FORM 10-K
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 [Fee Required]
For the Fiscal Year Ended    December 31, 1996

                                    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      N/A

Commission file number            0-15680

            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
           (Exact name of registrant as specified in its charter)

          Massachusetts                             04-2921566
 (State or other jurisdiction of       (I.R.S. Employer Identification No.)
  incorporation or organization)

 200 Clarendon Street, Boston, MA                     02116
(Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code:  (800) 722-5457
Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to section 12(g) of the Act:  Units of
Investor Limited Partnership Interest

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 filling requirements for the past 90 days.
                          Yes     X      No

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

State the aggregate market value of the voting stock held by non-affiliates
of the registrant.  The aggregate market value shall be computed by
reference to the price at which the stock was sold, or the average bid and
asked prices of such stock, as of a specified date within 60 days prior to
the date of filing.  (See definition of affiliate in Rule 405.)  Not
applicable, since the securities are non-voting

NOTE:  If a determination as to whether a particular person or entity is an
affiliate cannot be made without involving unreasonable effort and expense,
the aggregate market value of the common stock held by non-affiliates may
be calculated on the basis of assumptions reasonable under the
circumstances, provided that the assumptions are set forth in this Form.

                      Exhibit Index on Pages 29 - 33
                               Page 1 of 34
<PAGE>
                            TABLE OF CONTENTS




                                  PART I


  Item 1   Business                                                  3
  Item 2   Properties                                                6
  Item 3   Legal Proceedings                                         8
  Item 4   Submission of Matters to a Vote
             of Security Holders                                     8


                                 PART II


  Item 5   Market for the Partnership's Securities and Related
             Security Holder Matters                                 8
  Item 6   Selected Financial Data                                  10
  Item 7   Management's Discussion and Analysis of Financial
             Condition and Results of Operations                    11
  Item 8   Financial Statements and Supplementary Data              22
  Item 9   Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure                 22


                                 PART III


  Item 10  Directors and Executive Officers of the Registrant       22
  Item 11  Executive Compensation                                   25
  Item 12  Security Ownership of Certain Beneficial Owners
             and Management                                         25
  Item 13  Certain Relationships and Related Transactions           26


                                 PART IV


  Item 14  Exhibits, Financial Statement Schedules and
             Reports on Form 8-K                                    29

           Signatures                                               34












                                    2
<PAGE>
                                  Part I

Item 1 - Business

The Registrant, John Hancock Realty Income Fund Limited Partnership (the
"Partnership"), is a limited partnership organized on June 12, 1986 under
the Massachusetts Uniform Limited Partnership Act.  As of December 31,
1996, the partners in the Partnership consisted of John Hancock Realty
Equities, Inc. (the "General Partner"), John Hancock Realty Funding, Inc.
(the "John Hancock Limited Partner"), and 4,142 Investor Limited Partners
(the "Investors") owning 91,647 Units of Investor Limited Partnership
Interests (the "Units").  The John Hancock Limited Partner and the
Investors are collectively referred to as the Limited Partners.  The
initial capital of the Partnership was $2,000 representing capital
contributions of $1,000 from the General Partner and $1,000 from the John
Hancock Limited Partner.  During the offering period, the John Hancock
Limited Partner made additional capital contributions of $7,330,760.  There
have been no changes in the number of Units outstanding subsequent to the
termination of the offering period.  The Amended Agreement of Limited
Partnership of the Partnership (the "Partnership Agreement") authorized the
sale of up to 100,000 Units of Investor Limited Partnership Interests.

The Units were offered and sold to the public during the period from
September 9, 1986 to September 9, 1987, pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933.  The Partnership
sold the Units for $500 per Unit.  No established public market exists on
which the Units may be traded.

The Partnership is engaged in the business of acquiring, improving, holding
for investment and disposing of existing, income-producing, commercial and
industrial properties on an all-cash basis, free and clear of mortgage
indebtedness.  Although the Partnership's properties were acquired and are
held free and clear of mortgage indebtedness, the Partnership may incur
mortgage indebtedness on its properties under certain circumstances, as
specified in the Partnership Agreement.

The latest date on which the Partnership is due to terminate is December
31, 2016, unless it is sooner terminated in accordance with the terms of
the Partnership Agreement.  It is expected that in the ordinary course of
the Partnership's business, the properties of the Partnership will be
disposed of, and the Partnership terminated, before December 31, 2016.















                                    3
<PAGE>
Item 1 - Business (continued)

The Partnership's equity real estate investments are subject to various
risk factors.  Although the risks of equity investing are reduced when
properties are acquired on an unleveraged basis, the major risk of owning
income-producing properties is the possibility that the properties will not
generate income sufficient to meet operating expenses and to fund adequate
reserves for repairs, replacements, contingencies and anticipated
obligations.  The income received from properties may be affected by many
factors, including:  i) adverse changes in general economic conditions and
local conditions, such as competitive over-building, a decrease in
employment, or adverse changes in real estate zoning laws, which may reduce
the desirability of real estate in the area or ii) other circumstances over
which the Partnership may have little or no control, such as fires,
earthquakes and floods.  To the extent that the Partnership's properties
are leased in any substantial portion to a specific retail, industrial or
office tenant, the financial failure of any such major tenant, resulting in
the termination of the tenant's lease or non-payment of rental amounts due,
would likely cause at least a temporary reduction in cash flow from any
such property and might result in a decrease in the market value of that
property.

Under various federal, state and local laws, ordinances and regulations, an
owner or operator of real property may become liable for the costs of
removal or remediation of certain hazardous substances released on or in
its property.  Such laws often impose such liability without regard to
whether the owner or operator knew of, or was responsible for, the release
of such hazardous substances.  If any such substances were found in or on
any property owned by the Partnership, the Partnership could be exposed to
liability and be required to incur substantial remediation costs.  The
presence of such substances or the failure to undertake proper remediation
could adversely affect the ability to finance, refinance or dispose of such
property.

On October 24, 1986, the Partnership acquired the 1300 North Dutton Avenue,
an office/industrial facility located in Santa Rosa, California.  The
tenant that had leased all of the rentable space at the property notified
the Partnership during 1994 that it would not renew its lease, which
expired on January 31, 1995.  The property remained vacant after January
31, 1995 until the General Partner secured a new tenant, Union Oil Company
of California, to occupy the entire property under a five year lease which
commenced in October 1996.  Although real estate market conditions for
office/industrial space in Santa Rosa have declined since the Partnership
acquired the 1300 North Dutton Avenue property, leasing activity and rental
rates have increased during recent months.  Due to this new lease at the
property and the current favorable market conditions in the Santa Rosa,
California area, the General Partner listed the 1300 North Dutton Avenue
property for sale during October 1996.








                                    4
<PAGE>
Item 1 - Business (continued)

On February 17, 1987, the Partnership acquired the Marlboro Square Shopping
Center, a neighborhood shopping center located in Marlboro, Massachusetts.
Market conditions in Marlboro have weakened since the Partnership acquired
the property and have remain depressed.  An excess of supply over demand
for retail space has resulted in continued high vacancy rates and
competitive pricing for leasing space in the Marlboro area.  In addition, a
new retail development within close proximity to Marlboro Square commenced
operations during August 1996.  The General Partner anticipates that
absorption of existing retail space in the Marlboro area will remain
sluggish during 1997 due to both the lack of demand and the recent increase
in available retail space in the area.  The General Partner will continue
to offer competitive rental rates and concessions at Marlboro Square in an
effort to retain existing tenants and to lease the remaining vacant space
at the property.

On November 20, 1987, the Partnership acquired the Crossroads Square
Shopping Center, a neighborhood shopping center located in Jacksonville,
Florida.  Although real estate market conditions for retail properties in
Jacksonville have declined as compared to when the Partnership acquired the
property, occupancy levels and rental rates within the market have
stabilized over recent years and remain relatively favorable.  The General
Partner anticipates that these favorable retail market conditions in
Jacksonville and at the property should continue during 1997.

On December 22, 1987, the Partnership acquired the Carnegie Center, a
multi-tenant office/industrial facility located in Cincinnati, Ohio.  Since
the Partnership acquired the Carnegie Center, the Cincinnati industrial
real estate market has experienced an oversupply of office/industrial
space, which has resulted in a decline in rental rates and an increase in
vacancy rates.  In addition, during 1994 a tenant that had occupied 45% of
the Carnegie Center property did not renew its leases upon their
expirations and, as a result, the property's occupancy declined to 35%.  As
of December 31, 1996, the property's occupancy was 64%.  The General
Partner anticipates that market conditions in Cincinnati will remain
competitive during 1997 and, therefore, will continue to offer competitive
rental rates and concessions in an effort to further increase occupancy at
Carnegie Center.

On February 25, 1988, the Partnership acquired the Warner Plaza Shopping
Center, a neighborhood shopping center located in Chandler, Arizona.  The
Partnership acquired Warner Plaza exclusive of areas totaling 55,562
rentable square feet owned by a non-affiliate of the Partnership.  Real
estate market conditions have declined in the Chandler area since the
Partnership acquired the property.  However, steady population growth in
the Chandler area over the past few years has increased demand for
available retail space and stimulated the development of new retail space.
The Warner Plaza Shopping Center property was 100% leased at December 31,
1996.  The General Partner anticipates favorable retail market conditions
to continue in the Chandler area during 1997 and that the property should
provide the Partnership with stable income performance during 1997.





                                    5
<PAGE>
Item 1 - Business (continued)

On September 13, 1988, the Partnership acquired the J.C. Penney Credit
Operations Center, an office/service center located in Albuquerque, New
Mexico and 100% occupied by J.C. Penney.  J.C. Penney's lease had been
scheduled to expire during 1996; however, during the first quarter of 1995,
the General Partner negotiated an extension of the lease through June 2006.
The General Partner listed the J.C. Penney Credit Operations Center for
sale during July 1995 based upon the extension of J.C. Penney's lease at
the property and the then existing favorable real estate market conditions
in Albuquerque, New Mexico.  On December 29, 1995, the Partnership sold the
J.C. Penney Credit Operations Center to a non-affiliated buyer for a gross
sales price of $5,600,000 and received net sales proceeds of $5,392,032,
after deductions for commissions and selling expenses incurred in
connection with the sale of the property.  During February 1996, the
Partnership distributed $5,315,526 of the net sales proceeds, of which
$4,582,350 was distributed to the Investors, and $733,176 was distributed
to the John Hancock Limited Partner.  The remaining net sales proceeds of
$76,506 were retained in the Partnership's working capital reserves.

Within the power accorded to the General Partner under the terms of the
Partnership Agreement, the General Partner contracted, effective as of
January 1, 1992, with Hancock Realty Investors Incorporated ("HRI"), a
wholly-owned, indirect subsidiary of John Hancock Mutual Life Insurance
Company ("John Hancock"), to assist the General Partner in the performance
of its management duties as enumerated in the Partnership Agreement.
Effective May 28, 1993, HRI subcontracted with John Hancock to assist HRI
in the performance of its duties as enumerated in the January 1, 1992
contract.  The Partnership has not incurred any additional costs or
expenses as a result of these agreements.  The General Partner is further
described in Item 10 ("Directors and Executive Officers of the
Partnership") of this Report.

Industry segment information has not been provided since the Partnership is
engaged in only one industry segment.

Item 2 - Properties

At December 31, 1996, the Partnership held five properties in its
portfolio.

1300 North Dutton Avenue Office Complex
---------------------------------------
On October 24, 1986, the Partnership purchased the 1300 North Dutton Avenue
office building ("1300 North Dutton Avenue"), located in Santa Rosa,
California, from a non-affiliated seller.  The property consists of one
building with 24,120 rentable square feet of office space.  The building
and two adjacent buildings comprise "Park Campus", an association which in
common owns a 5.9 acre parcel with landscaping and parking serving all
three buildings.  1300 North Dutton Avenue's allocation of interest in Park
Campus is approximately 32% and includes the exclusive right to use 95
parking spaces.  This property was listed for sale during October 1996.





                                    6
<PAGE>
Item 2 - Properties (continued)

1300 North Dutton Avenue Office Complex (continued)
---------------------------------------
For the year ended December 31, 1996, the average occupancy of 1300 North
Dutton Avenue was 25%.  At December 31, 1996, the property was 100% leased
to Union Oil Company of California under a lease which expires on September
30, 2001.

Marlboro Square Shopping Center
-------------------------------
On February 17, 1987, the Partnership purchased the Marlboro Square
Shopping Center ("Marlboro Square"), located in Marlboro, Massachusetts,
from a non-affiliated seller.  The property consists of two freestanding
buildings.  One of the buildings contains 39,150 rentable square feet, and
the other building contains 3,000 rentable square feet, for a total of
42,150 rentable square feet of space.

For the year ended December 31, 1996, the average occupancy of Marlboro
Square was 80%.  At December 31, 1996 Marlboro Square's occupancy was 70%.

Crossroads Square Shopping Center
---------------------------------
On November 20, 1987, the Partnership purchased the Crossroads Square
Shopping Center ("Crossroads Square"), located in Jacksonville, Florida,
from a non-affiliated seller.  Crossroads Square contains 174,196 rentable
square feet of space with a total land area in excess of 18.5 acres.

For the year ended December 31, 1996, the average occupancy of Crossroads
Square was 93%.  At December 31, 1996, Crossroads Square's occupancy was
93%.

