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

                                    FORM 10-K405

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
      EXCHANGE ACT OF 1934

      For the fiscal year ended              December 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  0-12915
                            --------

                        McNEIL REAL ESTATE FUND XIV, LTD.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         California                         94-2822299
--------------------------------------------------------------------------------
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)              Identification No.)


             13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code       (972)  448-5800
                                                    ----------------------------

Securities registered pursuant to Section 12(b) of the Act:  None
----------------------------------------------------------

Securities registered pursuant to Section 12(g) of the Act:  Limited 
                                                             partnership units
----------------------------------------------------------

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,  and (2) has been subject to such filing  requirements
for the past 90 days. Yes X No___

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

85,662  of the  registrant's  86,534  limited  partnership  units  are  held  by
non-affiliates  of this registrant.  The aggregate market value of units held by
non-affiliates  is not determinable  since there is no public trading market for
limited  partnership  units  and  transfers  of units  are  subject  to  certain
restrictions.

Documents Incorporated by Reference:        See Item 14, Page 40.

                                TOTAL OF 43 PAGES
<PAGE>
                                     PART I

ITEM 1.  BUSINESS


ORGANIZATION
------------

McNeil Real Estate Fund XIV, Ltd. (the  "Partnership")  was organized  April 30,
1982 as a limited  partnership  under the provisions of the  California  Uniform
Limited  Partnership  Act.  The  general  partner of the  Partnership  is McNeil
Partners,  L.P. (the "General  Partner"),  a Delaware  limited  partnership,  an
affiliate  of Robert A. McNeil  ("McNeil").  The  Partnership  is governed by an
amended and restated partnership  agreement dated September 20, 1991, as amended
(the "Amended  Partnership  Agreement").  Prior to September  20, 1991,  Pacific
Investors  Corporation (the prior "Corporate General  Partner"),  a wholly-owned
subsidiary of Southmark Corporation  ("Southmark"),  and McNeil were the general
partners  of the  Partnership,  which was  governed by an  agreement  of limited
partnership  dated April 30, 1982 (the "Original  Partnership  Agreement").  The
principal place of business for the Partnership and the General Partner is 13760
Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

On  February  14,  1983,  a  Registration  Statement  on Form S-11 was  declared
effective by the  Securities  and Exchange  Commission  whereby the  Partnership
offered for sale $35,000,000 of limited  partnership  units ("Units"),  with the
General  Partners' right to increase the offering up to  $50,000,000.  The Units
represent equity interests in the Partnership and entitle the holders thereof to
participate in certain  allocations and  distributions of the  Partnership.  The
sale of Units closed on September 17, 1984, with 86,101 Units sold at $500 each,
or gross  proceeds of  $43,050,500  to the  Partnership,  including the original
general  partners'  purchase of 200 Units for $100,000.  In 1992, 483 Units were
issued to the General  Partner in payment of the fixed portion of the Management
Incentive  Distribution  ("MID").  In  1993,  30  Units  were  relinquished.  An
additional 20 Units were relinquished in 1994,  leaving 86,534 Units outstanding
at December 31, 1998.

SOUTHMARK BANKRUPTCY AND CHANGE IN GENERAL PARTNER
--------------------------------------------------

On July 14, 1989,  Southmark filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. Neither the Partnership,  McNeil nor the
Corporate   General   Partner   were   included  in  the   filing.   Southmark's
reorganization  plan became  effective  August 10, 1990. Under the plan, most of
Southmark's  assets,  including  Southmark's  interests in the Corporate General
Partner, were sold or liquidated for the benefit of creditors.

In  accordance  with  Southmark's  reorganization  plan,  on October  12,  1990,
Southmark, McNeil and various of their affiliates entered into an asset purchase
agreement  providing for, among other things,  the transfer of control to McNeil
or his affiliates of 34 limited partnerships  (including the Partnership) in the
Southmark portfolio.

On February 14,  1991,  pursuant to the asset  purchase  agreement as amended on
that date: (a) an affiliate of McNeil purchased the Corporate  General Partner's
economic  interest in the  Partnership;  (b) McNeil became the managing  general
partner of the Partnership  pursuant to an agreement with the Corporate  General
Partner  that  delegated  management  authority  to McNeil;  and (c) McNeil Real
Estate Management,  Inc. ("McREMI"), an affiliate of McNeil, acquired the assets

<PAGE>
relating to the property management and partnership  administrative  business of
Southmark  and its  affiliates  and commenced  management  of the  Partnership's
properties  pursuant  to an  assignment  of  the  existing  property  management
agreements from the Southmark affiliates.

On September 20, 1991, the limited  partners  approved a restructuring  proposal
that  provided for (i) the  replacement  of the  Corporate  General  Partner and
McNeil with the General  Partner;  (ii) the adoption of the Amended  Partnership
Agreement, which substantially alters the provisions of the Original Partnership
Agreement  relating  to,  among other  things,  compensation,  reimbursement  of
expenses, and voting rights; and (iii) the approval of a new property management
agreement with McREMI, the Partnership's property manager.

The  Amended  Partnership  Agreement  provides  for the MID to replace all other
forms of general partner  compensation  other than property  management fees and
reimbursements  of certain costs.  Additional  Units may be issued in connection
with the payment of the MID pursuant to the Amended Partnership  Agreement.  See
Item  8 -  Note  2  "Transactions  with  Affiliates."  For a  discussion  of the
methodology  for  calculating  and  distributing  the MID, see Item 13 - Certain
Relationships and Related Transactions.

Settlement of Claims:

The  Partnership  filed claims with the United States  Bankruptcy  Court for the
Northern  District of Texas,  Dallas Division (the  "Bankruptcy  Court") against
Southmark for damages relating to improper  overcharges,  breach of contract and
breach of fiduciary duty. The Partnership settled these claims in 1991, and such
settlement was approved by the Bankruptcy Court.

An Order Granting  Motion to Distribute  Funds to Class 8 Claimants  dated April
14, 1995 was issued by the Bankruptcy  Court.  In accordance  with the Order, in
May 1995, the Partnership  received in full satisfaction of its claims,  $30,118
in cash, and common and preferred stock in the reorganized  Southmark.  The cash
and  stock  represent  the  Partnership's  pro-rata  share of  Southmark  assets
available for Class 8 Claimants.  The Partnership  sold the Southmark common and
preferred  stock in May 1995,  for $9,723  which,  when  combined  with the cash
proceeds from Southmark, resulted in a gain on legal settlement of $39,841.

CURRENT OPERATIONS
------------------

General:

The Partnership is engaged in diversified real estate activities,  including the
ownership,  operation and management of  residential  and retail real estate and
other real estate related assets.  At December 31, 1998, the  Partnership  owned
five income-producing properties as described in Item 2 - Properties.

The  Partnership  does not directly  employ any personnel.  The General  Partner
conducts the business of the  Partnership  directly and through its  affiliates.
The  Partnership  is managed by the  General  Partner.  In  accordance  with the
Amended  Partnership  Agreement,  the Partnership  reimburses  affiliates of the
General  Partner for certain  expenses  incurred by the affiliates in connection
with the management of the Partnership. See Item 8 - Note 2 - "Transactions With
Affiliates."




<PAGE>
The business of the Partnership to date has involved only one industry  segment.
See Item 8 - Financial Statements and Supplementary Data. The Partnership has no
foreign operations. The business of the Partnership is not seasonal.

Business Plan:

As previously announced, the Partnership has retained PaineWebber,  Incorporated
("PaineWebber")  as its exclusive  financial advisor to explore  alternatives to
maximize  the  value  of  the  Partnership,  including,  without  limitation,  a
transaction  in which  limited  partnership  interests  in the  Partnership  are
converted into cash. The Partnership,  through  PaineWebber,  provided financial
and other  information to interested  parties as part of an auction  process and
until early March 1999 was conducting  discussions with one bidder in an attempt
to reach a definitive  agreement  with respect to a sale  transaction.  In early
March 1999, because the Partnership had been unable to conclude negotiations for
a transaction with such bidder, the Partnership  terminated such discussions and
commenced   discussions   with  respect  to  a  sale  transaction  with  another
well-financed  bidder who had been  involved in the  original  auction  process.
During  the last full  week of  March,  the  Partnership  entered  into a 45 day
exclusivity  agreement with such party.  It is possible that the General Partner
and its  affiliates  will receive  non-cash  consideration  for their  ownership
interests in  connection  with any such  transaction.  There can be no assurance
regarding whether any such agreement will be reached nor the terms thereof.

On October 1, 1996, the Partnership placed Redwood Plaza on the market for sale.

Competitive Conditions:

Since the  principal  business of the  Partnership  is to own and  operate  real
estate,  the Partnership is subject to all of the risks incident to ownership of
real estate and interests  therein,  many of which relate to the  illiquidity of
this type of  investment.  These  risks  include  changes  in  general  or local
economic conditions,  changes in supply or demand for competing properties in an
area,  changes in interest rates and  availability  of permanent  mortgage funds
which  may  render  the  sale  or  refinancing   of  a  property   difficult  or
unattractive, changes in real estate and zoning laws, increases in real property
tax rates and Federal or local  economic or rent  controls.  The  illiquidity of
real estate  investments  generally  impairs the ability of the  Partnership  to
respond  promptly  to  changed  circumstances.  The  Partnership  competes  with
numerous established companies, private investors (including foreign investors),
real estate investment trusts,  limited partnerships and other entities (many of
which have greater  resources than the Partnership) in connection with the sale,
financing  and  leasing  of  properties.  The  impact  of  these  risks  on  the
Partnership,   including   losses  from  operations  and   foreclosures  of  the
Partnership's  properties,  is described in Item 7 - Management's Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations.  See  Item 2 -
Properties  for a discussion  of  competitive  conditions  at the  Partnership's
properties.



<PAGE>
Forward-Looking Information:

Within this document,  certain  statements are made as to the expected occupancy
trends,  financial  condition,  results  of  operations,  and cash  flows of the
Partnership  for periods after  December 31, 1998.  All of these  statements are
forward-looking  statements  made pursuant to the safe harbor  provisions of the
Private  Securities  Litigation  Reform Act of 1995.  These  statements  are not
historical  and  involve  risks  and  uncertainties.  The  Partnership's  actual
occupancy trends, financial condition, results of operations, and cash flows for
future  periods may differ  materially  due to several  factors.  These  factors
include,  but are not limited to, the  Partnership's  ability to control  costs,
make necessary  capital  improvements,  negotiate  sales or  refinancings of its
properties and respond to changing economic and competitive factors.

Environmental Matters:

Environmental laws create potential liabilities that may affect property owners.
The  environmental  laws of the  federal  and  certain  state  governments,  for
example,  impose  liability on current and certain past owners of property  from
which  there is a release  or threat of release of  hazardous  substances.  This
liability  includes  costs of  investigation  and  remediation  of the hazardous
substances and natural  resource  damages.  Liability for costs of investigation
and  remediation  is strict,  and may be  imposed  irrespective  of whether  the
property  owner was at fault,  although  there are a number of  defenses.  Third
parties,  as well as governments,  may recover under these laws.  Third parties,
such as adjacent property owners, also may seek to recover under the common law,
for damages to their property or health.  The presence of contamination also may
affect the ability of the property owner to sell, lease, or borrow money against
the property. To date,  environmental  concerns,  including those related to the
presence of hazardous  substances,  have not generally had a material  effect on
the Partnership's capital expenditures, earnings or competitive position.

