500     9/30/83    Fee ownership of land and
Bell Plaza Shopping Center    gross                  improvements (though
Amarillo, Texas               leasable               joint venture)
                              sq. ft.

Greenbrier Associates         324         6/29/84    Fee ownership of land and
Greenbrier Apartments         units                  improvements (through
Indianapolis, Indiana                                joint venture)

Seven Trails West Associates  532         9/13/84    Fee ownership of land and
Seven Trails West Apartments  units                  improvements (through
Ballwin, Missouri                                    joint venture)

(1) See Notes to the  Financial  Statements  filed with this Annual Report for a
    description  of  the  long-term   mortgage   indebtedness   secured  by  the
    Partnership's  operating  property  investments and for a description of the
    agreements  through  which the  Partnership  has acquired  these real estate
    investments.

      The Partnership  originally had  investments in five operating  investment
properties. On June 30, 1994, Cambridge Associates, a joint venture in which the
Partnership had an investment interest,  sold its operating investment property,
the  Cambridge  Apartments,  to an  affiliate  of the  Partnership's  co-venture
partner for a gross  purchase  price of $9.7  million.  After  repayment  of the
outstanding mortgage debt and payment of transaction closing costs, net proceeds
of  approximately  $4.7 million were available for  distribution  to the venture
partners.  In accordance with the joint venture  agreement,  the Partnership was
entitled to and received  approximately $3.7 million of such proceeds. A portion
of the Cambridge sales proceeds was added to the Partnership's  cash reserves in
anticipation  of future capital  requirements  at certain of the remaining joint
ventures. The remainder of the proceeds,  totalling  approximately $2.2 million,
was  distributed  to the Limited  Partners in September  1994. See Note 4 to the
Financial Statements accompanying this Annual Report for a further discussion of
this transaction.


<PAGE>


      The Partnership's investment objectives are to:
    (i) provide the Limited Partners with cash  distributions  which, to some
         extent, will not constitute taxable income;
    (ii)preserve  and protect  the  Limited  Partners'  capital;  
   (iii)obtain long-term  appreciation in the value of its  properties;  and
   (iv)provide a build-up of equity through the reduction of mortgage loans
         on its properties.

      Through  September 30, 1995, the Limited Partners had received  cumulative
cash distributions  totalling approximately  $18,047,000,  or approximately $542
per original $1,000  investment for the  Partnership's  earliest  investors,  of
which  approximately   $7,720,000,  or  $284  per  original  $1,000  investment,
represents net proceeds from the  refinancing of the Carriage Hill Apartments in
1987  and  approximately  $2,200,000,  or $63 per  original  $1,000  investment,
represents  the  distributed  portion of the net  proceeds  from the sale of the
Cambridge  Apartments in 1994. The remaining  distributions  have been made from
the net operating cash flow of the  Partnership.  A substantial  portion of such
distributions  has been sheltered from current taxable  income.  The Partnership
suspended the payment of regular quarterly distributions of excess net cash flow
in fiscal 1988. As of September 30, 1995, the Partnership  retains its ownership
interest in four of its five original investment  properties.  The Partnership's
success in meeting  its  capital  appreciation  objective  will  depend upon the
proceeds received from the final  liquidation of the investments.  The amount of
such proceeds will ultimately depend upon the value of the underlying investment
properties  at the time of their final  disposition,  which cannot  presently be
determined.  At the present time, real estate values for retail shopping centers
in certain markets have begun to be affected by the effects of overbuilding  and
consolidations among retailers which have resulted in an oversupply of space.

      All of the properties  securing the Partnership's  investments are located
in real  estate  markets  in which  they face  significant  competition  for the
revenues they generate.  The apartment  complexes compete with numerous projects
of  similar  type  generally  on the basis of  price,  location  and  amenities.
Apartment  properties  in all markets also compete with the local single  family
home market for revenues.  The continued  availability  of low interest rates on
home mortgage  loans has increased the level of this  competition  over the past
few years.  However,  the impact of the competition from the single-family  home
market has been offset by the lack of significant new  construction  activity in
the multi-family apartment market over this period. The shopping center competes
for  long-term  commercial  tenants  with  numerous  projects  of  similar  type
generally  on the  basis  of  rental  rates,  location,  tenant  mix and  tenant
improvement allowances.

      The Partnership has no operating property  investments located outside the
United States.  The Partnership is engaged solely in the business of real estate
investment,  therefore,  presentation of information  about industry segments is
not applicable.

      The  Partnership  has no  employees;  it  has,  however,  entered  into an
Advisory  Contract with  PaineWebber  Properties  Incorporated  (the "Adviser"),
which is  responsible  for the  day-to-day  operations of the  Partnership.  The
Adviser is a wholly-owned  subsidiary of  PaineWebber  Incorporated  ("PWI"),  a
wholly owned subsidiary of PaineWebber Group Inc. ("PaineWebber").

      The general partners of the Partnership (the "General Partners") are Fifth
Income Properties Fund, Inc. and Properties Associates.  Fifth Income Properties
Fund,  Inc., a wholly-owned  subsidiary of PaineWebber,  is the Managing General
Partner of the Partnership.  The Associate General Partner of the Partnership is
Properties  Associates,  a Massachusetts  general  partnership,  certain general
partners of which are officers of the Adviser and the Managing  General Partner.
Subject  to  the  General  Partner's  overall  authority,  the  business  of the
Partnership  is managed by the Adviser.  The terms of  transactions  between the
Partnership  and affiliates of the Managing  General  Partner of the Partnership
are set forth in Items 11 and 13 below to which  reference  is hereby made for a
description of such terms and transactions.

Item 2. Properties

      As of  September  30,  1995,  the  Partnership  owned  interests  in  four
operating  properties  through  joint  venture  partnerships.  The joint venture
partnerships  and the related  properties  are referred to under Item 1 above to
which reference is made for the name, location and description of each property.


<PAGE>


      Occupancy  figures  for each fiscal  quarter  during  1995,  along with an
average for the year, are presented below for each property:


                                     Percent Occupied At            Fiscal 1995
                             12/31/94   3/31/95   6/30/95   9/30/95   Average

Carriage Hill Village
 Apartments                    92%        90%       89%       89%       90%

Bell Plaza Shopping Center     76%        78%       78%       78%       78%

Greenbrier Apartments          93%        89%       90%       93%       91%

Seven Trails West Apartments   95%        94%       93%       97%       95%

Item 3.  Legal Proceedings

     In  November  1994,  a series of  purported  class  actions  (the "New York
Limited Partnership Actions") were filed in the United States District Court for
the Southern District of New York concerning PaineWebber Incorporated's sale and
sponsorship of various limited partnership investments,  including those offered
by the Partnership.  The lawsuits were brought against PaineWebber  Incorporated
and Paine Webber Group Inc. (together "PaineWebber"), among others, by allegedly
dissatisfied  partnership  investors.  In March  1995,  after the  actions  were
consolidated under the title In re PaineWebber Limited  Partnership  Litigation,
the  plaintiffs  amended their  complaint to assert claims  against a variety of
other  defendants,  including Fifth Income  Properties Fund, Inc. and Properties
Associates,  which are the General Partners of the Partnership and affiliates of
PaineWebber.  On May 30, 1995, the court certified class action treatment of the
claims asserted in the litigation.

     The amended complaint in the New York Limited  Partnership  Actions alleges
that, in connection with the sale of interests in Paine Webber Income Properties
Five Limited  Partnership,  PaineWebber,  Fifth Income Properties Fund, Inc. and
Properties  Associates  (1) failed to provide  adequate  disclosure of the risks
involved; (2) made false and misleading  representations about the safety of the
investments and the Partnership's anticipated performance;  and (3) marketed the
Partnership  to  investors  for whom such  investments  were not  suitable.  The
plaintiffs,  who purport to be suing on behalf of all  persons  who  invested in
Paine  Webber  Income  Properties  Five  Limited  Partnership,  also allege that
following  the sale of the  partnership  interests,  PaineWebber,  Fifth  Income
Properties  Fund,  Inc.  and  Properties  Associates   misrepresented  financial
information about the Partnerships value and performance.  The amended complaint
alleges that  PaineWebber,  Fifth Income  Properties  Fund,  Inc. and Properties
Associates  violated the  Racketeer  Influenced  and Corrupt  Organizations  Act
("RICO")  and the federal  securities  laws.  The  plaintiffs  seek  unspecified
damages,   including  reimbursement  for  all  sums  invested  by  them  in  the
partnerships,  as well as  disgorgement  of all fees and other income derived by
PaineWebber from the limited partnerships. In addition, the plaintiffs also seek
treble  damages under RICO. The  defendants'  time to move against or answer the
complaint has not yet expired.

      Pursuant to provisions of the Partnership  Agreement and other contractual
obligations,  under certain  circumstances  the  Partnership  may be required to
indemnify Fifth Income  Properties Fund, Inc.,  Properties  Associates and their
affiliates for costs and  liabilities in connection  with this  litigation.  The
General Partners intend to vigorously contest the allegations of the action, and
believe that the action will be resolved  without material adverse effect on the
Partnership's financial statements, taken as a whole.

      The  Partnership  is not  subject  to any  other  material  pending  legal
proceedings.

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

      None.


<PAGE>




                                   PART II

Item 5.  Market  for the  Partnership's  Limited  Partnership  Interests  and
Related Security Holder Matters

      At  September  30,  1995 there were 2,407  record  holders of Units in the
Partnership.  There is no public market for the Units, and it is not anticipated
that a public market for Units will develop.  The Managing  General Partner will
not redeem or repurchase Units.

      No distributions were made to the Limited Partners during fiscal 1995.

Item 6.  Selected Financial Data (in thousands except per Unit data)

           Paine Webber Income Properties Five Limited Partnership
                 Selected Financial Data for the Partnership
      For the years ended September 30, 1995, 1994, 1993, 1992 and 1991

                                          Years  Ended September 30,
                                1995        1994      1993      1992     1991

Revenues                     $   106    $     87  $     21 $     16  $     18

Operating loss               $  (207)    $  (262)  $  (183) $  (177)  $  (187)

Partnership's share of
  ventures' losses           $(1,182)   $   (995) $   (860) $(1,160)  $(1,068)

Partnership's share of gain on
  sale of operating investment
  property                         -    $  3,174         -        -         -

Net income (loss)            $(1,389)     $1,917   $(1,043) $(1,337)  $(1,255)

Net income (loss) per Limited
  Partnership Unit           $(39.37)   $  54.36   $(29.57) $(37.90)  $(35.56)

Cash distributions from sale,
  refinancing or other disposition
  transactions per Limited
  Partnership Unit               -      $  63.00         -        -         -

Total assets                $  1,658    $  1,836   $ 1,280  $ 2,319   $ 3,651

      The above selected  financial data should be read in conjunction  with the
financial  statements and the related notes  appearing  elsewhere in this Annual
Report.

      The above per  Limited  Partnership  Unit  information  is based  upon the
34,928 Limited Partnership Units outstanding during each year.


<PAGE>


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

Liquidity and Capital Resources

      The Partnership offered limited  partnership  interests to the public from
May 1983 to May 1984  pursuant  to a  Registration  Statement  filed  under  the
Securities  Act of 1933.  Gross  proceeds of  $34,928,000  were  received by the
Partnership   and,  after  deducting   selling   expenses  and  offering  costs,
approximately  $30,920,000  was  invested  in joint  venture  interests  in five
operating  investment  properties.  The Partnership's  interest in the Cambridge
Apartments  property was sold in June 1994 in a  transaction  which  yielded net
proceeds of $3.7 million to the Partnership.  Of such proceeds, $2.2 million was
distributed  to the Limited  Partners  in  September  1994 and $1.5  million was
retained  by  the  Partnership  to  bolster  its  cash  reserve  balances.   The
Partnership does not have any commitments for additional capital expenditures or
investments but may be called upon to advance funds to its existing  investments
in accordance with the respective joint venture agreements.

      The Partnership's  four remaining  investment  properties consist of three
multi-family  apartment  complexes  and one retail  shopping  center.  While the
current estimated market values of certain of the remaining properties are below
the amounts paid for the properties at the time of the  Partnership's  inception
in 1983 and 1984,  all of the  properties  have  estimated  values  above  their
respective outstanding mortgage debt obligations. Management's strategy over the
past two years has been to  capitalize  on the  favorable  market  interest rate
environment  by  refinancing   the  mortgage  loans  secured  by  the  operating
investment  properties to improve cash flow and permit the reinvestment of funds
for capital improvement work. Such capital  improvements are aimed at preserving
and enhancing the properties' market values while the respective local economies
and market conditions improve until favorable  opportunities for the sale of the
properties can be achieved.  The status of such refinancing  efforts and capital
improvement work is discussed in more detail below.

      The occupancy  level at Seven Trails West  Apartments was 97% at September
30, 1995,  as compared to 96% at September 30, 1994.  The property  continued to
benefit  from a  combination  of a stable  multi-family  rental  market  and the
improvements  in physical  appearance  resulting  from the  capital  improvement
program  implemented  during the  current  year.  A major  capital  program  was
implemented  during 1995 with over $400,000  budgeted to improve the exterior of
the buildings as well as the grounds.  During the year, major  enhancements that
were  completed  included  replacing  and/or  repairing  retaining  walls  where
necessary,  replacing numerous roofs and balconies,  painting the exteriors of a
number of  buildings,  and  purchasing  exercise  equipment  for the  clubhouse.
Monthly  rental  rates have  increased by 4% since the  beginning  of 1995.  The
apartment  complex is  encumbered by a  nonrecourse  first  mortgage loan with a
principal  balance of  $14,700,000 at September 30, 1995. On March 31, 1994, the
Partnership  closed on a modification  and extension of the wraparound  mortgage
loan secured by the Seven Trails Apartments with the existing lender. As part of
the agreement,  the wrap mortgage lender purchased the underlying first mortgage
loan  and  is  now  the  sole  mortgage  lienholder.  Under  the  terms  of  the
modification agreement,  the loan maturity date was extended to February 1, 1996
and  the  accrual  rate of  interest  was  increased  from  11% to 12%,  with 1%
deferred,  on the  outstanding  mortgage  loan  principal.  In  addition  to the
outstanding  principal  balance,  there is currently deferred interest totalling
approximately  $1.7 million due to the Seven Trails mortgage  lender.  Under the
terms of the  extension  agreement,  no  interest  will accrue on the current or
additional amounts of deferred interest through the scheduled maturity date. The
Partnership contributed approximately $586,000 to the Seven Trails joint venture
in the second quarter of fiscal 1994 in order to complete the  modification  and
extension  transaction.  Such  advances  were used to pay a refundable  $147,000
extension fee, to fund a capital  improvement reserve of $400,000 and to pay for
the  transaction  closing  costs.  The  extension  fee will be  refunded  to the
Partnership  if the entire  obligation to the mortgage  lender is repaid in full
prior to the extended maturity date. Under the terms of the extension agreement,
all net cash flow of the joint  venture,  after payment of current debt service,
approved capital costs and approved  refinancing  costs,  will be payable to the
lender to pay down outstanding deferred interest and then loan principal. During
fiscal  1995,  the joint  venture  approached  several  potential  lenders in an
attempt to secure a timely  refinancing  of the first mortgage loan prior to the
February 1996 maturity date.  The joint venture  currently has an application in
process  for a new  loan  with  a  potential  replacement  lender.  However,  no
financing  agreement has been finalized as of the date of this report.  The loan
application is for a $17 million mortgage loan which would enable the venture to
repay, in full, the maturing  obligation.  The lender is currently reviewing the
loan  application  and  completing  its due  diligence.  The review process will
include an assessment  of reserves  required to be withheld from the loan amount
to be set aside for necessary  repairs and  improvements.  Since the property is
over 20 years old,  such reserve  requirements  could be  significant  and could
result in the Partnership  having to contribute  funds from its cash reserves to
cover transaction costs. Management is hopeful that the amounts spent on repairs
and  improvements  during  fiscal 1995 will  mitigate the  prospective  lender's
reserve  requirements.  While  there are no  assurances  that  this  refinancing
transaction  will be  completed,  management  is  cautiously  optimistic  that a
transaction  will close in the second  quarter of fiscal  1996.  It is uncertain
whether a transaction  would close in time to permit the  Partnership to recover
the $147,000 extension fee referred to above.