Carnegie Center Office/Warehouse
--------------------------------
On December 22, 1987, the Partnership purchased Carnegie Center, located in
Cincinnati, Ohio, from a non-affiliated seller.  The property consists of
two buildings containing an aggregate of 128,059 rentable square feet with
a total land area of approximately 7.8 acres.

For the year ended December 31, 1996, the average occupancy of Carnegie
Center was 61%.  At December 31, 1996, Carnegie Center's occupancy was 64%.

Warner Plaza Shopping Center
----------------------------
On February 25, 1988, the Partnership purchased 92,848 rentable square feet
of the Warner Plaza Shopping Center ("Warner Plaza") (which consists of a
total of 148,410 rentable square feet), located in Chandler, Arizona, from
a non-affiliated seller.

For the year ended December 31, 1996, average occupancy, for the portion of
Warner Plaza which is owned by the Partnership, was 100%.  At December 31,
1996 occupancy for such portion was 100%.

The foregoing properties are described more fully in Items 1, 2 and 7 and
Note 4 to the Financial Statements included in Item 8 of this Report.


                                    7
<PAGE>
Item 3 - Legal Proceedings

In February 1996, a putative class action complaint was filed in the
Superior Court in Essex County, New Jersey by a single investor in a
limited partnership affiliated with the Partnership.  The complaint named
as defendants the Partnership, the General Partner, certain other
affiliates of the General Partner, and certain unnamed officers, directors,
employees and agents of the named defendants.

The plaintiff sought unspecified damages stemming from alleged
misrepresentations and omissions in the marketing and offering materials
associated with the Partnership and two limited partnerships affiliated
with the Partnership.  The complaint alleged, among other things, that the
marketing materials for the Partnership and the affiliated limited
partnerships did not contain adequate risk disclosures.

On March 18, 1997, the court certified a class of investors who were
original purchasers in the Partnership.  The certification order should not
be construed as suggesting that any member of the class is entitled to
recover, or will recover, any amount in the action.

The General Partner believes the allegations are totally without merit and
will continue to vigorously contest the action.

There are no other material pending legal proceedings, other than ordinary
routine litigation incidental to the business of the Partnership, to which
the Partnership is a party or to which any of its properties is subject.

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

There were no matters submitted to a vote of security holders of the
Partnership during the fourth quarter of 1996.

                                 Part II

Item 5 - Market for the Partnership's Securities and Related Security
Holder Matters

(a)  Market Information

The Partnership's outstanding securities consist of 91,647 Units originally
sold for $500 per Unit.  The Units were offered and sold to the public
during the period from September 9, 1986 to September 9, 1987.  No
established public market exists on which the Units may be traded.
Consequently, holders of Units may not be able to liquidate their
investments in the event of an emergency, or for any other reason.
Additionally, the assignment or other transfer of Units would be subject to
compliance with the minimum investment and suitability standards imposed by
the Partnership or by applicable law, including state "Blue Sky" laws.








                                    8
<PAGE>
Item 5 - Market for the Partnership's Securities and Related Security
Holder Matters

(b)  Number of Security Holders
                                 Number of             Number of Units
                            record holders as of      outstanding as of
 Title of Class              December 31, 1996        December 31, 1996
 --------------              -----------------        -----------------
   Units of
   Investor Limited
   Partnership Interests             4,142                    91,647

(c)  Dividend History and Restrictions

During the fiscal year ended December 31, 1996, the Partnership distributed
cash in the aggregate amount of $7,485,429 to the Partners.  Of this
amount, $2,169,903 was generated from Distributable Cash from Operations
(defined in the Partnership Agreement), and $5,315,526 was generated from
Distributable Cash from Sales or Financings (defined in the Partnership
Agreement).  During the fiscal year ended December 31, 1995, the
Partnership distributed cash in the amount of $2,314,318 from Distributable
Cash from Operations.  These amounts were distributed in accordance with
the Partnership Agreement.

The following table reflects aggregate cash distributions with respect to
Distributable Cash from Operations and Distributable Cash from Sales or
Refinancings (in each case, as defined in the Partnership Agreement) made
during 1995 and 1996:
<TABLE>
<CAPTION>
                                                      Amount Paid to
      Date of          Amount of     Amount Paid to    John Hancock     Amount Paid     Distribution
    Distribution      Distribution  General Partner  Limited Partner    to Investors      Per Unit
    ------------      ------------   --------------   --------------    ------------      --------
        <S>               <C>             <C>              <C>              <C>             <C>
  February 15, 1995        $578,579      $5,786             $-             $572,793          $6.25
  May 15, 1995              578,580       5,786              -              572,794           6.25
  August 15, 1995           578,580       5,786              -              572,794           6.25
  November 15, 1995         578,579       5,785              -              572,794           6.25
  February 15, 1996 *     5,894,105       5,785        733,176            5,155,144          56.25
  May 15, 1996              548,956       5,489              -              546,467           5.93
  August 15, 1996           521,184       5,212              -              515,972           5.63
  November 15,1996          521,184       5,212              -              515,972           5.63

  * Includes Distributable Cash from Sales or Refinancings
</TABLE>









                                    9
<PAGE>
Item 5 - Market for the Partnership's Securities and Related Security
Holder Matters

(c)  Dividend History and Restrictions (continued)

The source of future distributions from cash from operations is dependent
upon cash generated by the Partnership's investments and the use of working
capital reserves for leasing costs and capital expenditures.  Distributions
of Cash from Operations during the year ended 1996 represent a 5% return on
Investors' Invested Capital.  The General Partner anticipates that the
Partnership will make distributions of Cash from Operations in 1997
comparable to those made during both 1996 and 1995.  For further discussion
on the financial condition and results of operations of the Partnership see
Item 7 of this Report.  Should any of the Partnership's properties be sold,
the General Partner will make a distribution of Distributable Cash from
Sales or Refinancings, as provided in the Partnership Agreement.  The 1300
North Dutton Avenue property was listed for sale in October 1996.  There
can be no assurances that the property will be sold, or what the sales
price may be, or how much cash will be distributable to Limited Partners,
if any, if the property is sold.

Item 6 - Selected Financial Data

The following table sets forth selected financial information regarding the
Partnership's financial position and operating results for the five year
period ended December 31, 1996.  This information should be read in
conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements and Notes
thereto, which are included in Items 7 and 8, respectively, of this Report.
<TABLE>
<CAPTION>
                                                           Years Ended December 31,
                                           1996         1995         1994        1993         1992
                                           ----         ----         ----        ----         ----
<S>                                        <C>          <C>          <C>         <C>          <C>
Rental income                           $2,614,989  $3,065,751   $3,618,826  $3,519,445   $3,648,457
Interest income                            171,767     173,286      110,982      71,557       87,970
Gain on sale of property                         -     128,539            -           -            -
Net (loss)/income                        (851,115)   1,551,706    1,497,221   1,684,608    1,095,594
Net (loss)/income per Unit (b)              (5.60)       17.42       17.02        18.95       12.49
Ordinary tax income (a)                  1,130,346   1,480,158    2,128,148   1,826,365    2,042,510
Ordinary tax income per Unit (b)            12.74        16.80       23.61        20.35       22.68
Cash distribution per Unit from
  operations                                23.44        25.00       25.00        28.75       30.00
Distributable cash from sales
  or financings                                  -   5,315,526            -           -            -
Cash distribution per Unit from
  sales or financings                       50.00
Cash and cash equivalents at
  December 31                            2,197,847   8,397,420    3,124,999   2,359,803    2,552,370
Total assets at December 31             25,375,190  33,605,444   34,325,239  35,150,707   36,092,419
</TABLE>





                                    10
<PAGE>
Item 6 - Selected Financial Data (continued)

(a)  The ordinary tax income for the Partnership was allocated as follows:
<TABLE>
<CAPTION>
                                                           Years Ended December 31,
                                           1996         1995         1994        1993         1992
                                           ----         ----         ----        ----         ----
<S>                                        <C>          <C>          <C>         <C>          <C>
  General Partner                          $11,303     $14,802      $21,281     $18,263      $20,425
  John Hancock Limited Partner            (48,573)    (74,321)     (56,684)    (56,684)     (56,684)
  Investors                              1,167,586   1,539,677    2,163,551   1,864,786    2,078,769
                                        ----------  ----------   ----------  ----------   ----------
     Total                              $1,130,346  $1,480,158   $2,128,148  $1,826,365   $2,042,510
                                        ==========  ==========   ==========  ==========   ==========
</TABLE>
(b)  The actual ordinary tax income per Unit has not been presented because
     the actual ordinary tax income/(loss) is allocated between tax-exempt
     and tax-paying entities based upon the respective number of Units held
     by each group at December 31, 1996, 1995, 1994, 1993 and 1992.  The
     ordinary tax income per Unit as presented was computed by dividing the
     Investors' share of ordinary tax income by the number of Units
     outstanding at December 31, 1996, 1995, 1994, 1993 and 1992,
     respectively.

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

General
-------
During the offering period from September 9, 1986 to September 9, 1987, the
Partnership sold 91,647 Units representing gross proceeds (exclusive of the
John Hancock Limited Partner's contribution which was used to pay sales
commissions, acquisition fees and organizational and offering expenses) of
$45,823,500.  The proceeds of the offering were used to acquire investment
properties and fund reserves.  These properties are described more fully in
Item 2 and Note 4 to the Financial Statements included in Item 8 of this
Report.

Liquidity and Capital Resources
-------------------------------
At December 31, 1996, the Partnership had $2,197,847 in cash and cash
equivalents, $5,799 in restricted cash and $53,333 in long-term restricted
cash.  The Partnership's cash and cash equivalents decreased by $6,199,573
from December 31, 1995 to December 31, 1996 primarily due to the
distribution of proceeds from the sale of the J.C. Penney Credit Operations
Center during the first quarter of 1996 and also due to leasing costs
incurred at the Partnership's properties.









                                    11
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Liquidity and Capital Resources (continued)
-------------------------------------------
The Partnership has established a working capital reserve with a current
balance of approximately 3% of the offering proceeds.  The General Partner
anticipates that such amount should be sufficient to satisfy the
Partnership's general liquidity requirements.  Liquidity would, however, be
materially adversely affected by a significant reduction in revenues or
significant unanticipated operating costs or unanticipated capital
expenditures.  If any or all of these events were to occur, to the extent
that working capital reserves would be insufficient to satisfy the cash
requirements of the Partnership, it is anticipated that additional funds
would be obtained through a further reduction of cash distributions to
Investors, bank loans, short-term loans from the General Partner or its
affiliates or the sale or financing of Partnership properties.

During 1996, cash from working capital reserves was used for the payment of
leasing costs in the aggregate amount of $953,606 incurred at the 1300
North Dutton Avenue, Carnegie Center, Marlboro Square and Crossroads Square
properties.  The General Partner estimates that the Partnership will incur
approximately $342,000 of leasing costs at its properties during 1997, of
which approximately $238,000 is expected to be incurred at the Carnegie
Center property in connection with the Partnership's efforts to secure new
tenants to lease the available space.  The General Partner anticipates that
the current balance in the working capital reserve should be sufficient to
pay such costs.

During the years ended December 31, 1996 and 1995, approximately $75,000
and $167,000, respectively, of cash from operations was used to fund non-
recurring maintenance and repair expenses incurred at the Partnership's
properties.  The General Partner estimates that the Partnership will incur
approximately $140,000 of non-recurring maintenance and repair expenses at
its properties during 1997.  These expenses will be funded from the
operations of the Partnership's properties and are not expected to have a
significant impact on the Partnership's liquidity.

Cash in the aggregate amount of $7,485,429 was distributed to the Partners
during 1996.  Of this amount, $2,169,903 was generated from Distributable
Cash from Operations, and $5,315,526 was generated from Distributable Cash
from Sales or Financings.  These amounts were distributed in accordance
with the Partnership Agreement and were allocated as follows:

                           From Distributable      From Distributable
                               Cash From               Cash From
                               Operations         Sales or Financings
                               ----------         -------------------

Investors                       $2,148,204             $4,582,350
John Hancock Limited Partner             -                733,176
General Partner                     21,699                      -
                                ----------             ----------
     Total                      $2,169,903             $5,315,526
                                ==========             ==========

                                    12
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Liquidity and Capital Resources (continued)
-------------------------------------------
The amount distributed to Investors from Distributable Cash from Operations
during 1996 represented a 5% annualized return on Investors' Invested
Capital.

The following table summarizes the leasing activity and occupancy status at
the Partnership's properties during 1996:
<TABLE>
<CAPTION>
                           1300 North     Marlboro Sq.  Crossroads Sq.    Carnegie      Warner Pl.
                          Dutton Ave.    Shopping Ctr.  Shopping Ctr.      Center     Shopping Ctr.
                          -----------    -------------  -------------      ------     -------------
<S>                           <C>             <C>            <C>            <C>            <C>
Square Feet                    24,120          42,150       174,196        128,059         92,848

Occupancy at
  January 1, 1996                  0%             69%           93%            56%           100%
                                 ====            ====          ====           ====           ====

New Leases                       100%             27%            0%             8%             0%

Lease Renewals                     0%              8%            5%            11%             0%

Leases Expired                     0%             26%            0%             0%             0%

Occupancy at
  December 31, 1996              100%             70%           93%            64%           100%
                                 ====            ====          ====           ====           ====
Leases Scheduled to
Expire During 1997                 0%              0%            3%             3%             3%
                                 ====            ====          ====           ====           ====
Leases Scheduled to
Commence During 1997               0%              0%            0%             2%             0%
                                 ====            ====          ====           ====           ====
</TABLE>

All of the rentable space at the 1300 North Dutton Avenue property became
vacant when the former tenant's lease expired on January 31, 1995 and
remained vacant until October 1996.  During July 1996, the General Partner
entered into a lease on behalf of the Partnership with a new tenant, Union
Oil Company of California, to take occupancy of the entire property.  The
lease, which commenced in October 1996, is for a five year term with a base
rent of approximately $355,000 for the first lease year.  The Partnership
incurred approximately $685,000 in leasing costs in connection with this
lease during 1996.  Due to this new lease at the property and current
favorable real estate market conditions in Santa Rosa, California, the
General Partner listed the 1300 North Dutton Avenue property for sale
during October 1996.





