<PAGE>

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

                                  FORM 10-QSB

( X )         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
                      THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 1998

                                       OR

(   )           TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) 
                      OF THE SECURITIES EXCHANGE ACT OF 1934

              for the transition period from           to             

                           Commission File Number 1-9043

                           Banyan Hotel Investment Fund
             (Exact Name of registrant as specified in its charter)

           Delaware                                   36-3361229
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                  Identification Number)

One Penn Plaza, Suite 1531, New York, New York          10119
  (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code (212) 736-7880

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

Shares of Common Stock outstanding as of May 5, 1998: 12,403,565

Transitional Small Business Disclosure Format   Yes   .  No X .

<PAGE>

                         PART 1 FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

                         BANYAN HOTEL INVESTMENT FUND
                          CONSOLIDATED BALANCE SHEETS
                     MARCH 31, 1998 AND DECEMBER 31, 1997
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                      1998            1997

<S>                                               <C>             <C>
ASSETS
Cash and Cash Equivalents                         $   216,560     $   238,077
Interest Receivable on
  Cash and Cash
  Equivalents, Mortgages and
  Investment Securities                                14,326          14,188
Mortgage Loans, Receivables                         1,523,228       1,536,489
Prepaid Insurance                                       1,761           7,080
Other Assets                                            4,437           4,437
                                                   ----------      ----------
Total Assets                                      $ 1,760,312     $ 1,800,271
                                                   ----------      ----------
                                                   ----------      ----------

LIABILITIES AND
  STOCKHOLDERS' EQUITY

Liabilities
  Accounts Payable and
  Accrued Expense                                 $    53,856     $    54,358
                                                   ----------      ----------

Stockholders' Equity
Shares of Common Stock
  $0.01 Par Value
  20,000,000 Shares
  Authorized 12,403,563
  Shares Issued                                   $87,477,847     $87,477,847

Accumulated Deficit                                (85,763,202)    (85,723,745)

Treasury Stock, At Cost,
  for 32,757 Shares of
  Common Stock                                         (8,189)         (8,189)
                                                   ----------      ----------

Total Stockholders' Equity                        $ 1,706,456     $ 1,745,913
                                                   ----------      ----------

</TABLE>

                                       2
<PAGE>

                         BANYAN HOTEL INVESTMENT FUND
                          CONSOLIDATED BALANCE SHEETS
               MARCH 31, 1998 AND DECEMBER 31, 1997 (continued)
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                      1998            1997

<S>                                               <C>             <C>
Total Liabilities and
  Stockholders' Equity                            $ 1,760,312     $ 1,800,271
                                                   ----------      ----------
                                                   ----------      ----------

Book Value Per Share of 
  12,403,565 Shares                               $      0.14     $      0.14
                                                   ----------      ----------
                                                   ----------      ----------
</TABLE>



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


                                       3

<PAGE>

                         BANYAN HOTEL INVESTMENT FUND
                 CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
              FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                      1998            1997

<S>                                               <C>             <C>
INCOME
Interest Income on Cash
  and Cash Equivalents                            $     2,038     $     4,234
Interest Income on
  Investment Securities                                 -              16,396
Interest Income on
  Mortgages Receivable                                 44,976          16,207
                                                   ----------      ----------
Total Income                                      $    47,014     $    36,837
                                                   ----------      ----------
                                                   ----------      ----------

EXPENSES

Stockholder Expenses                              $     2,039     $     2,068
Other Professional Fees                                30,826           1,179
General and Administrative                             53,606          45,193
                                                   ----------      ----------

TOTAL EXPENSES                                    $    86,471     $    48,440
                                                   ----------      ----------

Net Loss                                          $   (39,457)    $   (11,603)
                                                   ----------      ----------
                                                   ----------      ----------

Net Loss Per Share of
  Common Stock (Based
  on Number of Shares Out-
  standing of 12,403,565                           $     0.00     $      0.00
                                                   ----------      ----------
                                                   ----------      ----------

</TABLE>

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

                                       4

<PAGE>

                         BANYAN HOTEL INVESTMENT FUND
               CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                  FOR THE THREE MONTHS ENDED MARCH 31, 1998
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                    Shares of Common Stock
                                                      Shares         Amount

