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 fiscal period ended           June 30, 1997

(   )      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: 33-32197

NORTH OAKS PARTNERSHIP                        NORTH OAKS REAL ESTATE PARTNERSHIP
           (Exact names of registrants as specified in their charters)

                                    MARYLAND
         (State or other jurisdiction of incorporation or organization)

        42-1367576                                        42-1339868
(IRS Employer Identification No.)              (IRS Employer Identification No.)

2330 West Joppa Road  Lutherville, Maryland                              21093
 (Address of principal executive offices)                             (Zip Code)

Registrant's telephone number, including area code     (515) 245-7616

Former name, former address and former fiscal year, if changed since last report

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 ___

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ___      No ___

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date __N/A__

Page 1 of 15


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<CAPTION>
                             NORTH OAKS PARTNERSHIP
                                       AND
                       NORTH OAKS REAL ESTATE PARTNERSHIP

                                      INDEX

Part I         FINANCIAL INFORMATION                                            Page
------         ---------------------                                            ----
<S>                                                                                <C>
Item 1         Financial Statements

               *    Combining Balance Sheets, June 30, 1997
                    and December 31, 1996                                          3


               *    Combining Statements of Operations and Partners' Equity
                    (Deficit) Six Months Ended June 30, 1997 and 1996              5


               *    Combining Statements of Cash Flows, Six
                    Months Ended June 30, 1997 and 1996                            7


               *    Notes to Combining Financial Statements                        9

Item 2         Management's Discussion and Analysis of Financial

               Condition and Results of Operations                                11

PART II        OTHER INFORMATION

Item 1         Legal Proceedings                                                  13
Item 6         Exhibits and Reports on Form 8-K                                   13


SIGNATURES                                                                        14

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<TABLE>
<CAPTION>
 
PART I - FINANCIAL INFORMATION                                                                 NORTH OAKS PARTNERSHIP AND
                                                                                            NORTH OAKS REAL ESTATE PARTNERSHIP
Item I. Financial Statements                                                                     COMBINING BALANCE SHEETS
                                                                                                      (UNAUDITED)
                                                                                                     June 30, 1997

                                                                                                       North Oaks
                                                                                   North Oaks          Real Estate        Combined
                              Assets                                               Partnership         Partnership      Partnerships
                                                                                   ------------        ----------       -----------
<S>                                                                                <C>                 <C>               <C>       
Current assets:
       Cash and cash equivalents                                                   $  2,393,063              --           2,393,063
       Accounts receivable:
          Trade                                                                         418,496              --             418,496
          Affiliate                                                                      17,120              --              17,120
       Assets whose use is limited - required
          for current liabilities                                                       603,096              --             603,096
       Prepaid expenses                                                                  58,134              --              58,134
       Other assets                                                                      23,386              --              23,386
                                                                                   ------------        ----------       -----------
          Total current assets                                                        3,513,296              --           3,513,296
                                                                                   ------------        ----------       -----------

Assets whose use is limited - debt service
   funds, net of amounts req. for curr liabilities                                    1,681,107              --           1,681,107
Funds held in escrow                                                                  1,235,231              --           1,235,231
Property and equipment, net                                                                --          31,637,789        31,637,789
Cost of acquiring initial continuing-care contracts, net                              1,555,948              --           1,555,948
Deferred financing costs, net                                                           732,377              --             732,377
                                                                                   ------------        ----------       -----------
                                                                                   $  8,717,960        31,637,789        40,355,748
                                                                                   ============        ==========       ===========

                   Liabilities and Partners' Equity (Deficit)

Current liabilities:
       Accounts payable:
           Life Care Services Corporation - current portion                        $    650,000              --             650,000
           Trade                                                                        184,454              --             184,454
       Accrued expenses                                                                 202,140              --             202,140
       Refunds payable                                                                  151,780              --             151,780
       Accrued interest - mortgage bonds                                                560,120              --             560,120
       Current installment of mortgage bonds payable                                    155,000              --             155,000
                                                                                   ------------        ----------       -----------
           Total current liabilities                                                  1,903,494              --           1,903,494