                                    13
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Liquidity and Capital Resources (continued)
-------------------------------------------
At December 31, 1996, Marlboro Square's occupancy was 70%.  During 1996,
new leases on 27% of the property were executed, but leases on 26% of the
property expired.  Of the new leases, one tenant, occupying approximately
7% of the property, has not met its rental obligations since the lease
commenced in December 1996.  The General Partner will pursue collection of
all past due rental amounts owed by this tenant as well as all future
obligations not met by this tenant.

The General Partner anticipates that absorption of existing retail space in
the Marlboro, Massachusetts area will remain sluggish during 1997 based
upon both the lack of demand and increase in retail space in the area.  The
increase in retail space is due to a new retail development near to the
Marlboro Square property which commenced operations during August 1996.
The General Partner will continue to offer competitive rental rates and
concessions in an effort to retain existing tenants as well as to lease the
remaining vacant space at the property.

During 1994, a tenant that had occupied 45% of the Carnegie Center property
did not renew its leases upon their expirations and, as a result, the
property's occupancy declined to 35%.  Carnegie Center's occupancy was 64%
at December 31, 1996 and increased to 66% as of the date hereof with the
addition of a new tenant that took occupancy of approximately 3,000 square
feet in February 1997.  The Cincinnati area has an oversupply of industrial
space which has resulted in increased competition among landlords for
available tenants.  Rental rates and concessions are priced aggressively in
an effort to secure new tenants as well as retain existing tenants at the
property.

A tenant at the Crossroads Square property, with a lease for approximately
12,500 square feet, or 7% of the property, filed for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code in March 1996.  Prior to
filing for protection, this tenant discontinued satisfying its rental
obligations and subsequently requested a reduction in its rental payments
through the end of its lease, which is scheduled to expire in October 2003.
Given the current favorable real estate market conditions in the area where
Crossroads Square is located, the General Partner did not agree to a
reduced rental amount.  This tenant has since resumed paying its rent, but
it remains two months in arrears on its past due rental obligations.  The
General Partner will pursue full collection of this past due rental amount
and any future rental obligations not met by this tenant.

A tenant at the Warner Plaza property with a lease for approximately 13,000
square feet, or 14% of the property, vacated its space during August 1996.
The tenant continues to make all rental payments due under the lease.
Under the terms of its lease, the tenant has an option to terminate its
lease obligations in April 1999.  The General Partner has commenced efforts
to find a replacement tenant for this space and negotiate a lease buyout
with the former tenant.  In addition, one tenant at the property that
occupied approximately 1,600 square feet, or 2% of the property, had a
clause in its lease allowing it to terminate its lease if this above
described tenant vacates the property.  This tenant terminated its lease,
which had been scheduled to expire in August 2000, effective February 24,
1997.
                                    14
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Liquidity and Capital Resources (continued)
-------------------------------------------
The General Partner believes that, based upon the current occupancy and
tenant mix at Crossroads Square and Warner Plaza, as well as the current
real estate market conditions in the areas in which these properties are
located, these properties should provide the Partnership with stable income
performance during 1997.

During the second quarter of 1996, the General Partner had the Marlboro
Square Shopping Center property independently appraised.  Based upon the
appraiser's investigation and analysis, the property's market value was
estimated to be approximately $1,650,000.  The net book value of the
Marlboro Square Shopping Center property of approximately $2,309,000 at
June 30, 1996 was evaluated in comparison to its estimated future
undiscounted cash flows and to the independent appraisal.  Based upon such
evaluation, the General Partner determined that the property's estimated
future undiscounted cash flows were not expected to exceed its then net
book value.  Therefore, a write-down of $660,000, representing the
difference between the property's net book value and its estimated market
value (and not its estimated future undiscounted cash flows), was required
at June 30, 1996.  Weak absorption of available retail space in Marlboro,
Massachusetts, in general, has contributed to the decline in this
property's value.  The General Partner evaluated Marlboro Square's carrying
value at December 31, 1996 in comparison to the estimated future
undiscounted cash flows and determined that no further impairment in value
existed and, therefore, an additional write-down in value was not required.
The Partnership's cumulative investment in the property, before accumulated
depreciation and write-downs, is approximately $5,254,000.

During the third quarter of 1996, the General Partner had the Carnegie
Center property independently appraised.  Based upon the appraiser's
investigation and analysis, the property's market value was estimated to be
approximately $3,800,000.  The carrying value of the Carnegie Center
property of approximately $5,098,000 at September 30, 1996 was evaluated in
comparison to its estimated future undiscounted cash flows and the
independent appraisal.  Based upon such evaluation, the General Partner
determined that the property's estimated future undiscounted cash flows
were expected to exceed its carrying value and, therefore, a write-down in
value was not required at September 30, 1996.

The General Partner evaluated the carrying value of the Carnegie Center
property of approximately $5,047,000 at December 31, 1996 in comparison to
its estimated future undiscounted cash flows and a recent internal
appraisal.  Based upon such evaluation, the General Partner determined that
the property's estimated future undiscounted cash flows were not expected
to exceed its carrying value.  Therefore, a write-down of $1,247,093,
representing the difference between the property's carrying value and its
estimated current market value (and not its estimated future undiscounted
cash flows) was required as of December 31, 1996.  Since the date of the
independent appraisal, the General Partner's estimate of future lease
acquisition costs has increased, causing the property's estimated future
undiscounted cash flows to not exceed its carrying value.  An excess of
supply over demand for industrial space in Cincinnati, Ohio, in general,
has contributed to the decline in this property's value.  The Partnership's
cumulative investment in the property, before accumulated depreciation and
write-downs, is approximately $8,005,000.
                                    15
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Liquidity and Capital Resources (continued)
-------------------------------------------
The General Partner also evaluated the carrying value of each of the
Partnership's other properties as of December 31, 1996 by comparing such
value to the respective property's future undiscounted cash flows and the
then most recent internal appraisal.  Based on such evaluations, the
General Partner determined that no impairment in values exist with respect
to these properties and no write-downs were recorded as of December 31,
1996.  The General Partner will continue to conduct property valuations,
using internal or independent appraisals, in order to determine whether a
permanent impairment in value exists on any of the Partnership's
properties.

Results of Operations
---------------------
Average occupancy for the Partnership's properties was as follows:
                                               Years ended December 31,
                                               1996      1995       1994
                                               ----      ----       ----
  1300 North Dutton Avenue Office Complex        25%        8%      100%
  Marlboro Square Shopping Center                81%       73%       81%
  Crossroads Square Shopping Center              93%       94%       94%
  Carnegie Center Office/Industrial              61%       47%       65%
  Warner Plaza Shopping Center                  100%       99%       97%
  J.C. Penney Credit Operations Center           N/A       N/A      100%

Results of Operations - 1996 compared with 1995

The Partnership generated a net loss of $851,115 for the year ended
December 31, 1996 as compared to net income of $1,551,706 during the year
ended December 31, 1995.  Included in the results for 1996 are write-downs
in the value of two of the Partnership's properties in the aggregate amount
of $1,907,093.  Included in the results for 1995 is a non-recurring gain in
the amount of $128,539 resulting from the sale of the J.C. Penney Credit
Operations Center (J.C. "Penney") in December 1995 and approximately
$438,000 of net income generated at the J.C. Penney property during 1995.
Also, the Partnership's 1995 results reflect the collection of a one time
payment of approximately $82,000 made by the former tenant at the 1300
North Dutton Avenue property because of alterations it made to the property
without the consent of the General Partner, as required under the terms of
its lease agreement.  Excluding the amounts described above, the
Partnership's net income increased by 17% during 1996 as compared to 1995
as a result of increases in the performance of the Carnegie Center, Warner
Plaza and 1300 North Dutton Avenue properties.   Partially offsetting these
increases were a decrease in the performance of the Marlboro Square
property and increases in the Partnership's general and administrative
expenses and amortization of lease acquisition costs.







                                    16
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Results of Operations (continued)
---------------------------------
Rental income for the year ended December 31, 1996 decreased by $450,762,
or 15%, as compared to 1995.  This decrease was primarily due to the sale
of J.C. Penney.  Excluding the rental income generated by J.C. Penney
during 1995, rental income increased by 6% during 1996 as compared to 1995.
This increase is primarily due to increases in rental income at the 1300
North Dutton Avenue and Carnegie Center properties which were partially
offset by a decrease in rental income at the Marlboro Square property.
Rental income increased by 190% and 35% between periods at the 1300 North
Dutton Avenue and Carnegie Center properties, respectively, primarily due
to an increase in average occupancy at the properties.  Although average
occupancy increased between periods at Marlboro Square, rental income
decreased by 18% primarily due to a significant reduction in the rental
rate paid by the anchor tenant at the property.  Rental income also
decreased at Marlboro Square because rental rates on leases executed during
1995 and 1996 were less than the rates contracted and paid by previous
tenants at the property.  Rental income at the Crossroads Square and Warner
Plaza properties was consistent between periods.

Depreciation expense for the year ended December 31, 1996 decreased by
$179,535, or 19%, as compared to the same period in 1995.  This decrease is
primarily due to the sale of J.C. Penney.

The Partnership's share of property operating expenses for the year ended
December 31, 1996 decreased by $179,985, or 37%, as compared to the same
period in 1995.  This decrease is primarily due to decreases in the
Partnership's share of operating expenses at the Carnegie Center and Warner
Plaza properties partially offset by an increase in the Partnership's share
of property operating expenses at the 1300 North Dutton Avenue property.

Property operating expenses at the Carnegie Center property decreased by
51% as compared to 1995.  The property incurred approximately $25,000 and
$87,000 of non-recurring maintenance and repair expenses during 1996 and
1995, respectively.  Excluding these amounts, the Partnership's share of
property operating expenses at Carnegie Center decreased by 39%, as a
result of an increase in average occupancy at the property and, therefore,
an increase in tenant reimbursements for such expenses.

The Partnership's share of property operating expenses decreased at the
Warner Plaza property by 57% in 1996 as compared to 1995.  The property
incurred approximately $21,000 and $54,000 of non-recurring maintenance and
repair expenses during 1996 and 1995, respectively.  Excluding these
amounts, the Partnership's share of property operating expenses at Warner
Plaza decreased by 53% in 1996 as compared to 1995.  This decrease
primarily resulted because the accrual of tenant reimbursements due for
1995 and payable in 1996 was understated.  Therefore, when the actual 1995
reimbursements were collected in 1996, it had the effect of reducing the
Partnership's share of property operating expenses in 1996.

The Partnership's share of property operating expenses at the Crossroads
Square property were consistent between periods.  The property incurred
approximately $20,000 and $22,000 of non-recurring maintenance and repair
expenses during 1996 and 1995, respectively.
                                    17
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Results of Operations (continued)
---------------------------------
The Partnership's share of property operating expenses at the 1300 North
Dutton Avenue property increased by 7% in 1996 as compared to 1995
primarily due to the fact that the property was unoccupied during 1995 and
only minor routine maintenance and repair expenses were incurred during
that time.  A new tenant took occupancy of the property in October 1996.

General and administrative expenses for the year ended December 31, 1996
increased by $123,770, or 52%, primarily due to legal fees incurred by the
Partnership in connection with the class action complaint filed against the
Partnership during February 1996.  (For further information regarding the
class action complaint, see Item 3-Legal Proceedings).  Excluding this
amount, general and administrative expenses increased by 6% between years
primarily due an increase in the time required to be expended by the
General Partner in connection with its efforts to secure a tenant at the
1300 North Dutton Avenue property and to secure new leases at the Marlboro
Square and Carnegie Center properties.

Amortization of deferred expenses for the year ended December 31, 1996
increased by $75,970, or 57%, as compared to 1995 primarily due to the
amortization of lease acquisition costs related to leasing activity which
occurred at the Partnership's properties during both 1996 and 1995.

Management fee expense, which is equal to 3.5% of Cash from Operations,
decreased by $7,320, or 9%, during 1996 as compared to 1995.  This decrease
was due to a decline in Cash from Operations between periods primarily
resulting from the sale of J.C. Penney.

As referred to above, during 1996, the General Partner determined that the
values of the Carnegie Center and Marlboro Square Shopping Center
properties had been impaired.  As a result, the Partnership reduced the
carrying amount of the Carnegie Center and Marlboro Square properties by
$1,247,093 and $660,000, respectively, and these amounts were charged
directly to operations.