In connection with the proposed sale  transaction as more fully described above,
in  fiscal  1998,  an  independent   environmental  consultant  engaged  by  the
Partnership  completed a Phase I Environmental  Site Assessment of each property
owned  by the  Partnership.  Such  environmental  assessments  performed  on the
properties  have not revealed any  environmental  liability that the Partnership
believes  would have a material  adverse effect on the  Partnership's  business,
assets or results of  operations,  except for the Redwood Plaza property in Utah
(the "Property"). The Phase I report recommended additional investigation at the
Property because of the presence of a dry cleaning plant that had been there for
approximately twenty years, and because the plant reportedly had used and stored
the chemical tetrachloroethene (PCE). Pursuant to the Partnership's request, the
consultant  then  conducted  a Phase II  Environmental  Site  Assessment  of the
Property,  and found that some of the soil and groundwater contained PCE and its
degradation products. Pursuant to the Partnership's request, the consultant then
conducted a Phase III investigation,  and found the presence of contamination in
soil and groundwater samples taken at the property line. Because the Partnership
has not undertaken any groundwater or soil sampling off-site,  the extent of the
contamination  from the  Property  has not been  established.  To deal with this
situation,  the Partnership has applied to the Utah Department of  Environmental
Quality to enter the Property into the State's  Voluntary  Cleanup  Program,  to
obtain a release from the State for cleanup liabilities.






<PAGE>
The  Partnership  is also  investigating  whether prior owners or tenants of the
Property may be responsible for the remediation of the  contaminants and is also
reviewing whether the cost of remediation may be covered by insurance.

Following the 1998 Phase III  Environmental  Site  Assessment,  the  Partnership
asked its  consultant  to prepare a preliminary  estimate of likely  remediation
costs for the Property based on all of the information known at that time. These
estimated  costs ranged from $600,000 to $1,170,000 over a period of five years.
These  estimates  are  based  on  preliminary  information  and  may  change  as
additional  data is gathered.  There also exists the  potential  for third party
actions, the likelihood and extent of which cannot be predicted at this time.

Accordingly,  the Partnership  recorded a liability for remediation costs at the
Property  of $600,000 in fiscal year 1998.  This  estimate  may be affected  by,
among other things,  new data and by any  modifications  to any remediation plan
that may be  proposed  by the Utah  regulatory  authorities.  The  effect of the
resolution  of these  matters on the results of  operations  of the  Partnership
cannot be predicted  because of the  uncertainty  concerning both the amount and
timing of future expenditures and future results of operations.

It is possible that these assessments with respect to the Property do not reveal
all potential environmental liabilities or that there are material environmental
liabilities of which the Partnership is unaware.  Moreover, no assurances can be
given  that (i)  future  laws,  ordinances  or  regulations  will not impose any
material environmental  liability or (ii) the current environmental condition of
the  Property  has not been or will not be affected by tenants and  occupants of
the Property, by the condition of properties in the vicinity of the Property, or
by third parties unrelated to the Partnership.

Other Information:

In August 1995, High River Limited  Partnership,  a Delaware limited partnership
controlled by Carl C. Icahn ("High River") made an  unsolicited  tender offer to
purchase from holders of Units up to approximately  45% of the outstanding Units
of the Partnership for a purchase price of $95 per Unit. In September 1996, High
River made  another  unsolicited  tender  offer to  purchase  any and all of the
outstanding  Units of the  Partnership  for a purchase price of $95 per Unit. In
addition,   High  River  made  unsolicited   tender  offers  for  certain  other
partnerships controlled by the General Partner. The Partnership recommended that
the  limited  partners  reject  the  tender  offers  made  with  respect  to the
Partnership and not tender their Units.  The General Partner believes that as of
February  1,  1999,  High  River  has  purchased   approximately  12.3%  of  the
outstanding  Units  pursuant to the tender offers.  In addition,  all litigation
filed by High River,  Mr. Icahn and his affiliates in connection with the tender
offers has been dismissed without prejudice.



<PAGE>
ITEM 2.  PROPERTIES
-------  ----------

The  following  table sets forth the real  estate  investment  portfolio  of the
Partnership  at December 31, 1998.  The buildings and the land on which they are
located  are owned by the  Partnership  in fee,  subject in each case to a first
lien deed of trust as set forth more fully in Item 8 - Note 5 - "Mortgage  Notes
Payable."  See also  Item 8 - Note 4 - "Real  Estate  Investments"  and Item 8 -
Schedule  III -  "Real  Estate  Investments  and  Accumulated  Depreciation  and
Amortization."  In the opinion of  management,  the  properties  are  adequately
covered by insurance.

<TABLE>
<CAPTION>
                                               Net Basis                           1998            Date
Property              Description            of Property         Debt         Property Tax       Acquired
--------              -----------            -----------         ----         ------------       --------

Real Estate Investments:

Embarcadero
  Club (1)            Apartments
<S>                   <C>                 <C>               <C>               <C>                  <C>  
College Park, GA      404 units           $    6,042,089    $    7,501,825    $    127,145         09/84

Tanglewood
  Village (2)         Apartments
Carson City, NV       130 units                2,927,160         2,642,890          40,552         06/86

Thunder Hollow (3)
Bensalem              Apartments
  Township, PA        301 units                7,184,754         9,152,945         301,256         11/84

Windrock (4)          Apartments
El Paso, TX           150 units                3,243,929         3,360,064         128,268         10/84
                                           -------------      ------------     -----------

                                          $   19,397,932     $  22,657,724    $    597,221
                                           =============      ============     ===========

Asset Held for Sale:

Redwood Plaza         Retail Center
Salt Lake City, UT    104,211 sq. ft.     $    2,192,549     $     808,574    $     52,694         06/84
                                           =============      ============     ===========
</TABLE>

-----------------------------------------
Total:    Apartments  -  985 units
          Retail centers - 104,211 sq. ft.

(1)      Embarcadero  Club Apartments is owned by Embarcadero  Associates  which
         is wholly-owned by the Partnership and the General Partner.

(2)      Tanglewood  Village  Apartments   is   owned   by   Tanglewood Fund XIV
         Associates,  L.P. which is wholly-owned by the   Partnership  and   the
         General Partner.


<PAGE>
(3)      Thunder  Hollow  Apartments is owned by Thunder Hollow Fund XIV Limited
         Partnership which is wholly-owned by the Partnership.

(4)      Windrock   Apartments   is   owned  by Windrock Fund XIV, L.P. which is
         wholly-owned by the Partnership.

The  following  table sets  forth the  properties'  occupancy  rate and rent per
square foot for each of the last five years:

<TABLE>
<CAPTION>
                                        1998           1997            1996           1995           1994
                                    -------------  -------------  --------------  -------------  ------------

Real Estate Investments:

Embarcadero Club
<S>                                       <C>             <C>            <C>            <C>             <C>
   Occupancy Rate............             98%             99%            97%            99%             98%
   Rent Per Square Foot......           $7.93           $7.54          $7.10          $6.89           $6.46

Tanglewood Village
   Occupancy Rate............             99%             95%            97%            98%             97%
   Rent Per Square Foot......           $7.57           $7.47          $7.36          $7.35           $7.00

Thunder Hollow
   Occupancy Rate............             99%             97%            99%            97%             99%
   Rent Per Square Foot......           $8.81           $8.44          $8.15          $7.76           $7.53

Windrock
   Occupancy Rate............             94%             96%            93%            75%             83%
   Rent Per Square Foot......           $5.63           $5.57          $5.02          $5.01           $5.33

Asset Held for Sale:

Redwood Plaza
   Occupancy Rate............             97%            100%           100%           100%             98%
   Rent Per Square Foot......           $6.93           $7.45          $7.13          $7.04           $6.33
</TABLE>

Occupancy rate  represents all units leased divided by the total number of units
for  residential  properties  and square  footage leased divided by total square
footage for retail  properties  as of  December  31 of the given year.  Rent per
square foot represents all revenue, except interest, derived from the property's
operations divided by the leasable square footage of the property.


<PAGE>
Competitive Conditions
----------------------

Real Estate Investments:

Embarcadero Club Apartments
---------------------------

Embarcadero  Club  Apartments has enjoyed stable  management,  funds for capital
improvements,   and  a  good  location  2.5  miles  from  Atlanta's   Hartsfield
International  Airport.  These  factors have allowed the property to report good
operating  results over the past several years.  Occupancy  rates at Embarcadero
Club  generally  are two to three  percentage  points above the market  average.
Because tenants remain price driven,  the property works carefully on its tenant
retention  program,  as well as continual  updating of carpets,  countertops and
appliances.

Tanglewood Village Apartments
-----------------------------

Tanglewood Village Apartments is encountering new competition from new apartment
communities in the area, a new mobile home park, and especially  from affordable
single family housing.  These factors are limiting the rental increases that the
property is able to effect.  The property improved its operating results in 1998
by  implementing  pass  through of water and sewer  costs  directly  to tenants.
Control of expenses will remain important to improving operating  performance of
the property.

Thunder Hollow Apartments
-------------------------

Thunder  Hollow  Apartments  has been able to increase  rental rates to a higher
level than its  competitors  and still maintain  occupancy rates at or above the
local market's 95% average  occupancy rate. The property has some of the largest
floor plans in its market,  an  especially  attractive  feature for tenants with
children.  There has been no new  multi-family  development  in the  market  for
several years.  Competition is limited in this market,  but further increases in
rental rates may be difficult  to achieve due to the  predominantly  blue collar
demographics of the area and an overbuilt single family home market.

Windrock Apartments
-------------------

The occupancy  rate at Windrock  Apartments  exceeded the 92% market average for
1998. Furthermore, only minimal multi-family construction is planned for El Paso
during 1999.  Affordable  single family housing is a competitive  factor for the
property.  The local economy remains closely tied to Mexico's economy, which has
been  volatile.  High  unemployment  and  relatively  inexpensive  single family
housing will limit rental rate  increases.  Windrock offers some unusually large
floor plans in a secluded  setting,  but lack of  washer/dryer  connections  and
limited  parking space have been  handicaps for the property as it competes with
newer properties with full amenity packages.


<PAGE>
Asset Held for Sale:

Redwood Plaza
-------------

Redwood Plaza  completed an expansion  during 1998. Just over 17,000 square feet
of space  was added to the  property.  The  largest  tenant,  a  grocery  store,
occupied the new space.  In addition to the expansion,  the property added a new
exterior  facade.  The expansion and new facade should provide  positive leasing
momentum for the next  several  years.  Occupancy is projected to remain  strong
during 1999.  There are only two other small strip centers in the area, and both
are fully  occupied.  The property's  expansion and new facade fit well with the
emphasis  that Salt Lake City  community  leaders and  officials  have placed on
getting the city ready to host the 2002 Winter Olympics.