Payable to Life Care Services Corp. - excluding current portion                       3,794,936              --           3,794,936
Refundable deposits                                                                     459,581              --             459,581
Mortgage bonds payable                                                               12,960,000              --          12,960,000
Mortgage loans from residents                                                        26,824,420              --          26,824,420
                                                                                   ------------        ----------       -----------
           Total liabilities                                                         45,942,432              --          45,942,432
                                                                                   ------------        ----------       -----------

Partners' equity (deficit)                                                          (37,224,472)       31,637,789        (5,586,684)

Commitments and Contingencies

                                                                                   ------------        ----------       -----------
                                                                                   $  8,717,960        31,637,789        40,355,748
                                                                                   ============        ==========       ===========

</TABLE>

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<TABLE>
<CAPTION>
                                                                                           NORTH OAKS PARTNERSHIP AND
                                                                                       NORTH OAKS REAL ESTATE PARTNERSHIP
                                                                                             COMBINING BALANCE SHEETS
                                                                                                 DECEMBER 31, 1996

                                                                                                     North Oaks
                                                                                  North Oaks         Real Estate         Combined
                                   Assets                                         Partnership        Partnership       Partnerships
                                                                                  ------------       ------------      ------------
<S>                                                                               <C>                  <C>               <C>       
Current assets:
       Cash and cash equivalents                                                  $  2,721,397               --           2,721,397
       Accounts receivable:
          Trade                                                                        443,575               --             443,575
          Affiliate                                                                      2,153               --               2,153
       Admission fees receivable                                                             0               --                   0
       Assets whose use is limited - required
          for current liabilities                                                      708,110               --             708,110
       Prepaid expenses                                                                176,664               --             176,664
       Other assets                                                                     23,029               --              23,029
                                                                                  ------------       ------------      ------------
          Total current assets                                                       4,074,928               --           4,074,928
                                                                                  ------------       ------------      ------------

Assets whose use is limited - debt service
   funds, net of amounts req. for curr liabilities                                   1,579,805               --           1,579,805
Funds held in escrow                                                                    60,380               --              60,380
Property and equipment, net                                                               --           31,950,275        31,950,275
Cost of acquiring initial continuing-care contracts, net                             1,659,678               --           1,659,678
Deferred financing costs, net                                                          757,721               --             757,721
                                                                                  ------------       ------------      ------------
                                                                                  $  8,132,512         31,950,275        40,082,787
                                                                                  ============       ============      ============

                   Liabilities and Partners' Equity (Deficit)

Current liabilities:
       Accounts payable:
           Life Care Services Corporation - current portion                       $    650,000               --             650,000
           Trade                                                                       238,895               --             238,895
       Accrued expenses                                                                207,436               --             207,436
       Refunds payable                                                                  80,380               --              80,380
       Accrued interest - mortgage bonds                                               563,109               --             563,109
       Current installment of mortgage bonds payable                                   145,000               --             145,000
                                                                                  ------------       ------------      ------------
           Total current liabilities                                                 1,884,820               --           1,884,820

Payable to Life Care Services Corp. - excluding current portion                      3,687,029               --           3,687,029
Refundable deposits                                                                    438,882               --             438,882
Mortgage bonds payable                                                              13,040,000               --          13,040,000
Mortgage loans from residents                                                       26,143,574               --          26,143,574
                                                                                  ------------       ------------      ------------
           Total liabilities                                                        45,194,305               --          45,194,305

Partners' equity (deficit)                                                         (37,061,793)        31,950,275        (5,111,518)

Commitments and Contingencies

                                                                                  ------------       ------------      ------------
                                                                                  $  8,132,512         31,950,275        40,082,787
                                                                                  ============       ============      ============

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                                         NORTH OAKS PARTNERSHIP AND
                                                                                     NORTH OAKS REAL ESTATE PARTNERSHIP
                                                                                   COMBINING STATEMENTS OF OPERATIONS AND
                                                                                           PARTNERS' EQUITY (DEFICIT)
                                                                                                 (UNAUDITED)