     During the quarter  ended  December 31, 1994,  the Bell Plaza joint venture
obtained a six-month extension of the maturity date of its mortgage loan to June
1, 1995, in return for an extension fee of  approximately  $27,000.  On June 19,
1995, the  Partnership  completed the refinancing of the existing first mortgage
loan  secured by Bell  Plaza,  reducing  the annual  interest  rate from 9.4% to
8.125%.  The loan, in the initial  principal  amount of  $3,300,000,  matures in
seven years and requires  monthly  principal and interest  payments based upon a
twenty-five-year  amortization  schedule.  The  terms  of the loan  allow  for a
prepayment of the principal balance after the end of one year. The joint venture
paid a fee of $33,000 to obtain the loan commitment,  with an additional $33,000
paid  at  closing.  Occupancy  at the  Bell  Plaza  Shopping  Center  was 78% at
September  30,  1995,  down  from 88% at  September  30,  1994.  This  change in
occupancy is directly  attributable to the termination of the Wal-Mart lease and
the commencement of the United  Supermarkets  lease for approximately 77% of the
prior  Wal-Mart  space,  which occurred in the first quarter of fiscal 1995. The
property's leasing team continues to actively market the remaining approximately
19,000 square feet of the 82,800 square foot anchor space  formerly  occupied by
Wal-Mart.  Overall leasing activity has remained slow and very  competitive.  At
the present  time,  real estate  values for retail  shopping  centers in certain
markets  have  begun  to  be  affected  by  the  effects  of  overbuilding   and
consolidations among retailers which have resulted in an oversupply of space. It
remains  unclear at this time what impact,  if any, this general trend will have
on the  operations  and market value of Bell Plaza in the near term. In order to
make Bell Plaza more attractive to retail customers and potential  tenants,  the
exterior of the Center was repainted during fiscal 1995.

     As  previously  reported,  during  the second  quarter  of fiscal  1994 the
Carriage Hill joint venture did not generate sufficient cash flow to fully cover
its debt service payments to the lender. Consequently, the joint venture entered
into a  forbearance  agreement  with the lender which allowed for the payment of
less than the full  amount  due each month  through  July 1994 in the event that
cash flow from the property was not  sufficient to pay the required  amount.  In
return,  the joint venture agreed to, among other things,  apply for refinancing
at a lower interest rate through a HUD-insured loan program.  An application for
such financing was submitted in fiscal 1994.  However,  the dramatic increase in
market  interest rate levels during  calendar  1994 made this  refinancing  plan
economically  unfeasible  at that time.  Accordingly,  management of the venture
went back to the existing  lender to attempt to reach an  agreement  which would
allow the  venture to bring the loan,  which had a  scheduled  maturity  date of
January 2022,  current over a period of time. The lender agreed to an additional
forbearance period beginning in August 1994, whereby the venture was required to
make the full monthly payments due under the original  mortgage loan from August
1, 1994 forward and to repay the prior  deferred  payments  and restore  certain
required escrow deposits by October 31, 1994.  Through October 1994, the venture
had made the full  payments due under the mortgage  loan since  August,  but had
requested  additional time from the lender to make up the deferred  payments and
restore  the  escrow  deposits,  an  obligation  which  totalled   approximately
$300,000. During the first quarter of fiscal 1995, the lender agreed to give the
venture  until  January  15, 1995 to bring the loan  current.  During the second
quarter, the Partnership and its co-venture partner each contributed $150,000 to
the venture, the proceeds of which were used to bring the loan current under the
terms of the forbearance agreement. Subsequently, market interest rates declined
sufficiently to allow the existing first mortgage loan secured by Carriage Hill,
with an outstanding  principal  balance of  approximately  $26.5 million,  to be
refinanced. The new loan, in the initial principal amount of approximately $27.9
million,  has a fixed  interest  rate of 7.65% and a term of 35  years.  The new
loan, which closed on June 1, 1995,  significantly  reduces monthly debt service
requirements  and provides  additional  capital that will be used to convert the
gas utilities to individual  metering for each apartment  unit.  This conversion
would  transfer  the  utility  payments to the  tenants,  thereby  reducing  the
property's  future  operating  expenses.  The new loan  also  releases  from the
collateral a 23-acre parcel of excess land. This land may eventually be marketed
for sale to local developers once market conditions  improve  sufficiently.  The
suburban  Baltimore  market  remains   competitive  with  competing   properties
continuing to offer  concessions to attract new tenants.  Nonetheless,  Carriage
Hill is now  operating at a stabilized  level.  Management  was able to increase
rental rates by 2% during fiscal year 1995. However,  occupancy at Carriage Hill
decreased  to 89%  at  September  30,  1995  from  92% at  September  30,  1994.
Management  expects  that the average  occupancy  level will  increase in fiscal
1996,  stabilizing  in the low 90%  range.  Management  does  not  plan to raise
monthly  rental  rates in fiscal 1996 until the  tenants  become  accustomed  to
paying the individually metered utility charge.

     The occupancy level at Greenbrier Apartments was 93% at September 30, 1995,
down from 96% at  September  30, 1994.  During  fiscal  1995,  the  Indianapolis
apartment rental market remained very  competitive,  with little or no change in
the rental rates of the competition.  The property  management team continued to
improve  the  competitiveness  of the  Greenbrier  property  during  the year by
completing scheduled capital improvements which included installing  dishwashers
in the two-bedroom units as they turn over and replacing patio fences and roofs.
In addition,  during fiscal 1995,  the parking lot was sealed and re-striped and
interior  hallways,  exterior  doors,  stairs and all townhouse  exteriors  were
repainted.  The  scheduled  capital  improvement  program also  included  gutter
replacement  and balcony  repairs,  which are  scheduled  to be completed in the
first quarter of 1996.  Greenbrier  continues to produce  excess cash flow after
the  payment of  operating  expenses,  debt  service  payments to the lender and
capital  costs.  Although  the current  mortgage  debt of  $5,400,000,  which is
secured by the  property  and bears  interest at 10% per annum,  does not mature
until June 1998,  the joint  venture has applied  for a new  mortgage  loan with
another lender.  Given the current favorable  interest rate  environment,  a new
loan could reduce the monthly debt service payments of the joint venture.

     At September 30, 1995,  the  Partnership  had cash and cash  equivalents of
$1,658,000.  Such cash and cash  equivalents  will be  utilized  for the working
capital  requirements of the Partnership and for future refinancing expenses and
capital contributions related to the Partnership's joint ventures. The source of
future  liquidity and  distributions to the partners is expected to be from cash
generated by the Partnership's income-producing properties and from the proceeds
received from the sale or refinancing of such properties or from the sale of the
Partnership's  interests in the joint  ventures.  These sources of liquidity are
expected to be sufficient to meet the  Partnership's  needs on both a short-term
and long-term basis.

Results of Operations
1995 Compared to 1994

     The  Partnership  reported  a net loss of  $1,389,000  for  fiscal  1995 as
compared to net income of $1,917,000  for the prior year. The primary reason for
this  unfavorable  change  in net  operating  results  is that  the  Partnership
recognized a $3.2  million  gain in the prior year on the sale of the  Cambridge
Apartments,  which  occurred in June 1994. In addition,  the Carriage Hill joint
venture  recognized a loss on the write-off of  unamortized  deferred  financing
costs in the  current  year of  $1,177,000  in  conjunction  with the June  1995
refinancing transaction discussed further above. The Partnership's share of this
loss was  $471,000,  which is included in the  Partnership's  share of ventures'
losses for fiscal 1995. The Partnership's  share of ventures'  losses,  prior to
the effect of the  Carriage  Hill  refinancing  loss,  decreased  by $284,000 in
fiscal 1995 mainly due to improved  operating  results at the Greenbrier,  Seven
Trails and Carriage  Hill joint  ventures.  Rental  revenues  were higher at all
three  apartment  properties in fiscal 1995,  despite  lower  average  occupancy
levels,  due to  increases  in  rental  rates  made  possible  by the  generally
improving market  conditions for multi-family  apartment  properties  across the
country during fiscal 1995. At Greenbrier,  rental revenues improved by $58,000,
or 4%, in fiscal 1995, when compared to the prior year, while average  occupancy
declined  from  94% to  91%.  In  addition,  repairs  and  maintenance  expenses
decreased  by $96,000 at  Greenbrier  due to certain  non-recurring  repair work
performed in fiscal 1994 as a result of winter  storm  damage.  Rental  revenues
increased by $194,000, or 6%, at the Seven Trails property despite a slight drop
in average  occupancy  from 96% for fiscal  1994 to 95% for  fiscal  1995.  Such
increased  revenues at Seven Trails were partially offset by the increase in the
venture's  interest  expense which  resulted  from the fiscal 1994  modification
agreement  described above. At Carriage Hill,  revenues were up only slightly in
what have been less favorable  local market  conditions.  The improvement in the
Carriage Hill joint venture's net operating  results were more attributable to a
decrease in expenses,  primarily  depreciation  and  utilities  expenses,  which
declined by $61,000 and $63,000, respectively. The improved operating results at
the three apartment properties were partially offset by a decline in revenues at
the Bell Plaza Shopping Center which resulted from the anchor tenant  re-leasing
situation  described  further above. The resulting drop in average  occupancy at
Bell Plaza, from 87% for fiscal 1994 to 78% for fiscal 1995,  contributed to the
decrease of $64,000 in the venture's rental revenues.

     The unfavorable changes in net operating results were also partially offset
by a decrease in the Partnership's  operating loss of approximately  $55,000 for
the current year due to an increase in interest income and a decrease in general
and  administrative  expenses.  Interest  income  increased by $19,000 due to an
increase in the interest rates earned on the  Partnership's  cash  reserves,  as
well as the  significant  increase  in the average  outstanding  balance of such
reserves which resulted from the retention of $1.5 million of the Cambridge sale
proceeds  from  the June  1994  sale  transaction.  General  and  administrative
expenses decreased by $36,000 mainly due to higher professional fees incurred in
the prior year.

1994 Compared to 1993

     The  Partnership  reported  net income of  $1,917,000  for  fiscal  1994 as
compared to a net loss of $1,043,000 in the prior year.  The  Partnership's  net
income  for  fiscal  1994 was a result  of the  Partnership's  share of the gain
realized  from the sale of the Cambridge  Apartments,  as discussed  above.  The
total gain recognized by the Cambridge joint venture  totalled  $3,336,000,  and
the Partnership's share of such gain amounted to $3,174,000 per the terms of the
joint venture agreement.  The Partnership's share of ventures' losses,  prior to
the gain on the Cambridge sale, increased by $135,000 when compared to the prior
year. This  unfavorable  change in the  Partnership's  share of ventures' losses
from  operations was mainly a result of an increase in the operating loss at the
Cambridge  Apartments,  primarily  due to the payment,  in  accordance  with the
agreement, of previously unaccrued subordinated management fees in the amount of
$100,000  upon the sale of the  operating  investment  property.  An increase in
interest  expense at the Seven Trails joint  venture  during  fiscal 1994,  as a
result  of the  modification  and  extension  agreement  described  above,  also
contributed to the increase in the combined joint ventures'  operating loss. The
Partnership's  operating  loss increased by $79,000 during fiscal 1994 due to an
increase in  Partnership  general and  administrative  expenses.  These expenses
increased mainly as a result of additional  expenditures  incurred related to an
independent  valuation  of the  Partnership's  operating  properties  which  was
commissioned  during  fiscal  1994  in  conjunction  with  management's  ongoing
refinancing efforts and portfolio management responsibilities.

1993 Compared to 1992

      For the year ended September 30, 1993, the Partnership reported a net loss
of  $1,043,000,  as  compared  to a net loss of  $1,337,000  for the year  ended
September 30, 1992. This favorable change in net operating results was primarily
due to a decrease in the Partnership's  share of ventures'  losses.  The largest
factor in the decline in ventures'  losses was an increase in rental  revenue at
all five of the joint  ventures.  Occupancy  and rental  rates  increased at the
properties  during  fiscal  1993,  reflecting  the  gradual  improvement  of the
multi-family  apartment  market in most areas of the country,  as well as strong
leasing  activity  at the  Bell  Plaza  Shopping  Center.  This  improvement  in
operating  results was  partially  offset by an  increase in property  operating
expenses.  Property  operating  expenses  increased mainly due to an increase in
utilities  expense  at the  majority  of the joint  ventures  as a result of the
severe 1993 winter  season and an increase in repairs and  maintenance  costs at
Carriage Hill, Cambridge and Seven Trails.

Inflation

     The  Partnership  completed  its twelfth full year of  operations in fiscal
1995 and the effects of inflation and changes in prices on revenues and expenses
to date have not been significant.

      Inflation in future  periods may increase  revenues,  as well as operating
expenses,  at the Partnership's  operating  investment  properties.  Some of the
existing leases with tenants at the Partnership's retail shopping center contain
rental  escalation  and/or expense  reimbursement  clauses based on increases in
tenant  sales or  property  operating  expenses  which  would  tend to rise with
inflation.  Tenants at the  Partnership's  apartment  projects  have  short-term
leases, generally of six - to - twelve months in duration. Rental rates at these
properties  can be adjusted to keep pace with  inflation,  as market  conditions
allow, as the leases are renewed or turned over. Such increases in rental income
would be expected to at least partially  offset the  corresponding  increases in
Partnership and property operating expenses.