Results of Operations - 1995 compared with 1994

Net income for the year ended December 31, 1995 was $1,551,706 as compared
to net income of $1,497,221 in 1994.  Included in the results for 1995 is a
non-recurring gain in the amount of $128,539 resulting from the sale of the
J.C. Penney Credit Operations Center on December 29, 1995.  Included in the
results for 1994 is a write-down of $512,000 of the value of the Carnegie
Center property.  Excluding these amounts, net income decreased by 29% in
1995 as compared to 1994 due to declines in the performance of the Carnegie
Center, 1300 North Dutton Avenue and Marlboro Square properties.  These
declines were partially offset by increases in the performance of the
Crossroads Square and Warner Plaza properties.





                                    18
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Results of Operations (continued)
---------------------------------
Rental income for the year ended December 31, 1995 decreased by $553,075,
or 15%, as compared to 1994, primarily due to declines in rental income at
the 1300 North Dutton Avenue, Marlboro Square and Carnegie Center
properties, which were partially offset by increases in rental income at
the Crossroads Square and Warner Plaza properties.  Rental income at the
1300 North Dutton Avenue property decreased by 92% in 1995 as compared to
1994 because the lease held by the sole tenant at the property expired on
January 31, 1995 and the property remained vacant through the remainder of
1995.  Rental income at the Marlboro Square property decreased by 23% in
1995 as compared to 1994 primarily due to a decline in average occupancy
between years.  Rental income at Marlboro Square declined further in 1995
due to a significant reduction in the rental rate paid by the anchor tenant
after June 1, 1995.  Rental income at the Carnegie Center property
decreased by 39% in 1995 as compared to 1994 primarily due to a significant
decrease in average occupancy at the property.  Rental income at the
Crossroads Square property increased by 4% in 1995 as compared to 1994
primarily due to an increase in the rental rates paid by certain tenants.
Rental income at the Warner Plaza property increased by 6% in 1995 as
compared to 1994 primarily due to an increase in average occupancy as well
as increases in rental rates paid by certain tenants.  Rental income at the
J.C. Penney property was consistent between years.

Interest income for the year ended December 31, 1995 increased by $62,304,
or 56%, as compared to 1994.  This increase was primarily due to an
increase in the interest rates earned on the Partnership's working capital
reserves during 1995 as well as an increase in the amount of such reserves.

The Partnership's share of property operating expenses for the year ended
December 31, 1995 decreased by $173,463, or 55%, as compared to 1994
primarily due to increases in the Partnership's share of property operating
expenses at the Carnegie Center, Marlboro Square and Warner Plaza
properties partially offset by a decrease in the Partnership's share of
property operating expenses at the 1300 North Dutton Avenue property.

The Partnership's share of property operating expenses at the Carnegie
Center property increased during 1995 by 142% as compared to 1994.  The
property incurred approximately $87,000 and $31,000 of non-recurring
maintenance and repair expenses during 1995 and 1994, respectively.
Excluding these amounts, the Partnership's share of property operating
increased by 55%.  This increase is primarily due to a decline in average
occupancy at the property and, therefore, a decline in tenant
reimbursements for such expenses.

The Partnership's share of property operating expenses at Marlboro Square
increased by 39% in 1995 as compared to 1994.  This increase is primarily
due to a decrease in occupancy at the property, and therefore, decreases in
tenant reimbursements for such expenses.  Minor increases in real estate
taxes, maintenance and repair expenses and management fees also contributed
to the increase in 1995 as compared to 1994.



                                    19
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Results of Operations (continued)
---------------------------------
The Partnership's share of property operating expenses increased at the
Warner Plaza property by 22% in 1995 as compared to 1994.  The property
incurred approximately $54,000 and $32,000 of non-recurring maintenance and
repair expenses during 1995 and 1994, respectively.  Excluding these
amounts, the Partnership's share of property operating expenses at Warner
Plaza increased by 21% in 1995 as compared to 1994 primarily due to an
increase in real estate taxes.

The Crossroads Square property incurred approximately $22,000 and $14,000
of non-recurring maintenance and repair expenses during 1995 and 1994,
respectively.  Excluding these amounts, the Partnership's share of property
operating expenses was consistent between periods.

The Partnership's share of property operating expenses at the 1300 North
Dutton Avenue property decreased by 22% in 1995 as compared to 1994.  The
sole tenant occupying the 1300 North Dutton Avenue property did not renew
its lease upon its expiration on January 31, 1995 and vacated its space
during 1994.  As a result, only minor routine maintenance expenses were
incurred subsequent to the tenant vacating the space, resulting in a
decrease in the Partnership's share of property operating expenses during
1995 as compared to 1994.

General and administrative expenses for the year ended December 31, 1995
increased by $34,662, or 17%, as compared to 1994.  The increase in 1995 as
compared to 1994 is primarily due to an increase in the time required to be
expended by the General Partner and expenses incurred in connection with
managing the Partnership's properties, including actions taken in the
attempt to increase their occupancies and sell the J.C. Penney Credit
Operations Center.  In addition, general and administrative expenses
increased during 1995 as compared to 1994 due to an increase in postage
charges on investor mailings resulting from the increase in postal rates.

Amortization of deferred expenses for the year ended December 31, 1995
decreased by $15,174, or 10%, as compared to 1994.  The decrease in 1995 as
compared to 1994 was primarily due to the expiration of certain leases at
the 1300 North Dutton Avenue, Marlboro Square and Warner Plaza properties
and the full amortization of the related deferred leasing costs.  This
decrease in 1995 as compared to 1994 was partially offset by an increase in
deferred expenses relating to leasing costs incurred at the Carnegie Center
property during 1995.

During 1994, the General Partner determined that the value of the Carnegie
Center property had been permanently impaired.  As a result, the carrying
value of the property was reduced by $512,000 and this amount was charged
directly to operations.

The General Partner believes that inflation has had no significant impact
on the Partnership's operations during the last three fiscal years, and the
General Partner anticipates that inflation will not have a significant
impact during 1997.


                                    20
<PAGE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Cash Flow
---------
The following table provides the calculations of Cash from Operations and
Distributable Cash from Operations, which are calculated in accordance with
Section 17 of the Partnership Agreement:
<TABLE>
<CAPTION>
                                                          Years Ended December 31,
                                           1996         1995        1994         1993         1992
                                           ----         ----        ----         ----         ----
<S>                                        <C>          <C>         <C>          <C>          <C>
Net cash provided by
 operating activities (a)               $2,239,462  $2,431,249   $3,118,434  $2,853,183   $2,907,816
Net change in operating assets
 and liabilities (a)                     (201,460)      77,507        7,210      17,432       83,153
                                         ---------   ---------     --------    --------     --------
Cash provided by operations (a)          2,038,002   2,508,756    3,125,644   2,870,615    2,990,969
Increase in working capital reserves             -   (194,438)    (811,326)   (324,865)    (213,789)
Add:    Accrual basis Partnership
        management fee                      76,619      83,939       83,939      89,101      104,854
                                         ---------   ---------     --------    --------     --------
Cash from operations (b)                 2,114,621   2,398,257    2,398,257   2,634,851    2,882,034
Decrease in working capital reserves        74,507           -            -           -            -
Less:   Accrual basis Partnership
        management fee                    (76,619)    (83,939)     (83,939)    (89,101)    (104,854)
                                         ---------   ---------     --------    --------     --------
Distributable cash from
 operations (b)                         $2,112,509  $2,314,318   $2,314,318  $2,545,750   $2,777,180
                                        ==========  ==========   ==========  ==========   ==========

Allocation to General Partner              $21,125     $23,143      $23,143     $25,458      $27,772
Allocation to John Hancock
 Limited Partner                                 -           -            -           -            -
Allocation to Investors                  2,091,384   2,291,175    2,291,175   2,520,292    2,749,408
                                         ---------   ---------     --------    --------     --------
Distributable cash from
 operations (b)                         $2,112,509  $2,314,318   $2,314,318  $2,545,750   $2,777,180
                                        ==========  ==========   ==========  ==========   ==========
</TABLE>
(a)   Net cash provided by operating activities, net change in operating
      assets and liabilities, and cash provided by operations are as
      calculated in the Statements of Cash Flows included in Item 8 of
      this Report.
 (b)  As defined in the Partnership Agreement.  Distributable Cash from
      Operations should not be considered as an alternative to net income
      (i.e. not an indicator of performance) or to reflect cash flows or
      availability of discretionary funds.

On February 14, 1997, the Partnership made a cash distribution of $515,972
to the Investors representing a 5% annualized return to all Investors at
December 31, 1996, based on Distributable Cash from Operations for the
quarter then ended.  The General Partner anticipates that the Partnership
will be able to make cash distributions from Distributable Cash from
Operations in each of the four quarters of 1997 comparable to those made
during 1996.
                                    21
<PAGE>
Item 8 - Financial Statements and Supplementary Data

The response to this Item appears beginning on page F-1 of this Report.

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

No events requiring disclosure under this Item have occurred.

                                 Part III

Item 10 - Directors and Executive Officers of the Partnership

(a-b)  Identification of Directors and Executive Officers

By virtue of its organization as a limited partnership, the Partnership has
no directors or executive officers.  As indicated in Item 1 of this Report,
the General Partner of the Partnership is John Hancock Realty Equities,
Inc., a Delaware corporation.  Pursuant to the terms of the Partnership
Agreement, the General Partner is solely responsible for the management of
the Partnership's business.  The names and ages of the directors and
executive officers of the General Partner are as follows:

         Name                        Title                            Age
         ----                        -----                            ---
   William M. Fitzgerald      President and Director                   53
   Malcolm G. Pittman, III    Director                                 45
   Susan M. Shephard          Director                                 44
   Richard E. Frank           Treasurer (Chief Accounting Officer)     35

The term of office and other positions held by the persons listed above
appear in paragraph (e) below.

(c)  Identification of certain significant persons

The General Partner is responsible for the identification, analysis,
purchase, operation, and disposal of specific Partnership real estate
investments.  The General Partner has established a Real Estate Investment
Committee utilizing senior real estate personnel of John Hancock and its
Affiliates (defined in the Partnership Agreement) to review each proposed
investment.  The members of the Real Estate Investment Committee are
designated each year at the annual meeting of the Board of Directors of
John Hancock Realty Equities, Inc.  The current members of the committee
are as follows:

         Name                        Title                            Age
         ----                        -----                            ---
     Edward P. Dowd           Senior Vice President of                 54
                              John Hancock's Real Estate
                              Investment Group

     Kevin McGuire            Vice President of John Hancock's         50
                              Real Estate Investment Group,
                              President of John Hancock Realty
                              Services Corp. and subsidiaries


                                    22
<PAGE>
Item 10 - Directors and Executive Officers of the Partnership (continued)

         Name                        Title                            Age
         ----                        -----                            ---
     Stephen Kindl            Senior Investment Officer of             39
                              John Hancock's Real Estate
                              Investment Group, Assistant Vice
                              President of John Hancock Realty
                              Equities, Inc.

(d)  Family relationships

There exist no family relationships among any of the foregoing directors or
officers of the General Partner.

(e)  Business experience

William M. Fitzgerald (age 53) joined John Hancock in 1968.  He has been
President and a Director of the General Partner, and a Senior Investment
Officer of John Hancock, since June 1993 and a Managing Director of Hancock
Realty Investors Incorporated since November 1991.  His term as a Director
of the General Partner expires in May 1997.  From 1987 to 1991, Mr.
Fitzgerald was a Senior Vice President of John Hancock Properties, Inc.
Prior to that time, he held a number of positions including Senior Real
Estate Management Officer and Real Estate Management Officer of John
Hancock.  He holds an M.B.A. from Boston University and an A.B. from Boston
College.

Malcolm G. Pittman III (age 45) joined John Hancock in 1986 as an Assistant
Counsel.  He has been a Director of the General Partner since November
1991.  His term as a Director of the General Partner expires in May 1997.
Mr. Pittman has been a Counsel of John Hancock's Real Estate Law Division
since 1993.  From 1989 to 1993, he was an Associate Counsel of John
Hancock.  He holds a J.D. from Yale Law School and a B.A. from Oberlin
College.

Susan M. Shephard (age 44) joined John Hancock in 1985 as an Attorney.  She
has been a Director of the General Partner since November 1991.  Her term
as a Director of the General Partner expires in May 1997.  Ms. Shephard has
been a Mortgage Investment Officer of John Hancock since 1991.  From 1988
to 1991, she was an Associate Counsel of John Hancock and from 1987 to
1988, she was an Assistant Counsel of John Hancock.  She holds a J.D. from
Georgetown University Law Center and a B.A. from the University of Rhode
Island.

Richard E. Frank (age 35) joined John Hancock in 1983.  He has been
Treasurer of the General Partner since June 1993.  Mr. Frank has been an
Associate Investment Officer of John Hancock since January 1995.  From 1993
to 1995, he was a Senior Financial Administrator of John Hancock; from 1991
to 1993, he was an Associate of Hancock Realty Investors, Incorporated;
from 1990 to 1991 he held the position of Assistant Treasurer of John
Hancock Realty Services Corp.  He holds a B.S. from Stonehill College.