<S>                                               <C>             <C>

Stockholders'
Equity (Deficit)
December 31, 1997                                 $12,403,565     $87,477,847

Net Loss                                              ---             ---

Stockholders'
Equity (Deficit)
March 31, 1998                                     12,403,565      $87,477,847
                                                   ----------      ----------
                                                   ----------      ----------

</TABLE>


                                       5

<PAGE>

                         BANYAN HOTEL INVESTMENT FUND
               CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
            FOR THE THREE MONTHS ENDED MARCH 31, 1998 (continued)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>

                          Accumulated            Treasury            Total
                            Deficit               Stock
<S>                       <C>                 <C>                <C>
Stockholders'
Equity (Deficit)          $(85,723,745)       $      (8,189)     $   1,745,913
December 31, 1997

Net Loss                       (39,457)             ---                (39,457)
                           -----------         ------------       ------------

Stockholders'
Equity (Deficit)
March 31, 1998            $(85,763,202)       $      (8,189)     $  1,706,456
                           -----------         ------------       ------------
                           -----------         ------------       ------------

</TABLE>

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

                                       6

<PAGE>

                          BANYAN HOTEL INVESTMENT FUND
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                         1998               1997
                                         ----               ----
<S>                                      <C>                <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:

NET LOSS                                 $ (39,457)          $ (11,603)

Adjustment to
  Reconcile Net Loss
  to Net Cash (Used in)
  Provided by Operating
  Activities:
Amortization of Premium
  or Discount on Investment
  Securities                                    --                 (83)

Net Change in:
  Interest Receivable
  on Cash and Cash
  Equivalents and
  Investment Securities                       (138)               (505)
Prepaid Insurance                            5,319               4,717

Accounts Payable and
  Accrued Expenses                            (502)            (51,664)
                                         ---------          ----------

Net Cash (Used in)
  Provided by Operating
  Activities                             $ (34,778)           $ 59,138)
                                         ---------          ----------

CASH FLOW FROM
  INVESTMENT
  ACTIVITIES:

Net Investment in Mortgages
  or Principal Repayments                $  13,261            $ 12,045
                                         ---------          ----------

Net Cash Provided by
  (Used in) Investment
  Activities                             $  13,261            $ 12,045
                                         ---------          ----------
</TABLE>


                                      7
<PAGE>

                          BANYAN HOTEL INVESTMENT FUND
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                         1998               1997
                                         ----               ----
<S>                                      <C>                <C>

Net Increase (Decrease)
  in Cash and Cash
  Equivalents                            $ (21,517)          $ (47,093)

Cash and Cash Equivalents
  at Beginning of Period                   238,077             414,935
                                         ---------          ----------

Cash and Cash Equivalents
  at End of Period                       $ 216,560           $ 367,842
                                         ---------          ----------
                                         ---------          ----------
</TABLE>


                                      8



<PAGE>

                         BANYAN HOTEL INVESTMENT FUND
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                MARCH 31, 1998
                                  (UNAUDITED)

     Readers of this quarterly report should refer to the Banyan Hotel 
Investment Fund's (the "Fund's") audited financial statements for the year 
ended December 31, 1997, as certain footnote disclosures which would 
substantially duplicate those contained in such audited statements have been 
omitted from this report.

1.   FINANCIAL STATEMENT PRESENTATION

     The accompanying financial statements include the accounts of this Fund 
and its wholly owned subsidiaries. All intercompany balances and transactions 
have been eliminated in consolidation. In the opinion of management, all 
adjustments necessary for a fair presentation have been made to the 
accompanying financial statements as of March 31, 1998 and for the three 
months ended March 31, 1998 and 1997. These adjustments made to the financial 
statements, as presented, are all of a normal recurring nature to the Fund 
unless otherwise indicated.

2.   TRANSACTIONS WITH AFFILIATES

     During 1997, the Fund reimbursed an affiliated company $21,534 for Health 
Insurance premiums paid on behalf of the Fund. During the first quarter of 
1998, this reimbursement amounted to $5,319.

3.   MORTGAGE LOANS RECEIVABLE

     In May, 1993, the Financial Accounting Standards board issued Statements 
of Financial Accounting Standards No. 114, Accounting by Creditors for 
Impairment of a Loan ("FAS 114"). Effective January 1, 1995, in accordance 
with FAS 114, the Fund has reclassified Mortgage Loans in Substantive 
Foreclosure to Mortgage Loans Receivable with an appropriate allowance for 
loan losses determined based on consideration of the fair value of the 
collateral of discounted future cash flows to be received.