<PAGE>


Item 8.  Financial Statements and Supplementary Data

      The financial statements and supplementary data are included under Item 14
of this Annual Report.

Item 9.  Changes in and  Disagreements  with  Accountants  on Accounting and
Financial Disclosure

      None.


<PAGE>





                                    III -4

                                   PART III

Item 10.  Directors and Executive Officers of the Partnership

      The Managing General Partner of the Partnership is Fifth Income Properties
Fund,  Inc.  a  Delaware  corporation,  which is a  wholly-owned  subsidiary  of
PaineWebber.  The Associate  General  Partner of the  Partnership  is Properties
Associates,  a Massachusetts  general  partnership,  certain general partners of
which are also  officers of the Adviser and the Managing  General  Partner.  The
Managing  General  Partner  has overall  authority  and  responsibility  for the
Partnership's operation,  however, the day-to-day business of the Partnership is
managed by the Adviser pursuant to an advisory contract.

      (a) and (b) The names and ages of the directors  and  principal  executive
officers of the Managing General Partner of the Partnership are as follows:

                                                                   Date elected
      Name                      Office                      Age      to Office

Lawrence A. Cohen    President and Chief Executive Officer  42        8/30/88
Albert Pratt         Director                               84       11/19/82*
J. Richard Sipes     Director                               48         6/9/94
Walter V. Arnold     Senior Vice President and Chief 
                       Financial Officer                    48       10/29/85
James A. Snyder      Senior Vice President                  50         7/6/92
John B. Watts III    Senior Vice President                  42         6/6/88
David F. Brooks      First Vice President and 
                       Assistant Treasurer                  53       11/19/82 *
Timothy J. Medlock   Vice President and Treasurer           34         6/1/88
Thomas W. Boland     Vice President                         33        12/1/91

*  The date of incorporation of the Managing General Partner.

      (c) There are no other significant  employees in addition to the directors
and principal executive officers mentioned above.

      (d) There is no family  relationship among any of the foregoing  directors
and executive  officers of the Managing General Partner of the Partnership.  All
of the foregoing  directors  and  executive  officers have been elected to serve
until the annual meeting of the Managing General Partner.

      (e) All of the directors and officers of the Managing General Partner hold
similar  positions in affiliates of the Managing General Partner,  which are the
corporate general partners of other real estate limited  partnerships  sponsored
by PWI, and for which PaineWebber Properties Incorporated serves as the Adviser.
The  business  experience  of  each of the  directors  and  principal  executive
officers of the Managing General Partner is as follows:

      Lawrence A. Cohen is President and Chief Executive Officer of the Managing
General Partner and President and Chief  Executive  Officer of the Adviser which
he joined in January 1989. He is also a member of the Board of Directors and the
Investment Committee of the Adviser. From 1984 to 1988, Mr. Cohen was First Vice
President of VMS Realty  Partners where he was  responsible  for origination and
structuring  of  real  estate  investment  programs  and for  managing  national
broker-dealer  relationships.  He is a  member  of the  New  York  Bar  and is a
Certified Public Accountant.

    J.  Richard  Sipes is a Director  of the  Managing  General  Partner  and a
Director  of  the  Adviser.  Mr.  Sipes  is  an  Executive  Vice  President  at
PaineWebber.  He joined the firm in 1978 and has  served in various  capacities
within the Retail Sales and  Marketing  Division.  Before  assuming his current
position  as  Director of Retail  Underwriting  and  Trading in 1990,  he was a
Branch Manager,  Regional  Manager,  Branch System and Marketing  Manager for a
PaineWebber  subsidiary,  Manager  of Branch  Administration  and  Director  of
Retail  Products  and  Trading.  Mr.  Sipes  holds a B.S.  in  Psychology  from
Memphis State University.

      Albert Pratt is Director of the Managing General Partner,  a Consultant of
PWI and a general partner of the Associate General Partner. Mr. Pratt joined PWI
as Counsel in 1946 and since that time has held a number of positions  including
Director of both the Investment Banking Division and the International Division,
Senior  Vice  President  and Vice  Chairman of PWI and  Chairman of  PaineWebber
International, Inc.

      Walter V. Arnold is a Senior Vice President and Chief Financial Officer of
the Managing  General  Partner and a Senior Vice  President and Chief  Financial
Officer of the Adviser which he joined in October 1985. Mr. Arnold joined PWI in
1983 with the  acquisition  of Rotan  Mosle,  Inc.  where he had been First Vice
President and Controller  since 1978,  and where he continued  until joining the
Adviser.  Mr. Arnold is a Certified Public  Accountant  licensed in the state of
Texas.

      James A. Snyder is a Senior Vice President of the Managing General Partner
and a Senior  Vice  President  and  Member of the  Investment  Committee  of the
Adviser.  Mr. Snyder re-joined the Adviser in July 1992 having served previously
as an officer of PWPI from July 1980 to August  1987.  From January 1991 to July
1992, Mr. Snyder was with the Resolution  Trust  Corporation  where he served as
the Vice President of Asset Sales prior to re-joining  PWPI.  From February 1989
to October  1990,  he was  President  of Kan Am  Investors,  Inc., a real estate
investment  company.  During the period August 1987 to February 1989, Mr. Snyder
was Executive Vice President and Chief Financial  Officer of Southeast  Regional
Management Inc., a real estate development company.

      John B.  Watts III is a Senior  Vice  President  of the  Managing  General
Partner and a Senior Vice President of the Adviser which he joined in June 1988.
Mr. Watts has had over 16 years of experience in acquisitions,  dispositions and
finance of real  estate.  He  received  degrees  of  Bachelor  of  Architecture,
Bachelor of Arts and Master of Business  Administration  from the  University of
Arkansas.

      David F. Brooks is a First Vice  President and Assistant  Treasurer of the
Managing  General Partner and a First Vice President and an Assistant  Treasurer
of the Adviser.  Mr. Brooks joined the Adviser in March 1980. From 1972 to 1980,
Mr. Brooks was an Assistant  Treasurer of Property  Capital  Advisors,  Inc. and
also,  from March 1974 to February 1980, the Assistant  Treasurer of Capital for
Real  Estate,  which  provided  real estate  investment,  asset  management  and
consulting services.

      Timothy J.  Medlock is a Vice  President  and  Treasurer  of the  Managing
General  Partner and Vice President and Treasurer of the Adviser which he joined
in 1986.  From June 1988 to August 1989, Mr. Medlock served as the Controller of
the Managing General Partner and the Adviser. From 1983 to 1986, Mr. Medlock was
associated  with Deloitte  Haskins & Sells.  Mr. Medlock  graduated from Colgate
University  in 1983  and  received  his  Masters  in  Accounting  from  New York
University in 1985.

      Thomas W. Boland is a Vice  President  of the Managing  General  Partner
and a Vice  President and Manager of Financial  Reporting of the Adviser which
he joined in 1988.  From 1984 to 1987, Mr. Boland was  associated  with Arthur
Young & Company.  Mr. Boland is a Certified Public Accountant  licensed in the
state of  Massachusetts.  He holds a B.S. in Accounting from Merrimack College
and an M.B.A. from Boston University.

      (f) None of the directors and officers were involved in legal  proceedings
which are  material to an  evaluation  of his or her ability or  integrity  as a
director or officer.

      (g)  Compliance  With  Exchange Act Filing  Requirements:  The  Securities
Exchange Act of 1934 requires the officers and directors of the Managing General
Partner, and persons who own more than ten percent of the Partnership's  limited
partnership units, to file certain reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers, directors and ten-percent
beneficial  holders are required by SEC  regulations to furnish the  Partnership
with copies of all Section 16(a) forms they file.

      Based solely on its review of the copies of such forms received by it, the
Partnership  believes that, during the year ended September 30, 1995, all filing
requirements  applicable to the officers and  directors of the Managing  General
Partner and ten-percent beneficial holders were complied with.


<PAGE>


Item 11.  Executive Compensation

      The directors and officers of the  Partnership's  Managing General Partner
receive no current or proposed remuneration from the Partnership.

      The  Partnership  is required to pay certain fees to the Adviser,  and the
General   Partners  are  entitled  to  receive  a  share  of  Partnership   cash
distributions and a share of profits and losses. These items are described under
Item 13.

    The Partnership has not paid regular cash  distributions  to the Unitholders
over the past five years.  Regular  quarterly  distributions of excess cash flow
were  suspended  in  1988.  Furthermore,  the  Partnership's  Units  of  Limited
Partnership  Interest are not actively traded on any organized exchange,  and no
efficient secondary market exists.  Accordingly no accurate price information is
available for these Units.  Therefore,  a presentation of historical  Unitholder
total returns would not be meaningful.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

      (a) The  Partnership  is a limited  partnership  issuing  Units of limited
partnership  interest,  not voting securities.  All the outstanding stock of the
Managing  General  Partner,  Fifth Income  Properties  Fund,  Inc.,  is owned by
PaineWebber.   Properties  Associates,  the  Associate  General  Partner,  is  a
Massachusetts  general  partnership,  the  general  partners  of which  are also
officers of the Adviser and the Managing General Partner.  No limited partner is
known by the  Partnership to own  beneficially  more than 5% of the  outstanding
interests of the Partnership.

      (b) The  directors  and  officers of the Managing  General  Partner do not
directly own any Units of limited  partnership  interest of the Partnership.  No
director or officer of the Managing General Partner,  nor any general partner of
the Associate General Partner, possesses a right to acquire beneficial ownership
of Units of limited partnership interest of the Partnership.

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

Item 13.  Certain Relationships and Related Transactions

      The General Partners of the Partnership are Fifth Income  Properties Fund,
Inc. (the "Managing General Partner"), a wholly-owned  subsidiary of PaineWebber
Group Inc.  ("PaineWebber")  and Properties  Associates (the "Associate  General
Partner"),  a Massachusetts  general  partnership,  certain general  partners of
which  are  also  officers  of the  Managing  General  Partner  and  PaineWebber
Properties  Incorporated.  Subject to the  Managing  General  Partner's  overall
authority,  the business of the Partnership is managed by PaineWebber Properties
Incorporated (the "Adviser") pursuant to an advisory contract.  The Adviser is a
wholly-owned  subsidiary  of  PaineWebber   Incorporated  ("PWI").  The  General
Partners,  the Adviser and PWI receive fees and  compensation,  determined on an
agreed-upon  basis, in consideration of various services performed in connection
with  the  sale  of the  Units,  the  management  of  the  Partnership  and  the
acquisition, management, financing and disposition of Partnership investments.

      All  distributable  cash,  as  defined,  for  each  fiscal  year  shall be
distributed  quarterly in the ratio of 99% to the Limited Partners and 1% to the
General  Partners.  All  sale  or  refinancing  proceeds  shall  be  distributed
generally 85% to the Limited Partners and 15% to the General Partners, after the
prior receipt by the Limited  Partners of their adjusted  capital  contributions
and a  cumulative,  noncompounded  return  on  their  average  adjusted  capital
contributions  ranging from 10% to 6%  depending  on when a Limited  Partner was
admitted to the Partnership.  All sale and refinancing  proceeds received by the
Partnership to date have been  distributed to the Limited Partners in accordance
with the Partnership Agreement.

      Pursuant to the terms of the Partnership Agreement, taxable income and tax
loss of the Partnership  will be allocated 99% to the Limited Partners and 1% to
the  General  Partners.  Taxable  income  or tax  loss  arising  from a sale  or
refinancing of investment  properties will be allocated to the Limited  Partners
and to the General  Partners in proportion to the amounts of sale or refinancing
proceeds to which they are entitled; provided that the General Partners shall be
allocated at least 1% of taxable income arising from a sale or  refinancing.  If
there are no sale or refinancing proceeds,  taxable income and tax losses from a
sale or refinancing  will be allocated 99% to the Limited Partners and 1% to the
General Partners.  Notwithstanding this, the Partnership Agreement provides that
the  allocation  of taxable  income and tax  losses  arising  from the sale of a
property which leads to the dissolution of the Partnership  shall be adjusted to
the extent  feasible so that neither the General or Limited  Partners  recognize
any gain or loss as a result of having  either a positive  or  negative  balance
remaining in their capital accounts upon the dissolution of the Partnership.  If
the General Partner has a negative  capital  account  balance  subsequent to the
sale of a  property  which  leads to the  dissolution  of the  Partnership,  the
General  Partner may be obligated to restore a portion of such negative  capital
account  balance  as  determined  in  accordance  with  the  provisions  of  the
Partnership Agreement.  Allocations of the Partnership's  operations between the
General Partners and the Limited Partners for financial accounting purposes have
been made in conformity with the allocations of taxable income or tax loss.

      Under  the  advisory  contract,   the  Adviser  has  specific   management
responsibilities; to administer day-to-day operations of the Partnership, and to
report  periodically  the performance of the Partnership to the Managing General
Partner.  The Adviser is paid a basic  management fee (4% of adjusted cash flow)
and an incentive  management  fee (5% of adjusted  cash flow  subordinated  to a
noncumulative annual return to the Limited Partners equal to 6% based upon their
adjusted capital  contribution) for services  rendered.  No management fees were
earned during the three-year period ended September 30, 1995.

      The Managing  General  Partner and its affiliates are reimbursed for their
direct expenses  relating to the offering of Units,  the  administration  of the
Partnership  and  the  acquisition  and  operations  of the  Partnership's  real
property investments.

      An affiliate of the Managing General Partner performs certain  accounting,
tax  preparation,  securities  law compliance  and investor  communications  and
relations  services  for the  Partnership.  The  total  costs  incurred  by this
affiliate in providing  such  services are  allocated  among  several  entities,
including the Partnership.  Included in general and administrative  expenses for
the years ended September 30, 1995 is $87,000,  representing  reimbursements  to
this affiliate for providing such services to the Partnership.

      The  Partnership  uses the  services  of Mitchell  Hutchins  Institutional
Investors,  Inc.  ("Mitchell  Hutchins"),  an affiliate of the Managing  General
Partner,  for the managing of cash assets.  Mitchell Hutchins is a subsidiary of
Mitchell Hutchins Asset Management,  Inc., an independently  operated subsidiary
of PaineWebber.  Mitchell  Hutchins earned $5,000 for managing the Partnership's
cash  assets  in  fiscal   1995,   which  amount  is  included  in  general  and
administrative  expenses  on the  accompanying  statement  of  operations.  Fees
charged by Mitchell Hutchins are based on a percentage of invested cash reserves
which varies based on the total amount of invested cash which Mitchell  Hutchins
manages on behalf of PWPI.



<PAGE>







                                   PART IV



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


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

            (1) and (2) Financial Statements and Schedule:

                     The  response to this  portion of Item 14 is submitted as a
                     separate  section of this  report.  See Index to  Financial
                     Statements and Financial Statement Schedule at
                     page F-1.

