<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
 
                                   FORM 10-Q
 
(Mark One)
 
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
 
For the quarterly period ended September 30, 1996
 
                                       OR
 
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
 
Commission file number: 0-14271
 
     PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited
                                  Partnership
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)
 
California                                                            94-2949474
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(State or other jurisdiction of
incorporation or organization)              (I.R.S. Employer Identification No.)
 
One Seaport Plaza, New York, N.Y.                                     10292-0116
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(Address of principal executive offices)                  (Zip Code)
 
Registrant's telephone number, including area code: (212) 214-1016
 
                                      N/A
--------------------------------------------------------------------------------
   Former name, former address and former fiscal year, if changed since last
                                    report.
 
   Indicate by check CK whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _CK_  No __
<PAGE>
<PAGE>
 
                         Part I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
               PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
                        A California Limited Partnership
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                      September 30,     December 31,
                                                                          1996              1995
<S>                                                                   <C>               <C>
----------------------------------------------------------------------------------------------------
                                                                              (in thousands)
ASSETS
Investment in property:
Land                                                                    $  10,870         $ 10,870
Buildings, improvements and equipment                                      40,127           39,735
Less: Accumulated depreciation                                            (19,230)         (17,905)
      Allowance for loss on impairment of assets                             (500)            (500)
                                                                      -------------     ------------
Net investment in property                                                 31,267           32,200
Cash and cash equivalents                                                   1,060              806
Prepaid expenses and other assets, net                                      1,264            1,382
                                                                      -------------     ------------
Total assets                                                            $  33,591         $ 34,388
                                                                      -------------     ------------
                                                                      -------------     ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Notes payable                                                           $  26,453         $ 26,621
Due to affiliates                                                             715              700
Accounts payable and accrued liabilities                                      382              291
Security deposits and deferred revenue                                        280              232
Real estate taxes payable                                                      79               73
                                                                      -------------     ------------
Total liabilities                                                          27,909           27,917
                                                                      -------------     ------------
Partners' capital
Unitholders (68,795 depositary units issued and outstanding)                5,933            6,714
General partners                                                             (251)            (243)
                                                                      -------------     ------------
Total partners' capital                                                     5,682            6,471
                                                                      -------------     ------------
Total liabilities and partners' capital                                 $  33,591         $ 34,388
                                                                      -------------     ------------
                                                                      -------------     ------------
----------------------------------------------------------------------------------------------------
                  The accompanying notes are an integral part of these statements
</TABLE>
 
                                       2

<PAGE>
 
               PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
                        A California Limited Partnership
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
 
<TABLE>
<CAPTION>
                                          For the nine months ended          For the three months ended
                                       September 30,     September 30,     September 30,     September 30,
                                           1996              1995              1996              1995
<S>                                    <C>               <C>               <C>               <C>
----------------------------------------------------------------------------------------------------------
                                               (in thousands, except for depositary unit amounts)
REVENUES
Operating                                $   4,517         $   4,456          $ 1,462           $ 1,364
Recovery of expenses                           307               429               92               186
                                       -------------     -------------     -------------     -------------
                                             4,824             4,885            1,554             1,550
                                       -------------     -------------     -------------     -------------
EXPENSES
Property operating                           2,081             2,128              680               753
Interest                                     1,817             1,798              601               613
Depreciation and amortization                1,507             1,421              478               461
General and administrative                     208               326               65                90
                                       -------------     -------------     -------------     -------------
                                             5,613             5,673            1,824             1,917
                                       -------------     -------------     -------------     -------------
Net loss                                 $    (789)        $    (788)         $  (270)          $  (367)
                                       -------------     -------------     -------------     -------------
                                       -------------     -------------     -------------     -------------
ALLOCATION OF NET LOSS
Unitholders                              $    (781)        $    (780)         $  (267)          $  (363)
                                       -------------     -------------     -------------     -------------
                                       -------------     -------------     -------------     -------------
General partners                         $      (8)        $      (8)         $    (3)          $    (4)
                                       -------------     -------------     -------------     -------------
                                       -------------     -------------     -------------     -------------
Net loss per depositary unit             $  (11.35)        $  (11.34)         $ (3.88)          $ (5.28)
                                       -------------     -------------     -------------     -------------
                                       -------------     -------------     -------------     -------------
----------------------------------------------------------------------------------------------------------
</TABLE>
 
             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                                GENERAL
                                                              UNITHOLDERS       PARTNERS     TOTAL
<S>                                                          <C>                <C>          <C>
---------------------------------------------------------------------------------------------------
                                                                         (in thousands)
Partners' capital (deficit)--December 31, 1995                   $6,714          $ (243)     $6,471
Net loss                                                           (781)             (8)       (789)
                                                             --------------     --------     ------
Partners' capital (deficit)--September 30, 1996                  $5,933          $ (251)     $5,682
                                                             --------------     --------     ------
                                                             --------------     --------     ------
---------------------------------------------------------------------------------------------------
                  The accompanying notes are an integral part of these statements
</TABLE>
 