     On October 10, 1995, the Fund made a first mortgage loan in the amount 
of $375,000 which is secured by a commercial property in New York City, as 
well as by a personal guaranty of one of the principals of the borrower. The 
loan calls for interest at 12% per annum with monthly payments based on a ten 
(10) year amortization schedule and a balloon payment of the total balance in 
five (5) years. The carrying amount of the mortgage loan approximates the 
fair value.

     On February 13, 1996, the Fund made a first mortgage loan in the amount 
of $150,000 which is secured by a commercial property in New York City. The 
loan represents less than 17% of the appraised value of the property, bears 
interest at the rate of 10% per annum and calls for monthly payments on a 
five year self-liquidating basis.


                                       9

<PAGE>

                         BANYAN HOTEL INVESTMENT FUND
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                MARCH 31, 1998
                                  (UNAUDITED)

3.   MORTGAGE LOANS RECEIVABLE (continued)

     On February 29, 1996, the Fund made a first mortgage loan in the 
approximate amount of $106,000 which is secured by an industrial property in 
Lake Worth, Florida. The property securing the mortgage is controlled by 
Mr. Harvey Polly, who has personally guaranteed the mortgage. The loan calls 
for 10% interest per annum, payable monthly, with a balloon payment of 
principal after five (5) years.

     On August 20, 1997, the Fund made a first mortgage loan in the amount of 
$1,000,000 which is secured by one commercial and one residential property 
located in the Dallas, Texas area. The loan bears interest at the rate of 
12%, and calls for monthly payments of interest only. The loan is due on 
April 1, 1998. The principal of the corporate owners of both properties have 
personally guaranteed the loan. On April 3, 1998, the due date of the loan 
was extended to July 1, 1998. On April 30, 1998, the Fund received a $700,000
principal payment on this loan.

4.   INVESTMENT IN PARTNERSHIP

     In 1991, in connection with a release from liability related to a loan 
made by the Fund, the Fund acquired a 50% limited partnership interest in the 
partnership which owns the Santa Barbara Biltmore Resort. The fund did not 
record losses related to its interest in the Santa Barbara Biltmore during 
1998 and 1997, since the carrying value of the partnership interest was 
reduced to zero as of December, 1992, and the Fund has no obligation to make 
additional capital contributions to, or to pay the liabilities of, the 
partnership.

5.   INVESTMENT SECURITIES

     The Fund's investment securities portfolio at March 31, 1997 is as 
follows:

<TABLE>
<CAPTION>
                              Amortized Cost
                                  Net of
                                 Principal         Estimated
                                 Paydowns        Market Value
     Title of Each Issue         Received         At Mar. 31,
     and Name of Issuer        Mar. 31, 1997       1997 (2)
<S>                            <C>                <C>
     Federal National
     Mortgage Assn. (1)
     7.25%, 3/1/93-
     5/25/22                     $891,514           $829,125
                               -----------        -----------
                                 $891,514           $829,125
                               -----------        -----------
                               -----------        -----------
</TABLE>


                                       10

<PAGE>


                         BANYAN HOTEL INVESTMENT FUND
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                MARCH 31, 1998
                                  (UNAUDITED)

5.   INVESTMENT SECURITIES (continued)

(1)  The guaranteed REMIC Pass-through Certificates are guaranteed as to 
     timely payment of principal and interest by the Federal National 
     Mortgage Association. The maturity of the principal of the above 
     investment securities is dependent upon the repayment of the underlying 
     U.S. Agency sponsored mortgages. The rate of repayment is dependent upon 
     the current market level of interest rates on mortgage loans as it 
     relates to the interest rates of the Mortgages underlying each REMIC 
     security. The stated maturity of these investment securities, under the 
     market conditions as of the first quarter of 1997, is expected to be 
     from February 25, 2005 to February 25, 2011. These expectations may 
     change as interest rates on mortgage loans change.

(2)  The Fund has recorded a market adjustment of $62,389 representing 
     unrealized losses on its investment securities based on current market 
     values at March 31, 1997.