            (3)      Exhibits:

                The  exhibits  listed on the  accompanying  index to exhibits at
                page IV-3 are filed as part of this Report.


      (b)   No Current Reports on Form 8-K were filed during the last quarter of
            fiscal 1995.

      (c)   Exhibits

                  See (a)(3) above.

      (d)   Financial Statement Schedules

                The  response  to this  portion  of Item  14 is  submitted  as a
                separate  section  of  this  report.   See  Index  to  Financial
                Statements and Financial Statement Schedule at page F-1.























<PAGE>


                                  SIGNATURES


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


                                 PAINE WEBBER INCOME PROPERTIES FIVE
                               LIMITED PARTNERSHIP


                                 By:  Fifth Income Properties Fund, Inc.
                                         Managing General Partner


                                  By:    /s/ Lawrence A. Cohen
                                     Lawrence A. Cohen
                                     President and Chief Executive Officer


                                  By:     /s/ Walter V. Arnold
                                     Walter V. Arnold
                                     Senior Vice President and
                                     Chief Financial Officer


                                  By:     /s/ Thomas W. Boland
                                     Thomas W. Boland
                                     Vice President

Dated:  January 11, 1996

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  Partnership in
the capacity and on the dates indicated.




By:/s/ Albert Pratt                             Date:January 11, 1996
   Albert Pratt
   Director





By: /s/ J. Richard Sipes                        DateJanuary 11, 1996
   J. Richard Sipes
   Director

                                     IV-2


<PAGE>


                          ANNUAL REPORT ON FORM 10-K
                                Item 14(a)(3)

           PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP


                              INDEX TO EXHIBITS


                                                        Page Number in the
Exhibit No.      Description of Document                Report or Other
                                                        Reference
--------------   -----------------------------------    -----------------------

(3) and          Prospectus of the Registrant dated     Filed with the
(4)              May 26, 1983, as supplemented,         Commission pursuant
                 with particular reference to           to Rule 424(c) and
                 the Restated Certificate               incorporated herein
                 and Agreement of Limited               by reference.
                 Partnership.


(10)             Material contracts previously filed    Filed with the
                 as exhibits to registration            Commission pursuant
                 statements and amendments thereto      to Section 13 or
                 of the  registrant  together  with     15(d) of the
                 all such contracts filed as exhibits   Securities Exchange
                 of previously filed Forms 8-K and      Act of 1934 and
                 Forms 10-K are hereby incorporated     incorporated herein 
                 herein by refererence.                 by reference.
             


(13)             Annual Report to Limited Partners      No Annual Report for
                                                        the year ended
                                                        September 30, 1995
                                                        has been sent to the
                                                        Limited Partners.  An
                                                        Annual Report will be
                                                        sent to the Limited
                                                        Partners subsequent
                                                        to this filing.

(22)             List of subsidiaries                   Included in Item 1 of
                                                        Part  I of  this  Report
                                                        Page   I-1,   to   which
                                                        reference    is   hereby
                                                        made.


(27)             Financial data schedule                Filed   as  the   last
                                                        page     of      EDGAR
                                                        submission   following
                                                        the          Financial
                                                        Statements         and
                                                        Financial    Statement
                                                        Schedule  required  by
                                                        Item 14.

        




<PAGE>


                          ANNUAL REPORT ON FORM 10-K
                       Item 14(a) (1) and (2) and 14(d)

           PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

        INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE


                                                                      Reference

Paine Webber Income Properties Five Limited Partnership:

      Report of independent auditors                                     F-2

      Balance sheets as of September 30, 1995 and 1994                   F-3

      Statements of operations  for the years ended  
          September 30, 1995,  1994 and 1993                             F-4

      Statements  of  changes in  partners'  capital  (deficit)  
          for the years ended  September 30, 1995, 1994 and 1993         F-5

      Statements of cash flows for the years ended  September  
          30, 1995,  1994 and 1993                                       F-6

      Notes to financial statements                                      F-7

Combined  Joint  Ventures  of Paine  Webber  Income  Properties  Five  Limited
Partnership:

      Report of independent auditors                                    F-17

      Combined balance sheets as of September 30, 1995 and 1994         F-18

      Combined  statements  of operations  and changes in  
          venturers'  capital (deficit) for the
        years ended September 30, 1995, 1994 and 1993                   F-19

      Combined  statements  of cash flows for the years  ended
            September  30, 1995, 1994  and 1993                         F-20

      Notes to combined financial statements                            F-21

      Schedule III - Real estate and accumulated depreciation           F-28


   Other  schedules  have been  omitted  since the required  information  is not
present or not  present  in amounts  sufficient  to  require  submission  of the
schedule,  or because the  information  required  is  included in the  financial
statements, including the notes thereto.



<PAGE>


                        REPORT OF INDEPENDENT AUDITORS






The Partners of
Paine Webber Income Properties Five Limited Partnership:

      We have audited the  accompanying  balance  sheets of Paine Webber  Income
Properties  Five Limited  Partnership as of September 30, 1995 and 1994, and the
related  statements of operations,  changes in partners'  capital  (deficit) and
cash flows for each of the three years in the period ended  September  30, 1995.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

      In our opinion, the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position  of  Paine  Webber  Income
Properties  Five Limited  Partnership  at September  30, 1995 and 1994,  and the
results of its  operations and its cash flows for each of the three years in the
period  ended  September  30,  1995,  in  conformity  with  generally   accepted
accounting principles.






                              ERNST & YOUNG LLP


Boston, Massachusetts
December 28, 1995


<PAGE>


            PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

                                BALANCE SHEETS
                          September 30, 1995 and 1994
                     (In thousands, except per Unit data)

                                    ASSETS
                                                            1995       1994

Cash and cash equivalents                                 $ 1,658    $  1,836

                  LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Equity in losses in excess of investments and
  advances in joint ventures                              $ 2,059    $    861
Accounts payable and accrued expenses                          38          25
      Total liabilities                                     2,097         886

Partners' capital (deficit):
  General Partners:
   Capital contributions                                        1           1
   Cumulative net loss                                       (139)       (125)
   Cumulative cash distributions                              (60)        (60)

  Limited Partners ($1,000 per unit; 34,928 units issued):
   Capital contributions, net of offering costs            31,554      31,554
   Cumulative net loss                                    (13,748)    (12,373)
   Cumulative cash distributions                          (18,047)    (18,047)
      Total partners' capital (deficit)                      (439)        950
                                                         $  1,658    $  1,836





















                            See accompanying notes.


<PAGE>


            PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

                           STATEMENTS OF OPERATIONS
             For the years ended September 30, 1995, 1994 and 1993
                     (In thousands, except per Unit data)

                                                 1995        1994       1993


Revenues:
   Interest income                         $      106    $     87   $      21

Expenses:
   General and administrative                     313         349         204

Operating loss                                   (207)       (262)       (183)

Partnership's share of ventures' losses        (1,182)       (995)       (860)

Partnership's share of gain on sale of
   operating investment property                    -       3,174           -

Net income (loss)                             $(1,389)     $1,917     $(1,043)

Net income (loss) per Limited 
  Partnership Unit                            $(39.37)    $ 54.36     $(29.57)

Cash distributions per Limited 
  Partnership Unit                           $     -      $ 63.00     $     -



   The above net income (loss) and cash  distributions  per Limited  Partnership
Unit are based upon the 34,928 Limited Partnership Units outstanding during each
year.




















                            See accompanying notes.


<PAGE>


            PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

             STATEMENTS OF CHANGES IN PARTNERS'  CAPITAL (DEFICIT)
              For the years ended September 30, 1995, 1994 and 1993
                                (In thousands)

                                            General       Limited
                                            Partners      Partners      Total

Balance at September 30, 1992              $(193)        $2,469        $2,276

Net loss                                     (10)        (1,033)       (1,043)

Balance at September 30, 1993               (203)         1,436         1,233

Net income                                    19          1,898         1,917

Cash distributions                             -         (2,200)       (2,200)

Balance at September 30, 1994               (184)         1,134           950

Net loss                                     (14)        (1,375)       (1,389)

Balance at September 30, 1995              $(198)        $ (241)      $  (439)



























                            See accompanying notes.


<PAGE>


            PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

                           STATEMENTS   OF  CASH  FLOWS
              For the years ended September 30, 1995, 1994 and 1993
               Increase (Decrease) in Cash and Cash Equivalents
                                (In thousands)

                                               1995         1994        1993

Cash flows from operating activities:
   Net income (loss)                        $  (1,389)    $ 1,917     $(1,043)
   Adjustments to reconcile net income (loss)
    to net cash used for operating activities:
     Partnership's share of ventures' losses    1,182         995         860
     Partnership's share of gain on sale of
      operating investment property                 -      (3,174)          -
      Changes in assets and liabilities:
      Accounts payable - affiliates                 -         (24)          6
      Accounts payable and accrued expenses        13           -         (1)
        Total adjustments                       1,195      (2,203)        865
        Net cash used for operating
          activities                             (194)       (286)       (178)

Cash flows from investing activities:
   Distributions from joint ventures              275       4,191         390
   Additional investments in joint ventures      (259)       (586)          -
        Net cash provided by
         investing activities                      16       3,605         390

Cash flows from financing activities:
   Distributions to partners                        -      (2,200)          -
        Net cash used for
         financing activities                       -      (2,200)          -

Net increase (decrease) in cash and 
 cash equivalents                               (178)       1,119         212
     
Cash and cash equivalents, beginning of year    1,836         717         505

Cash and cash equivalents, end of year        $ 1,658     $ 1,836   $     717
















                            See accompanying notes.


<PAGE>


                     PAINE WEBBER INCOME PROPERTIES FIVE
                             LIMITED PARTNERSHIP
                        Notes to Financial Statements



1.    Organization

      Paine   Webber   Income   Properties   Five   Limited   Partnership   (the
    "Partnership") is a limited  partnership  organized  pursuant to the laws of
    the State of Delaware  in January  1983 for the  purpose of  investing  in a
    diversified  portfolio  of  income-producing   properties.  The  Partnership
    authorized  the  issuance  of units (the  "Units")  of  limited  partnership
    interest  (at $1,000 per Unit) of which  34,928 were  subscribed  and issued
    between May 26, 1983 and May 25, 1984.

2.    Summary of Significant Accounting Policies

      The  accompanying  financial  statements as of September 30, 1995 and 1994
    include the  Partnership's  investment  in four joint  venture  partnerships
    which own operating properties. The Partnership accounts for its investments
    in  joint  venture   partnerships   using  the  equity  method  because  the
    Partnership does not have a voting control  interest in the ventures.  Under
    the  equity  method  the  ventures  are  carried  at cost  adjusted  for the
    Partnership's  share of the ventures' earnings and losses and distributions.
    The  Partnership's  policy is to identify any  permanent  impairment  to the
    carrying value of its joint venture investments on a specific identification
    basis.  At September  30, 1995 and 1994,  the  carrying  value of one of the
    Partnership's  joint  ventures is adjusted  for an  allowance  for  possible
    investment loss. See Note 4 for a discussion of this allowance account and a
    description of the joint venture partnerships.

      The Partnership has reviewed FAS No. 121 "Accounting for the Impairment of
    Long-Lived  Assets and for  Long-Lived  Assets To Be Disposed  Of," which is
    effective for financial  statements for years  beginning  after December 15,
    1995, and believes this new pronouncement will not have a material effect on
    the Partnership's financial statements.

      For purposes of reporting cash flows,  cash and cash  equivalents  include
    all highly liquid  investments which have original  maturities of 90 days or
    less.

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

3.    The Partnership Agreement and Related Party Transactions

      The General Partners of the Partnership are Fifth Income  Properties Fund,
    Inc.  (the  "Managing  General  Partner"),  a  wholly-owned   subsidiary  of
    PaineWebber  Group  Inc.  ("PaineWebber")  and  Properties  Associates  (the
    "Associate General Partner"),  a Massachusetts general partnership,  certain
    general  partners of which are also officers of the Managing General Partner
    and PaineWebber  Properties  Incorporated.  Subject to the Managing  General
    Partner's overall  authority,  the business of the Partnership is managed by
    PaineWebber Properties  Incorporated (the "Adviser") pursuant to an advisory
    contract.   The  Adviser  is  a   wholly-owned   subsidiary  of  PaineWebber
    Incorporated ("PWI"). The General Partners, the Adviser and PWI receive fees
    and  compensation,  determined on an agreed-upon  basis, in consideration of
    various  services  performed in connection  with the sale of the Units,  the
    management of the Partnership and the acquisition, management, financing and
    disposition of Partnership investments.

      All  distributable  cash,  as  defined,  for  each  fiscal  year  shall be
    distributed  quarterly in the ratio of 99% to the Limited Partners and 1% to
    the General Partners.  All sale or refinancing proceeds shall be distributed
    generally 85% to the Limited Partners and 15% to the General Partners, after
    the  prior  receipt  by the  Limited  Partners  of  their  adjusted  capital
    contributions  and a  cumulative,  noncompounded  return  on  their  average
    adjusted  capital  contributions  ranging from 10% to 6% depending on when a
    Limited  Partner was admitted to the  Partnership.  All sale and refinancing
    proceeds  received by the  Partnership to date have been  distributed to the
    Limited Partners in accordance with the Partnership Agreement.

      Pursuant to the terms of the Partnership Agreement, taxable income and tax
    loss of the Partnership will be allocated 99% to the Limited Partners and 1%
    to the General  Partners.  Taxable income or tax loss arising from a sale or
    refinancing  of  investment  properties  will be  allocated  to the  Limited
    Partners and to the General Partners in proportion to the amounts of sale or
    refinancing  proceeds to which they are entitled;  provided that the General
    Partners  shall be  allocated at least 1% of taxable  income  arising from a
    sale or refinancing.  If there are no sale or refinancing proceeds,  taxable
    income and tax losses from a sale or  refinancing  will be allocated  99% to
    the Limited Partners and 1% to the General Partners.  Notwithstanding  this,
    the Partnership Agreement provides that the allocation of taxable income and
    tax  losses  arising  from  the  sale  of a  property  which  leads  to  the
    dissolution of the  Partnership  shall be adjusted to the extent feasible so
    that neither the General or Limited Partners recognize any gain or loss as a
    result of having  either a positive or negative  balance  remaining in their
    capital  accounts upon the  dissolution of the  Partnership.  If the General
    Partner has a negative  capital account balance  subsequent to the sale of a
    property  which leads to the  dissolution  of the  Partnership,  the General
    Partner  may be  obligated  to  restore a portion of such  negative  capital
    account  balance as  determined  in  accordance  with the  provisions of the
    Partnership Agreement.  Allocations of the Partnership's  operations between
    the General  Partners  and the Limited  Partners  for  financial  accounting
    purposes have been made in conformity with the allocations of taxable income
    or tax loss.