                                                                                       SIX MONTHS ENDED JUNE 30 , 1997

                                                                                                  North Oaks
                                                                           North Oaks            Real Estate             Combined
                                                                           Partnership           Partnership           Partnerships
                                                                           ------------          ------------          ------------
<S>                                                                        <C>                     <C>                   <C>        
Revenues
   Apartment service fees                                                  $  2,418,295                  --               2,418,295
   Health center fees                                                           779,734                  --                 779,734
   Nonrefundable entrance fees                                                  199,254                  --                 199,254
   Supervision fees                                                              70,826                  --                  70,826
   Other                                                                         44,680                  --                  44,680
                                                                           ------------          ------------          ------------
     Total revenues                                                           3,512,789                  --               3,512,789
                                                                           ------------          ------------          ------------

Expenses
   Selling, general, and administrative                                         747,367                  --                 747,367
   Plant operations                                                             357,180                  --                 357,180
   Environmental services                                                       188,701                  --                 188,701
   Dietary                                                                      714,103                  --                 714,103
   Medical and resident care                                                    747,762                  --                 747,762
   Depreciation and amortization                                                129,074               457,096               586,170
                                                                           ------------          ------------          ------------
     Total expenses                                                           2,884,188               457,096             3,341,284
                                                                           ------------          ------------          ------------

      Income (loss) from operations                                             628,601              (457,096)              171,506
                                                                           ------------          ------------          ------------

Other income (expense)
   Interest income                                                               74,923                  --                  74,923
   Interest expense                                                            (721,595)                 --                (721,595)

                                                                           ------------          ------------          ------------
                                                                               (646,672)                 --                (646,672)
                                                                           ------------          ------------          ------------

   Net loss                                                                     (18,071)             (457,096)             (475,166)

Partners' equity (deficit) at beginning of period                           (37,061,793)           31,950,275            (5,111,518)

Distribution to partners of property                                           (144,610)                 --                (144,610)
Contribution by partners of property                                               --                 144,610               144,610
Cash contributions from partners                                                   --                    --                    --
                                                                           ------------          ------------          ------------

Partners' equity (deficit) at end of period                                $(37,224,473)           31,637,789            (5,586,684)
                                                                           ============          ============          ============

</TABLE>

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<TABLE>
<CAPTION>
                                                                                           NORTH OAKS PARTNERSHIP AND
                                                                                       NORTH OAKS REAL ESTATE PARTNERSHIP
                                                                                     COMBINING STATEMENTS OF OPERATIONS AND
                                                                                           PARTNERS' EQUITY (DEFICIT)
                                                                                                 (UNAUDITED)

                                                                                      SIX  MONTHS ENDED JUNE 30, 1996

                                                                                                 North Oaks
                                                                           North Oaks            Real Estate             Combined
                                                                           Partnership           Partnership           Partnerships
                                                                           ------------          ------------          ------------
<S>                                                                        <C>                     <C>                   <C>        
Revenues
   Apartment service fees                                                  $  2,275,768                  --               2,275,768
   Health center fees                                                           688,368                  --                 688,368
   Nonrefundable entrance fees                                                  214,723                  --                 214,723
   Supervision fees                                                              71,765                  --                  71,765
   Other                                                                         32,201                  --                  32,201
                                                                           ------------          ------------          ------------
     Total revenues                                                           3,282,825                  --               3,282,825
                                                                           ------------          ------------          ------------

Expenses
   Selling, general, and administrative                                         633,046                  --                 633,046
   Plant operations                                                             375,176                  --                 375,176
   Environmental services                                                       155,939                  --                 155,939
   Dietary                                                                      674,483                  --                 674,483
   Medical and resident care                                                    740,903                  --                 740,903
   Depreciation and amortization                                                129,074               453,801               582,875
                                                                           ------------          ------------          ------------
     Total expenses                                                           2,708,621               453,801             3,162,422
                                                                           ------------          ------------          ------------

      Income (loss) from operations                                             574,204              (453,801)              120,403
                                                                           ------------          ------------          ------------

Other income (expense)
   Interest  income                                                              24,434                  --                  24,434
   Interest  expense                                                           (735,872)                 --                (735,872)
   Other income                                                                       0                  --                       0
                                                                           ------------          ------------          ------------
                                                                               (711,438)                 --                (711,438)
                                                                           ------------          ------------          ------------