                                       3

<PAGE>
 
               PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
                        A California Limited Partnership
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
 
<TABLE>
<CAPTION>
                                                                      For the nine      For the nine
                                                                      months ended      months ended
                                                                      September 30,     September 30,
                                                                          1996              1995
<S>                                                                   <C>               <C>
-----------------------------------------------------------------------------------------------------
                                                                              (in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                 $  (789)          $  (788)
                                                                      -------------     -------------
Adjustments to reconcile net loss to net cash provided by
  operating activities:
  Depreciation and amortization                                            1,507             1,421
  Lease concessions-effective rents                                           50                53
  Leasing commissions paid                                                  (148)             (215)
  Changes in:
     Prepaid expenses and other assets, net                                   34               (11)
     Due to affiliates                                                        15               (18)
     Accounts payable and accrued liabilities                                 91                14
     Security deposits and deferred revenue                                   48               (30)
     Real estate taxes payable                                                 6                43
                                                                      -------------     -------------
Total adjustments                                                          1,603             1,257
                                                                      -------------     -------------
Net cash provided by operating activities                                    814               469
CASH FLOWS FROM INVESTING ACTIVITIES
Building improvements                                                       (392)             (426)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes                                                 (168)             (181)
                                                                      -------------     -------------
Net increase (decrease) in cash and cash equivalents                         254              (138)
Cash and cash equivalents at beginning of period                             806             1,118
                                                                      -------------     -------------
Cash and cash equivalents at end of period                               $ 1,060           $   980
                                                                      -------------     -------------
                                                                      -------------     -------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid                                                            $ 1,678           $ 1,933
                                                                      -------------     -------------
                                                                      -------------     -------------
-----------------------------------------------------------------------------------------------------
                   The accompanying notes are an integral part of these statements
</TABLE>
 
                                       4

<PAGE>
 
               PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
                        A California Limited Partnership
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1996
                                  (Unaudited)
 
A. General
 
   These financial statements have been prepared without audit. In the opinion
of Prudential-Bache Properties, Inc. (``PBP'') and Glenborough Corporation and
Robert Batinovich (together, ``Glenborough'') (collectively, the ``General
Partners''), the financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the financial
position of Prudential-Bache/Equitec Real Estate Partnership, A California
Limited Partnership (the ``Partnership'') as of September 30, 1996, and the
results of its operations for the nine and three months ended September 30, 1996
and 1995 and its cash flows for the nine months ended September 30, 1996 and
1995. However, the operating results for the interim periods may not be
indicative of the results expected for the full year.
 
   Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1995.
 
B. Related Parties
 
   The General Partners and their affiliates perform services for the
Partnership which include, but are not limited to: accounting and financial
management; registrar, transfer and assignment functions; property management;
investor communications; printing and other administrative services. The General
Partners and their affiliates receive reimbursements for costs incurred in
connection with these services, the amount of which is limited by the provisions
of the Partnership Agreement. The costs and expenses were:
 
<TABLE>
<CAPTION>
                                                             Nine months              Nine months
                                                                ended                    ended
                                                          September 30, 1996       September 30, 1995
<S>                                                       <C>                      <C>
-----------------------------------------------------------------------------------------------------
                                                                        (in thousands)
PBP and affiliates:
  General and administrative                                     $ 70                     $ 98
                                                               ------                   ------
Glenborough and affiliates:
  Property management fee and expenses                            443                      485
  Leasing commissions                                             103                      109
                                                               ------                   ------
                                                                  546                      594
                                                               ------                   ------
                                                                 $616                     $692
                                                               ------                   ------
                                                               ------                   ------
</TABLE>
 
<TABLE>
<CAPTION>
                                                             Three months             Three months
                                                                ended                    ended
                                                          September 30, 1996       September 30, 1995
<S>                                                       <C>                      <C>
-----------------------------------------------------------------------------------------------------
                                                                        (in thousands)
PBP and affiliates:
  General and administrative                                     $ 17                     $ 32
                                                               ------                   ------
Glenborough and affiliates:
  Property management fee and expenses                            151                      165
  Leasing commissions                                              40                       97
                                                               ------                   ------
                                                                  191                      262
                                                               ------                   ------
                                                                 $208                     $294
                                                               ------                   ------
                                                               ------                   ------
</TABLE>
 
                                       5

<PAGE>
 
   PBP is not being paid on a current basis for general and administrative
expenses other than printing costs. During the nine months ended September 30,
1996, PBP was reimbursed approximately $48,000 which was applied to prior years'
general and administrative expenses due. At September 30, 1996 and December 31,
1995, the total liability outstanding to PBP was approximately $715,000 and
$700,000, respectively.
 
   The Partnership maintains an account with the Prudential Institutional
Liquidity Portfolio Fund, an affiliate of PBP, for investment of its available
cash in short-term instruments pursuant to the guidelines established by the
Partnership Agreement.
 
   Prudential Securities Incorporated (``PSI''), an affiliate of PBP, owns 180
depositary units at September 30, 1996.
 