      Under  the  advisory  contract,   the  Adviser  has  specific   management
    responsibilities;  to administer  day-to-day  operations of the Partnership,
    and  to  report  periodically  the  performance  of the  Partnership  to the
    Managing General Partner.  The Adviser is paid a basic management fee (4% of
    adjusted  cash flow) and an incentive  management  fee (5% of adjusted  cash
    flow  subordinated to a noncumulative  annual return to the Limited Partners
    equal to 6% based upon their  adjusted  capital  contribution)  for services
    rendered.  No management fees were earned during the three-year period ended
    September 30, 1995.

      The Managing  General  Partner and its affiliates are reimbursed for their
    direct expenses relating to the offering of Units, the administration of the
    Partnership  and the acquisition  and operations of the  Partnership's  real
    property investments.

      Included  in  general  and  administrative  expenses  for the years  ended
    September  30,  1995,  1994  and  1993 is  $87,000,  $96,000  and  $107,000,
    respectively,  representing  reimbursements  to an affiliate of the Managing
    General  Partner for providing  certain  financial,  accounting and investor
    communication services to the Partnership.

      The  Partnership  uses the  services  of Mitchell  Hutchins  Institutional
    Investors,  Inc. ("Mitchell Hutchins"), an affiliate of the Managing General
    Partner, for the managing of cash assets.  Mitchell Hutchins is a subsidiary
    of Mitchell  Hutchins  Asset  Management,  Inc., an  independently  operated
    subsidiary of  PaineWebber.  Mitchell  Hutchins  earned  $5,000,  $2,000 and
    $1,000 for managing the  Partnership's  cash assets in fiscal 1995, 1994 and
    1993, respectively, which amounts are included in general and administrative
    expenses on the accompanying statements of operations.




<PAGE>


4.  Investments in Joint Venture Partnerships

     As of September 30, 1995,  the  Partnership  has  investments in five joint
ventures (four at September 30, 1994).  On June 30, 1994,  Cambridge  Associates
sold its operating investment  property,  the Cambridge  Apartments,  a 378-unit
apartment  complex  located  in  Omaha,   Nebraska,   to  an  affiliate  of  the
Partnership's  co-venture partner.  The property was sold for $9,700,000.  After
repayment of the  outstanding  $5 million first mortgage loan and closing costs,
the  sale  generated   approximately  $4.7  million  to  be  split  between  the
Partnership and the co-venturer in accordance  with the venture  agreement.  The
Partnership's  share of such proceeds amounted to approximately  $3.7 million in
cash.  The sale  resulted in a gain of  $3,336,000  which was  recognized by the
venture  in  fiscal  1994.  The  Partnership's   share  of  such  gain  totalled
$3,174,000.

      The  joint  ventures  are  accounted  for  on  the  equity  method  in the
    Partnership's financial statements.  Condensed combined financial statements
    of these joint ventures (including  Cambridge Associates through the date of
    the sale transaction described above) are as follows:

                       Condensed Combined Balance Sheet
                         September 30, 1995 and 1994
                                (in thousands)

                                    Assets
                                                            1995        1994

   Current assets                                        $  2,369    $  2,284
   Operating investment properties, net                    45,566      46,744
   Other assets, net                                        1,982       1,987
                                                         $ 49,917     $51,015

                      Liabilities and Venturers' Deficit

   Current liabilities                                  $  18,333    $  7,297
   Other liabilities                                          980         860
   Long-term mortgage debt,
     less current portion                                  36,325      46,530

   Partnership's share of combined deficit                 (2,607)     (1,470)
   Co-venturers' share of combined deficit                 (3,114)     (2,202)
                                                         $ 49,917     $51,015

                 Reconciliation of Partnership's Investments
                                (in thousands)
                                                           1995        1994

   Partnership's share of deficit, as shown above     $    (2,607) $   (1,470)
   Partnership's share of current liabilities
     and long-term debt                                       848         909
   Less:  Allowance for possible investment loss (1)         (300)       (300)

   Investments in joint ventures, at equity, net       $   (2,059) $     (861)

         (1)  The  carrying  value  of the  Partnership's  investments  in joint
              ventures at September 30, 1995 and 1994 is net of an allowance for
              possible  investment  loss  of  $300,000,  which  relates  to  the
              Amarillo Bell Associates  joint venture.  See discussion below for
              further details.


<PAGE>



                Condensed  Combined Summary of Operations 
             For the years ended September 30, 1995, 1994 and 1993
                                (in thousands)
                                                1995        1994        1993
   Revenues:
     Rental income and expense recoveries     $11,173     $12,458     $12,782
     Interest and other income                    443         386         343
                                               11,616      12,844      13,125

   Expenses:
     Property operating expenses                4,968       6,199       6,135
     Depreciation and amortization              2,525       2,688       2,983
     Interest expense                           5,216       5,421       5,435
     Loss on write-off of deferred 
       financing costs                          1,177           -           -
                                               13,886      14,308      14,553

   Operating loss                              (2,270)     (1,464)     (1,428)

   Gain on sale of operating 
     investment property                            -       3,336           -

   Net income (loss)                         $ (2,270)   $  1,872    $ (1,428)

   Net income (loss):
     Partnership's share of 
       combined income (loss)                $ (1,182)   $  2,179   $    (860)
     Co-venturers' share of combined loss      (1,088)       (307)       (568)
                                             $ (2,270)   $  1,872    $ (1,428)


   The  Partnership's  share of the combined income (loss) of the joint ventures
is  presented  as follows  on the  accompanying  statements  of  operations  (in
thousands):

                                               1995        1994          1993

   Partnership's share of ventures' losses   $ (1,182)   $   (995)    $  (860)
   Partnership's share of gain on sale of
     operating investment property                  -       3,174           -
                                             $ (1,182)    $ 2,179     $  (860)


    Investments in joint ventures, at equity is the Partnership's net investment
    in the joint  venture  partnerships.  These  joint  ventures  are subject to
    partnership  agreements which determine the distribution of available funds,
    the  disposition  of the  venture's  assets and the rights of the  partners,
    regardless  of  the  Partnership's  percentage  ownership  interest  in  the
    venture.  Substantially all of the Partnership's  investments in these joint
    ventures are restricted as to distributions.


<PAGE>



    Investments in joint  ventures,  at equity on the balance sheet at September
    30, 1995 and 1994 is comprised of the following (in thousands):

                                                            1995        1994

   Randallstown Carriage Hill Associates                $  (5,796)   $ (4,970)
   Signature Partners, L.L.C.                                 238           -
   Amarillo Bell Associates                                 1,556       1,506
   Greenbrier Associates                                      855         915
   Seven Trails West Associates                             1,088       1,688
                                                        $  (2,059)  $    (861)

    The Partnership  received cash  distributions from the ventures as set forth
    below (in thousands):

                                                1995        1994        1993

   Amarillo Bell Associates                $       50  $       59   $      78
   Greenbrier Associates                          132         111           4
   Carriage Hill                                   93           -           -
   Cambridge Associates                             -       4,021         308
                                             $    275    $  4,191    $    390

    A description of the ventures' properties and the terms of the joint venture
    agreements are summarized as follows:

a)  Randallstown Carriage Hill Associates

    On August 30, 1983,  the  Partnership  acquired an interest in  Randallstown
    Carriage  Hill  Associates,  a Maryland  general  partnership  organized  to
    purchase and operate Carriage Hill Village Apartments, an 806-unit apartment
    complex in Randallstown,  Maryland.  The Partnership  ("PWIP5") is a general
    partner  in the joint  venture.  JBG  Associates  ("JBG")  was the  original
    co-venturer of the joint venture.

    The aggregate cash  investment  made by the Partnership for its interest was
    approximately  $11,524,000  (including an acquisition fee of $1,150,000 paid
    to the  Adviser).  The  apartment  complex  was  acquired  subject  to  four
    mortgages;  two  institutional  nonrecourse  first  mortgages  with balances
    totalling  approximately  $6,136,000 at the time of closing,  and two second
    mortgage  notes  from the seller of the  property  with  balances  totalling
    $6,000,000  at the time of closing.  On December 30, 1986,  the  Partnership
    refinanced the aforementioned  debt by obtaining a $28,000,000  non-recourse
    mortgage loan. The  Partnership  received a  distribution  of  approximately
    $9,926,000 in fiscal 1987,  reflecting  its share of the excess  refinancing
    proceeds.

    The joint  venture  obtained  necessary  new capital by admitting  Signature
    Development  Corporation  ("Signature") as a new partner in fiscal 1988. The
    amended  partnership  agreement provided for the admission of Signature as a
    50% partner in the joint venture with JBG and PWIP5 (collectively "JBG/PW").
    JBG and PWIP5's  ownership  percentages were adjusted,  pro rata, to 10% and
    40%,  respectively.  In return for its 50% interest,  Signature committed to
    contribute up to $3,000,000 to the joint venture over the first three years,
    primarily to fund capital improvements,  working capital needs and meet debt
    payments.

     The Carriage  Hill joint venture did not generate  sufficient  cash flow to
     fully  cover its debt  service  payments  to the  lender  during the second
     quarter of fiscal  1994.  Consequently,  the joint  venture  entered into a
     forbearance  agreement  with the lender  which  provided for the payment of
     less than the full  amount  due each month  through  July 1994 in the event
     that cash flow was not sufficient.  In return, the joint venture agreed to,
     among other things,  apply for refinancing at a lower interest rate through
     a HUD-insured loan program. An application for such financing was submitted
     in fiscal 1994.  However,  the dramatic  increase in market  interest  rate
     levels  during  calendar  1994  made  this  refinancing  plan  economically
     unfeasible at that time.  Accordingly,  management of the venture went back
     to the existing  lender to attempt to reach an agreement  which would allow
     the  venture  to bring the loan,  which had a  scheduled  maturity  date of
     January  2022,  current  over a period  of time.  The  lender  agreed to an
     additional forbearance period beginning in August 1994, whereby the venture
     was  required  to make the full  monthly  payments  due under the  original
     mortgage  loan from August 1, 1994 forward and to repay the prior  deferred
     payments and restore certain  required escrow deposits by October 31, 1994.
     Through  October 1994, the venture had made the full payments due under the
     mortgage loan since  August,  but had  requested  additional  time from the
     lender to make up the deferred payments and restore the escrow deposits, an
     obligation which totalled approximately $300,000.  During the first quarter
     of fiscal 1995,  the lender  agreed to give the venture  until  January 15,
     1995 to bring the loan current.  During the second quarter, the Partnership
     and its co-venture  partner each contributed  $150,000 to the venture,  the
     proceeds  of which were used to bring the loan  current  under the terms of
     the  forbearance  agreement.  Subsequently,  market interest rates declined
     sufficiently  to allow the existing first mortgage loan secured by Carriage
     Hill, with an outstanding principal balance of approximately $26.5 million,
     to be  refinanced.  The  new  loan,  in the  initial  principal  amount  of
     approximately $27.9 million,  has a fixed interest rate of 7.65% and a term
     of 35 years. The venture  recognized a loss of $1,177,000 in fiscal 1995 in
     connection  with the  refinancing  transaction to write off the unamortized
     balance of the deferred financing costs related to the prior mortgage loan.
     The new loan also releases from the  collateral a 23-acre  parcel of excess
     land. The venture distributed this land parcel,  which had a carrying value
     of $563,000,  to a new entity,  Signature Partners,  L.L.C., in conjunction
     with the refinancing  transaction.  Signature Partners,  L.L.C. is owned by
     Signature,  JBG  and the  Partnership  with  the  same  ownership  interest
     percentages as in the Carriage Hill joint venture agreement. The land owned
     by  Signature  Partners,  L.L.C.  could  eventually  be  marketed  to local
     developers once market  conditions  improve.  Proceeds of any such sale, if
     completed,  would be distributed to the owners in accordance  with the same
     priorities  called for under the terms of the Carriage  Hill joint  venture
     agreement described below.

    The amended joint venture  agreement  provides that available net cash flow,
    as defined,  is to be distributed in the following order of priority:  1) To
    the partners for any  deficiency  loans,  as defined,  simple but cumulative
    interest  at 15% per annum;  2) To  Signature  and  JBG/PW,  until both have
    received an amount of $151,324  plus simple but  cumulative  interest at 10%
    thereon  from  January 15,  1995  through  the date of  distribution;  3) To
    Signature,  simple but cumulative interest at 10% per annum on the aggregate
    unreturned  balance of the Initial Capital  Commitment of $2,549,120 and any
    Additional Capital, as defined; 4) To JBG/PW, simple but cumulative interest
    at 10% per  annum on the  unreturned  balance  of  JBG/PW's  deemed  capital
    contribution  of  $1,500,000;  and (5) any net cash flow  remaining,  to the
    partners pro rata in proportion to their respective  partnership  interests.
    Any  cash  flow  distributed  by  the  joint  venture  to  JBG/PW  is  to be
    distributed  between  them in the  following  order of  priority:  1) To the
    holders of operating  notes,  interest on all operating notes other than the
    Initial  Operating  Loan,  as  defined;   2)  To  PWIP5  and  JBG,  $300,000
    distributed 90% to PWIP5 and 10% to JBG; and 3) any remainder,  80% to PWIP5
    and 20% to JBG.

    Per the terms of the  amended  joint  venture  agreement,  any net  proceeds
    arising from the  refinancing,  sale,  exchange or other  disposition of the
    Property or any part thereof,  will be distributed in the following order of
    priority:  1) To the  lenders of  deficiency  loans,  simple but  cumulative
    interest at 15% per annum on, and then to the payment of the  principal  of,
    any deficiency  loans; 2) To Signature and JBG/PW,  until both have received
    an amount of  $151,324  plus simple but  cumulative  interest at 10% thereon
    from January 15, 1995 through the date of distribution;  3) to Signature and
    JBG/PW, an amount equal to their respective Closing Adjustment Accounts,  as
    defined, plus the Deferred Distribution of $137,500 owed to JBG/PW, together
    with  simple  but  cumulative  interest  at 10%  per  annum  thereon;  4) to
    Signature,  simple but cumulative  interest at 10% per annum on, and then to
    the payment of principal of, the aggregate unreturned balance of the Initial
    Capital Commitment of $2,549,120 and any Additional  Capital, as defined; 5)
    to JBG/PW,  simple but cumulative  interest at 10% per annum on, and then to
    the payment of principal of, the  unreturned  aggregate  balance of JBG/PW's
    deemed capital contribution of $1,500,000, plus $351,000; and 5) the balance
    pro rata to the partners in proportion to their  respective  percentages  of
    partnership interests. Any capital proceeds distributed by the joint venture
    to JBG/PW  are to be  distributed  between  them in the  following  order of
    priority:  1) To the holders of operating notes, all unpaid accrued interest
    on, and then to the payment of principal of, all outstanding operating notes
    other  than  the  Initial  Operating  Loan;  2)  To  JBG,  any  subordinated
    management  fees and  management  fees then  unpaid and  accrued  from prior
    fiscal years,  3) To PWIP5,  payment of the Initial  Operating Note together
    with accrued interest thereon;  4) To JBG, $200,000 for services rendered in
    connection  with the refinancing of the original  mortgage;  5) To PWIP5 and
    JBG, the next $5,000,000  distributed 90% to PWIP5 and 10% to JBG; and 6) To
    PWIP5 and JBG, any  remaining  balance  distributed  80% to PWIP5 and 20% to
    JBG.