The following schedule shows lease expirations for the Partnership's  commercial
property for 1999 through 2008:

<TABLE>
<CAPTION>
                           Number of                                   Annual           % of Gross
                           Expirations           Square Feet            Rent            Annual Rent
                           -----------           -----------           -------          -----------
Asset Held for Sale:

Redwood Plaza
-------------
<C>                              <C>                   <C>           <C>                      <C>
1999                             2                     2,989         $    22,619              4%
2000                             1                     3,440              32,860              6%
2001                             1                     3,040              55,630              9%
2002                             -                         -                   -              -
2003                             1                    20,100             203,613             34%
2004                             2                    16,491              82,744             14%
2005-2008                        -                         -                   -              -

</TABLE>
No  residential  tenant  leases 10% or more of the available  rental space.  The
following  schedule reflects  information on commercial tenants occupying 10% or
more of the leasable square feet for each property:

<TABLE>
<CAPTION>
Nature of
Business                          Square Footage                                                 Lease
   Use                                Leased                    Annual Rent                   Expiration
----------                        --------------                -----------                   ----------

Asset Held for Sale:

Redwood Plaza
-------------

<S>                                   <C>                      <C>                               <C> 
Grocery Store                         49,200                   $    110,000                      2010
Government Office                     20,100                        203,613                      2003
Discount Store                        14,993                         63,270                      2004
</TABLE>

<PAGE>
ITEM 3.  LEGAL PROCEEDINGS
-------  -----------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except for the following:

James F.  Schofield,  Gerald C. Gillett,  Donna S. Gillett,  Jeffrey  Homburger,
Elizabeth Jung,  Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors,  Inc., McNeil Real Estate Management,  Inc., Robert A. McNeil,
Carole J. McNeil,  McNeil Pacific  Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX,  Ltd.,  McNeil Real  Estate  Fund X, Ltd.,  McNeil Real Estate Fund XI,
Ltd.,  McNeil  Real Estate Fund XII,  Ltd.,  McNeil Real Estate Fund XIV,  Ltd.,
McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P.,  McNeil Real Estate Fund XXII,  L.P.,  McNeil Real Estate
Fund XXIII,  L.P.,  McNeil Real Estate Fund XXIV, L.P.,  McNeil Real Estate Fund
XXV,  L.P.,  McNeil  Real Estate  Fund XXVI,  L.P.,  and McNeil Real Estate Fund
XXVII,  L.P., Hearth Hollow  Associates,  McNeil Midwest  Properties I, L.P. and
Regency North Associates,  L.P., - Superior Court of the State of California for
the  County of Los  Angeles,  Case No.  BC133799  (Class and  Derivative  Action
Complaint).

The action involves  purported  class and derivative  actions brought by limited
partners  of each  of the  limited  partnerships  that  were  named  as  nominal
defendants as listed above (the  "Partnerships").  Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management,  Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their  fiduciary  duties and certain  obligations  under the respective  Amended
Partnership  Agreement.  Plaintiffs  allege that  Defendants  have rendered such
Units highly illiquid and  artificially  depressed the prices that are available
for Units on the resale market.  Plaintiffs also allege that Defendants  engaged
in a course of conduct to prevent the  acquisition  of Units by an  affiliate of
Carl  Icahn  by  disseminating  purportedly  false,  misleading  and  inadequate
information.  Plaintiffs  further allege that Defendants  acted to advance their
own personal  interests at the expense of the Partnerships'  public unit holders
by failing to sell Partnership  properties and failing to make  distributions to
unitholders.

On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs  are suing for breach of  fiduciary  duty,  breach of contract and an
accounting,  alleging,  among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive,  that these fees should
be reduced retroactively and that the respective Amended Partnership  Agreements
governing the Partnerships are invalid.

Defendants  filed a demurrer to the  consolidated  and amended  complaint  and a
motion to strike on February 14, 1997,  seeking to dismiss the  consolidated and
amended complaint in all respects.  A hearing on Defendant's demurrer and motion
to strike  was held on May 5,  1997.  The Court  granted  Defendants'  demurrer,
dismissing  the  consolidated  and  amended  complaint  with leave to amend.  On
October  31,  1997,  the  Plaintiffs  filed a second  consolidated  and  amended
complaint. The case was stayed pending settlement discussions.  A Stipulation of
Settlement dated September 15, 1998 has been signed by the parties.  Preliminary
Court  approval was received on October 6, 1998. A hearing for Final Approval of
Settlement, initially scheduled for December 17, 1998, has been continued to May
25, 1999.



<PAGE>
Because McNeil Real Estate Fund XXIII,  L.P., Hearth Hollow  Associates,  McNeil
Midwest  Properties I, L.P. and Regency North Associates,  L.P. would be part of
the  transaction  contemplated  in the settlement  and Plaintiffs  claim that an
effort should be made to sell the McNeil Partnerships,  Plaintiffs have included
allegations with respect to McNeil Real Estate Fund XXIII,  L.P.,  Hearth Hollow
Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P.
in the third consolidated and amended complaint.

Plaintiff's  counsel  intends  to seek an  order  awarding  attorney's  fees and
reimbursements  of their  out-of-pocket  expenses.  The  amount of such award is
undeterminable  until  final  approval  is  received  from the  court.  Fees and
expenses shall be allocated amongst the Partnerships on a pro rata basis,  based
upon  tangible  asset value of each such  partnership,  less total  liabilities,
calculated in accordance with the Amended Partnership Agreements for the quarter
most recently ended.

For a discussion of the Southmark bankruptcy, see Item 1 - Business.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------  ---------------------------------------------------

None.
                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP AND
-------  ------------------------------------------------------------
         RELATED SECURITY HOLDER MATTERS
         -------------------------------

(A)          There is no established  public trading market for limited
             partnership  units, nor is one expected to develop.

(B)          Title of Class                    Number of Record Unit Holders

             Limited partnership units         3,513 as of February 1, 1999

(C)          The Partnership  paid  distributions  totaling  $499,996 ($5.78 per
             Unit) and $6,146,222  ($71.02 per Unit) to the limited  partners in
             1998 and  1997,  respectively.  No  distributions  were paid to the
             limited  partners  during 1996. In the last week of March 1999, the
             Partnership  distributed  $500,169 to limited partners of record as
             of  March  1,  1999.  The  Partnership  accrued   distributions  of
             $545,928,  $564,834  and  $618,786  for the  benefit of the General
             Partner  for the years  ended  December  31,  1998,  1997 and 1996,
             respectively.  These  distributions  are  the MID  pursuant  to the
             Amended Partnership Agreement.  The Partnership paid $1,774,877 and
             $500,000  of  MID  to  the  General   Partner  in  1997  and  1996,
             respectively.  No MID payments were made in 1998. See Item 8 - Note
             2 - "Transactions  with Affiliates." See also Item 7 - Management's
             Discussion  and  Analysis  of  Financial  Condition  and Results of
             Operations for a discussion of the likelihood  that the Partnership
             will continue distributions to limited partners.


<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA
-------  -----------------------

The  following  table sets forth a summary  of  certain  financial  data for the
Partnership.  This summary should be read in conjunction with the  Partnership's
financial  statements  and  notes  thereto  appearing  in  Item  8  -  Financial
Statements and Supplementary Data.

<TABLE>
<CAPTION>
Statements of                                                  Years Ended December 31,
Operations                               1998             1997            1996             1995             1994
------------------                   ------------     ------------    ------------     ------------     ------------
<S>                                  <C>              <C>             <C>              <C>              <C>         
Rental revenue ..................    $  8,662,524     $  8,996,989    $  9,429,880     $  9,188,439     $  8,899,488
Gain on legal settlement ........              --               --              --           39,841               --
Gain on involuntary
   conversion ...................         393,795               --              --               --           51,588
Gain on disposition of
   real estate ..................              --        3,081,755              --               --               --
Total revenue ...................       9,159,934       12,289,725       9,536,634        9,350,464        8,988,225
Net income (loss) ...............        (167,386)       3,328,774        (119,302)        (331,176)        (300,760)

Net income (loss) per
   limited partnership unit .....    $      (1.91)    $       3.02    $      (1.36)    $      (3.79)    $      (3.44)
                                     ============     ============    ============     ============     ============

Distributions per limited
   partnership unit .............    $       5.78     $      71.02    $         --     $         --     $           --
                                     ============     ============    ============     ============     ==============

                                                               Years Ended December 31,
Balance Sheets                            1998             1997            1996             1995             1994
------------------                   ------------     ------------    ------------     ------------     ------------
Real estate investments,
   net ..........................    $ 19,397,932     $ 20,251,190    $ 21,656,966     $ 30,950,884     $ 31,396,082
Assets held for sale ............       2,192,549        1,932,910       7,942,855               --               --
Total assets ....................      25,601,245       26,325,605      34,188,885       35,275,343       35,214,866
Mortgage notes payable,
   net ..........................      23,466,298       23,891,012      27,423,689       27,871,969       27,161,556
Partners' equity (deficit) ......        (114,266)       1,099,044       4,481,326        5,219,414        6,152,173

</TABLE>

See Item 7 -  Management's  Discussion  and Analysis of Financial  Condition and
Results of  Operations.  The  Partnership  sold Country  Hills Plaza and Midvale
Plaza on April 8, 1997 and September 24, 1997, respectively.
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-------  ----------------------------------------------------------- 
         AND RESULTS OF OPERATIONS
         -------------------------

FINANCIAL CONDITION
-------------------

The  Partnership  was formed to  acquire,  operate and  ultimately  dispose of a
portfolio  of  income-producing  real  properties.  At  the  end  of  1998,  the
Partnership owned four apartment  properties and one retail shopping center. The
retail  shopping  center is on the  market  for sale.  All of the  Partnership's
properties are subject to mortgage notes.

The Partnership  sold Country Hills Plaza and Midvale Plaza on April 8, 1997 and
September 24, 1997,  respectively.  The Partnership distributed the net proceeds
from the sale of these two  properties to the limited  partners.  Redwood Plaza,
the Partnership' sole remaining commercial  property,  remains on the market for
sale.

RESULTS OF OPERATIONS
---------------------

1998 compared to 1997

Revenue:

The Partnership's  rental revenue decreased $334,465 or 3.7% in 1998 as compared
to 1997. However,  the sale of Country Hills Plaza and Midvale Plaza during 1997
accounts for the decrease.  Rental revenue earned by the Partnership's remaining
properties  increased  $294,987  or 3.5% in 1998 as  compared  to  1997.  Rental
revenue increased at all four of the Partnership's  residential properties,  and
decreased at Redwood Plaza.

The  Partnership  increased  both rental  rates and average  occupancy  rates at
Tanglewood  Village  Apartments,  Embarcadero Club Apartments and Thunder Hollow
Apartments.  These properties reported increases in rental revenue of 1.3%, 4.9%
and 4.2%, respectively. Rental revenue increased 0.9% at Windrock Apartments. An
increase  in  vacancy  losses  at the El Paso  property  nearly  offset  a small
increase in rental rates. Rental revenue at Redwood Plaza decreased 5.2% in 1998
as  compared to 1997.  The  Partnership's  sole  remaining  commercial  property
reported decreased  occupancy during 1998, because of construction  taking place
during  1998 that added  approximately  17,000  square feet of space to the Salt
Lake City property.

Interest  income  decreased  by  $107,366  or 51% for 1998 as  compared to 1997,
because  of  decreased   balances  of  Partnership  cash  reserves  invested  in
interest-bearing accounts.

The Partnership  recognized  gains of $17,998 and $375,797  relating to fires at
Embarcadero  Club Apartments and Thunder Hollow  Apartments,  respectively.  The
gains equal insurance  proceeds  received in excess of the basis of the property
damaged by the fires. No such gains were recognized in 1997.

The sale of Country Hills Plaza on April 8, 1997 provided a $2,208,359  one-time
gain on sale of real estate.  An  additional  gain of $873,396 was realized with
the September 24, 1997 sale of Midvale Plaza.  No such gains were  recognized in
1998.

<PAGE>
Expenses:

Partnership  expenses increased $366,369 or 4.1% for the year ended December 31,
1998 as compared  to the same period in 1997.  However,  after  eliminating  the
effects of expenses  pertaining to Country Hills Plaza and Midvale Plaza,  which
were sold during 1997, expenses at the remainder of the Partnership's properties
increased  $899,256 or 10.7% for 1998 as compared to the same period in 1997. In
particular,  environmental  remediation  expenses,  personnel,  and  general and
administrative  expenses  increased,  while general and administrative  expenses
paid to affiliates decreased.