                                    23
<PAGE>
Item 10 - Directors and Executive Officers of the Partnership (continued)

Edward P. Dowd (age 54) joined John Hancock in 1970.  He has been a
Director of Hancock Realty Investors, Incorporated since 1991, and a
Director of John Hancock Realty Services Corp. and subsidiaries and John
Hancock Property Investors Corp. since 1987.  Mr. Dowd has been a Senior
Vice President of John Hancock since 1991.  From 1989 to 1990, he was a
Vice President of John Hancock and from 1986 to 1989, he was a Second Vice
President of John Hancock.  Prior to that time, he held a number of
positions including Senior Real Estate Investment Officer and Real Estate
Investment Officer of John Hancock.  From July 1982 to May 1986, Mr. Dowd
was President of the General Partner.  He holds an A.B. from Boston
College.

Kevin McGuire (age 50) joined John Hancock in 1968.  He has been a Vice
President of John Hancock since June 1993 and President of John Hancock
Realty Services Corp. and subsidiaries since July 1993.  He has been a
Managing Director and a Director of Hancock Realty Investors Incorporated
since 1991, and a Director of John Hancock Property Investors Corp. since
1987.  Mr. McGuire served as an interim basis President of the General
Partner from May 1991 to November 1991 and was President of John Hancock
Properties, Inc. from 1987 to 1991.  Prior to that time, he held a number
of positions including Second Vice President, Senior Real Estate Investment
Officer and Real Estate Investment Officer of John Hancock.  He holds an
M.B.A. from Babson College and an A.B. from Boston College.

Stephen Kindl (age 39), joined John Hancock in 1995 as a Senior Real Estate
Investment Officer.  Prior to joining John Hancock, he held a number of
positions with Aetna Real Estate Investment, Inc., including Managing
Director and Director.  He holds an M.B.A. from the University of Hartford
and a B.S. from the University of Connecticut.

(f)  Involvement in certain legal proceedings

None

Compliance with Section 16(a) of the Exchange Act

Under Section 16(a) of the Securities Exchange Act of 1934, as amended, the
General Partner's directors and executive officers, as well as any person
holding more than ten percent of the Units, are required to report their
initial ownership of Units and any subsequent change in such ownership to
the Securities and Exchange Commission and the Partnership (such
requirements hereinafter referred to as "Section 16(a) filing
requirements").  Specific time deadlines for Section 16(a) filing
requirements have been established.

To the Partnership's knowledge, no officer or director of the General
Partner has or had an ownership interest in the Partnership at any time
during the 1996 fiscal year or as of the date hereof.  In addition, to the
Partnership's knowledge, the Commonwealth of Massachusetts Pension Reserve
Investment Trust Fund, the greater than ten percent holder of the Units,
was not required to file any reports relating to Section 16(a) filing
requirements during the 1996 fiscal year.



                                    24
<PAGE>
Item 11 - Executive Compensation

None of the officers or directors of the General Partner or any of the Real
Estate Investment Committee members referred to in Item 10(c) receive any
current or proposed direct remuneration from the Partnership in their
capacities as officers, directors or Real Estate Investment Committee
members, pursuant to any standard arrangements or otherwise, nor is any
such remuneration currently proposed.  In addition, the Partnership has not
given and does not propose to give any options, warrants or rights,
including stock appreciation rights, to any such persons in such
capacities.  No long-term incentive plan exists with any such persons in
such capacities and no remuneration plan or arrangement exists with any
such persons resulting from resignation, retirement or any other
termination.  Therefore, tables relating to these topics have been omitted.

Compensation Committee Interlocks and Insider Participation:

The Partnership did not have a Compensation Committee in 1996 and does not
currently have such a committee.  During the 1996 fiscal year, no current
or former officer or employee of the General Partner or its Affiliates
participated in deliberations regarding the General Partner's or its
Affiliates' compensation as it relates to the Partnership.

Item 12 - Security Ownership of Certain Beneficial Owners and Management

(a)  Security ownership of certain beneficial owners

   No person or group, including the General Partner, is known by the
   General Partner to own beneficially more than 5% of the Partnership's
   91,647 outstanding Units as of December 31, 1996, except as follows:

    Title                                         Amount and       Percent
      of              Name and Address            Nature of           of
    Class           of Beneficial Owner      Beneficial Ownership   Class
    -----           -------------------      --------------------   -----
     Units of        The Commonwealth of          10,000 Units       10.91%
     Investor        Massachusetts Pension        owned directly
     Limited         Reserve Investment
     Partnership     Trust Fund
     Interests       125 Summer Street,
                     10th Floor
                     Boston, MA

(b)  Security ownership of management

     By virtue of its organization as a Limited Partnership, the
     Partnership has no officers or directors.  Neither the General Partner
     nor any officer or director of the General Partner possesses the right
     to acquire a beneficial ownership of Units.

(c)  Changes in control

     The Partnership does not know of any arrangements the operations of
     which may at a subsequent date result in a change of control of the
     Partnership.


                                    25
<PAGE>
Item 13 - Certain Relationships and Related Transactions

See Note 6 of the Notes to the Financial Statements included in Item 8 of
this Report for a description of certain transactions and related amounts
paid by the Partnership to the General Partner and its Affiliates (as
defined in the Partnership Agreement) during the years ended 1996, 1995 and
1994.

The Partnership provides indemnification to the General Partner and its
Affiliates for acts or omissions of the General Partner or its Affiliates
performed in good faith on behalf of the Partnership, subject to certain
specified exceptions, as described in the following paragraph.

The Partnership Agreement provides that General Partner and its Affiliates
performing services on behalf of the Partnership shall be entitled to
indemnity from the Partnership for any loss, damage, or claim by reason of
any act performed or omitted to be performed by the General Partner in good
faith on behalf of the Partnership and in a manner within the scope of the
authority granted to the General Partner by the Partnership Agreement and
in the best interest of the Partnership, except that they shall not be
entitled to be indemnified in respect of any loss, damage, or claim
incurred by reason of fraud, negligence, misconduct, or breach of fiduciary
duty.  Any indemnity shall be provided out of and to the extent of
Partnership assets only.  The Partnership shall not advance any funds to
the General Partner or its Affiliates for legal expenses and other costs
incurred as a result of any legal action initiated against the General
Partner or its Affiliates by a Limited Partner in the Partnership, except
under certain specified circumstances.

In accordance with the terms of the Partnership Agreement, the General
Partner and/or its Affiliates are entitled to the following types of
compensation, fees, profits/(losses), expense reimbursements and
distributions:

The General Partner may receive a Partnership Management Fee (defined in
the Partnership Agreement) for managing the normal operations of the
Partnership in an amount equal to 3.5% of cash flow from operations.  In
such circumstances the General Partner was paid a Partnership Management
Fee totaling $76,619, $83,939 and $83,939 during the years ended December
31, 1996, 1995 and 1994, respectively.

An Affiliate of the General Partner is entitled to receive a Property
Management Fee (defined in the Partnership Agreement) for providing
property management services to the Partnership's properties.  The
Partnership is obligated to pay a fee equal to the amount customarily
charged in arms-length transactions by other entities rendering services in
an area where the Partnership's properties are located, but in no event may
such fees exceed 6% of the gross receipts of any property under management.
To date, no Affiliate of the General Partner has provided property
management services to the Partnership's properties; therefore, the
Partnership did not pay any such fees during the years ended December 31,
1996, 1995 or 1994.





                                    26
<PAGE>
Item 13 - Certain Relationships and Related Transactions (continued)

The General Partner and its Affiliates are entitled to receive
reimbursement for expenses relating to the administrative services
necessary to the prudent operation of the Partnership, such as legal,
accounting, computer, transfer agent and other services.  The amounts
charged to the Partnership for such administrative services may not exceed
the lesser of the General Partner's or such Affiliates' costs or 90% of
those which the Partnership would be required to pay to independent parties
for comparable services in the same or comparable geographic locations.
The Partnership reimbursed the General Partner for $171,710, $151,675 and
$118,293 of such expenses during the years ended December 31, 1996, 1995
and 1994, respectively.

Upon disposition of any property, the General Partner is entitled to a
Subordinated Disposition Fee (defined in the Partnership Agreement) in the
amount of 3% of the sales price of each property sold.  However, no such
Subordinated Disposition Fees may be paid to the General Partner unless and
until the Investors and the John Hancock Limited Partner have received a
return of their total Invested Capital (defined in the Partnership
Agreement) plus the Cumulative Return on Investment (defined in the
Partnership Agreement) of 12% per annum for all fiscal years ended prior to
the date of payment.  Such Subordinated Disposition Fees may not exceed 50%
of the competitive real estate commission in the area where the property is
located or, together with any other brokerage commission payable to or by
any other person, exceed 6% of the contract sales price of such property.
The Partnership did not pay any such fees to the General Partner during the
years ended December 31, 1996, 1995 or 1994.

A share of the Partnership's Distributable Cash from Operations (defined in
the Partnership Agreement) may be distributed to the General Partner and
the John Hancock Limited Partner.  Distributable Cash from Operations is
distributable 1% to the General Partner and the remaining 99% among the
Investors, the General Partner and the John Hancock Limited Partner, in
accordance with Section 8 of the Partnership Agreement (described more
fully in Note 3 to the Financial Statements included in Item 8 of this
Report).  The General Partner's Share of Distributable Cash from Operations
was $21,125, $23,143 and $23,143 for the years ended December 31, 1996,
1995 and 1994, respectively.  In accordance with the Partnership Agreement,
the John Hancock Limited Partner was not entitled to receive any such
distributions during the 1996, 1995 and 1994 fiscal years.

A share of Cash from Sales or Financings (defined in the Partnership
Agreement) may be distributable to the General Partner and the John Hancock
Limited Partner.  Cash from Sales or Financings are distributable in
accordance with Section 8 of the Partnership Agreement (described more
fully in Note 3 to the Financial Statements included in Item 8 of this
Report).  The John Hancock Limited Partner's share of Cash from Sales or
Financings was $0, $733,176 and $0 during the years ended December 31,
1996, 1995 and 1994, respectively.  In accordance with the Partnership
Agreement, the General Partner was not entitled to receive any such
distributions during the years ended 1996, 1995 or 1994.





                                    27
<PAGE>
Item 13 - Certain Relationships and Related Transactions (continued)

A share of the Partnership's profits or losses for tax purposes (defined in
the Partnership Agreement) is allocable to the General Partner and the John
Hancock Limited Partner.  Such allocation generally approximates, insofar
as practicable, their percentage share of Distributable Cash from
Operations and of Cash from Sales or Financings.  The General Partner is
generally allocated 1% of the Partnership's losses for tax purposes, while
the John Hancock Limited Partner is allocated tax losses associated with
the Partnership's sales commissions funded by the John Hancock Limited
Partner's Capital Contributions.  The General Partner's share of such
profits or losses were profits of $11,303, $14,802 and $21,281 during the
years ended December 31, 1996, 1995 and 1994, respectively.  The John
Hancock Limited Partner's share of such profits or losses were losses of
$48,573, $74,321 and $56,684 during the years ended December 31, 1996, 1995
and 1994 respectively.

The following table reflects compensation, fees, profits/(losses), expense
reimbursements or distributions from the Partnership to the General Partner
and/or its Affiliates:

                                              Years Ended December 31,
                                             1996       1995        1994
                                             ----       ----        ----
  Partnership management
   fee expense                             $76,619    $83,939    $83,939
  Reimbursement for operating
   expenses                                171,710    151,675    118,293
  General Partner's share of
   Distributable Cash from Operations       21,125     23,143     23,143
  John Hancock Limited Partner's share
   of Cash from Sales or Financings              -    733,176          -
  General Partner's share of profits
   for tax purposes                         11,303     14,802     21,281
  John Hancock Limited Partner's share
   of losses for tax purposes             (48,573)   (74,321)   (56,684)





















                                    28
<PAGE>
                                 Part IV

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

(a)  (1) and (2)  -   Listed on Index to Financial Statements and Financial
Statement Schedules.