    All tax losses shall be allocated  to the  partners in  proportion  to their
    percentages  of partnership  interest;  provided,  however,  that no partner
    shall be  allocated  any loss which would reduce its capital  account  below
    zero unless all Partners  have negative  capital  accounts.  Taxable  income
    shall be allocated in accordance with the cash flow  distributions set forth
    above.  Any  income  allocated  by the  joint  venture  to  JBG/PW  is to be
    allocated  between them to the extent of cash flow  distributed  to them for
    such taxable year, with the remainder allocated 80% to PWIP5 and 20% to JBG.
    Tax  losses  allocated  by the joint  venture to JBG/PW  shall be  allocated
    between  them in the  ratio  of their  positive  capital  account  balances,
    subsequent to any distributions,  with any remaining losses allocated 80% to
    PWIP5 and 20% to JBG.  Allocations  of the joint  venture's  net  losses for
    financial  accounting  purposes  have  been  made  in  accordance  with  the
    allocations of tax losses.

    A management agreement ("Management  Agreement"),  dated as of July 8, 1988,
    between the joint  venture  and  Signature  Management  Services,  Inc.,  an
    affiliate of Signature, sets forth conditions of the property management for
    the  Carriage  Hill  Apartments.  The  Management  Agreement  provides for a
    monthly  management  fee of 5% of  the  prior  month's  gross  revenues,  as
    defined.

b)  Amarillo Bell Associates

    On September 30, 1983, the  Partnership  acquired a 50% interest in Amarillo
    Bell Associates,  an existing Texas general partnership which owns a 151,500
    square foot shopping center in Amarillo, Texas. The Partnership is a general
    partner in the joint venture. The Partnership's  co-venturer is an affiliate
    of The Boyer Company.  The aggregate  investment by the  Partnership for its
    interest was  approximately  $2,222,000  (including  an  acquisition  fee of
    $230,000 paid to the Adviser).

          During the  quarter  ended  December  31,  1994,  the Bell Plaza joint
     venture obtained a six-month extension of the maturity date of its mortgage
     loan to June 1,  1995,  in return  for an  extension  fee of  approximately
     $27,000. On June 19, 1995, the Partnership completed the refinancing of the
     existing first  mortgage loan secured by Bell Plaza,  reducing the interest
     rate from 9.4% to 8.125%.  The loan,  in the  initial  principal  amount of
     $3,300,000,  matures in seven  years and  requires  monthly  principal  and
     interest payments based upon a twenty-five year amortization  schedule. The
     terms of the loan allow for a prepayment of the principal balance after the
     end of one year. The joint venture paid a fee of $33,000 to obtain the loan
     commitment,  with an additional  $33,000 paid at closing.  At September 30,
     1995, the balance of the mortgage loan,  which matures on July 1, 2002, was
     approximately $3,293,000.

    Subsequent  to the end of fiscal  1990,  the  Partnership  had entered  into
    negotiations  with its  co-venture  partner to  execute a purchase  and sale
    agreement for the sale of the  Partnership's  interest in the joint venture.
    The  proposed  agreement  would  have  given  the  co-venturer  an option to
    purchase the Partnership's interest for $1,500,000. Because the option price
    was below the equity method carrying value of the  Partnership's  investment
    in  Amarillo  Bell   Associates  at  September  30,  1990,  the  Partnership
    recognized a provision  for possible  investment  loss of $300,000 in fiscal
    1990 which  reflected an estimate of the loss that would have been  incurred
    if the option had been executed and exercised. The co-venturer was unable to
    obtain  financing  to  complete  this  transaction  and the option was never
    executed. The $300,000 allowance for possible investment loss remains on the
    Partnership's balance sheet at September 30, 1995 due to management's belief
    that it  represents  a permanent  impairment  to the  carrying  value of the
    investment in the Bell Plaza joint venture.

    The joint venture agreement  provides that the Partnership will receive from
    cash flow an annual non-cumulative preferred return, payable monthly, of 50%
    of the  distributable  cash flow with a minimum of $164,000  from October 1,
    1988 annually through September 30, 1990. For the period after September 30,
    1990, the Partnership will receive an annual  distribution paid on a monthly
    basis equal to 50% of distributable  cash flow. The co-venturer will receive
    an  annual  non-cumulative  base  return  payable  quarterly  equal  to  the
    available cash flow after the Partnership's return as set forth above.

    Taxable income before  depreciation will be allocated to the Partnership and
    the  co-venturer  first in the same amount as cash is  distributed,  and any
    balance will be allocated 50% to the Partnership and 50% to the co-venturer.
    If  no  cash  flow  is  available,  then  100%  is to be  allocated  to  the
    Partnership.  Depreciation  will  be  allocated  to  the  partners  as it is
    attributable  to  their   respective   basis  in  the  depreciable   assets.
    Allocations of income and loss for financial  accounting  purposes have been
    made in accordance with the allocations of taxable income or tax loss.

    If additional  cash is required for any reason in connection  with the joint
    venture,  it is to be provided in equal  proportions by the  Partnership and
    the co-venturer.

    Per the terms of the joint venture  agreement,  distributions from a sale of
    the operating  investment  property and/or  refinancing  proceeds will be as
    follows,  after  the  payment  of  mortgage  debts  and  to the  extent  not
    previously  returned to each  partner:  1) to the  Partnership  in an amount
    equal  to  the  Partnership's  gross  investment,   2)  to  the  co-venturer
    $2,140,000,  3) payment of all unpaid  accrued  interest on all  outstanding
    operating  notes  and  then  to  the  repayment  of  the  principal  of  all
    outstanding   operating  notes,  4)  payment  of  any  accrued  subordinated
    management  fees, 5) any remaining  balance thereof shall be distributed 50%
    to the Partnership and 50% to the co-venturer.

    The joint  venture has entered into a property  management  contract with an
    affiliate of the  co-venturer  cancellable at the option of the  Partnership
    upon the occurrence of certain events.  The management fee is equal to 4% of
    gross rents.

c)  Greenbrier Associates

    On June 29,  1984,  the  Partnership  acquired  an  interest  in  Greenbrier
    Associates, an Indiana general partnership that owns and operates Greenbrier
    Apartments,  a 324-unit apartment complex located in Indianapolis,  Indiana.
    The Partnership is a general partner in the joint venture. The Partnership's
    co-venturer is an affiliate of the Paragon Group.

    The aggregate cash  investment  made by the Partnership for its interest was
    approximately  $4,109,000  (including an acquisition fee of $432,000 paid to
    the Adviser).  The apartment  complex is encumbered by a first mortgage loan
    with a balance of $5,400,000 at September 30, 1995.

    The joint venture agreement  provides that the Partnership will receive from
    available  cash flow an annual  cumulative  preferred  base return,  payable
    monthly, of $378,000.  The Partnership's  preference return is noncumulative
    on a year-to-year  basis  beginning July 1, 1987. The cumulative  preference
    return of the  Partnership  in arrears at  September  30,  1995 and 1994 for
    unpaid preference  returns through June 30, 1987 is approximately  $312,000.
    After the Partnership has received its preferred return,  the co-venturer is
    then entitled to receive an annual noncumulative,  subordinated base return,
    payable  quarterly,  of  $21,000.  Any  remaining  cash flow not  previously
    distributed at the end of each year will be used to pay any accrued interest
    on all outstanding  operating  notes.  The next $100,000 of cash flow in any
    year will be distributed 90% to the Partnership and 10% to the  co-venturer.
    Thereafter,  any excess cash flow will be distributed 80% to the Partnership
    and 20% to the co-venturer.

    Taxable  income or tax loss from  operations  will be  allocated in the same
    proportions  as cash  distributions,  but in no  event  less  than 5% to the
    co-venturer.  Additionally,  the  co-venturer  shall  not be  allocated  net
    profits in excess of net cash flow distributed to it during the fiscal year.
    Allocations  of the venture's  operations  between the  Partnership  and the
    co-venturer for financial  accounting  purposes have been made in conformity
    with the actual allocations of taxable income or tax loss.

    If additional  cash is required for any reason in connection  with the joint
    venture, it will be provided by the Partnership and the co-venturer as loans
    to the joint  venture.  Such loans would be provided 85% by the  Partnership
    and 15% by the co-venturer.

    Any  proceeds   arising  from  a  refinancing,   sale,   exchange  or  other
    distribution  of property  will be  distributed  in the  following  order of
    priority: (1) to the payment of unpaid principal and accrued interest on all
    outstanding operating notes, then to the repayment of unpaid operating loans
    and accrued  interest to the  Partnership  and the  co-venturer,  (2) to the
    Partnership  for  the  aggregate  amount  of  the  Partnership's  cumulative
    preference return not previously distributed, (3) the next $4,044,000 to the
    Partnership,  (4) the next $200,000 to the co-venturer,  (5) to the property
    manager,  an amount equal to the sum of any unpaid  subordinated  management
    fees,  (6) the  next  $3,500,000  to the  Partnership  and  the  co-venturer
    allocated  90%  and  10%,  respectively,  (7)  the  next  $3,000,000  to the
    Partnership and the co-venturer allocated 80% and 20%, respectively, and (8)
    any  remaining  balance  to  the  Partnership  and  the  co-venturer  in the
    proportions of 70% and 30%, respectively.

    The joint  venture  entered  into a  property  management  contract  with an
    affiliate of the  co-venturer,  cancellable at the option of the Partnership
    upon the occurrence of certain events. The management fee is 5% of the gross
    receipts collected from the property.

d)  Seven Trails West Associates

    On September 13, 1984 the  Partnership  acquired an interest in Seven Trails
    West Associates, a Missouri general partnership that owns and operates Seven
    Trails West Apartments,  a 532-unit apartment complex in Ballwin,  Missouri.
    The Partnership is a general partner in the joint venture.

     The  aggregate  cash  investment  by the  Partnership  for its interest was
     approximately  $10,011,000 (including an acquisition fee of $1,050,000 paid
     to the Adviser). The apartment complex is encumbered by a nonrecourse first
     mortgage  loan with a principal  balance of  $14,700,000  at September  30,
     1995.  On March 31, 1994,  the  Partnership  closed on a  modification  and
     extension  of the  wraparound  mortgage  loan  secured by the Seven  Trails
     Apartments  with the existing  lender.  As part of the agreement,  the wrap
     mortgage lender purchased the underlying first mortgage loan and is now the
     sole mortgage  lienholder.  Under the terms of the modification  agreement,
     the loan  maturity  date was  extended  to February 1, 1996 and the accrual
     rate of interest was increased  from 11% to 12%,  with 1% deferred,  on the
     outstanding  mortgage  loan  principal of  $14,700,000.  In addition to the
     outstanding  principal  balance,   there  is  currently  deferred  interest
     totalling  approximately  $1.7  million  due to the Seven  Trails  mortgage
     lender. Under the terms of the extension agreement, no interest will accrue
     on the  current or  additional  amounts of  deferred  interest  through the
     scheduled maturity date. The Partnership contributed approximately $586,000
     to the Seven Trails joint  venture in the second  quarter of fiscal 1994 in
     order to complete the modification and extension transaction. Such advances
     were used to pay a  refundable  $147,000  extension  fee, to fund a capital
     improvement  reserve of  $400,000  and to pay for the  transaction  closing
     costs.  The extension fee will be refunded to the Partnership if the entire
     obligation  to the mortgage  lender is repaid in full prior to the extended
     maturity  date.  Under the terms of the extension  agreement,  all net cash
     flow of the joint venture, after payment of current debt service,  approved
     capital costs and approved refinancing costs, will be payable to the lender
     to pay down outstanding  deferred interest and then loan principal.  During
     fiscal 1995, the joint venture  approached  several potential lenders in an
     attempt to secure a timely  refinancing of the first mortgage loan prior to
     the  February  1996  maturity  date.  The joint  venture  currently  has an
     application in process for a new loan with a potential  replacement lender.
     However,  no financing  agreement has been finalized as of the date of this
     report.

    The joint venture agreement  provides that the Partnership will receive from
    available  cash flow an annual  cumulative  preferred  base return,  payable
    monthly, of $875,000. The Partnership's  preference return was cumulative on
    a year to year basis through  September  30, 1987 and is cumulative  monthly
    but  not  annually  thereafter.  The  cumulative  preference  return  of the
    Partnership in arrears at September 30, 1995 for unpaid  preference  returns
    through September 30, 1987 is approximately $1,691,000.

    After the Partnership has received its preferred return,  the co-venturer is
    then entitled to receive an annual noncumulative,  subordinated base return,
    payable quarterly,  of $50,000. Any cash flow not previously  distributed at
    the end of each  fiscal  year will be applied as  follows:  $250,000 of cash
    flow in any year will be distributed  90% to the  Partnership and 10% to the
    co-venturer;  the next $300,000 of annual cash flow will be distributed  80%
    to the Partnership and 20% to the co-venturer;  thereafter,  any excess cash
    flow will be distributed 70% to the Partnership and 30% to the co-venturer.

    Taxable  income or tax loss from  operations  will be  allocated in the same
    proportions  as cash  distributions,  but in no event  less  than 10% to the
    co-venturer.  Additionally,  the  co-venturer  shall  not be  allocated  net
    profits in excess of net cash flow distributed to it during the fiscal year.
    Allocations  of the venture's  operations  between the  Partnership  and the
    co-venturer for financial  accounting  purposes have been made in conformity
    with the allocations of taxable income or tax loss.

    If additional  cash is required for any reason in connection  with the joint
    venture,  the joint venture agreement calls for such funds to be provided by
    the  Partnership  and the  co-venturer as loans to the joint  venture.  Such
    loans would be provided 90% by the Partnership  and 10% by the  co-venturer.
    Operating notes have been provided by the Partnership and co-venturer in the
    amounts of $836,000 and $11,000,  respectively.  The notes bear  interest at
    the prime  interest rate of a local bank. As stated above,  the  Partnership
    advanced  100% of the  funds  required  to close the loan  modification  and
    extension  agreement in fiscal  1994.  The portion of such  operating  notes
    representing the co-venture  partner's 10% share of the required funds bears
    interest at twice the rate of the regular operating notes.