The Partnership  established a $600,000 provision for environmental  remediation
as discussed in "Item 1 - Business  Environmental  Matters." No such expense was
incurred during 1997.

Personnel expenses at the Partnership's  remaining  properties increased $97,256
or 10.8% in 1998 as compared to 1997. The Partnership  increased wage and salary
rates and benefits in order to retain  property  personnel in a competitive  job
market.   The  increases  were   concentrated  at  Thunder  Hollow   Apartments,
Embarcadero  Club  Apartments  and  Windrock   Apartments.   Personnel  expenses
decreased at Redwood Plaza.

General and administrative  expenses increased $267,369 in 1998 to $359,374. The
increase was attributable to costs incurred to explore  alternatives to maximize
the value of the Partnership (see Liquidity and Capital Resources).

General and administrative  expenses paid to affiliates  decreased by $34,564 or
13.9% in 1998 as compared to 1997.  The level of  administrative  reimbursements
paid to  affiliates  is  partly a  function  of the  number  of  properties  the
Partnership  owns.  These  expenses  decreased  due to the sale of Country Hills
Plaza and  Midvale  Plaza  during  the  course of 1997.  Costs  associated  with
investor relations  services were charged to general and  administrative  during
1997.  Such services,  beginning in 1998, are now provided by an affiliate,  and
the related increase in general and  administrative  expenses paid to affiliates
partially  offset  the  decrease  in  expenses  due to  the  reduced  number  of
properties under management.

1997 compared to 1996

Revenue:

Rental revenue for the year ended  December 31, 1997 decreased  $432,891 or 4.6%
from rental  revenue  earned for 1996.  Excluding  rental  revenue  derived from
Country  Hills Plaza and Midvale  Plaza for both 1997 and 1996,  rental  revenue
increased $375,765 or 4.7% in 1997 compared to 1996.

Rental  revenue  increased  at all of the  Partnership's  remaining  properties.
Increased  occupancy at Windrock  Apartments  led to a 10.9%  increase in rental
revenue at the El Paso property.  Increased rental rates provided rental revenue
increases  ranging from 3.5% to 6.1% at  Embarcadero  Club  Apartments,  Thunder
Hollow  Apartments and Redwood Plaza.  Rental revenues  increased  approximately
1.5% at  Tanglewood  Village  Apartments  as an  increase  in  rental  rates was
partially offset by increased vacancy losses.

Interest  revenue  nearly doubled in 1997 compared to 1996.  Increased  interest
income was the result of  increasing  amounts of cash and cash  equivalents  the
Partnership was able to invest in interest-bearing accounts.


<PAGE>
The sale of Country Hills Plaza on April 8, 1997 provided a $2,208,359  one-time
gain on sale of real estate.  An  additional  gain of $873,396 was realized with
the September 24, 1997 sale of Midvale Plaza.

Expenses:

Partnership  expenses decreased $694,985 or 7.2% for the year ended December 31,
1997 as  compared  to the same  period  of 1996.  Expenses  decreased  primarily
because of the sale of  Country  Hills  Plaza on April 8, 1997,  and the sale of
Midvale Plaza on September 24, 1997. After excluding expenses related to Country
Hills Plaza and Midvale Plaza, the Partnership's  expenses  decreased $26,310 or
0.3% for 1997 as  compared  to 1996.  General and  administrative  expenses  and
general and administrative expenses paid to affiliates decreased, while property
taxes increased.

General  and  administrative  expenses  decreased  60.4% for 1997 as compared to
1996.  In 1996,  the  Partnership  incurred  costs to evaluate  and  disseminate
information  regarding  an  unsolicited  tender  offer.  Similar  costs were not
incurred in 1997.  The  decrease  was  partially  offset by charges for investor
services, which beginning in 1997, were provided by a third party vendor instead
of by affiliates of the General Partner. The switch of investor service expenses
from  affiliates  to a third party  vendor also  accounts  for most of the 15.5%
decrease  in  general  and  administrative  expenses  paid to  affiliates.  Also
contributing  to the  decrease in general and  administrative  expenses  paid to
affiliates was a decrease in partnership  administrative  reimbursements  due to
the sale of  Country  Hills  Plaza in April  1997,  and also the sale of Midvale
Plaza in September 1997.

Property taxes on the Partnership's  remaining  properties  increased $51,293 or
9.1% in 1997 as  compared  to 1996.  Increased  assessments  on  Thunder  Hollow
Apartments  contributed to a 7.7% increase in property taxes at the Pennsylvania
property.  Property taxes at Embarcadero Club Apartments in 1996 were reduced by
a one-time  credit for an adjustment for prior year's  property  taxes.  No such
adjustment was made in 1997.

Other property operating expenses increased $89,104 or 17.2% in 1997 as compared
to 1996.  All of the  increase in other  property  operating  expenses is due to
increased bad-debt write-offs incurred at Country Hills Plaza and Midvale Plaza.
An evaluation of the receivables after the sale of the two properties  indicated
that  the  Partnership  was  unlikely  to  collect   approximately   $89,916  of
receivables due from a single tenant that entered into  bankruptcy  proceedings,
and who occupied space at both properties.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Cash  flow  from  operating  activities  decreased  $40,751  or  1.7% in 1998 as
compared to 1997.  The  decrease  is due to the sale of Country  Hills Plaza and
Midvale  Plaza  during  the  course  of  1997.  Operating  cash  flow  from  the
Partnership's remaining properties increased almost enough to offset the loss of
the two properties during the course of 1997.

The Partnership invested $1,276,488 in capital improvements in 1998, in addition
to the $668,126 and $834,036 invested in 1997 and 1996,  respectively.  However,
$499,814 of the 1998 capital  improvements were costs to repair damage caused by
a fire at Thunder Hollow Apartments.  Proceeds from the Partnership's  insurance
carrier covered all costs to reconstruct and repair the fire damage,  except for
a $10,000  deductible for each fire. The Partnership has budgeted  approximately
$740,000 for capital improvements in 1999. The capital improvements budgeted for
1999 are expected to be funded from cash flow from operations.
<PAGE>
The  Partnership  paid  $1,774,877  and  $500,000 of MID to the General  Partner
during 1997 and 1996, respectively.  No MID was paid during 1998. The balance of
accrued  and unpaid MID at the end of 1998  amounted  to  $636,254.  The General
Partner has deferred MID payments.

Two of the Partnership's properties,  Country Hills Plaza and Midvale Plaza were
sold during 1997. The sale of these two properties  provided  $6,146,226 of cash
proceeds to the  Partnership,  after repayment of the mortgage notes  associated
with  the two  properties.  The  net  cash  proceeds  from  the  sale of the two
properties  was  distributed  to the  limited  partners in two  installments  in
September  1997 and December  1997.  The  Partnership  distributed an additional
$499,996 to the limited  partners during 1998. The 1998  distribution was funded
from Partnership operating activities. The Partnership distributed approximately
$500,000 to the limited partners during the last week of March 1999.

Short Term Liquidity:

The Partnership expended  considerable  resources over the past several years to
restore its properties to good operating condition. These expenditures have been
necessary  to  maintain  the  competitive  position of the  Partnership's  aging
properties in each of their markets.  The capital  improvements  made during the
three years have enabled the  Partnership  to increase  its rental  revenues and
reduce  certain  of  its  repairs  and  maintenance  expenses.   For  1999,  the
Partnership has budgeted  approximately  $740,000 of capital improvements to its
real estate investments.  Budgeted capital  improvements for 1999 will be funded
from property operations.

At  December  31,  1998,  the  Partnership  held  cash and cash  equivalents  of
$1,911,552.  The General  Partner  considers  this level of cash  reserves to be
adequate to meet the Partnership's operating needs. The General Partner believes
that  anticipated  operating  results  for 1999 will be  sufficient  to fund the
Partnership's  budgeted capital improvements for 1999, repay the current portion
of  the  Partnership's  mortgage  notes  and  provide  funds  for  any  required
environmental  remediation  as discussed  in "Item 1 - Business -  Environmental
Matters."

Long Term Liquidity:

For the long-term,  property operations will remain the primary source of funds.
In this regard,  the General Partner expects that the capital  improvements made
by the  Partnership  over the past few years will yield  improved cash flow from
property   operations  in  the  future.  If  the  Partnership's   cash  position
deteriorates,  the  General  Partner  may elect to defer  certain of the capital
improvements,   except   where   improvements   are  expected  to  increase  the
competitiveness or marketability of the Partnership's properties.

As previously announced, the Partnership has retained PaineWebber,  Incorporated
("PaineWebber")  as its exclusive  financial advisor to explore  alternatives to
maximize  the  value  of  the  Partnership,  including,  without  limitation,  a
transaction  in which  limited  partnership  interests  in the  Partnership  are
converted into cash. The Partnership,  through  PaineWebber,  provided financial
and other  information to interested  parties as part of an auction  process and
until early March 1999 was conducting  discussions with one bidder in an attempt
to reach a definitive  agreement  with respect to a sale  transaction.  In early




<PAGE>
March 1999, because the Partnership had been unable to conclude negotiations for
a transaction with such bidder, the Partnership  terminated such discussions and
commenced   discussions   with  respect  to  a  sale  transaction  with  another
well-financed  bidder who had been  involved in the  original  auction  process.
During  the last full  week of  March,  the  Partnership  entered  into a 45 day
exclusivity  agreement with such party.  It is possible that the General Partner
and its  affiliates  will receive  non-cash  consideration  for their  ownership
interests in  connection  with any such  transaction.  There can be no assurance
regarding whether any such agreement will be reached nor the terms thereof.

The Partnership placed Redwood Plaza on the market for sale effective October 1,
1996.

Income Allocations and Distributions:

Terms of the Amended Partnership Agreement specify that net losses for financial
reporting  purposes  are  allocated  99% to the limited  partners  and 1% to the
General Partner. Net income for financial reporting purposes is allocated to the
General Partner in an amount equal to the greater of (a) 1% of net income or (b)
the  cumulative  amount of the  contingent  portion of the MID paid for which no
income  allocation  has  previously  been  made;  any  remaining  net  income is
allocated to the limited partners. Therefore, for the years in the periods ended
December 31, 1998,  1997 and 1996,  net income of $4,326 and  $3,067,248 and net
loss of $1,193, respectively, were allocated to the General Partner. The limited
partners  were  allocated  net income of $428,288 and $261,526 and a net loss of
$118,109 for the years ended December 31, 1998, 1997 and 1996, respectively.

The Partnership  distributed $499,996 and $6,146,222 to the limited partners for
1998 and 1997, respectively. During the last week of March 1999, the Partnership
distributed  approximately $500,000 to limited partners of record as of March 1,
1999. The General Partner will continue to monitor the cash reserves and working
capital  needs of the  Partnership  to  determine  when cash flows will  support
additional  distributions  to the Unit holders.  The Partnership paid $1,774,877
and $500,000 of MID to the General Partner during 1997 and 1996, respectively.
No MID was paid during 1998.

YEAR 2000 DISCLOSURE
--------------------

State of readiness
------------------

The year 2000 problem is the result of computer programs being written using two
digits rather than four to define the  applicable  year.  Any programs that have
time-sensitive  software may recognize a date using "00" as the year 1900 rather
than  the  year  2000.   This  could   result  in  major   systems   failure  or
miscalculations.

Management has assessed its  information  technology  ("IT")  infrastructure  to
identify  any systems  that could be affected by the year 2000  problem.  The IT
used by the  Partnership  for  financial  reporting and  significant  accounting
functions was made year 2000 compliant  during recent systems  conversions.  The
software  utilized for these  functions  are licensed by third party vendors who
have warranted that their systems are year 2000 compliant.