   Net loss                                                                    (137,234)             (453,801)             (591,035)

Partners' equity (deficit) at beginning of period                           (36,542,435)           32,637,223            (3,905,212)

Distribution to partners of property                                           (151,895)                 --                (151,895)
Contribution by partners of property                                            151,895               151,895
Cash contributions from partners                                                   --                    --                    --
                                                                           ------------          ------------          ------------

Partners' equity (deficit) at end of period                                $(36,831,564)           32,335,317            (4,496,247)
                                                                           ============            ==========            ========== 
</TABLE>

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<TABLE>
<CAPTION>
                                                                                           NORTH OAKS PARTNERSHIP AND
                                                                                       NORTH OAKS REAL ESTATE PARTNERSHIP
                                                                                       COMBINING STATEMENTS OF CASH FLOW
                                                                                                  (UNAUDITED)

                                                                                             SIX MONTHS ENDED JUNE 30, 1997

                                                                                                   North Oaks
                                                                              North Oaks           Real Estate           Combined
                                                                              Partnership          Partnership          Partnerships
                                                                              -----------          -----------          -----------
<S>                                                                           <C>                     <C>                  <C>      
Cash flows from operating activities:
   Net loss                                                                   $   (18,071)            (457,096)            (475,166)
   Depreciation and amortization                                                  129,074              457,096              586,170
   Amortization of Entrance Fees                                                  (23,454)                --                (23,454)
   Decrease in accounts receivable                                                 10,112                 --                 10,112
   Decrease in prepaid expenses and other assets                                  118,173                 --                118,173
   Decrease in accounts payable and accrued expenses                              (59,737)                --                (59,737)
   Decrease in accrued interest - mortgage bonds                                   (2,989)                --                 (2,989)
                                                                              -----------          -----------          -----------
     Net cash provided by operating activities                                    153,108                 --                153,108
                                                                              -----------          -----------          -----------

Cash flows from investing activities:
   Payments for property and equipment                                           (144,610)                --               (144,610)
   Increase in funds held in escrow                                            (1,174,851)                --             (1,174,851)
   Decrease in cash invested in assets
    whose use is limited                                                            3,712                 --                  3,712
                                                                              -----------          -----------          -----------
     Net cash used in investing activities                                     (1,315,749)                --             (1,315,749)
                                                                              -----------          -----------          -----------

Cash flows from financing activities:
   Bond principal payments                                                        (70,000)                --                (70,000)
   Increase in advances from Life Care Services
     Corporation, net                                                             107,907                 --                107,907
   Increase in loans from residents, net                                          704,300                 --                704,300
   Increase in refundable deposits, net                                            92,099                 --                 92,099
                                                                              -----------          -----------          -----------
      Net cash provided by financing activities                                   834,307                 --                834,307
                                                                              -----------          -----------          -----------

        Net decrease in cash                                                     (328,334)                --               (328,334)

Cash at beginning of period                                                     2,721,397                 --              2,721,397
                                                                              -----------          -----------          -----------

Cash at end of period                                                         $ 2,393,063                 --              2,393,063
                                                                              ===========          ===========          ===========

Supplemental disclosures of noncash financing
   activities:
   Distributions to partners of property                                      $   144,610                 --                144,610
                                                                              ===========          ===========          ===========

   Contributions from partners of property                                    $      --                144,610              144,610
                                                                              ===========          ===========          ===========
</TABLE>

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<TABLE>
<CAPTION>
                                                                                          NORTH OAKS PARTNERSHIP AND
                                                                                       NORTH OAKS REAL ESTATE PARTNERSHIP
                                                                                      COMBINING STATEMENTS OF CASH FLOW
                                                                                                  (UNAUDITED)