                                       11

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

     Banyan Hotel Investment Fund (the "Fund"), was formed to make mortgage 
loans to affiliates of VMS Realty Partners, ("VMS"), secured by hotel and 
resort properties. The Fund has been adversely affected as a result of the 
non-payment of amounts due from these borrowers on mortgage loans and notes 
receivable. As a result of these defaults, the Fund suspended the making of 
new loans (except for advances of additional funds under circumstances which 
it is deemed necessary to preserve the value of existing collateral) and 
suspended distributions to shareholders.

     In early 1990, the Fund implemented a business plan focused on 
preservation of its assets and managing its properties acquired through 
foreclosure until they could be disposed of in an orderly manner (the 
"Principal Recovery Plan").

     On January 28, 1992, the Board of Directors of the Fund authorized the 
preparation of a formal plan of liquidation which was subsequently adopted on 
April 7, 1992 (the "Plan"). The Plan contemplated the Fund liquidating its 
assets and distributing the proceeds to its stockholders. The Fund estimated 
that its liquidation value was between $.15 and $.20 per share. After the 
adoption of the Plan, Management of the Fund completed the workout of 
liquidation of certain assets and considered alternatives to the announced 
plan of liquidation which could provide greater stockholder value, including 
a number of unsolicited proposals from various third parties. Based upon 
Management's review of these various proposals, the Board of Directors 
resolved that one proposal was in the best interest of the Fund and its 
stockholders because it allowed every stockholder an opportunity to sell his 
shares at an amount in excess of the projected liquidation value. The Board 
of Directors, by unanimous written consent dated June 15, 1994, authorized 
the Fund to execute and deliver a non-binding letter of intent to Mr. Harvey 
Polly.

     On August 3, 1994, the Fund entered into a Purchase Agreement (the 
"Purchase Agreement") with Mr. Polly providing, among other things, for an all
cash tender offer, under which Mr. Polly agreed to offer to Purchase 100% of 
the shares of common stock of the Fund for $.35 per share. The purchase 
Agreement was subsequently amended on November 4, 1994, December 19, 1994 and 
February 15, 1995. The Purchase Agreement provided, among other things, for 
the following events to occur at or before closing: (i) the resignation of the 
current officers and directors; (ii) the purchase by the Fund of "run-off 
directors' and officers' liability insurance coverage for the current 
officers and directors; (iii) the termination of the employment contract of 
Leonard G. Levine and payment of the severance compensation associated 
therewith; (iv) the termination for the Administrative Services Agreement with 
Banyan Management Corp. and payment of the termination fee associated 
therewith; and (v) the assignment by the Fund of its ownership interest in 
Banyan Management Corp. 


                                       12

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 
         (continued)

     On February 15, 1995, a change in control of the Fund occurred pursuant 
to the closing of the sale of shares of common stock in the Fund to Mr. Polly 
per the terms of the Purchase Agreement. Mr. Polly's tender offer, which 
commenced on December 28, 1994, concluded on January 26, 1995, and resulted 
in the tender to Mr. Polly of 1,288,217 shares of common stock, or 12.5% of 
the Fund's then outstanding shares of common stock, for a cash price of $0.35 
per share. Subsequent to the closing of the tender offer, the terms of the 
Purchase Agreement also required Mr. Polly to purchase from the Fund a number 
of shares sufficient to allow Mr. Polly to own, by virtue of the combination 
of the shares acquired pursuant to the tender offer and the shares purchased 
directly from the Fund, not less than 3,335,000 and not more than 40% of the 
shares of common stock of the Fund after giving effect to the shares issued 
in connection with the purchase. On February 15, 1995, per the Purchase 
Agreement, Mr. Polly purchased 2,047,766 newly issued shares of common stock 
of the Fund for a cash price of $0.22 per share. Upon the acquisition of the 
aforesaid shares from the Fund, when combined with the shares of common stock 
previously owned and acquired pursuant to the tender offer, Mr. Polly is the 
beneficial owner of 3,335,983 shares, or approximately 27% of the Fund's 
outstanding voting shares of common stock.