<PAGE>
Management  is  in  the  process  of  evaluating  the  mechanical  and  embedded
technological systems at the various properties.  Management has inventoried all
such systems and queried suppliers,  vendors and manufacturers to determine year
2000 compliance. Management will complete assessment of findings by May 1, 1999.
In  circumstances  of  non-compliance  management  will work with the  vendor to
remedy the  problem or seek  alternative  suppliers  who will be in  compliance.
Management believes that the remediation of any outstanding year 2000 conversion
issues  will  not  have a  material  or  adverse  effect  on  the  Partnership's
operations. However, no estimates can be made as to the potential adverse impact
resulting  from the failure of third party  service  providers and vendors to be
year 2000 compliant.

Cost
----

The cost of IT and  embedded  technology  systems  testing  and  upgrades is not
expected to be material to the Partnership. Because all the IT systems have been
upgraded  over the last three years,  all such systems were  compliant,  or made
compliant at no additional cost by third party vendors.  Management  anticipates
the costs of assessing,  testing, and if necessary replacing embedded technology
components will be less than $50,000.  Such costs will be funded from operations
of the Partnership.

Risks
-----

Ultimately,  the potential impact of the year 2000 issue will depend not only on
the corrective measures the Partnership undertakes, but also on the way in which
the year 2000 issue is  addressed  by  government  agencies  and  entities  that
provide services or supplies to the  Partnership.  Management has not determined
the most likely worst case scenario to the  Partnership.  As management  studies
the findings of its property  systems  assessment and testing,  management  will
develop  a better  understanding  of what  would  be the  worst  case  scenario.
Management  believes  that  progress  on all  areas is  proceeding  and that the
Partnership  will  experience  no  adverse  effect  as a result of the year 2000
issue. However, there is no assurance that this will be the case.

Contingency plans
-----------------

Management  is  developing  contingency  plans to  address  potential  year 2000
non-compliance of IT and embedded technology  systems.  Management believes that
failure of any IT system could have an adverse  impact on  operations.  However,
management  believes  that  alternative  systems  are  available  that  could be
utilized to minimize  such impact.  Management  believes that any failure in the
embedded  technology  systems  could have an adverse  impact on that  property's
performance.  Management  will assess these risks and develop  plans to mitigate
possible failures by June, 1999.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------  ----------------------------------------------------------

Not Applicable.
<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------   -------------------------------------------

<TABLE>
<CAPTION>

                                                                                                       Page
                                                                                                      Number
                                                                                                      ------
INDEX TO FINANCIAL STATEMENTS
-----------------------------

Financial Statements:

<S>                                                                                                      <C>
   Report of Independent Public Accountants.......................................                       18

   Balance Sheets at December 31, 1998 and 1997...................................                       19

   Statements of Operations for each of the three years in the period
      ended December 31, 1998.....................................................                       20

   Statements of Partners' Equity (Deficit) for each of the three years
      in the period ended December 31, 1998.......................................                       21

   Statements of Cash Flows for each of the three years in the period
      ended December 31, 1998.....................................................                       22

   Notes to Financial Statements..................................................                       24

   Financial Statement Schedule:

      Schedule III - Real Estate Investments and Accumulated
         Depreciation and Amortization............................................                       35

</TABLE>

All other  schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.


<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Partners of
McNeil Real Estate Fund XIV, Ltd.:

We have audited the accompanying  balance sheets of McNeil Real Estate Fund XIV,
Ltd. (a California  limited  partnership)  as of December 31, 1998 and 1997, and
the related statements of operations,  partners' equity (deficit) and cash flows
for each of the  three  years in the  period  ended  December  31,  1998.  These
financial  statements and the schedule referred to below are the  responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements and the schedule based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of McNeil Real Estate Fund XIV,
Ltd. as of December 31, 1998 and 1997, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole.  The  schedule  listed  in the index to
financial  statements is presented for purposes of complying with the Securities
and  Exchange  Commission's  rules  and  is not  part  of  the  basic  financial
statements.  The schedule has been subjected to the auditing  procedures applied
in our audits of the basic  financial  statements  and, in our  opinion,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the basic financial statements taken as a whole.


/s/ Arthur Andersen LLP

Dallas, Texas
   March 19, 1999


<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                  December 31,
                                                                        ----------------------------------
                                                                             1998                 1997
                                                                        ------------         -------------

ASSETS
------

Real estate investments:
<S>                                                                     <C>                  <C>         
   Land ........................................................        $  4,663,828         $  4,663,828
   Building and improvements ...................................          37,237,007           36,220,158
                                                                        ------------         ------------
                                                                          41,900,835           40,883,986
   Less:  Accumulated depreciation .............................         (22,502,903)         (20,632,796)
                                                                        ------------         ------------
                                                                          19,397,932           20,251,190

Asset held for sale ............................................           2,192,549            1,932,910

Cash and cash equivalents ......................................           1,911,552            1,292,615
Cash segregated for security deposits ..........................             409,259              431,148
Accounts receivable ............................................              84,539              663,087
Prepaid expenses and other assets ..............................             139,313              141,281
Escrow deposits ................................................             607,161              664,294
Deferred borrowing costs, net of accumulated
   amortization of $532,052 and $441,912 at
   December 31, 1998 and 1997, respectively ....................             858,940              949,080
                                                                        ------------         ------------

                                                                        $ 25,601,245         $ 26,325,605
                                                                        ============         ============


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
------------------------------------------

Mortgage notes payable, net ....................................        $ 23,466,298         $ 23,891,012
Accounts payable ...............................................             106,574               69,128
Accrued interest ...............................................             161,403              164,766
Accrued property taxes .........................................                  --              101,200
Other accrued expenses .........................................             117,056               73,912
Payable to affiliates - General Partner ........................             873,553              211,757
Provision for environmental remediation ........................             600,000                   --
Deferred gain on involuntary conversions .......................                  --              346,114
Security deposits and deferred rental revenue ..................             390,627              368,672
                                                                        ------------         ------------
                                                                          25,715,511           25,226,561
                                                                        ------------         ------------

Partners' equity (deficit):
   Limited  partners - 100,000  limited partnership units
     authorized;  86,534 limited partnership units issued
     and outstanding at December 31, 1998 and 1997 .............           1,097,737            1,763,445
   General Partner .............................................          (1,212,003)            (664,401)
                                                                        ------------         ------------
                                                                            (114,266)           1,099,044
                                                                        ------------         ------------
                                                                        $ 25,601,245         $ 26,325,605
                                                                        ============         ============
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                             For the Years Ended December 31,
                                                   --------------------------------------------------
                                                       1998                1997               1996
                                                   -----------         -----------        -----------
Revenue:
<S>                                                <C>                 <C>                <C>        
   Rental revenue .........................        $ 8,662,524         $ 8,996,989        $ 9,429,880
   Interest ...............................            103,615             210,981            106,754
   Gain on involuntary conversions ........            393,795                  --                 --
   Gain on sales of real estate ...........                 --           3,081,755                 --
                                                   -----------         -----------        -----------
     Total revenue ........................          9,159,934          12,289,725          9,536,634
                                                   -----------         -----------        -----------

Expenses:
   Interest ...............................          2,172,940           2,400,690          2,682,467
   Depreciation and amortization ..........          1,870,107           1,882,343          2,185,099
   Property taxes .........................            649,915             670,709            713,729
   Personnel expenses .....................            996,078             946,896            925,738
   Repairs and maintenance ................          1,082,452           1,148,956          1,145,081
   Utilities ..............................            479,295             514,372            495,851
   Property management fees -
     affiliates ...........................            429,016             451,074            465,738
   Other property operating expenses ......            474,818             606,017            516,913
   Provision for environmental
     remediation ..........................            600,000                  --                 --
   General and administrative .............            359,374              92,005            232,097
   General and administrative -
     affiliates ...........................            213,325             247,889            293,223
                                                   -----------         -----------        -----------
     Total expenses .......................          9,327,320           8,960,951          9,655,936
                                                   -----------         -----------        -----------

Net income (loss) .........................        $  (167,386)        $ 3,328,774        $  (119,302)
                                                   ===========         ===========        ===========

Net income (loss) allocated to
   limited partners .......................        $  (165,712)        $   261,526        $  (118,109)
Net income (loss) allocated to
   General Partner ........................             (1,674)          3,067,248             (1,193)
                                                   -----------         -----------        -----------

Net income (loss) .........................        $  (167,386)        $ 3,328,774        $  (119,302)
                                                   ===========         ===========        ===========

Net income (loss) per limited
  partnership unit ........................        $     (1.91)        $      3.02        $     (1.36)
                                                   ===========         ===========        ===========

Distributions per limited partnership
   unit ...................................        $      5.78         $     71.02        $        --
                                                   ===========         ===========        ===========
</TABLE>



                 See accompanying notes to financial statements.
 
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

              For the Years Ended December 31, 1998, 1997 and 1996


<TABLE>
<CAPTION>
                                                                                             Total
                                                    General            Limited             Partners'
                                                    Partner            Partners             Equity
                                                 ------------        ------------        ------------
<S>                                              <C>                 <C>                 <C>        
Balance at December 31, 1995 ............        $(2,546,836)        $ 7,766,250         $ 5,219,414

Net loss ................................             (1,193)           (118,109)           (119,302)

Management Incentive Distribution........           (618,786)                 --            (618,786)
                                                 -----------         -----------         -----------

Balance at December 31, 1996 ............         (3,166,815)          7,648,141           4,481,326

Net income ..............................          3,067,248             261,526           3,328,774

Management Incentive Distribution .......           (564,834)                 --            (564,834)

Distributions to limited partners .......                 --          (6,146,222)         (6,146,222)
                                                 -----------         -----------         -----------

Balance at December 31, 1997 ............           (664,401)          1,763,445           1,099,044

Net income ..............................             (1,674)           (165,712)           (167,386)

Management Incentive Distribution .......           (545,928)                 --            (545,928)

Distributions to limited partners .......                 --            (499,996)           (499,996)
                                                 -----------         -----------         -----------

Balance at December 31, 1998 ............        $(1,212,003)        $ 1,097,737         $  (114,266)
                                                 ===========         ===========         ===========
</TABLE>





                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                            STATEMENTS OF CASH FLOWS

                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                               For the Years Ended December 31,
                                                    -------------------------------------------------------
                                                         1998                1997                 1996
                                                    -------------        -------------        -------------
Cash flows from operating activities:
<S>                                                 <C>                  <C>                  <C>         
   Cash received from tenants ..............        $  8,768,184         $  8,962,254         $  9,395,118
   Cash paid to suppliers ..................          (3,319,924)          (3,253,015)          (3,182,745)
   Cash paid to affiliates .................            (526,473)            (665,534)            (744,666)
   Interest received .......................             103,615              210,981              106,754
   Interest paid ...........................          (2,032,182)          (2,246,442)          (2,450,431)
   Property taxes paid .....................            (661,664)            (635,937)            (715,239)
                                                    ------------         ------------         ------------
Net cash provided by operating
   activities ..............................           2,331,556            2,372,307            2,408,791
                                                    ------------         ------------         ------------

Cash flows from investing activities:
   Additions to real estate
     investments ...........................          (1,276,488)            (668,126)            (834,036)
   Proceeds from sales of real estate ......                  --            9,868,596                   --
   Insurance proceeds from gain on
     involuntary conversions ...............             542,560                   --                   --
                                                    ------------         ------------         ------------
Net cash (used in) provided by
   investing activities ....................            (733,928)           9,200,470             (834,036)
                                                    ------------         ------------         ------------

Cash flows from financing activities:
   Principal payments on mortgage
     notes payable .........................            (478,695)            (540,595)            (588,801)
   Retirement of mortgage notes
     payable ...............................                  --           (3,722,370)                  --
   Management incentive distribution
     paid ..................................                  --           (1,774,877)            (500,000)
   Distributions to limited partners .......            (499,996)          (6,146,222)                  --
                                                    ------------         ------------         ------------

Net cash used in financing activities.......            (978,691)         (12,184,064)          (1,088,801)
                                                    ------------         ------------         ------------

Net increase (decrease) in cash
     and cash equivalents ..................             618,937             (611,287)             485,954

Cash and cash equivalents at
     beginning of year .....................           1,292,615            1,903,902            1,417,948
                                                    ------------         ------------         ------------

Cash and cash equivalents at end
     of year ...............................        $  1,911,552         $  1,292,615         $  1,903,902
                                                    ============         ============         ============
</TABLE>


See  discussion of noncash  investing   and   financing  activities in  Note 6 -
"Sale of Real Estate" and in Note 7 - "Gain on Involuntary Conversions."