                                                                                         SIX MONTHS ENDED JUNE 30, 1996

                                                                                                   North Oaks
                                                                              North Oaks           Real Estate            Combined
                                                                              Partnership          Partnership          Partnerships
                                                                              -----------          -----------          -----------
<S>                                                                           <C>                      <C>                  <C>    
Cash flows from operating activities:
   Net loss                                                                   $  (137,235)            (453,801)            (591,036)
   Depreciation and amortization                                                  129,074              453,801              582,875
   Amortization of entrance fees                                                   (6,623)                --                 (6,623)
   Increase in accounts receivable                                                (25,341)                --                (25,341)
   Decrease in prepaid expenses and other assets                                  145,825                 --                145,825
   Increase in accounts payable and accrued expenses                               62,989                 --                 62,989
   Decrease in accrued interest - mortgage bonds                                        0                 --                      0
                                                                              -----------          -----------          -----------
     Net cash provided by operating activities                                    168,689                 --                168,689
                                                                              -----------          -----------          -----------

Cash flows from investing activities:
   Payments for property and equipment                                           (151,895)                --               (151,895)
   Decrease in funds held in escrow                                                62,500                 --                 62,500
   Increase in cash invested in assets
   whose use is limited                                                           (38,759)                --                (38,759)
                                                                              -----------          -----------          -----------
     Net cash used in investing activities                                       (128,154)                --               (128,154)
                                                                              -----------          -----------          -----------

Cash flows from financing activities:
  Bond principal payments                                                         (65,000)                --                (65,000)
  Increase in advances from Life Care Services
     Corporation, net                                                              72,991                 --                 72,991
  Increase in loans from residents, net                                           566,767                 --                566,767
  Payments of refundable deposits, net                                           (797,676)                --               (797,676)
                                                                              -----------          -----------          -----------
      Net cash used in financing activities                                      (222,918)                --               (222,918)
                                                                              -----------          -----------          -----------

        Net decrease in cash                                                     (182,383)                --               (182,383)

Cash at beginning of period                                                     2,528,103                 --              2,528,103
                                                                              -----------          -----------          -----------

Cash at end of period                                                         $ 2,345,720                 --              2,345,720
                                                                              ===========          ===========          ===========

Supplemental disclosures of noncash financing
   activities:
   Distributions to partners of property                                      $   151,895                 --                151,895
                                                                              ===========          ===========          ===========

   Contributions from partners of property                                    $      --                151,895              151,895
                                                                              ===========          ===========          ===========

</TABLE>

<PAGE>


                             NORTH OAKS PARTNERSHIP
                                       AND
                       NORTH OAKS REAL ESTATE PARTNERSHIP

                     NOTES TO COMBINING FINANCIAL STATEMENTS
                                  June 30, 1997

A.             Basis for Presentation

               The accompanying unaudited financial statements of North Oaks
               Partnership (Partnership) and North Oaks Real Estate Partnership
               (NOREP), in the opinion of management, reflect all adjustments
               (none of which were other than normal recurring items),
               eliminations, and reclassifications considered necessary for a
               fair statement and presentation of the results of the interim
               periods presented. For purposes of preparing the combined
               financial statements, all material transactions between the
               partnerships have been eliminated but not displayed, including
               the elimination of the NOREP obligation to the Partnership. The
               partnership and NOREP's are sometimes herein after referred to as
               "Partnerships".

               The Partnership and NOREP were formed to develop, own and operate
               North Oaks Retirement Community (the Project).

               Because of the reorganization described in Note B below,
               transfers to ownership interests in land, property and equipment
               are made from Partnership to NOREP as costs are incurred. The
               transfers are recorded at cost.

               The partners of the Partnership and NOREP are North Oaks
               Properties, Inc. (NOPI), (62.5%) and The Mullan-North Oaks
               Limited Partnership (MNOLP), (37.5%).

               NOREP was organized by the Partnership solely for the purpose of
               owning the property and buildings and other improvements thereon
               that constitute the Project, in order to minimize certain
               mortgage recordation taxes. The publicity traded debt is a direct
               obligation of the Partnership, and is guaranteed by NOREP. The
               guaranty, however, is not intended to provide additional security
               for payment of the principal and interest than if the Partnership
               directly held the property and related improvements itself. The
               Partners of NOREP own no other assets than their interest in the
               Partnership. NOREP and the Partnership have executed an Operating
               and Use Agreement which obligated the Partnership to develop,
               operate and manage the Project at its expense and which grants
               the Partnership use of the property until dissolution,
               liquidation, and do not have independent operating activities.
               Therefore, management believes that, because of the guarantee and
               the Operating and Use Agreement, the combining of financial
               statements of the Partnership and NOREP are the most informative,
               and best portrays the relationship between the two entities.