     (3)          -   Listing of Exhibits

Exhibit Number                                  Page Number or
   Under                                       Incorporation by
Regulation S-K     Description                    Reference
--------------     -----------                    ---------
  4         Instruments defining the rights
            of security holders

     4.1    Amended Agreement of Limited          Exhibit A to the
            Partnership*                          final Prospectus
                                                  dated September 4, 1986
                                                  filed under the
                                                  Partnership's Form S-11
                                                  Registration Statement
                                                  (File 33-6451)

     4.2    The Seventeenth Amendment and         Exhibit 4.2 to the
            Restatement of Certificate of         Partnership's
            Limited Partnership filed with        Report on
            the Massachusetts Secretary of        Form 10-K dated
            State on September 15, 1987*          December 31, 1987
                                                  (File 0-15680)

  10        Material contracts and other
            documents

     10.1   Form of Escrow Agreement*             Exhibit 10.1 to
                                                  the Partnership's
                                                  Form S-11
                                                  Registration Statement
                                                  (File 33-6451)

     10.2   Letter from John Hancock              Exhibit 10.1 to
            Subsidiaries, Inc. containing         the Partnership's
            undertaking as to the net             Form S-11
            worth of the General Partner*         Registration Statement
                                                  (File 33-6451)

     10.3   Documents relating to
            1300 North Dutton Avenue

       (a)  Agreement of Purchase and Sale        Exhibit 10.3(a) to
            dated September 30, 1986, and         the Post-Effective
            First Amendment to Agreement of       Amendment No. 1 to
            Purchase and Sale dated               the Partnership's
            October 22, 1986, between             Form S-11
            Park Campus Associates and            Registration Statement
            John Hancock Realty Income Fund       (File 33-6451)
            Limited Partnership*

                                    29
<PAGE>
Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K
(continued)

       (b)  Lease dated June 12, 1986, and        Exhibit 10.3(b) to
            First Amendment to Lease dated        the Post-Effective
            June 12, 1986, between                Amendment No. 1 to
            Park Campus Associates and            the Partnership's
            Mag Media Ltd.*                       Form S-11
                                                  Registration Statement
                                                  (File 33-6451)

       (c)  Amended and Restated Statements       Exhibit 10.3(c) to
            of Development Policy and             the Post-Effective
            Declarations of Restrictions of       Amendment No. 1 to
            Santa Rosa Business Park dated        the Partnership's
            June 5, 1986*                         Form S-11
                                                  Registration Statement
                                                  (File 33-6451)

       (d)  Declaration of Covenants,             Exhibit 10.3(d) to
            Conditions and Restrictions of        the Post-Effective
            Park Campus dated October 2,          Amendment No. 1 to
            1986*                                 the Partnership's
                                                  Form S-11
                                                  Registration Statement
                                                  (File 33-6451)

     10.4   Documents relating to
            Marlboro Square Shopping Center

       (a)  Agreement of Purchase and Sale        Exhibit 10.4(a) to
            dated January 17, 1987, between       the Post-Effective
            Marlborough GLR Realty Trust          Amendment No. 2 to
            and John Hancock Realty Equities,     the Partnership's
            Inc.*                                 Form S-11
                                                  Registration Statement
                                                  (File 33-6451)

     10.5   Documents relating to
            Crossroads Square Shopping Center

       (a)  Agreement of Purchase and Sale        Exhibit 1 to the
            dated November 20, 1987, between      Partnership's
            Crossroads Square Limited             Report on
            Partnership and John Hancock          Form 8-K dated
            Realty Income Fund Limited            December 8, 1987
            Partnership*                          (File 0-15680)

       (b)  Limited Warranty Deed dated           Exhibit 2 to the
            November 20, 1987, relating           Partnership's
            to Crossroads Square Shopping         Report on
            Center*                               Form 8-K dated
                                                  December 8, 1987
                                                  (File 0-15680)

                                    30
<PAGE>
Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K
(continued)

       (c)  Master Lease Agreement                Exhibit 3 to the
            dated November 18, 1987,              Partnership's
            relating to Crossroads Square         Report on
            Shopping Center*                      Form 8-K dated
                                                  December 8, 1987
                                                  (File 0-15680)

     10.6   Documents relating to Carnegie
            Center Office/Warehouse

       (a)  Agreement of Purchase and Sale        Exhibit 1 to the
            between Carnegie Properties           Partnership's
            Partnership, Carnegie Properties      Report on
            Partnership II and John Hancock       Form 8-K dated
            Realty Income Fund Limited            January 22, 1988
            Partnership*                          (File 0-15680)

       (b)  General Warranty Deed dated           Exhibit 2 to the
            December 22, 1987, between            Partnership's
            Carnegie Properties Partnership       Report on
            and John Hancock Realty Income        Form 8-K dated
            Fund Limited Partnership*             January 22, 1988
                                                  (File 0-15680)

       (c)  General Warranty Deed dated           Exhibit 3 to the
            December 22, 1987, between            Partnership's
            Carnegie Properties Partnership       Report on
            II and John Hancock Realty Income     Form 8-K dated
            Fund Limited Partnership*             January 22, 1988
                                                  (File 0-15680)

     10.7   Documents relating to Warner
            Plaza Shopping Center

       (a)  Agreement of Purchase and Sale        Exhibit 1 to the
            between First Republic bank           Partnership's
            Dallas, N.A., and John Hancock        Report on
            Realty Income Fund Limited            Form 8-K dated
            Partnership*                          March 17, 1988
                                                  (File 0-15680)

       (b)  Special Warranty Deed dated           Exhibit 2 to the
            February 24, 1988, between            Partnership's
            First Republic bank, Dallas,          Report on
            N.A., and John Hancock                Form 8-K dated
            Realty Income Fund Limited            March 17, 1988
            Partnership*                          (File 0-15680)







                                    31
<PAGE>
Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K
(continued)

     10.8   Documents relating to
            J.C. Penney Credit Operations
            Center

       (a)  Agreement of Purchase and Sale        Exhibit 1 to the
            between Noro-Rocky Mountains          Partnership's
            B.V., a Netherlands Corporation,      Report on
            and John Hancock Realty Income        Form 8-K dated
            Fund Limited Partnership*             November 17, 1988
                                                  (File 0-15680)

       (b)  Warranty and Guaranty dated           Exhibit 2 to the
            August 18, 1988, between              Partnership's
            Noro-Rocky Mountains                  Report on
            B.V., a Netherlands Corporation,      Form 8-K dated
            and John Hancock Realty Income        November 17, 1988
            Fund Limited Partnership*             (File 0-15680)

       (c)  Purchase and Sale Agreement           Exhibit 1 to the
            between John Hancock Realty           Partnership's Report
            Income Fund Limited Partnership       on Form 8-K dated
            and 4580 Paradise Blvd.               December 29, 1995
            Associates Limited Partnership        (File 0-15680)
            dated November 20, 1995*

     10.9   Documents relating to
            Management Agreement

       (a)  Management Agreement dated            Exhibit 10.9(a) to the
            January 1, 1992, between              Partnership's Report on
            Hancock Realty Investors              Form 10-K dated
            Incorporated and John Hancock         December 31, 1992
            Realty Equities, Inc.*                (File 0-15680)

       (b)  Agreement Concerning Subcontracting   Exhibit 10.9(b) to the
            of Management Services Pertaining     Partnership's Report on
            to John Hancock Realty Income Fund    Form 10-K dated
            Limited Partnership dated             December 31, 1993
            May 28, 1993 between John Hancock     (File 0-15680)
            Realty Equities,Inc., Hancock
            Realty Investors, Incorporated
            and John Hancock Mutual Life
            Insurance Company*

     10.10  Documents relating to Executive
            Compensation Plans and Arrangements

       (a)  Amended Agreement of                  Exhibit A to the Final
            Limited Partnership*                  Prospectus dated
                                                  September 4, 1986, filed
                                                  under the Partnership's
                                                  Form S-11
                                                  Registration Statement
                                                  (File 33-6451)

                                    32
<PAGE>
Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K
(continued)

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

(c)   Exhibits - See Item 14 (a) (3) of this Report.

(d)   Financial Statement Schedules - The response to this portion of Item
      14 is submitted as a separate section of this     Report commencing
      on Page F-17.


  +Filed herewith
  *Incorporated by reference









































                                    33
<PAGE>

                                SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized, on the
31st day of March, 1997.

                              JOHN HANCOCK REALTY INCOME FUND
                              LIMITED PARTNERSHIP

                              By:  John Hancock Realty Equities, Inc.
                                   General Partner

                              By:  WILLIAM M. FITZGERALD
                                   --------------------------------
                                   William M. Fitzgerald, President

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 31st day of March, 1997.

   Signatures                         Title
  -----------                         ------

                               President (Principal Executive Officer) and
                               Director of John Hancock Realty Equities,
   WILLIAM M. FITZGERALD       Inc. (General Partner of Registrant)
   ---------------------
   William M. Fitzgerald


                               Treasurer (Chief Accounting Officer) of
                               John Hancock Realty Equities, Inc.
  RICHARD E. FRANK             (General Partner of Registrant)
   ---------------------
  Richard E. Frank




                               Director of John Hancock Realty Equities,
  MALCOLM G. PITTMAN           Inc. (General Partner of Registrant)
   ---------------------
  Malcolm G. Pittman, III




                               Director of John Hancock Realty Equities,
  SUSAN M. SHEPHARD            Inc. (General Partner of Registrant)
   ---------------------
  Susan M. Shephard




                                    34
<PAGE>














                        ANNUAL REPORT ON FORM 10-K



               ITEM 8, ITEM 14 (a) (1) AND (2), (c) AND (d)



               FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



     INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES



                      FINANCIAL STATEMENT SCHEDULES



                       YEAR ENDED DECEMBER 31, 1996



           JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP



                          BOSTON, MASSACHUSETTS














<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

     INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

                      (ITEMS 8 AND 14(a)(1) AND (2))



1.   Financial Statements:                                           Page

     Report of Independent Auditors                                   F-3

     Balance Sheets at December 31, 1996 and 1995                     F-4

     Statements of Operations for the Years Ended
     December 31, 1996, 1995 and 1994                                 F-5

     Statements of Partners' Equity for the Years Ended
     December 31, 1996, 1995 and 1994                                 F-6

     Statements of Cash Flows for the Years Ended
     December 31, 1996, 1995 and 1994                                 F-7

     Notes to Financial Statements                                    F-8


2.   Financial Statement Schedules:

     Schedule III:    Real Estate and Accumulated Depreciation        F-17



All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and, therefore,
have been omitted.




















                                   F-2
<PAGE>





                      Report of Independent Auditors


To the Partners
John Hancock Realty Income Fund Limited Partnership


We have audited the accompanying balance sheets of John Hancock Realty
Income Fund Limited Partnership as of December 31, 1996 and 1995, and the
related statements of operations, partners' equity and cash flows for each
of the three years in the period ended December 31, 1996.  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 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 John Hancock Realty
Income Fund Limited Partnership at December 31, 1996 and 1995, and the
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1996, 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
February 14, 1997, except for
Note 8, as to which the
date is March 18, 1997







                                   F-3
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                              BALANCE SHEETS

                                  ASSETS

                                                    December 31,
                                                 1996           1995
                                                 ----           ----
Current assets:
 Cash and cash equivalents                   $2,197,847     $8,397,420
 Restricted cash                                  5,799          4,946
 Other current assets                            78,999        183,696
 Property held for sale                       2,678,599              -
                                             ----------     ----------
   Total current assets                       4,961,244      8,586,062

Investment in property:
 Land                                         6,198,330      7,511,167
 Buildings and improvements                  17,991,609     24,094,055
                                             ----------     ----------
                                             24,189,939     31,605,222
 Less:    accumulated depreciation          (4,214,134)    (7,165,026)
                                             ----------     ----------
                                             19,975,805     24,440,196

Long-term restricted cash                        53,333         44,659

Deferred expenses, net of accumulated
 amortization of $361,132 in 1996 and
 $604,967 in 1995                               384,808        534,527
                                             ----------     ----------
   Total assets                             $25,375,190    $33,605,444
                                             ==========     ==========

                     LIABILITIES AND PARTNERS' EQUITY

Current liabilities:
 Accounts payable and accrued expenses         $340,087       $282,398
 Accounts payable to affiliates                 108,961         60,360
                                             ----------     ----------
   Total current liabilities                    449,048        342,758

Partners' equity/(deficit):
 General Partner's deficit                    (230,844)      (200,634)
 Limited Partners' equity                    25,156,986     33,463,320
                                             ----------     ----------
   Total partners' equity                    24,926,142     33,262,686
                                             ----------     ----------
   Total liabilities and partners' equity   $25,375,190    $33,605,444
                                             ==========     ==========



                    See Notes to Financial Statements

                                   F-4
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                         STATEMENTS OF OPERATIONS

                                               Years Ended December 31,
                                            1996         1995        1994
                                            ----         ----        ----

Income:
  Rental income                         $2,614,989  $3,065,751   $3,618,826
  Interest income                          171,767     173,286      110,982
  Other income                                   -      82,008            -
  Gain on sale of property                       -     128,539            -
                                        ----------  ----------   ----------
   Total income                          2,786,756   3,449,584    3,729,808

Expenses:
  Depreciation                             772,298     951,833      967,493
  Property operating expenses              311,439     491,424      317,961
  General and administrative expenses      360,696     236,926      202,264
  Amortization of deferred expenses        209,726     133,756      148,930
  Management fee                            76,619      83,939       83,939
  Property write-downs                   1,907,093           -      512,000
                                        ----------  ----------   ----------
   Total expenses                        3,637,871   1,897,878    2,232,587
                                        ----------  ----------   ----------
   Net (loss)/income                    ($851,115)  $1,551,706   $1,497,221
                                        ==========  ==========   ==========


Allocation of net (loss)/income:
  General Partner                         ($8,511)     $15,517      $14,972
  John Hancock Limited Partner           (329,810)    (60,357)     (77,909)
  Investors                              (512,794)   1,596,546    1,560,158
                                        ----------  ----------   ----------
                                        ($851,115)  $1,551,706   $1,497,221
                                        ==========  ==========   ==========

Net (loss)/income per Unit                 ($5.60)      $17.42      $17.02
                                        ==========  ==========   ==========














                    See Notes to Financial Statements

                                   F-5
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                      STATEMENTS OF PARTNERS' EQUITY
               Years Ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>

                                                           General      Limited
                                                           Partner      Partners        Total
                                                           -------      --------        -----
<S>                                                          <C>          <C>            <C>
Partners' equity/(deficit) at January 1, 1994
 (91,647 Units outstanding)                              ($184,837)    $35,027,232    $34,842,395


Less:  Cash distributions                                  (23,143)    (2,291,175)    (2,314,318)

Add:   Net income                                            14,972      1,482,249      1,497,221
                                                          ---------    -----------    -----------

Partners' equity/(deficit) at December 31, 1994
 (91,647 Units outstanding)                               (193,008)     34,218,306     34,025,298

Less:  Cash distributions                                  (23,143)    (2,291,175)    (2,314,318)