    Subject  to the  first  loan  modification  agreement  reached  in 1991,  as
    referred to above, any proceeds arising from a refinancing, sale or exchange
    or other disposition of property will be distributed first to the payment of
    unpaid  principal  and  accrued  interest  on  any  outstanding  notes.  Any
    remaining  proceeds will be distributed in the following  order:  20% of the
    proceeds in excess of $25,000,000  would be distributed to the holder of the
    mortgage note (except in a refinancing);  repayment of unpaid  principal and
    accrued  interest on all outstanding  operating notes to the Partnership and
    the  co-venturer;   and  any  remaining  balance   distributed  90%  to  the
    Partnership and 10% to the co-venturer.

    The joint  venture has entered into a property  management  contract with an
    affiliate of the  co-venturer,  cancellable at the option of the Partnership
    upon the occurrence of certain events.  The management fee is equal to 4% of
    the gross receipts collected from the property.

5.  Contingencies

      The Partnership is involved in certain legal actions. The Managing General
    Partner  believes these actions will be resolved  without  material  adverse
    effect on the Partnership's financial statements, taken as a whole.


<PAGE>






                               
                        REPORT OF INDEPENDENT AUDITORS





The Partners of
Paine Webber Income Properties Five Limited Partnership:

We have audited the combined  balance  sheets of the Combined  Joint Ventures of
Paine Webber Income Properties Five Limited Partnership as of September 30, 1995
and 1994,  and the related  combined  statements  of  operations  and changes in
ventures'  capital  (deficit)  and cash flows for each of the three years in the
period  ended  September  30,  1995.  Our audits  also  included  the  financial
statement schedule listed in the Index at Item 14(a). These financial statements
and  schedule  are  the  responsibility  of the  Partnership's  management.  Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits.

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

In our opinion,  the combined  financial  statements  referred to above  present
fairly, in all material  respects,  the financial position of the Combined Joint
Ventures of Paine Webber Income Properties Five Limited Partnership at September
30, 1995 and 1994 and the results of their  operations  and their cash flows for
each of the three years in the period ended  September  30, 1995,  in conformity
with generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements  taken  as a whole  presents  fairly  in all  material  respects  the
information set forth therein.





                              ERNST & YOUNG LLP


Boston, Massachusetts
November 17, 1995


<PAGE>


                          COMBINED JOINT VENTURES OF
           PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

                           COMBINED BALANCE SHEETS
                         September 30, 1995 and 1994
                                (In thousands)

                                    Assets

                                                            1995        1994
Current assets:
   Cash and cash equivalents                         $        545   $     666
   Escrow deposits                                          1,030       1,213
   Accounts receivable                                        130          67
   Prepaid expenses                                           664         581
      Total current assets                                  2,369       2,527

Operating investment properties:
   Land                                                     5,250       5,212
   Buildings, improvements and equipment                   68,244      66,959
                                                           73,494      72,171
   Less accumulated depreciation                          (27,928)    (25,427)
      Net operating investment properties                  45,566      46,744

Reserve for capital expenditures                              689         222

Deferred expenses, net of accumulated amortization
     of $212 ($465 in 1994)                                 1,138       1,361
Other assets                                                  155         161
                                                          $49,917     $51,015

                      Liabilities and Venturers' Deficit
Current liabilities:
   Current portion of long-term debt                      $14,911    $  3,524
   Current portion of deferred interest                     1,657       1,646
   Accounts payable                                           117         251
   Accounts payable - affiliates                               30          44
   Accrued real estate taxes                                  548         549
   Accrued interest                                           585         525
   Tenant security deposits                                   364         398
   Distributions payable to venturers                           -         235
   Other current liabilities                                  121         125
      Total current liabilities                            18,333       7,297

Notes payable to venturers                                    966         847

Other liabilities                                              14          13

Long-term debt                                             36,325      46,530

Venturers' deficit                                         (5,721)     (3,672)
                                                          $49,917     $51,015



                           See accompanying notes.


<PAGE>


                          COMBINED JOINT VENTURES OF
           PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

COMBINED  STATEMENTS OF OPERATIONS AND CHANGES IN VENTURERS' CAPITAL (DEFICIT)
            For the years ended September 30, 1995, 1994 and 1993
                                (In thousands)

                                                1995       1994       1993

Revenues:
  Rental income and expense recoveries        $11,173     $12,458     $12,782
  Interest and other income                       443         386         343
                                               11,616      12,844      13,125

Expenses:
  Interest expense                              5,216       5,421       5,435
  Depreciation and amortization                 2,525       2,688       2,983
  Real estate taxes                               994       1,136       1,187
  Repairs and maintenance                         839       1,288       1,269
  Salaries and related expenses                 1,376       1,505       1,491
  Utilities                                       725         874         883
  General and administrative                      320         384         382
  Management fees                                 532         670         578
  Insurance                                       155         324         333
  Bad debt expense                                 27          18          12
  Loss on write-off of deferred 
     financing costs                            1,177           -           -
                                               13,886      14,308      14,553

Operating loss                                 (2,270)     (1,464)     (1,428)

Gain on sale of operating 
     investment property                            -       3,336           -

Net income (loss)                              (2,270)      1,872      (1,428)

Contributions from venturers                      916          50          38

Distributions to venturers                       (695)     (4,950)       (524)

Venturers' capital (deficit), 
     beginning of year                         (3,672)      (644)       1,270

Venturers' deficit, end of year              $ (5,721)   $ (3,672)  $    (644)









                           See accompanying notes.


<PAGE>


                          COMBINED JOINT VENTURES OF
           PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP
                      COMBINED  STATEMENTS  OF CASH  FLOWS
              For the years ended September 30, 1995, 1994 and 1993
               Increase (Decrease) in Cash and Cash Equivalents
                                (In thousands)
                                                1995       1994       1993
Cash flows from operating activities:
   Net income (loss)                         $ (2,270)    $ 1,872     $(1,428)
   Adjustments to reconcile net income
      (loss) to  net cash provided by 
       operating activities:
      Depreciation and amortization             2,525       2,688       2,983
      Amortization of deferred financing costs     99          70           -
      Loss on write-off of deferred
         financing costs                        1,177           -           -
      Gain on sale of operating 
        investment property                        -       (3,336)          -
      Changes in assets and liabilities:
         Escrow deposits                          183        (368)         98
         Accounts receivable                      (63)         21          (4)
         Accounts receivable - affiliates           -           -          38
         Prepaid expenses                         (83)        (48)          8
         Other current assets                       -           -         (86)
         Deferred expenses                       (126)       (144)        (36)
         Accounts payable                        (134)        (80)         59
         Accounts payable - affiliates            (14)        (45)         72
         Accrued real estate taxes                 (1)         27           3
         Accrued interest                          60           7          20
         Tenant security deposits                 (34)        (97)        (58)
         Other current liabilities                 (4)        (37)        (15)
         Deferred interest                         11         (88)         79
         Other liabilities                          1           2           -
            Total adjustments                   3,597      (1,428)      3,161
            Net cash provided by 
               operating activities             1,327         444       1,733

Cash flows from investment activities:
   Additions to operating investment
      properties                              (1,323)       (776)       (800)
   Increase in reserve for capital 
     expenditures                               (467)        243           2
   Proceeds from sale of assets                     -       9,686           -
            Net cash provided by
            (used for)
              investing activities             (1,790)      9,153        (798)

Cash flows from financing activities:
   Proceeds from long-term debt                31,184           -           -
   Payment of deferred financing costs           (945)          -           -
   Contributions by venturers                     916          50           -
   Distributions to venturers                    (930)     (5,115)       (469)
   Repayment of long-term debt                (30,002)     (5,277)       (255)
   Proceeds from loans from venturers             119         586           -
   Repayment of notes to partners                   -          (85)          -
            Net cash provided by (used for)
             financing activities                 342      (9,841)       (724)

Net increase (decrease) in cash and 
     cash equivalents                            (121)       (244)        211
Cash and cash equivalents, 
     beginning of year                             666        910         699
Cash and cash equivalents, end of year    $       545 $       666    $    910
Cash paid during the year for interest     $    4,909  $    5,432     $ 5,336

                           See accompanying notes.


<PAGE>


                          COMBINED JOINT VENTURES of
                     PAINE WEBBER INCOME PROPERTIES FIVE
                             LIMITED PARTNERSHIP
                    Notes to Combined Financial Statements



1.    Summary of significant accounting policies

      Organization

      The  accompanying  financial  statements of the Combined Joint Ventures of
    Paine Webber Income  Properties  Five Limited  Partnership  (Combined  Joint
    Ventures) include the accounts of Randallstown  Carriage Hill Associates,  a
    Maryland general partnership; Signature Partners, L.L.C., a Maryland limited
    liability company;  Amarillo Bell Associates,  a Texas general  partnership;
    Greenbrier Associates, an Indiana general partnership; Cambridge Associates,
    a Nebraska  general  partnership and Seven Trails West Associates a Missouri
    general  partnership.  As further described in Note 2, Cambridge  Associates
    sold its operating  investment  property and commenced a liquidation  of its
    operations  during  fiscal 1994.  The  financial  statements of the Combined
    Joint  Ventures  are  presented  in  combined  form due to the nature of the
    relationship  between  each of the  co-venturers  and  Paine  Webber  Income
    Properties Five Limited Partnership (PWIP5).

    The dates of PWIP5's  acquisition  of interests in the joint ventures are as
    follows:

                                              Date of Acquisition
                 Joint Venture                    of Interest

         Randallstown Carriage Hill Associates     8/30/83
         Signature Partners L.L.C.                 6/1/95
         Amarillo Bell Associates                  9/30/83
         Greenbrier Associates                     6/29/84
         Cambridge Associates                      7/31/84
         Seven Trails West Associates              9/13/84

      Basis of presentation

      Generally,  the records of the combined  joint  ventures are maintained on
    the  income tax basis of  accounting  and  adjusted  to  generally  accepted
    accounting  principles for financial  reporting  purposes,  principally  for
    depreciation.

      Reclassifications

      Certain  prior  year  amounts  have been  reclassified  to  conform to the
     current year presentation.

      Operating investment properties

      The  operating  investment  properties  are  carried at the lower of cost,
    reduced  by  accumulated  depreciation,  or net  realizable  value.  The net
    realizable  value of a property  held for long-term  investment  purposes is
    measured by the recoverability of the venture's  investment through expected
    future cash flows on an undiscounted  basis, which may exceed the property's
    market  value.  The  net  realizable  value  of a  property  held  for  sale
    approximates its current market value. All of the operating properties owned
    by the Combined Joint Ventures were held for long-term  investment  purposes
     as of September  30, 1995 and 1994.  Depreciation  expense is computed on a
straight-line   basis  over  the  estimated   useful  lives  of  the  buildings,
improvements and equipment,  generally,  five to forty years.  Professional fees
and other costs  incurred in connection  with the  acquisition of the properties
have been capitalized and are included in the cost of the land and buildings.

     The Combined Joint Ventures have reviewed FAS No. 121  "Accounting  for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets To Be Disposed Of,"
which is effective for financial  statements for years  beginning after December
15, 1995, and believe this new pronouncement  will not have a material effect on
the financial statements of the Combined Joint Ventures.

<PAGE>


      Deferred expenses

      Deferred expenses consist of organization  costs,  leasing commissions and
    loan fees which are being amortized,  using the straight-line  method,  over
    five years and the terms of the  related  leases  and  loans,  respectively.
    Amortization  of deferred  loan fees is included in interest  expense on the
    accompanying statements of operations.

      Revenue Recognition

      The  Combined  Joint  Ventures  lease  space at the  operating  investment
    properties under short-term and long-term operating leases.  Rental revenues
    are  recognized on an accrual  basis as earned  pursuant to the terms of the
    leases.

      Income tax matters

      The  Combined  Joint  Ventures  are  comprised  of entities  which are not
    taxable and accordingly, the results of their operations are included on the
    tax returns of the various partners.  Accordingly no income tax provision is
    reflected in the accompanying combined financial statements.

      Cash and cash equivalents

      For purposes of the statement of cash flows, the Partnerships consider all
    short-term investments with original maturity dates of 90 days or less to be
    cash equivalents.

      Escrow deposits

      Escrow  deposits at September 30, 1995 and 1994 consist of tenant security
    deposits,  amounts  escrowed  for the payment of  insurance  premiums,  real
    estate taxes and repair and replacement funds.

      Reserve for Capital Expenditures

      In connection  with the mortgage loan of the Carriage Hill joint  venture,
    an escrow account was established as a reserve for replacements  stipulating
    that a portion of each  month's  mortgage  payment is to be deposited in the
    reserve for  replacement  account.  When repairs are made, the joint venture
    pays the vendor and then the lender reimburses the joint venture and reduces
    the escrow account by the amount of the expenditure. These funds can only be
    used for making necessary repairs as stipulated in the mortgage agreement.

2.    Joint Ventures

    See Note 4 to the financial  statements of PWIP5 in this Annual Report for a
    more detailed description of the joint venture partnerships. Descriptions of
    the ventures' properties are summarized below:

      a.    Randallstown Carriage Hill Associates

            The  joint   venture  owns  and  operates   Carriage   Hill  Village
        Apartments,  an  806-unit  apartment  complex  located in  Randallstown,
        Maryland.



<PAGE>


      b.    Signature Partners, L.L.C.

            This  limited  liability  company  owns a  23-acre  parcel of land
        located in Randallstown, Maryland.  See Note 4.

      c.    Amarillo Bell Associates

            The joint venture owns and operates Bell Plaza  Shopping  Center,  a
        151,500 gross leasable  square foot shopping center located in Amarillo,
        Texas.

      d.    Greenbrier Associates

            The  joint  venture  owns  and  operates  Greenbrier  Apartments,  a
        324-unit apartment complex located in Indianapolis, Indiana.

      e.    Seven Trails West Associates

            The joint venture owns and operates Seven Trails West Apartments,  a
        532-unit apartment complex located in Ballwin, Missouri.

            As further  described  in Note 4, the  mortgage  loan secured by the
         Seven  Trails West  Apartments  is  scheduled  to mature on February 1,
         1996.  Management  is currently  pursuing new  financing  sources which
         would  allow the  venture  to repay the  outstanding  debt  obligation.
         However,  no financing  agreement has been  finalized as of the date of
         this report.

      f.    Cambridge Associates

            The  joint  venture  owned  and  operated  Cambridge  Apartments,  a
        378-unit apartment complex located in Omaha, Nebraska. On June 30, 1994,
        Cambridge  Associates  sold  its  operating  investment  property,   the
        Cambridge Apartments, to an affiliate of PWIP5's co-venture partner. The
        property was sold for $9,700,000.  After repayment of the outstanding $5
        million  first  mortgage  loan and  closing  costs,  the sale  generated
        approximately $4.7 million to be split between PWIP5 and the co-venturer
        in accordance with the venture agreement. PWIP5's share of such proceeds
        amounted to approximately $3.7 million in cash. The venture recognized a
        gain  of  $3,336,000  in  fiscal  1994  in  connection   with  the  sale
        transaction.