B.             Reorganization

               In August, 1989, the Partnership transferred its ownership
               interests in land and construction in progress to its Partners
               who then transferred such ownership to NOREP.

C.             Income Taxes

               Income and losses of the partnership are included in the income
               tax returns of the partners. Accordingly, the financial
               statements make no provision for income taxes.




<PAGE>

D.             Transactions with Partners

               The nonrefundable admission fees to be paid under the Residency
               Agreements for compensation of the owners' and developer's risk
               in connection with the Project have been assigned to the Partners
               by the Partnership. The Partners have agreed to make capital
               contributions to the Partnership equal to the admission fees
               assigned to them. Admission fees of $199,254 and $214,743 have
               been assigned to the Partners during the six months ended June
               30, 1997, and June 30, 1996, respectively, and contributed to the
               Partnership. In addition, purchases of property and equipment of
               $144,610 and $151,895 have been distributed by the Partnership to
               the partners and contributed by the partners to NOREP for the six
               months ended June 30, 1997 and June 30, 1996 respectively.

E.             Transactions with Affiliates

               Life Care Services Corporation (LCS), affiliate of NOPI, receives
               a management fee of 5% of the total revenues of operation of the
               Project from the partnership. Such fee is paid by the residents
               as part of their monthly service fee. For the six months ended
               June 30, 1997 and 1996, the management fee was $140,796 and
               $136,959 respectively.

F.             Commitments and Contingencies

               The realization of the costs of the Project is contingent upon
               sustained adequate occupancy of the Project and its operation in
               a cost effective manner.


<PAGE>



                             NORTH OAKS PARTNERSHIP
                                       AND
                       NORTH OAKS REAL ESTATE PARTNERSHIP

Item 2.       Management's Discussion and Analysis of Financial Condition and 
              Results of Operation.

Overall Financial Condition

The Project contains a total of 182 residential apartment units. The health care
center contains 37 comprehensive care beds and 12 domiciliary care units. As of
June 30, 1997, 174 apartment units, 33 comprehensive care beds, and 12
domiciliary care units were occupied. During the six months ended June 30, 1997,
apartment occupancy increased five units, from 169 units to 174 units.

During the six months ended June 30, 1997, 13 apartments became available due to
death, permanent assignment to the health center, or move-outs. In 1996, during
the six months ended June 30, 18 apartments became available. Also during the
first six months of 1997, 20 sales occurred, compared to 15 sales in the same
time period in 1996.

Sales efforts resulted in occupancy being maintained at 94% during the six
months ended June 30, 1997. At June 30, 1996, 91% of the units were occupied.

Effective January 1, 1997, the monthly service fees for apartments increased
approximately 3.9%, and for the health center, approximately 4.1%. Effective
July 1, 1997, the Entrance Fees increased approximately 2%; this increase is the
first such increase in several years and reflects market demand.

Results Of Operations

On January 1, 1997, a 3.9% increase was implemented for the apartment service
fees. During the first six months of 1997, average occupancy was 94%, compared
average occupancy of 92% in the same time period in 1996. These two factors are
the reasons why apartment service fee revenues increased in the six months ended
June 30, 1997, compared to the same time period in 1996. Health Center revenues
increased due to the increase in monthly fees of 4.1% and substantial increased
occupancy by patients reimbursed by the Medicare program.

Operating expenses increased in 1997 compared to the same period in 1996. The
total number of full time equivalent employees increased slightly. Selling,
general and administrative expenses increased approximately $123,000, primarily
because of in increase in marketing and professional fees. Plant operating costs
decreased, primarily because utility costs declined due to changes in carriers.
Dietary costs increased as staffing was higher in 1997 than 1996, and food costs
increased.

Overall, the net income from operations improved to $171,506 in 1997 compared to
$120,403 in 1996. This improvement, together with an increase in interest income
and decrease in interest expense (because $150,000 less of mortgage bonds are
outstanding currently than one year ago), resulted in a loss for the six months
of $475,166 compared to a loss of $591,035 at June 30, 1996.