                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                            STATEMENTS OF CASH FLOWS

           Reconciliation of Net Income (Loss) to Net Cash Provided by
                              Operating Activities

<TABLE>
<CAPTION>

                                                                For the Years Ended December 31,
                                                     ----------------------------------------------------
                                                          1998               1997                1996
                                                     ------------        -----------         ------------
<S>                                                  <C>                 <C>                 <C>         
Net income (loss) ...........................        $  (167,386)        $ 3,328,774         $  (119,302)
                                                     -----------         -----------         -----------

Adjustments to reconcile net income
   (loss) to net cash provided by
   operating activities:
   Depreciation and amortization ............          1,870,107           1,882,343           2,185,099
   Amortization of deferred
     borrowing costs ........................             90,140              95,657              95,658
   Amortization of discounts on
     mortgage notes payable .................             53,981              90,949             140,521
   Gain on sales of real estate .............                 --          (3,081,755)                 --
   Gain on involuntary conversions ..........           (393,795)                 --                  --
   Provision for environmental
     remediation ............................            600,000                  --                  --
   Changes in assets and liabilities:
     Cash segregated for security
       deposits .............................             21,889             (31,782)            (29,269)
     Accounts receivable ....................             83,669             137,088             (34,898)
     Prepaid expenses and other
       assets ...............................              1,968              18,289              26,666
     Escrow deposits ........................             57,133              17,136             163,192
     Accounts payable .......................             37,446             (34,619)            (62,687)
     Accrued property taxes .................           (101,200)                219                 104
     Accrued interest .......................             (3,363)            (32,358)             (4,143)
     Other accrued expenses .................             43,144              (8,417)              2,604
     Payable to affiliates - General
       Partner ..............................            115,868              33,429              14,295
     Security deposits and deferred
       rental revenue .......................             21,955             (42,646)             30,951
                                                     -----------         -----------         -----------
     Total adjustments ......................          2,498,942            (956,467)          2,528,093
                                                     -----------         -----------         -----------

Net cash provided by operating
   activities ...............................        $ 2,331,556         $ 2,372,307         $ 2,408,791
                                                     ===========         ===========         ===========
</TABLE>



                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------

Organization
------------

McNeil Real Estate Fund XIV, Ltd. (the  "Partnership")  was organized  April 30,
1982 as a limited  partnership  under the provisions of the  California  Uniform
Limited  Partnership  Act.  The  general  partner of the  Partnership  is McNeil
Partners,  L.P. (the "General  Partner"),  a Delaware  limited  partnership,  an
affiliate of Robert A.  McNeil.  The  Partnership  is governed by an amended and
restated  agreement of limited  partnership dated September 20, 1991, as amended
(the "Amended Partnership  Agreement").  The principal place of business for the
Partnership  and General  Partner is 13760 Noel Road,  Suite 600, LB70,  Dallas,
Texas, 75240.

The Partnership is engaged in diversified real estate activities,  including the
ownership,  operation and management of residential  and commercial  real estate
and other real estate  related  assets.  At December 31, 1998,  the  Partnership
owned five  income-producing  properties  as  described  in Note 4 - Real Estate
Investments.

As previously announced, the Partnership has retained PaineWebber,  Incorporated
("PaineWebber")  as its exclusive  financial advisor to explore  alternatives to
maximize  the  value  of  the  Partnership,  including,  without  limitation,  a
transaction  in which  limited  partnership  interests  in the  Partnership  are
converted into cash. The Partnership,  through  PaineWebber,  provided financial
and other  information to interested  parties as part of an auction  process and
until early March 1999 was conducting  discussions with one bidder in an attempt
to reach a definitive  agreement  with respect to a sale  transaction.  In early
March 1999, because the Partnership had been unable to conclude negotiations for
a transaction with such bidder, the Partnership  terminated such discussions and
commenced   discussions   with  respect  to  a  sale  transaction  with  another
well-financed  bidder who had been  involved in the  original  auction  process.
During  the last full  week of  March,  the  Partnership  entered  into a 45 day
exclusivity  agreement with such party.  It is possible that the General Partner
and its  affiliates  will receive  non-cash  consideration  for their  ownership
interests in  connection  with any such  transaction.  There can be no assurance
regarding whether any such agreement will be reached nor the terms thereof.

On October 1, 1996, the Partnership placed Redwood Plaza on the market for sale.


<PAGE>

Basis of Presentation
---------------------

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles ("GAAP").  The preparation of financial
statements in conformity  with GAAP  requires  management to make  estimates and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

The  Partnership's  financial  statements  include the accounts of the following
listed tier  partnerships.  These single asset tier  partnerships were formed to
accommodate the refinancings of the related  properties.  The ownership interest
of the  Partnership  and the  General  Partner in each tier is  detailed  on the
following  page.  The  Partnership   retains  effective  control  of  each  tier
partnership.  The General Partner's  minority interest is not presented as it is
either negative or immaterial.

<TABLE>
<CAPTION>

                                                                      % of Ownership Interest
     Tier Partnership                                         Partnership         General Partner
     ----------------                                         -----------         ---------------

     Limited partnerships:
<S>                                                                   <C>                  <C>
       Tanglewood Fund XIV Associates, L.P................            99%                  1%
       Thunder Hollow Fund XIV Limited
         Partnership (a)..................................           100                   -
       Windrock Fund XIV, L.P. (a)........................           100                   -

     General partnerships:
       Embarcadero Associates.............................            99                   1
</TABLE>

     (a) The general partner of these  partnerships is a corporation whose stock
         is 100% owned by the Partnership.

Adoption of Recent Accounting Pronouncements
--------------------------------------------

The Partnership has adopted Statement of Financial Accounting Standards No. 131,
"Disclosures  About  Segments of an Enterprise  and Related  Information  ("SFAS
131"). SFAS 131 requires an enterprise to report financial information about its
reportable operating segments, which are defined as components of a business for
which  separate  financial  information  is  evaluated  regularly  by the  chief
decision  maker  in  allocating   resources  and  assessing   performance.   The
Partnership  does not  prepare  such  information  for  internal  use,  since it
analyzes  the   performance  of  and  allocates   resources  for  each  property
individually.  The Partnership's  management has determined that it operates one
line of business and it would be  impracticable  to report segment  information.
Therefore, the adoption of SFAS 131 has no impact on the Partnership's financial
statements.



<PAGE>
Real Estate Investments
-----------------------

Real estate investments are generally stated at the lower of depreciated cost or
fair value. Real estate investments are reviewed for impairment  whenever events
or changes in  circumstances  indicate  that their  carrying  amounts may not be
recoverable in accordance with Statement of Financial  Accounting  Standards No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed Of". When the carrying value of a property exceeds the sum
of all estimated  future cash flows, an impairment  loss is recognized.  At such
time,  a  write-down  is  recorded  to reduce the basis of the  property  to its
estimated fair value.

Improvements and betterments are capitalized and expensed  through  depreciation
charges. Repairs and maintenance are charged to operations as incurred.

Asset Held for Sale
-------------------

The asset held for sale is stated at the lower of depreciated cost or fair value
less costs to sell.  Depreciation  and  amortization  on the asset ceased at the
time it was placed on the market for sale.

Depreciation
------------

Buildings and improvements are depreciated using the  straight-line  method over
the  estimated  useful lives of the assets,  ranging from 5 to 25 years.  Tenant
improvements are amortized over the terms of the related tenant leases using the
straight-line method.

Cash and Cash Equivalents
-------------------------

Cash  and  cash  equivalents  include  cash on hand  and  cash on  deposit  with
financial  institutions  with  original  maturities  of  three  months  or less.
Carrying amounts for cash and cash equivalents approximate fair value.

Escrow Deposits
---------------

The  Partnership is required to maintain  escrow accounts in accordance with the
terms of various  mortgage  agreements.  These escrow accounts are controlled by
the  mortgagee  and are used for payment of property  taxes,  hazard  insurance,
capital improvements and/or property  replacements.  Carrying amounts for escrow
deposits approximate fair value.

Deferred Borrowing Costs
------------------------

Loan fees and other related costs incurred to obtain long-term financing on real
property are  capitalized  and amortized  using a method that  approximates  the
effective  interest  method  over  the  terms  of the  related  mortgage  notes.
Amortization of deferred  borrowing costs is included in interest expense on the
Statements of Operations.




<PAGE>
Discounts on Mortgage Notes Payable
-----------------------------------

Discounts on mortgage  notes payable are amortized  over the remaining  terms of
the related mortgage notes using the effective interest method.  Amortization of
discounts on mortgage notes is included in interest expense on the Statements of
Operations.

Rental Revenue
--------------

The Partnership  leases its residential  properties under  short-term  operating
leases. Lease terms generally are less than one year in duration.  Rental income
is recognized as earned.

The Partnership leases its commercial  property under  non-cancelable  operating
leases.  Certain leases provide concessions and/or periods of escalating or free
rent. Rental income is recognized on a straight-line  basis over the term of the
related  lease.  The excess of rental  income  recognized  over the  contractual
rental  payments  is  recorded  as accrued  rent  receivable  and is included in
accounts receivable on the Balance Sheets.

Income Taxes
------------

No provision for Federal  income taxes is necessary in the financial  statements
of the  Partnership  because,  as a  partnership,  it is not  subject to Federal
income tax and the tax effect of its activities accrues to the partners.

Allocation of Net Income and Net Loss
-------------------------------------

Net  losses of the  Partnership  for both  financial  statement  and  income tax
reporting  purposes  are  allocated  99% to the limited  partners  and 1% to the
General Partner.

Net  income of the  Partnership  for both  financial  statement  and  income tax
reporting purposes is allocated to the General Partner in an amount equal to the
greater  of (a) 1% of net  income  or (b) the  cumulative  amount  paid  for the
Management  Incentive  Distribution  ("MID") for which no income  allocation has
previously  been  made  (see  Note  2 -  "Transactions  with  Affiliates").  Any
remaining net income is allocated to the limited partners.

Federal  income tax law provides  that the  allocation of loss to a partner will
not be  recognized  unless the  allocation  is in  accordance  with a  partner's
interest in the partnership or the allocation has substantial  economic  effect.
Internal  Revenue  Code Section  704(b) and  accompanying  Treasury  Regulations
establish  criteria for allocation of  partnership  deductions  attributable  to
debt. The  Partnership's  tax allocations for 1998, 1997 and 1996 have been made
in accordance with these provisions.