     Upon closing the sale of shares of common stock of the Fund on February 
15, 1995, the Purchase Agreement provided for the resignation of the Fund's 
then current directors and officers. Accordingly, all of the then current 
directors and officers resigned and were replaced with Mr. Polly's designees. 
Subsequent to the resignation of the directors and officers of the Fund, no 
further arrangements or understandings existed among the Fund and its 
officers and directors. On February 15, 1995, Messrs. Leo Yarfitz, Morton I. 
Kalb, Willis Ryckman and Harvey Polly were appointed as new directors of the 
Fund. In addition, the new directors appointed Mr. Harvey Polly as President 
and Chief Executive Officer, Mr. Morton I. Kalb as Vice President and Chief 
Financial Officer, Ms. Celia Zisfein as Secretary and Mr. William L. Weiss as 
Assistant Secretary. Effective February 15, 1995, the address of the Fund's 
principal executive office is One Penn Plaza, Suite 1531, New York, New York 
10119.

     On October 14, 1996, the Fund was notified by the American Stock 
Exchange that its shares would be removed from listing on the Exchange, and 
that the last day of trading on the Exchange, would be October 25, 1996. The 
reason for this action was that the Fund no longer meets the requirements for 
continued listing, and Banyan had discontinued previously announced 
negotiations to acquire a portfolio of retail shopping center properties.


                                       13

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
        (continued) 

     During the week of October 28, 1996, the Fund's shares began trading on 
the NASD market with a ticker symbol of "VHTI".

     On February 9, 1998, the Fund announced that an agreement had been 
entered into providing for the acquisition of approximately 38% of the shares 
of the Fund by Fifteen Brickell Corp. The Fund noted that it expected to 
close this transaction in mid March 1998, assuming Brickell's satisfactory 
completion of its due diligence review of the operations, business and 
financial condition of the Fund. The mid March closing date was delayed to 
March 31st, and as of May 5th, 1998 negotiations are proceeding.

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents consist of cash and short-term investments. 
The Fund's cash and cash equivalents balance at March 31, 1998 and December 31,
1997 was $216,560 and $238,077 respectively. At March 31, 1997, the Fund held 
investment securities with a carrying value of $829,125.

     At this time, there are no material commitments for capital 
expenditures. The Fund's cash and cash equivalents are sufficient to meet 
its needs for anticipated operating expenses. The Fund deems its liquidity to 
be adequate.

     As of March 31, 1998, the Fund's mortgage loan portfolio consisted of 
four loans, as detailed in Note 3.

     The Fund's ultimate return of cash to its stockholders is dependent 
upon, among other things: (i) the activities undertaken by the Fund; (ii) 
interest earned from the investment of cash and cash equivalents, investment 
securities and mortgages; (iii) the Fund's ability to control its operating 
expenses; and (iv) possible recoveries from the Santa Barbara Biltmore Hotel 
and the liquidating trust, if any. 

RESULTS OF OPERATIONS

     Total income for the three months ended March 31, 1998 and 1997 was 
$47,014 and $36,837 respectively.

     Operating expenses for the three months ended March 31, 1998 were higher 
than those for the same period in 1997, due primarily to increased legal 
costs.

     The above changes for the three months ended March 31, 1998, when 
compared to the same period in 1997, resulted in an increase in the net loss 
to $39,457 ($0.00 per share) from $11,603 ($0.00 per share)


                                       14

<PAGE>

                                    PART II

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  No exhibits are included with this Report. 

(b)  On January 17, 1995, a current report on Form 8-K was filed under Item 5.
     Other information reporting the terms of a Tender Offer of the 
     Registrant's shares of common stock by Mr. Harvey Polly.

     On February 22, 1995, a current report on Form 8-K was filed under Item 6.
     Registration of the Registrant's Directors reporting the Resignation of 
     the Registrant's Directors on February 15, 1995 pursuant to a change in 
     control of the Registrant.

     On February 28, 1995, a current report on Form 8-K was filed under Item 1.
     Change in control of the Registrant reporting a change in control of the 
     Registrant on February 15, 1995 pursuant to the closing of the sale of 
     shares of stock in the Registrant to Mr. Harvey Polly.


                                       15

<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.



BANYAN HOTEL INVESTMENT FUND


By: /s/ Harvey Polly                                   Date: May 5, 1998
    Harvey Polly, Director, President
    and Chief Executive Officer



By: /s/ Morton I. Kalb                                Date: May 5, 1998
    Morton I. Kalb, Director, Vice Pres.
    and Chief Financial Officer






                                       16