Add:   Net income                                            15,517      1,536,189      1,551,706
                                                          ---------    -----------    -----------

Partners' equity/(deficit) at December 31, 1995
 (91,647 Units outstanding)                               (200,634)     33,463,320     33,262,686

Less:  Cash distributions                                  (21,699)    (7,463,730)    (7,485,429)

Add:   Net loss                                             (8,511)      (842,604)      (851,115)
                                                          ---------    -----------    -----------

Partners' equity/(deficit) at December 31, 1996
 (91,647 Units outstanding)                              ($230,844)    $25,156,986    $24,926,142
                                                         ==========    ===========    ===========
</TABLE>














                    See Notes to Financial Statements

                                   F-6
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                         STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                     Years Ended December 31,
                                                               1996            1995          1994
                                                               ----            ----          ----
<S>                                                            <C>             <C>           <C>
Operating activities:
Net (loss)/income                                           ($851,115)     $1,551,706     $1,497,221
 Adjustments to reconcile net (loss)/income to
 net cash provided by operating activities:

   Amortization of deferred expenses                           209,726        133,756        148,930
   Depreciation                                                772,298        951,833        967,493
   Property write-downs                                      1,907,093              -        512,000
   Gain on sale of property                                          -      (128,539)              -
                                                            ----------     ----------     ----------
                                                             2,038,002      2,508,756      3,125,644
 Changes in operating assets and liabilities:
   Increase in restricted cash                                 (9,527)        (4,982)        (4,850)
   Decrease/(increase) in other current assets                 104,697      (115,342)          6,011
   Increase/(decrease) in accounts payable and
     accrued expenses                                           57,689         30,422        (5,208)
   Increase/(decrease) in accounts payable
     to affiliates                                              48,601         12,395        (3,163)
                                                            ----------     ----------     ----------
      Net cash provided by operating activities              2,239,462      2,431,249      3,118,434

Investing activities:
 Proceeds from sale of property                                      -      5,392,032              -
 Increase in deferred expenses                               (953,606)      (236,542)       (38,920)
                                                            ----------     ----------     ----------
      Net cash (used in)/provided by investing
        activities                                           (953,606)      5,155,490       (38,920)

Financing activities:
 Cash distributed to Partners                              (7,485,429)    (2,314,318)    (2,314,318)
                                                            ----------     ----------     ----------
      Net cash used in financing activities                (7,485,429)    (2,314,318)    (2,314,318)
                                                            ----------     ----------     ----------
      Net (decrease)/increase in cash and
        cash equivalents                                   (6,199,573)      5,272,421        765,196

      Cash and cash equivalents at
        beginning of year                                    8,397,420      3,124,999      2,359,803
                                                            ----------     ----------     ----------
      Cash and cash equivalents at
        end of year                                         $2,197,847     $8,397,420     $3,124,999
                                                            ==========     ==========     ==========
</TABLE>


                    See Notes to Financial Statements

                                   F-7
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                      NOTES TO FINANCIAL STATEMENTS

1. Organization of Partnership
   ---------------------------
     John Hancock Realty Income Fund Limited Partnership (the
     "Partnership") was formed under the Massachusetts Uniform Limited
     Partnership Act on June 12, 1986.  As of December 31, 1995, the
     Partnership consisted of John Hancock Realty Equities, Inc. (the
     "General Partner"), a wholly-owned, indirect subsidiary of John
     Hancock Mutual Life Insurance Company; John Hancock Realty Funding,
     Inc. (the "John Hancock Limited Partner"); and 4,142 Investor Limited
     Partners (the "Investors"), owning 91,647 Units of Investor Limited
     Partnership Interests (the "Units").  The John Hancock Limited Partner
     and the Investors are collectively referred to as the Limited
     Partners.  The initial capital of the Partnership was $2,000,
     representing capital contributions of $1,000 from the General Partner
     and $1,000 from the John Hancock Limited Partner.  The Amended
     Agreement of Limited Partnership of the Partnership (the "Partnership
     Agreement") authorized the issuance of up to 100,000 Units of Limited
     Partnership Interests at $500 per unit.  During the offering period,
     which terminated on September 9, 1987, 91,647 Units were sold and the
     John Hancock Limited Partner made additional capital contributions of
     $7,330,760.  There have been no changes in the number of Units
     outstanding subsequent to the termination of the offering period.

     The Partnership is engaged in the business of acquiring, improving,
     holding for investment and disposing of existing, income-producing,
     commercial and industrial properties on an all-cash basis, free and
     clear of mortgage indebtedness.  Although the Partnership's properties
     were acquired and are held free and clear of mortgage indebtedness,
     the Partnership may incur mortgage indebtedness on its properties
     under certain circumstances, as specified in the Partnership
     Agreement.

     The latest date on which the Partnership is due to terminate is
     December 31, 2016, unless it is sooner terminated in accordance with
     the terms of the Partnership Agreement.  It is expected that in the
     ordinary course of the Partnership's business, the properties of the
     Partnership will be disposed of, and the Partnership terminated,
     before December 31, 2016.

2. Significant Accounting Policies
   -------------------------------
     The Partnership maintains its accounting records and recognizes rental
     revenue on the accrual basis.

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

                                   F-8
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)
   ------------------------------------------
     Cash equivalents are highly liquid investments with maturities of
     three months or less when purchased.  These investments are recorded
     at cost plus accrued interest, which approximates market value.
     Restricted cash represents funds restricted for tenant security
     deposits and other escrows, and has been designated as current or long-
     term, based upon the term of the related lease agreement.

     Property held for sale is recorded at the lower of its carrying
     amount, at the time the property is listed for sale, or its fair
     value, less cost to sell.  Carrying amount includes the property's
     cost, as described below, less accumulated depreciation thereon and
     less any property write-downs for impairment in value and plus any
     related unamortized deferred expenses.

     Investments in property are recorded at cost less any property write-
     downs for permanent impairment in values.  Cost includes the initial
     purchase price of the property plus acquisition and legal fees, other
     miscellaneous acquisition costs, and the cost of significant
     improvements.

     Depreciation has been provided on a straight-line basis over the
     estimated useful lives of the various assets:  thirty years for the
     buildings and five years for related improvements.  Maintenance and
     repairs are charged to operations as incurred.

     Deferred expenses relating to tenant improvements and lease
     commissions are amortized on a straight-line basis over the terms of
     the leases to which they relate.  During 1993, the Partnership reduced
     the period over which its remaining deferred acquisition fees are
     amortized from thirty years, the estimated useful life of the
     buildings owned by the Partnership, to four and one-half years, the
     then estimated remaining life of the Partnership.

     The net (loss)/income per Unit for each year is computed by dividing
     the Investors' share of net (loss)/income by the number of Units
     outstanding during each year.

     No provision for income taxes has been made in the financial
     statements as such taxes are the responsibility of the individual
     partners and not of the Partnership.

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

                                   F-9
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)

3. The Partnership Agreement
   -------------------------
     Distributable Cash from Operations (defined in the Partnership
     Agreement) is distributed 99% to the Limited Partners and 1% to the
     General Partner.  The Limited Partners' share of Distributable Cash
     from Operations is distributed as follows:  first, to the Investors
     until they receive a 7% non-cumulative, non-compounded annual cash
     return on their Invested Capital (defined in the Partnership
     Agreement); second, to the John Hancock Limited Partner until it
     receives a 7% non-cumulative, non-compounded annual cash return on its
     Invested Capital; and third, to the Investors and the John Hancock
     Limited Partner in proportion to their respective Capital
     Contributions (defined in the Partnership Agreement).  However, any
     Distributable Cash from Operations which is available as a result of
     the reduction of working capital reserves funded by Capital
     Contributions of the Investors will be distributed 100% to the
     Investors.

     Cash from Sales or Financings (defined in the Partnership Agreement)
     is first used to pay all debts and liabilities of the Partnership then
     due and is then used to fund any reserves for contingent liabilities.
     Cash from Sales or Financings is then distributed as follows:  first,
     to the Limited Partners until they receive an amount equal to their
     Invested Capital with the distribution being made between the
     Investors and the John Hancock Limited Partner in proportion to their
     respective Capital Contributions; second, to the Investors until they
     have received, with respect to all previous distributions during the
     year, their Cumulative Return on Investment (defined in the
     Partnership Agreement); third, to the John Hancock Limited Partner
     until it has received, with respect to all previous distributions
     during the year, its Cumulative Return on Investment; fourth, to the
     General Partner to pay any Subordinated Disposition Fees (defined in
     the Partnership Agreement); and fifth, 99% to the Limited Partners and
     1% to the General Partner, with the distribution being made between
     the Investors and the John Hancock Limited Partner in proportion to
     their respective Capital Contributions.

     Cash from the sale of the last of the Partnership's properties is to
     be distributed in the same manner as Cash from Sales or Financings,
     except that before any other distribution is made to the Partners,
     each Partner shall first receive from such cash, an amount equal to
     the then positive balance, if any, in such Partner's Capital Account
     after crediting or charging to such account the profits or losses for
     tax purposes from such sale.  To the extent, if any, that a Partner is
     entitled to receive a distribution of cash based upon a positive
     balance in its capital account prior to such distribution, such
     distribution will be credited against the amount of such cash the
     Partner would have been entitled to receive based upon the manner of
     distribution of Cash from Sales or Financings, as specified in the
     previous paragraph.


                                   F-10
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)

3. The Partnership Agreement (continued)
   -------------------------------------
     Profits from the normal operations of the Partnership for each fiscal
     year are allocated to the Limited Partners and General Partner in the
     same amounts as Distributable Cash from Operations for that year.  If
     such profits are less than Distributable Cash from Operations for any
     year, they are allocated in proportion to the amounts of Distributable
     Cash from Operations for that year.  If such profits are greater than
     Distributable Cash from Operations for any year, they are allocated
     99% to the Limited Partners and 1% to the General Partner, with the
     allocation made between the John Hancock Limited Partner and the
     Investors in proportion to their respective Capital Contributions.
     Losses from the normal operations of the Partnership are allocated 99%
     to the Limited Partners and 1% to the General Partner, with the
     allocation made between the John Hancock Limited Partner and the
     Investors in proportion to their respective Capital Contributions.
     Depreciation deductions are allocated 1% to the General Partner and
     99% to the Investors, and not to the John Hancock Limited Partner.

     Profits and Losses from Sales or Financings are generally allocated
     99% to the Limited Partners and 1% to the General Partners.  In
     connection with the sale of the last of the Partnership's properties,
     and therefore the dissolution of the Partnership, profits will be
     allocated to any Partners having a deficit balance in their Capital
     Account in an amount equal to the deficit balance.  Any remaining
     profits will be allocated in the same order as cash from the sale
     would be distributed.

     Neither the General Partner nor any Affiliate (as defined in the
     Partnership Agreement) of the General Partner shall be liable,
     responsible or accountable in damages to any of the Partners or the
     Partnership for any act or omission of the General Partner in good
     faith on behalf of the Partnership within the scope of the authority
     granted to the General Partner by the Partnership Agreement and in the
     best interest of the Partnership, except for acts or omissions
     constituting fraud, negligence, misconduct or breach of fiduciary
     duty.  The General Partner and its Affiliates performing services on
     behalf of the Partnership shall be entitled to indemnity from the
     Partnership for any loss, damage, or claim by reason of any act
     performed or omitted to be performed by the General Partner in good
     faith on behalf of the Partnership and in a manner within the scope of
     the authority granted to the General Partner by the Partnership
     Agreement and in the best interest of the Partnership, except that
     they shall not be entitled to be indemnified in respect of any loss,
     damage, or claim incurred by reason of fraud, negligence, misconduct,
     or breach of fiduciary duty.  Any indemnity shall be provided out of
     and to the extent of Partnership assets only.  The Partnership shall
     not advance any funds to the General Partner or its Affiliates for
     legal expenses and other costs incurred as a result of any legal
     action initiated against the General Partner or its Affiliates by a
     Limited Partner in the Partnership, except under certain specified
     circumstances.

                                   F-11
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)

4. Investment in Property
   ----------------------
     Investment in property at cost and reduced by write-downs consists of
     managed, fully-operating, commercial real estate as follows:
                                                        December 31,
                                                     1996           1995
                                                     ----           ----
     1300 North Dutton Avenue Office Complex              $-     $2,835,779
     Marlboro Square Shopping Center               1,649,130      3,183,643
     Crossroads Square Shopping Center            12,266,920     12,266,920
     Carnegie Center Office/Warehouse              3,800,000      6,844,991
     Warner Plaza Shopping Center                  6,473,889      6,473,889
                                                ------------    -----------
        Total                                    $24,189,939    $31,605,222
                                                ============    ===========

     The real estate market is cyclical in nature and is materially
     affected by general economic trends and economic conditions in the
     market where a property is located.  As a result, determination of
     real estate values involves subjective judgments.  These judgments are
     based on current market conditions and assumptions related to future
     market conditions.  These assumptions involve, among other things, the
     availability of capital, occupancy rates, rental rates, interest rates
     and inflation rates.  Amounts ultimately realized from each property
     may vary significantly from the values presented and the differences
     could be material.  Actual market values of real estate can be
     determined only by negotiation between the parties in a sales
     transaction.