Liquidity and Capital Resources

During the six months ended June 30, 1997, as compared to the same time period
in 1996:

*        Net cash provided by operating activities declined approximately
         $15,600, even though the net loss after adjustment for depreciation and
         amortization provided $119,000 more cash than in previous years. The
         reason was principally a smaller decrease in prepaids in the six months
         ended June 30, 1997, compared to the six months ended June 30, 1996,
         and a decrease in accounts payable and accrued expenses in the current
         reporting period of approximately $60,000, compared to an increase in
         the previous comparable period of approximately $63,000 (a net change
         of approximately $123,000 use of cash).



<PAGE>



*        Net cash used by investment activities increased approximately
         $1,188,000 as cash balances due to closings held in escrow increased.

*        Net cash provided by financing activities improved by approximately
         $1,057,000, because of increase in loans from residents due to
         increased occupancy and a slight increase in refundable deposits, as
         less deposits were paid to residents moving out than in the six months
         ended June 30, 1996.

Residents, upon occupancy, make loans to the Partnership. The loans from
residents totaled $26,824,420 at June 30, 1997, and were initially used to
retire the Construction Loan.

Subsequent to June 30, 1993, loans from residents are being used to pay the
accumulated obligations to LCS. LCS provided Construction Loan security and per
agreement with the Partnership, provided funding to the Partnership to meet
needs in excess of available Construction Loan and Bond proceeds, until
substantial completion of the Project was attained in May 1991. The Partnership
Agreement provided that in the event the Partners are unable to obtain any
additional required financing for the Partnership from other sources, each of
the Partners shall make available, when and as determined by the Partners, funds
required by the Partnership.

The Partners were not required to make any advances during the six months ended
June 30, 1997. Attrition receipts were sufficient to cover the operating cash
shortfall after debt service.

For 1997 and 1996, the Partners have agreed to contribute an amount equal to the
projected excess resident related operating expenditures over resident related
operating revenues.

The long-term success of the Project is dependent upon the marketing of the
unoccupied units and of enough units to minimize the time a unit is vacant.
Maintenance of adequate levels of occupancy and efficient and effective
operation of the Project are critical to the long-term success of the Project.



<PAGE>



Part II - OTHER INFORMATION

Item 1.  Legal Proceedings

         None

Item 6.  Exhibits and Reports on Form 8-K

         A.   Exhibits

              27.1 Financial Data Schedule
              27.2 Financial Data Schedule

         B.   Reports on Form 8-K

              None



<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.

                                    NORTH OAKS PARTNERSHIP

                               by:  NORTH OAKS PROPERTIES, INC.
                                    General Partner

Date: August 13, 1997               by:       /s/ Stan G. Thurston
                                             ---------------------
                                    Stan G. Thurston, President and
                                    Chief Operating Officer

Date: August 13, 1997               by:       /s/ Arthur V. Neis
                                             -------------------
                                    Arthur V. Neis, Treasurer
                                    (Principal Financial and Accounting Officer)

                               by:  THE MULLAN-NORTH OAKS LIMITED PARTNERSHIP
                                    General Partner

                                    by:      Rosedale Company, Inc.,
                                             its general partner

Date: August 13, 1997               by:       /s/ T. F. Mullan III
                                             ---------------------
                                    Thomas F. Mullan III, President



<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.

                               NORTH OAKS REAL ESTATE PARTNERSHIP

                               by:  NORTH OAKS PROPERTIES, INC.
                                    General Partner

Date: August 13, 1997               by:       /s/ Stan G. Thurston
                                             ---------------------
                                    Stan G. Thurston, President and
                                    Chief Operating Officer

Date: August 13, 1997               by:       /s/ Arthur V. Neis
                                             -------------------
                                    Arthur V. Neis, Treasurer
                                    (Principal Financial and Accounting Officer)

                               by:  THE MULLAN-NORTH OAKS LIMITED PARTNERSHIP
                                    General Partner

                                    by:      Rosedale Company, Inc.,
                                             its general partner

Date: August 13, 1997               by:       /s/ T. F. Mullan III
                                             ---------------------
                                    Thomas F. Mullan III, President