                                       6

<PAGE>
 
               PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
                        A California Limited Partnership
      ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
 
Liquidity and Capital Resources
 
   The Partnership generated cash from operations of $814,000 for the nine
months ended September 30, 1996 reduced by $168,000 of principal payments on
notes. During the nine months ended September 30, 1996, the Partnership
disbursed approximately $392,000 for building and tenant improvements, primarily
related to the Poplar Towers, Montrose and Totem Valley properties. In order to
keep the properties competitive, building and tenant improvements will continue
to be required.
 
   The Partnership had cash of approximately $1,060,000 at September 30, 1996.
PBP is not being reimbursed for its general and administrative expenses (other
than printing) on a current basis; however, payments for past due amounts of
approximately $48,000 were made during the nine months ended September 30, 1996.
At September 30, 1996, the total liability outstanding (including printing) was
approximately $715,000. Cash on hand plus any cash generated from operations may
not be sufficient to fund building and tenant improvements and to pay deferred
general and administrative expenses.
 
   The Poplar Tower note came due on October 1, 1996 and the lender has extended
the maturity on a month-to-month basis, while one of the General Partners is
attempting to refinance the note with another lender.
 
   The General Partners continue to evaluate all of the properties' prospects
for eventual sale. The properties were appraised in November 1995 by a third
party to be approximately $34,900,000, which exceeds the Partnership's total net
investment in these properties. However, it is unlikely that investors will be
returned a significant portion of their original investment upon the sale of the
properties and ultimate dissolution of the Partnership.
 
Results of Operations
 
   The Partnership's net loss increased by approximately $1,000 but decreased by
approximately $97,000 for the nine and three months ended September 30, 1996 as
compared to the corresponding periods in 1995 for the reasons discussed below.
 
   Property operating revenues increased by approximately $61,000 and $98,000
for the nine and three months ended September 30, 1996 as compared to the
corresponding periods in 1995 as increases in Poplar Towers, Gateway, Park
Plaza, and Totem Valley more than offset the decrease at the Montrose property.
The changes in operating revenues were primarily the result of corresponding
changes in average occupancies with the Montrose property experiencing a
decrease in average occupancy to 80% for the nine months ended September 30,
1996 from 93% for the nine months ended September 30, 1995 as a result of a
major tenant's lease expiring in May 1996. The Partnership is currently seeking
to re-lease the space.
 
   Recovery of expenses decreased by approximately $122,000 and $94,000 for the
nine and three months ended September 30, 1996 as compared to the corresponding
periods in 1995 primarily due to lower tenant recoveries at the Montrose
property as a result of a major tenant's lease expiring in May 1996 partially
offset by increases in expense recoveries at the Totem Valley property.
 
   Property operating expenses decreased by $47,000 and $73,000 for the nine and
three months ended September 30, 1996 as compared to the corresponding periods
in 1995 primarily due to decreased operating expenses at Montrose, Gateway and
Park Plaza partially offset by increased maintenance charges at Poplar Towers
resulting from an increase in occupancy rates.
 
   Depreciation and amortization increased by approximately $86,000 and $17,000
for the nine and three months ended September 30, 1996 as compared to the
corresponding periods in 1995 due to increased building and tenant improvement
additions.
 
   General and administrative expenses decreased by approximately $118,000 and
$25,000 for the nine and three months ended September 30, 1996 as compared to
1995 primarily due to professional fees in 1995 which were not previously
accrued.
 
                                       7

<PAGE>
 
                           PART II. OTHER INFORMATION
 
Item 1.     Legal Proceedings--None
Item 2.     Changes in Securities--None
Item 3.     Defaults Upon Senior Securities--None
Item 4.     Submission of Matters to a Vote of Security Holders--None
Item 5.     Other Information--None
Item 6.     Exhibits and Reports on Form 8-K

            (a) Exhibits:

3 and 4     Amended and Restated Limited Partnership Agreement of Registrant
            dated February 11, 1985 (incorporated by reference to Amendment 
            No. 1 to the Registrant's Form S-11 Registration Statement filed
            on February 14, 1985) and Amendment No. 1 thereto dated April 18,
            1985 (incorporated by reference to Form 8-A filed on February 28,
            1986), as amended on March 25, 1994 (incorporated by reference to
            Registrant's 1994 Annual Report on Form 10-K)

            Amended and Restated Agreement between General Partners dated
            December 28, 1990 (incorporated by reference to the Registrant's
            1990 Annual Report filed on Form 10-K) 27 Financial Data Schedule
            (filed herewith)

            (b) Reports on Form 8-K--None
 
                                       8

<PAGE>
 
                                   SIGNATURES
 
   Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
 
Prudential-Bache/Equitec Real Estate Partnership,
A California Limited Partnership
 
By: Prudential-Bache Properties, Inc.
    A Delaware corporation, General Partner

By: /s/ Eugene D. Burak                          Date: November  13, 1996
-----------------------------------------------
Eugene D. Burak
Vice President 
Chief Accounting Officer for the Registrant
 
                                       9