     During 1996, the General Partner determined that the estimated future
     undiscounted cash flows from the Carnegie Center and Marlboro Square
     Shopping Center properties were less than their respective carrying
     amounts, due, in general, to weak real estate market conditions for
     similar properties in the areas where these properties are located.
     Accordingly, the Partnership wrote-down the carrying amounts of the
     Carnegie Center and Marlboro Square Shopping Center by $1,247,093 and
     $660,000, respectively.  These write-downs represent the difference
     between the property's carrying value and its estimated fair market
     value.

     During 1994, the General Partner determined that the estimated future
     undiscounted cash flows from the Carnegie Center property were less
     than the property's carrying value, due in general, to weak real
     estate market conditions for similar properties in the area where the
     property is located.  Accordingly, the Partnership wrote-down the
     carrying value of the Carnegie Center by $512,000, representing the
     difference between the property's carrying value and its estimated
     future undiscounted cash flows.




                                   F-12
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)

4. Investment in Property (continued)
   ----------------------
     The General Partner listed the 1300 North Dutton Avenue for sale
     during October 1996.  Accordingly, this property is classified in
     "Property Held For Sale" on the Balance Sheet at December 31, 1996 at
     its carrying value, which is not in excess of its estimated fair value
     less selling costs.  The General Partner believes that this property
     will be sold during 1997.  The 1300 North Dutton Avenue property only
     contributed approximately 2% of the Partnership's net cash from
     operations primarily because the property was vacant for most of the
     year,.

     The Partnership leases its properties to non-affiliated tenants under
     primarily long-term operating leases.

     At December 31, 1996, future minimum rentals on non-cancelable leases
     relating to the above properties were as follows:
                       1997               $2,459,074
                       1998                2,190,344
                       1999                1,807,765
                       2000                1,594,592
                       2001                1,517,586
                       Thereafter          7,762,555
                                          ----------
                       Total             $17,331,916
                                          ==========
5. Deferred Expenses
   -----------------
     Deferred expenses consist of the following:
<TABLE>
<CAPTION>
                                                                 Unamortized Balance at
                                                                      December 31,
      Description                                                 1996            1995
      -----------                                                 ----            ----
      <S>                                                          <C>             <C>
      $114,494 of acquisition fees paid to the General
      Partner.  This amount was amortized over a period
      of thirty years prior to June 30, 1993.  Subsequent
      to June 30, 1993, the unamortized balance is
      amortized over a period of fifty-four months.              $21,415        $42,829

      $368,673 of tenant improvements.  These amounts
      are amortized over the terms of the leases to which
      they relate.                                               187,716        256,271

      $262,773 of lease commissions.  These amounts
      are amortized over the terms of the leases to
      which they relate.                                         175,677        235,427
                                                               ---------       --------
                                                                $384,808       $534,527
                                                               =========      =========
</TABLE>
                                   F-13
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)

6. Transactions with the General Partner and Affiliates
   ----------------------------------------------------
     Fees and expenses incurred or paid by the General Partner or its
     affiliates on behalf of the Partnership and to which the General
     Partner or its affiliates are entitled to reimbursement from the
     Partnership were as follows:

                                              Years Ended December 31,
                                             1996       1995        1994
                                             ----       ----        ----
      Reimbursement for operating
        expenses                          $171,710   $151,675   $118,293
      Partnership management fee
        expense                             76,619     83,939     83,939
                                          --------   --------   --------
          Total                           $248,329   $235,614   $202,232
                                          ========   ========   ========

     These expenses are included in expenses on the Statements of
     Operations.

     The Partnership provides indemnification to the General Partner and
     its Affiliates for any acts or omissions of the General Partner good
     faith on behalf of the Partnership, except for acts or omissions
     constituting fraud, negligence, misconduct or breach of fiduciary
     duty.  The General Partner believes that this indemnification applies
     to the class action complaint described in Note 8.  Accordingly, the
     Partnership has accrued $41,475, which amount is included in the
     Statements of Operations, and represents the Partnership's share of
     the costs incurred by the General Partner and its affiliates relating
     to the class action complaint.

     Accounts payable to affiliates represents amounts due to the General
     Partner or its affiliates for various services provided to the
     Partnership, including amounts to indemnify the General Partner or its
     affiliates for claims incurred by them in connection with their
     actions as General Partner of the Partnership.  All amounts accrued by
     the Partnership to indemnify the General Partner or its affiliates for
     legal fees incurred by them shall not be paid unless or until all
     conditions set forth in the Partnership Agreement for such payment
     have been fulfilled.

     The General Partner serves in a similar capacity for two other
     affiliated real estate limited partnerships.








                                   F-14
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)

7. Federal Income Taxes
   --------------------
     A reconciliation of the net (loss)/income reported in the Statements
     of Operations to the net income reported for federal income tax
     purposes is as follows:
<TABLE>
<CAPTION>
                                                                  Years Ended December 31,
                                                             1996           1995           1994
                                                             ----           ----           ----
        <S>                                                  <C>            <C>            <C>
      Net (loss)/income per Statements of
        Operations                                       ($851,115)     $1,551,706     $1,497,221

      Add/(deduct):   Excess of book gain over tax
                        gain on disposition of assets             -      (260,176)              -
                      Excess of tax depreciation
                        over book depreciation             (87,266)       (44,106)       (31,514)
                      Excess of book amortization
                        over tax amortization                96,919         70,286         67,356
                      Other income/(loss)                         -          3,573              -
                      Reduction of property carrying
                        value                             1,907,093              -        512,000
                      Other expenses                         64,715        158,875         83,085
                                                         ----------     ----------     ----------
      Net income for federal income tax purposes         $1,130,346     $1,480,158     $2,128,148
                                                         ==========     ==========     ==========
</TABLE>

     A reconciliation of the Partnership's properties' aggregate cost for
     book and federal income tax purposes is as follows:
<TABLE>
<CAPTION>
                                                                  Years Ended December 31,
                                                             1996           1995           1994
                                                             ----           ----           ----
        <S>                                                  <C>            <C>            <C>
      Aggregate cost, book purposes                     $24,189,939    $28,769,443    $28,769,443

      Add/(deduct):   Costs capitalized for federal income
                        tax purposes, cumulative            370,203        329,109        170,235
                      Book basis property write-downs,
                        cumulative                       10,887,498      6,307,993      6,307,993
                                                         ----------     ----------     ----------
      Aggregate cost, federal income tax purposes       $35,447,640    $35,404,545    $35,247,671
                                                         ==========     ==========     ==========
</TABLE>





                                   F-15
<PAGE>
            JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                   (A Massachusetts Limited Partnership)

                NOTES TO FINANCIAL STATEMENTS (continued)

8.   Contingencies
     -------------
     In February 1996, a putative class action complaint was filed in the
     Superior Court in Essex County, New Jersey by a single investor in a
     limited partnership affiliated with the Partnership.  The complaint
     named as defendants the Partnership, the General Partner, certain
     other Affiliates of the General Partner, and certain unnamed officers,
     directors, employees and agents of the named defendants.  The
     plaintiff sought unspecified damages stemming from alleged
     misrepresentations and omissions in the marketing and offering
     materials associated with the Partnership and two limited partnerships
     affiliated with the Partnership.  On March 18, 1997, the court
     certified a class of investors who were original purchasers in the
     Partnership.

     The Partnership provides indemnification to the General Partner and
     its Affiliates for acts or omissions of the General Partner in good
     faith on behalf of the Partnership, except for acts or omissions
     constituting fraud, negligence, misconduct or breach of fiduciary
     duty.  The General Partner believes that this indemnification applies
     to the class action complaint described above.  Accordingly, the
     Partnership has accrued $41,475 for the year ended December 31, 1996,
     which amount is included in the Statement of Operations and represents
     the Partnership's share of costs incurred by the General Partner and
     its Affiliates relating to the class action complaint.

     At  the present time, the General Partner can not estimate the impact,
     if  any,  of the potential indemnification claims on the Partnership's
     Financial Statements, taken as a whole.  Accordingly, no provision for
     any  liability which could result from the eventual outcome  of  these
     matters has been made in the accompanying financial statements.

9. Subsequent Events
   -----------------
     On February 14, 1997, the Partnership made a cash distribution of
     $515,972 to the Investors representing a 5% annualized return to all
     Investors of record at December 31, 1996, based on Distributable Cash
     from Operations for the quarter then ended.














                                   F-16
<PAGE>
<TABLE>
<CAPTION>
                                       JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                                             (A Massachusetts Limited Partnership)

                                                           SCHEDULE III

                                             REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                   Year Ended December 31, 1996

                                                                    Costs
                                                                 Capitalized
                                       Initial Costs to         Subsequent to                   Gross Amount
                                         Partnership             Acquisition        At Which Carried at Close of Period
                                   ----------------------- -----------------------  -----------------------------------
                                               Buildings                                         Buildings
                                                  and                                               and
Description           Encumbrances    Land    Improvements ImprovementsWrite-down (1)    Land   Improvements  Total (2)
-----------           ------------    ----    ------------ --------------------------    ----   ------------  ---------
<S>                       <C>         <C>         <C>          <C>          <C>          <C>        <C>          <C>
Marlboro Square Shopping Center
Marlboro, MA                 -    $1,700,000 $  3,431,725   $121,775   ($3,604,370)    $345,000  $1,304,130   $1,649,130

Crossroads Square Shopping Center
Jacksonville, FL             -     3,910,000   10,582,095     74,825    (2,300,000)   3,266,000   9,000,920   12,266,920

Carnegie Center Office/Warehouse
Cincinnati, OH               -       400,000    6,824,894    132,097    (3,556,991)     315,000   3,485,000    3,800,000

Warner Plaza Shopping Center
Chandler, AZ                 -     2,800,000    5,069,990     30,035    (1,426,136)   2,272,330   4,201,559    6,473,889
                            --    ----------  -----------  ---------     ----------  ---------- -----------  -----------
     Total                   -    $8,810,000  $25,908,704   $358,732  ($10,887,497)  $6,198,330 $17,991,609  $24,189,939
                            ==    ==========  ===========   ========     ==========  ========== ===========  ===========

</TABLE>

                                                               F-17
<PAGE>
<TABLE>
<CAPTION>
                                       JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                                             (A Massachusetts Limited Partnership)

                                                     SCHEDULE III (Continued)

                                             REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                   Year Ended December 31, 1996

                                                                                   Life on Which
                                                                                  Depreciation in
                                                                                  Latest Statement
                                  Accumulated           Date of       Date         of Operations
   Description                  Depreciation (5)      Construction  Acquired        is Computed
   -----------                  ----------------      ------------  --------        -----------
<S>                                   <C>                 <C>         <C>               <C>
Marlboro Square Shopping Center
Marlboro, MA                        $26,460              1986         2/17/87        30 Years  (3)
                                                                                     15 Years  (4)

Crossroads Square Shopping Center
Jacksonville, FL                  2,875,103              1986         11/20/87       30 Years  (3)

Carnegie Center Office/Warehouse
Cincinnati, OH                            -              1986         12/22/87       30 Years  (3)

Warner Plaza Shopping Center
Chandler, AZ                      1,315,571              1985         2/25/88        30 Years  (3)
                                -----------

     Total                       $4,214,134
                                ===========

(1)   These write-downs represent impairment in the values of the properties based upon the General
      Partner's estimates.
      For a further discussion relating to the determination of property write-downs, please see
      "Management's Discussion and Analysis of Financial Condition" included in Item 7 of this
      Report.
</TABLE>

                                                              F-18
<PAGE>
<TABLE>
<CAPTION>
                                        JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                                               (A Massachusetts Limited Partnership)

                                                      SCHEDULE III (continued)

                                              REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                    Year Ended December 31, 1996


(2)  The Partnership's properties' aggregate cost for federal income tax purposes at December 31,
     1996 are as follows:

           Property                                  Amount
           --------                                 -------
       Marlboro Square Shopping Center          $5,269,490
       Crossroads Square Shopping Center        14,653,372
       Carnegie Center Office/Warehouse          7,487,529
       Warner Plaza Shopping Center              8,037,249
                                               -----------
          Total                                $35,447,640
                                               ===========

     The Partnership's aggregate cost for federal income tax purposes may differ from the aggregate
     cost for Financial Statement purposes.

(3)  Estimated useful life for buildings
(4)  Estimated useful life for land improvements
(5)  Reconciliation of real estate and accumulated depreciation:

                                                          Years Ended December 31,
                                                   1996             1995           1994
                                                   ----             ----           ----
<S>                                                <C>              <C>            <C>
     Investment in Real Estate
       Balance at beginning of year           $31,605,222       $38,108,981    $38,620,981
       Improvements                                     -                 -              -
       Sale of property                                 -       (6,503,759)              -
       Property held for sale                 (2,835,779)                 -              -
       Reduction of carrying value,
         including leasing costs              (4,579,504)                 -      (512,000)
                                              -----------       -----------    -----------
       Balance at end of year                 $24,189,939       $31,605,222    $38,108,981
                                              ===========       ===========    ===========

     Accumulated Depreciation
       Balance at beginning of year            $7,165,026        $7,453,459     $6,485,966
       Sale of property                                 -       (1,240,266)              -
       Additions charged to costs
         and expenses                             772,298           951,833        967,493
       Property held for sale                   (808,904)                 -              -
       Reduction of carrying value            (2,914,286)                 -              -
                                              -----------       -----------    -----------
       Balance at end of year                  $4,214,134        $7,165,026     $7,453,459
                                              ===========       ===========    ===========
</TABLE>
                                                               F-19