<PAGE>
Distributions
-------------
Pursuant to the  Amended  Partnership  Agreement  and at the  discretion  of the
General  Partner,  distributions  during  each  taxable  year  shall  be made as
follows:

(a)   First,  to the  General  Partner,  in an  amount  equal  to the  MID  (see
      Note  2 -  "Transactions  with Affiliates"); and

(b)   any  remaining  distributable cash, as defined,  shall be distributed 100%
      to the limited  partners.  

The  Partnership  paid  distributions  of $499,996 and $6,146,222 to the limited
partners  in 1998 and  1997,  respectively.  No  distributions  were paid to the
limited  partners in 1996.  The  Partnership  paid or accrued  distributions  of
$545,928,  $564,834 and $618,786 for the benefit of the General Partner in 1998,
1997 and 1996,  respectively.  These  distributions  are the MID pursuant to the
Amended  Partnership  Agreement.  The General  Partner has waived the collection
terms of  reimbursable  expenses and MID, and has elected for the Partnership to
pay  limited  partner  distributions  before the  payment of such  amounts.  The
Partnership plans to distribute  approximately  $500,000 to the limited partners
in March 1999.

Net Income (Loss) Per Limited Partnership Unit
----------------------------------------------

Net income (loss) per limited partnership unit ("Units") is computed by dividing
net income  (loss)  allocated to the limited  partners by the  weighted  average
number of Units  outstanding.  Per Unit  information  has been computed based on
86,534 Units outstanding in 1998, 1997 and 1996.

NOTE 2 - TRANSACTIONS WITH AFFILIATES
-------------------------------------

The Partnership pays property  management fees equal to 5% of the  Partnership's
gross rental  receipts to McNeil Real Estate  Management,  Inc.  ("McREMI"),  an
affiliate of the General Partner, for providing property management services for
the Partnership's residential and commercial properties and leasing services for
its residential  properties.  McREMI may choose to perform leasing  services for
the  Partnership's  commercial  properties,  in which case McREMI will receive a
property  management  fee  equal  to 3% of  the  gross  rental  receipts  of the
Partnership's  commercial  properties  plus a commission for performing  leasing
services equal to the prevailing market rate for such services in the area where
the property is located.

The  Partnership  reimburses  McREMI  for  its  costs,  including  overhead,  of
administering the Partnership's affairs.

Under terms of the Amended Partnership Agreement,  the Partnership is paying MID
to the General  Partner.  The maximum MID is  calculated  as 1% of the  tangible
asset value of the Partnership.  Tangible asset value is determined by using the
greater of (i) an amount  calculated by applying a capitalization  rate of 9% to
the annualized net operating  income of each property or (ii) a value of $10,000
per apartment  unit for  residential  property and $50 per gross square foot for
commercial property to arrive at the property tangible asset value. The property
tangible  asset  value  is then  added to the book  value  of all  other  assets
excluding  intangible  assets.  The maximum MID percentage  decreases to .75% in
2000, .50% in 2001 and .25% thereafter.

<PAGE>
The MID will be paid to the  extent of the  lesser of the  Partnership's  excess
cash flow, as defined,  or net operating  income,  as defined (the  "Entitlement
Amount"),  and may be paid (i) in cash, unless there is insufficient cash to pay
the  distribution  in which event any unpaid  portion not taken in Units will be
deferred and is payable,  without interest, from the first available cash and/or
(ii) in Units.  A maximum of 50% of the MID may be paid in Units.  The number of
Units  issued in payment  of the MID is based on the  greater of $50 per Unit or
the net tangible asset value, as defined,  per Unit. During 1998, 1997 and 1996,
no Units were issued as payment for the MID.

During  1991,  the  Partnership  amended  its  capitalization  policy  and began
capitalizing certain costs of improvements and betterments which, under policies
of prior  management,  had been  expensed  when  incurred.  The  purpose  of the
amendment was to more properly recognize items which were capital in nature. The
effect of the amendment  standing alone was evaluated at the time the change was
made and  determined  not to be  material  to the  financial  statements  of the
Partnership  in 1991,  nor was it expected  to be  material in any future  year.
However,  the amendment  does have a material  effect on the  calculation of the
Entitlement   Amount  which  determines  the  amount  of  MID  earned.   Capital
improvements  are  excluded  from cash flow,  as defined.  The  majority of base
period cash flow was measured under the previous  capitalization  policy,  while
incentive  period cash flow is determined  using the amended  policy.  Under the
amended  policy,  more  items  are  capitalized,  and cash flow  increases.  The
amendment of the  capitalization  policy did not  materially  affect the MID for
1998,  1997 or 1996 as the  Entitlement  Amount  was  sufficient  to pay the MID
notwithstanding the amendment of the capitalization policy.

Any amount of MID that is paid to the  General  Partner in Units will be treated
as if cash is distributed to the General Partner and is then  contributed to the
Partnership by the General Partner. The MID represents a return of equity to the
General Partner for increasing cash flow, as defined, and accordingly is treated
as a distribution.

Compensation and  reimbursements  paid or accrued for the benefit of the General
Partner and its affiliates are as follows:

<TABLE>
<CAPTION>
                                                             For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                       1998               1997               1996
                                                   --------------     --------------    ---------------
Property management fees -
<S>                                                <C>                <C>               <C>            
   affiliates..............................        $      429,016     $      451,074    $       465,738
Charged to general and
   administrative - affiliates:
   Partnership administration..............               213,325            247,889            293,223
                                                    -------------      -------------     --------------

                                                   $      642,341     $      698,963    $       758,961
                                                    =============      =============     ==============

Charged to General Partner's deficit:
   Management Incentive Distribution               $      545,928     $      564,834    $       618,786
                                                    =============      =============     ==============
</TABLE>


<PAGE>
Payable to  affiliates - General  Partner at December 31, 1998 and 1997 consists
of reimbursable costs, property management fees and MID that are due and payable
from current operations.  The General Partner has waived the collection terms of
reimbursable  expenses  and MID,  and has  elected  for the  Partnership  to pay
limited partner distributions before the payment of such amounts.

NOTE 3 - TAXABLE LOSS
---------------------

McNeil Real Estate Fund XIV, Ltd. is a partnership and is not subject to Federal
and state income taxes.  Accordingly,  no  recognition  has been given to income
taxes in the  accompanying  financial  statements of the  Partnership  since the
income or loss of the  Partnership  is to be  included in the tax returns of the
individual  partners.  The  tax  returns  of  the  Partnership  are  subject  to
examination by Federal and state taxing authorities. If such examinations result
in  adjustments  to  distributive  shares of  taxable  income  or loss,  the tax
liability of the partners could be adjusted accordingly.

The  Partnership's  net assets and liabilities for tax purposes exceeded the net
assets  and  liabilities  for  financial   reporting   purposes  by  $2,876,913,
$2,059,398 and $1,802,969 in 1998, 1997 and 1996, respectively.

NOTE 4 - REAL ESTATE INVESTMENTS
--------------------------------

The  basis  and  accumulated  depreciation  of  the  Partnership's  real  estate
investments at December 31, 1998 and 1997 are set forth in the following tables:

<TABLE>
<CAPTION>
                                                   Buildings and       Accumulated           Net Book
       1998                         Land           Improvements        Depreciation            Value
       ----                    --------------      ------------        ------------       ----------------

Embarcadero Club
<S>                            <C>                 <C>                 <C>                 <C>           
   College Park, GA            $    1,216,712      $   12,806,176      $   (7,980,799)     $    6,042,089
Tanglewood Village
   Carson City, NV                    705,859           5,173,959          (2,952,658)          2,927,160
Thunder Hollow
   Bensalem Township, PA            1,837,539          13,357,311          (8,010,096)          7,184,754
Windrock
   El Paso, TX                        903,718           5,899,561          (3,559,350)          3,243,929
                                -------------       -------------       -------------       -------------
                               $    4,663,828      $   37,237,007      $  (22,502,903)     $   19,397,932
                                =============       =============       =============       =============

                                                   Buildings and       Accumulated           Net Book
       1997                         Land           Improvements        Depreciation            Value
       ----                    --------------      ------------        ------------       ---------------

Embarcadero Club               $    1,216,712      $   12,552,561      $   (7,378,627)     $    6,390,646
Tanglewood Village                    705,859           5,131,625          (2,682,535)          3,154,949
Thunder Hollow                      1,837,539          12,744,793          (7,314,921)          7,267,411
Windrock                              903,718           5,791,179          (3,256,713)          3,438,184
                                -------------       -------------       -------------       -------------
                               $    4,663,828      $   36,220,158      $  (20,632,796)     $   20,251,190
                                =============       =============       =============       =============
</TABLE>
<PAGE>
On October 1, 1996,  the General  Partner  placed  Country Hills Plaza,  Midvale
Plaza and Redwood  Plaza on the market for sale.  The  Partnership  sold Country
Hills  Plaza  and  Midvale  Plaza on  April 8,  1997  and  September  24,  1997,
respectively.  Redwood Plaza,  located in Salt Lake City,  Utah,  remains on the
market for sale. The Partnership's investment in Redwood Plaza was classified as
an asset held for sale at December 31, 1998 and 1997.  The net book value of the
Partnership's  investment  in Redwood  Plaza at  December  31, 1998 and 1997 was
$2,192,549 and $1,932,910, respectively.

Included in the Partnership's Statements of Operations are results of operations
for the assets  held for sale.  Results of  operations  for assets held for sale
amounted  to  ($339,318),  $440,868  and  $459,447  for  1998,  1997  and  1996,
respectively.  Results of  operations  are  operating  revenues  less  operating
expenses including interest expense and depreciation and amortization.

The Partnership  leases its commercial  properties under various  non-cancelable
operating leases.  Future minimum rents to be received under terms of the leases
are as follows:

       1999............................             $      505,037
       2000............................                    492,670
       2001............................                    451,149
       2002............................                    405,419
       2003............................                    270,254
       Thereafter......................                    805,950
                                                     -------------
                                                    $    2,930,479
                                                     =============
Future  minimum rents do not include  contingent  rents based on sales volume of
tenants.  No contingent  rents were  collected  for the year ended  December 31,
1998.  Contingent  rents  amounted  to $2,591  and  $2,462  for the years  ended
December  31,  1997 and 1996,  respectively.  Future  minimum  rents also do not
include expense reimbursements for common area maintenance,  property taxes, and
other expenses.  These expense reimbursements amounted to $74,579,  $206,243 and
$349,600 for the years ended  December 31,  1998,  1997 and 1996,  respectively.
These  contingent  rents and  expense  reimbursements,  which are  comprised  of
amounts generated by assets held for sale, are included in rental revenue on the
Statements of Operations.

The Partnership's real estate investments and asset held for sale are encumbered
by mortgage notes as discussed in Note 5 - "Mortgage Notes Payable."


<PAGE>
NOTE 5 - MORTGAGE NOTES PAYABLE
-------------------------------

The following table sets forth the mortgage notes of the Partnership at December
31, 1998 and 1997.  All  mortgage  notes are secured by the related  real estate
investments or asset held for sale:

<TABLE>
<CAPTION>
                           Mortgage         Annual           Monthly
                             Lien          Interest         Payments/                     December 31,
Property                 Position (a)       Rates %     Maturity Date (d)          1998                1997
--------                 -------------      -------     -----------------     ---------------     --------------
<S>                      <C>                  <C>          <C>       <C>        <C>                <C>          
Embarcadero Club         First                7.875        57,280    12/23      $   7,501,825      $   7,594,425
                                                                                 ------------       ------------

Redwood Plaza            First                9.875        14,660    06/06            929,452          1,009,255
                         Discount (b)                                                (120,878)          (145,251)
                                                                                 ------------      -------------
                                                                                      808,574            864,004
                                                                                 ------------      -------------

Tanglewood Village       First                6.750        20,176    11/18          2,642,890          2,704,333
                                                                                 ------------      -------------

Thunder Hollow (c)       First                8.150        82,131    07/03 (d)      9,309,136          9,526,308
                         Discount (b)                                                (156,191)          (185,799)
                                                                                 ------------      -------------
                                                                                    9,152,945          9,340,509
                                                                                 ------------      -------------

Windrock                 First                9.440        28,859    04/02 (d)      3,360,064          3,387,741
                                                                                 ------------      -------------
                                                                                $  23,466,298     $   23,891,012
                                                                                 ============      =============
</TABLE>

(a)    The debt is non-recourse to the Partnership.