      The following description of the joint venture agreements provides certain
    general information.

      Allocations of net income and loss

      The  agreements  generally  provide that taxable  income and losses (other
    than those resulting from sales or other  dispositions of the projects) will
    be allocated  between PWIP5 and the  co-venturers in the same proportions as
    cash flow distributed  from  operations,  except for certain items which are
    specifically  allocated to the  partners,  as set forth in the joint venture
    agreements.  Gains or losses  resulting from sales or other  dispositions of
    the  projects   shall  be  allocated  as  specified  in  the  joint  venture
    agreements. Allocations of income and loss for financial accounting purposes
    have been made in accordance with the actual joint venture agreement.


<PAGE>



      Distributions

      The joint venture agreements  generally provide that distributions will be
    paid on an annual basis first to PWIP5,  in specified  amounts  ranging from
    $283,500  to  $875,000  as a  preferred  return.  After  payment  of PWIP5's
    preference  return,  the agreements  generally provide for certain preferred
    payments,  up to  specified  amounts,  to be paid to the  co-venturers.  Any
    remaining distributable cash will be paid in proportions ranging from 90% to
    50% to PWIP5 and 10% to 50% to the  co-venturers,  as set forth in the joint
    venture  agreements.  Allocations of the distributable  cash of the Carriage
    Hill joint venture differ significantly from these general terms. See Note 4
    to the financial  statements  of PWIP5  included in this Annual Report for a
    further discussion.

      Distributions of net proceeds upon the sale or refinancing of the projects
    shall be made in  accordance  with  formulas  provided in the joint  venture
    agreements.

3.    Related party transactions

      The Combined Joint Ventures  entered into property  management  agreements
    with  affiliates  of the  co-venturers,  cancelable  at the joint  ventures'
    option upon the occurrence of certain events.  The management fees are equal
    to 4% to 5% of gross receipts, as defined in the agreements. Management fees
    totalling  $532,000,  $670,000 and $578,000  were paid to  affiliates of the
    co-venturers for fiscal 1995, 1994 and 1993, respectively.

      Accounts  payable  -  affiliates  at  September  30,  1995  and  1994  are
    principally management fees and reimbursements payable to property managers.
    Notes payable to venturers at September 30, 1995 represents  operating notes
    provided by PWIP5 and its  co-venturer  to Seven Trails West  Associates and
    Randallstown  Carriage  Hill  Associates  in the  amounts  of  $848,000  and
    $118,000,  respectively.  Notes  payable to venturers at September  30, 1994
    represent  operating  notes provided by PWIP 5 and its  co-venturer to Seven
    Trails West Associates in the amounts of $836,000 and $11,000, respectively.
    Such loans  generally  bear  interest at the prime rate and are payable only
    out of  the  respective  venture's  available  net  cash  flow  or  sale  or
    refinancing proceeds.

4.    Long-term debt

      Long-term  debt at September  30, 1995 and 1994  consists of the following
    (in thousands):

                                                           1995        1994

      7.65% mortgage note to a financial
      institution,  due in 2030. Payments are
      made in monthly  installments of $191,
      including  principal and interest.
      The  mortgage  note is  secured  by 
      the  property  owned  by  Randallstown
      Carriage  Hill  Associates  and  is  
      subject  to  certain  escrow  deposit
      requirements.  The mortgage note is 
      co-insured by the Secretary of Housing
      and Urban  Development  (HUD) in  
      accordance  with the  provisions  of the
      National Housing Act and the laws 
     of the State of Maryland.                        $  27,843  $    -



<PAGE>



                                                             1995        1994

      8.75%  mortgage  note to a  financial  
      institution,  due  January 1, 2022.
      Payments were made in monthly  
      installments of $214,  including  principal
      and  interest.  The  mortgage  note 
      was secured by the  property  owned by
      Randallstown  Carriage Hill  Associates 
      and was subject to certain deposit
      requirements of real estate tax and 
      insurance premiums.  The mortgage note
      was co-insured by the Secretary of 
      Housing and Urban  Development (HUD) in
      accordance with the provisions of 
      the National Housing Act and the laws of
      the State of Maryland.
      See discussion below.                                   -      26,677

      8.125%  nonrecourse  mortgage  note 
      secured by land and building  owned by
      Amarillo  Bell  Associates,  guaranteed  
      by the  co-venturer.  Payable  in
      monthly  installments of $26, including 
      interest,  with a final payment of
      approximately
      $2,943 due July 1, 2002.                              3,293           -

      9.4%  nonrecourse  mortgage  note,  
      secured by land and building  owned by
      Amarillo  Bell  Associates,  guaranteed
      by the  co-venturer.  Payable  in
      monthly  installments of $30, including 
      interest,  with a final payment of
      approximately
      $3,250 due June 1, 1995.                                  -       3,277

      Wrap-around   mortgage   of   $5,400
      secured     by    the     Greenbrier
      Associates property,  bears interest
      at 10% payable  monthly  thereafter.
      The entire  principal of  $5,400,000
      and any unpaid  accrued  interest is
      due June 29,  1998.  See  discussion
      below regarding extension.                            5,400       5,400

      Wrap-around deed of trust of $14,700,000  
      secured by the Seven Trails West
      Associates  operating  investment  property,  
      bearing interest of 12% (11%
      payable monthly,  1% accrued and deferred).  
      The entire principal  balance
      and  deferred  interest is due  
      February  1, 1996.  See  discussion  below
      regarding 1994 modification
      agreement.                                           14,700      14,700
                                                           51,236      50,054

      Less current portion                                (14,911)     (3,524)
                                                          $36,325     $46,530



<PAGE>


    Maturities  of  long-term  debt,  which  is all  non-recourse  to the  joint
    ventures and PWIP5,  for each of the next five years and  thereafter  are as
    follows:

            1996                  $ 14,911
            1997                       228
            1998                     5,645
            1999                       266
            2000                       287
            Thereafter              29,899
                                   $51,236

      The Carriage Hill joint venture did not generate  sufficient  cash flow to
fully cover its debt service payments to the lender during the second quarter of
fiscal  1994.  Consequently,  the  Carriage  Hill joint  venture  entered into a
forbearance  agreement  with its lender  which  provided for the payment of less
than the full  amount  due each month  through  July 1994 in the event that cash
flow was not sufficient.  In return,  the venture agreed to, among other things,
apply for  refinancing  at a lower  interest  rate  through a  HUD-insured  loan
program.  An  application  for such  financing  was  submitted  in fiscal  1994.
However,  the dramatic  increase in market  interest rate levels during calendar
1994  made  this  refinancing  plan   economically   unfeasible  at  such  time.
Accordingly,  management  of the  venture  went back to the  existing  lender to
attempt to reach an  agreement  which would allow the venture to bring the loan,
which had a scheduled  maturity date of January  2022,  current over a period of
time. The lender agreed to an additional  forbearance period beginning in August
1994,  whereby the venture was  required to make the full  monthly  payments due
under the  original  mortgage  loan from August 1, 1994 forward and to repay the
prior deferred  payments and restore certain required escrow deposits by October
31, 1994. Through October 1994, the venture had made the full payments due under
the mortgage  loan since  August,  but had  requested  additional  time from the
lender to make up the  deferred  payments  and restore the escrow  deposits,  an
obligation which totalled  approximately  $300,000.  During the first quarter of
fiscal 1995,  the lender  agreed to give the venture  until  January 15, 1995 to
bring the loan  current.  During the second  quarter,  the  Partnership  and its
co-venture  partner each  contributed  $150,000 to the venture,  the proceeds of
which  were used to bring the loan  current  under the terms of the  forbearance
agreement.  Subsequently,  market interest rates declined  sufficiently to allow
the existing first  mortgage loan secured by Carriage Hill,  with an outstanding
principal  balance of  approximately  $26.5 million,  to be refinanced.  The new
loan, in the initial  principal  amount of  approximately  $27.9 million,  has a
fixed  interest rate of 7.65% and a term of 35 years.  The venture  recognized a
loss of $1,177,000 in fiscal 1995 in connection with the refinancing transaction
to write off the unamortized  balance of the deferred financing costs related to
the prior mortgage loan.

      As part of the refinancing  transaction described above, the Carriage Hill
joint venture was able to secure the release from collateral of a 23-acre parcel
of excess land. Title to this land, which had a carrying value of $563,000,  was
transferred from the joint venture to a newly formed limited liability  company,
Signature Partners,  L.L.C. ("Signature Partners").  Signature Partners is owned
by the venture partners with the same ownership  interest  percentages as in the
Carriage Hill joint venture agreement. This land could eventually be marketed to
local developers once market conditions  improve.  Proceeds of any such sale, if
completed,  would be  distributed  to the  owners  in  accordance  with the same
priorities  called  for under  the  terms of the  Carriage  Hill  joint  venture
agreement.

      In fiscal 1993,  Greenbrier  Associates  exercised an option to extend the
maturity  date of its mortgage  loan to June 29, 1998,  at which time the entire
principal  and any  unpaid  accrued  interest  is due.  In  connection  with the
extension of the maturity date,  deferred interest expense of $263,000 was to be
paid partially with the extension, with two remaining installments of $88,000 to
be paid on June 30,  1994 and 1995.  As of  September  30,  1995,  all  deferred
interest has been paid.

      On March 31, 1994, the Seven Trails joint venture closed on a modification
and  extension  of the  wraparound  mortgage  loan  secured by the Seven  Trails
Apartments with the existing lender. As part of the agreement, the wrap mortgage
lender purchased the underlying first mortgage loan and is now the sole mortgage
lienholder.  Under the terms of the  modification  agreement,  the loan maturity
date was  extended  to February  1, 1996 and the  accrual  rate of interest  was
increased from 11% to 12%, with 1% deferred,  on the  outstanding  mortgage loan
principal of  $14,700,000.  In addition to the  outstanding  principal  balance,
there is currently deferred interest totalling approximately $1.7 million due to
the Seven Trails mortgage lender. Under the terms on the extension agreement, no
interest  will accrue on the current or additional  amount of deferred  interest
through the scheduled maturity date. PWIP5 contributed approximately $586,000 to
the Seven Trails joint venture in the second  quarter of fiscal 1994 in order to
complete this transaction.  Such advances were used to pay a refundable $147,000
extension fee, to fund a capital  improvement reserve of $400,000 and to pay for
transaction  closing costs.  The extension fee will be refunded to PWIP 5 if the
entire obligation to the mortgage lender is repaid in full prior to the extended
maturity date. Under the terms of the extension agreement,  all net cash flow of
the joint venture, after payment of current debt service, approved capital costs
and  approved  refinancing  costs,  will be  payable  to the  lender to pay down
outstanding deferred interest and then loan principal.

      The mortgage loan secured by the Seven Trails West Apartments is scheduled
to mature on  February  1,  1996.  Management  has  preliminarily  identified  a
financing  source which would enable the venture to repay the  outstanding  debt
obligation.  However,  completion of any refinancing transaction remains subject
to,  among  other  things,  final  negotiation,  lender  due  diligence  and the
execution of final loan documents.  As a result,  there are no assurances that a
refinancing will be successfully completed (see Note 2). Accordingly, the entire
mortgage loan balance  secured by the  operating  investment  property  owned by
Seven Trails West Associates has been classified as current on the  accompanying
combined balance sheet as of September 30, 1995.

5.    Leases

      Minimum annual future lease revenues under noncancellable operating leases
at the Bell Plaza  Shopping  Center as of September  30, 1995 are as follows (in
thousands):

            1996               $       574
            1997                       544
            1998                       533
            1999                       435
            2000                       352
            Thereafter               3,715
                                  $  6,153

      Revenues from a major tenant of the Bell Plaza Shopping  Center  comprised
approximately  34% of the total rental  revenues of Amarillo Bell Associates for
the  year  ended  September  30,  1995.  This  major  tenant  replaced   another
significant tenant which accounted for approximately 50% of the venture's rental
revenues for the year ended September 30, 1994.



<PAGE>


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

-------------------------------------------------------
<TABLE>
Schedule III - Real Estate and Accumulated Depreciation


 COMBINED JOINT VENTURES OF PAINE WEBBER INCOME PROPERTIES FIVE LIMITED PARTNERSHIP

              SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION

                               September 30, 1995
                                 (In thousands)


<CAPTION>

                          Initial Cost to                 Gross Amount at Which Carried at                           Life  on Which
                          Partnership            Costs          Close of period                                        Depreciation
                                Buildings      Capitalized        Buildings,                                             in Latest
                                Improvements  (Removed)           Improvements                                             Income
                               & Personal     Subsequent to       & Personal         Accumulated   Date of     Date      Statement
Description Encumbrances  Land  Property      Acquisition  Land   Property     Total Depreciation Construction Acquired  is Computed
<S>         <C>           <C>   <C>           <C>          <C>    <C>           <C>   <C>          <C>         <C>       <C>
COMBINED JOINT VENTURES:
  

Apartment 
Complex      $27,843     $1,000   $23,633   $3,932        $1,000   $27,565  $28,565   $ 12,836    1970-73   8/30/83     5-30 yrs.
Randallstown, MD

Land              -         563         -       38           601         -      601          -       -      6/1/95       -
Randallstown, MD

Shopping
Center        3,293       1,519     6,310      889          1,519     7,199    8,718      2,542    1979-82  9/30/83    5-40 yrs.
Amarillo, TX

Apartment 
Complex      5,400          420     8,990      418            420     9,408    9,828      3,543    1964-68   6/29/84 5-30 yrs.
Indianapolis,
 IN

Apartment 
Complex
Ballwin, 
 MO        14,700         1,710    22,131    1,941           1,710    24,072   25,782      9,007   1968-74   9/13/84 5-30 yrs.
Total     $51,236        $5,212   $61,064  $ 7,218          $5,250   $68,244  $73,494    $27,928

Notes

(A) The  aggregate  cost of real estate owned at September  30, 1995 for Federal
income tax  purposes is  approximately  $71,278,000.  (B) See Note 4 to Combined
Financial  Statements for a description of the terms of the debt encumbering the
properties.
(C) Reconciliation of real estate owned:
                                             1995               1994               1993
      Balance at beginning of period         $ 72,171           $80,879           $80,079
      Acquisitions and improvements             1,323               776               800
      Dispositions                                  -            (9,484)                -
      Balance at end of period                $73,494         $  72,171           $80,879

(D) Reconciliation of accumulated depreciation:

      Balance at beginning of period         $ 25,427          $ 25,891           $23,115
      Depreciation expense                      2,501             2,669             2,776
      Dispositions                                  -            (3,133)                -
      Balance at end of period               $ 27,928           $25,427           $25,891

</TABLE>