(b)    The discount on the Thunder Hollow mortgage note is based on an effective
       interest rate of 8.62%.  The discount on the Redwood Plaza  mortgage note
       is based on an effective interest rate of 14.30%.

(c)    The Thunder  Hollow  mortgage note was obtained under the terms of a Real
       Estate Mortgage Investment Conduit financing. Terms of the Thunder Hollow
       mortgage  note  specify that  prepayments  in whole or part prior to July
       2000 are subject to a Yield Maintenance premium, as defined.

(d)    Balloon payments on the mortgage notes are due as follows:

                 Property                  Balloon Payment      Date
                 --------                  ---------------      ----

                Windrock                    $   3,249,832       04/02
                Thunder Hollow                  8,080,794       07/03



<PAGE>
Scheduled principal  maturities of the mortgage notes under existing agreements,
before consideration of discounts of $277,069, are as follows:

                1999 ..........................        $      519,886
                2000 ..........................               564,669
                2001...........................               613,361
                2002...........................             3,885,548
                2003...........................             8,594,093
                Thereafter ....................             9,565,810
                                                        -------------
                                                       $   23,743,367

Based on borrowing  rates  currently  available to the  Partnership for mortgage
loans  with  similar  terms  and  average  maturities,  the  fair  value  of the
Partnership's   mortgage  notes  payable  was   approximately   $23,928,000  and
$24,889,000 at December 31, 1998 and 1997, respectively.

NOTE 6 - SALES OF REAL ESTATE
-----------------------------

On April 8, 1997, the  Partnership  sold Country Hills Plaza to an  unaffiliated
purchaser for a cash sales price of $6,610,000.  Cash proceeds from the sale, as
well as the gain on sale are detailed below.

<TABLE>
<CAPTION>
                                                                      Gain on Sale           Cash Proceeds
                                                                     --------------         ---------------
     <S>                                                             <C>                    <C>           
     Cash sales price.......................................         $   6,610,000          $    6,610,000

     Selling costs..........................................              (185,304)               (185,304)
     Mortgage discount written off..........................              (397,561)
     Straight-line rent receivables written off.............               (26,828)
     Basis of real estate sold..............................            (3,791,948)
                                                                     -------------           -------------

     Gain on sale of real estate............................         $   2,208,359
                                                                      ============
     Proceeds from sale of real estate......................                                     6,424,696
     Retirement of mortgage note payable....................                                    (2,231,440)
                                                                                             -------------

     Net cash proceeds......................................                                $    4,193,256
                                                                                             =============
</TABLE>

<PAGE>

On September 24, 1997,  the  Partnership  sold Midvale Plaza to an  unaffiliated
purchaser for a cash sales price of $3,500,000.  Cash proceeds from the sale, as
well as the gain on sale are detailed below.

<TABLE>
<CAPTION>
                                                                      Gain on Sale           Cash Proceeds
                                                                     --------------         ---------------
<S>                                                                  <C>                    <C>           
     Cash sales price.......................................         $   3,500,000          $    3,500,000

     Selling costs..........................................               (56,100)                (56,100)
     Mortgage discount written off..........................              (241,778)
     Straight-line rent receivables written off.............               (85,197)
     Prepaid leasing commission written off.................               (14,338)
     Basis of real estate sold..............................            (2,229,191)
                                                                     -------------           -------------

     Gain on sale of real estate............................         $     873,396
                                                                      ============
     Proceeds from sale of real estate......................                                     3,443,900
     Retirement of mortgage note payable....................                                    (1,490,930)
                                                                                             -------------

     Net cash proceeds......................................                                $    1,952,970
                                                                                             =============
</TABLE>

NOTE 7 - GAIN ON INVOLUNTARY CONVERSIONS
----------------------------------------

On July 18,  1997, a fire caused  $49,498 of damage to two units of  Embarcadero
Club  Apartments.  In  1998,  the  Partnership  received  $39,498  of  insurance
reimbursements  to cover the repair and  restoration  costs to Embarcadero  Club
Apartments.  The excess of the insurance  reimbursements received over the basis
of  the  property  damaged  was  recorded  as  a  $17,998  gain  on  involuntary
conversion. The gain on involuntary conversion was deferred on the Partnership's
December  31, 1997  Balance  Sheet  because it was not  collected;  the gain was
recognized  on the  Partnership's  Statement  of  Operations  for the year ended
December 31, 1998.

On November 14, 1997, a fire caused $544,716 of damage to eight units of Thunder
Hollow  Apartments.  In 1998,  the  Partnership  received  $503,062 of insurance
reimbursements  to cover the repair  and  restoration  costs to  Thunder  Hollow
Apartments.  An additional  $31,600 of insurance  reimbursements was received in
January 1999. The excess of the insurance reimbursements received over the basis
of  the  property  damaged  was  recorded  as a  $375,797  gain  on  involuntary
conversion.  $328,116 of the gain was deferred on the Partnership's December 31,
1997 Balance Sheet because it was not  collected;  the entire  $375,797 gain was
recognized  on the  Partnership's  Statement  of  Operations  for the year ended
December 31, 1998.







<PAGE>
NOTE 8 - ENVIRONMENTAL REMEDIATION
----------------------------------

Environmental laws create potential liabilities that may affect property owners.
The  environmental  laws of the  federal  and  certain  state  governments,  for
example,  impose  liability on current and certain past owners of property  from
which  there is a release  or threat of release of  hazardous  substances.  This
liability  includes  costs of  investigation  and  remediation  of the hazardous
substances and natural  resource  damages.  Liability for costs of investigation
and  remediation  is strict,  and may be  imposed  irrespective  of whether  the
property  owner was at fault,  although  there are a number of  defenses.  Third
parties,  as well as governments,  may recover under these laws.  Third parties,
such as adjacent property owners, also may seek to recover under the common law,
for damages to their property or health.  The presence of contamination also may
affect the ability of the property owner to sell, lease, or borrow money against
the property. To date,  environmental  concerns,  including those related to the
presence of hazardous  substances,  have not generally had a material  effect on
the Partnership's capital expenditures, earnings or competitive position.

In connection with the proposed sale transaction as more fully described in Note
1 - "Organization  and Summary of Significant  Accounting  Policies",  in fiscal
1998,  an  independent  environmental  consultant  engaged  by  the  Partnership
completed a Phase I Environmental  Site Assessment of each property owned by the
Partnership. Such environmental assessments performed on the properties have not
revealed any environmental  liability that the Partnership believes would have a
material  adverse  effect on the  Partnership's  business,  assets or results of
operations,  except for the Redwood Plaza property in Utah (the "Property"). The
Phase I report recommended  additional  investigation at the Property because of
the  presence  of a dry  cleaning  plant that had been  there for  approximately
twenty years,  and because the plant reportedly had used and stored the chemical
tetrachloroethene  (PCE). Pursuant to the Partnership's  request, the consultant
then conducted a Phase II  Environmental  Site  Assessment of the Property,  and
found that some of the soil and  groundwater  contained PCE and its  degradation
products. Pursuant to the Partnership's request, the consultant then conducted a
Phase III  investigation,  and found the presence of  contamination  in soil and
groundwater  samples taken at the property line. Because the Partnership has not
undertaken  any  groundwater  or  soil  sampling  off-site,  the  extent  of the
contamination  from the  Property  has not been  established.  To deal with this
situation,  the Partnership has applied to the Utah Department of  Environmental
Quality to enter the Property into the State's  Voluntary  Cleanup  Program,  to
obtain a release from the State for cleanup liabilities.

The  Partnership  is also  investigating  whether prior owners or tenants of the
Property may be responsible for the remediation of the  contaminants and is also
reviewing whether the cost of remediation may be covered by insurance.

Following the 1998 Phase III  Environmental  Site  Assessment,  the  Partnership
asked its  consultant  to prepare a preliminary  estimate of likely  remediation
costs for the Property based on all of the information known at that time. These
estimated  costs ranged from $600,000 to $1,170,000 over a period of five years.
These  estimates  are  based  on  preliminary  information  and  may  change  as
additional  data is gathered.  There also exists the  potential  for third party
actions, the likelihood and extent of which cannot be predicted at this time.






<PAGE>
Accordingly,  the Partnership  recorded a liability for remediation costs at the
Property  of $600,000 in fiscal year 1998.  This  estimate  may be affected  by,
among other things,  new data and by any  modifications  to any remediation plan
that may be  proposed  by the Utah  regulatory  authorities.  The  effect of the
resolution  of these  matters on the results of  operations  of the  Partnership
cannot be predicted  because of the  uncertainty  concerning both the amount and
timing of future expenditures and future results of operations.

It is possible that these assessments with respect to the Property do not reveal
all potential environmental liabilities or that there are material environmental
liabilities of which the Partnership is unaware.  Moreover, no assurances can be
given  that (i)  future  laws,  ordinances  or  regulations  will not impose any
material environmental  liability or (ii) the current environmental condition of
the  Property  has not been or will not be affected by tenants and  occupants of
the Property, by the condition of properties in the vicinity of the Property, or
by third parties unrelated to the Partnership.

NOTE 9 - LEGAL PROCEEDINGS
--------------------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except as noted below.

James F.  Schofield,  Gerald C. Gillett,  Donna S. Gillett,  Jeffrey  Homburger,
Elizabeth Jung,  Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors,  Inc., McNeil Real Estate Management,  Inc., Robert A. McNeil,
Carole J. McNeil,  McNeil Pacific  Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX,  Ltd.,  McNeil Real  Estate  Fund X, Ltd.,  McNeil Real Estate Fund XI,
Ltd.,  McNeil  Real Estate Fund XII,  Ltd.,  McNeil Real Estate Fund XIV,  Ltd.,
McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P.,  McNeil Real Estate Fund XXII,  L.P.,  McNeil Real Estate
Fund XXIII,  L.P.,  McNeil Real Estate Fund XXIV, L.P.,  McNeil Real Estate Fund
XXV,  L.P.,  McNeil  Real Estate  Fund XXVI,  L.P.,  and McNeil Real Estate Fund
XXVII,  L.P., Hearth Hollow  Associates,  McNeil Midwest  Properties I, L.P. and
Regency North Associates,  L.P., - Superior Court of the State of California for
the  County of Los  Angeles,  Case No.  BC133799  (Class and  Derivative  Action
Complaint).

The action involves  purported  class and derivative  actions brought by limited
partners  of each  of the  limited  partnerships  that  were  named  as  nominal
defendants as listed above (the  "Partnerships").  Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management,  Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their  fiduciary  duties and certain  obligations  under the respective  Amended
Partnership  Agreement.  Plaintiffs  allege that  Defendants  have rendered such
Units highly illiquid and  artificially  depressed the prices that are available
for Units on the resale market.  Plaintiffs also allege that Defendants  engaged
in a course of conduct to prevent the  acquisition  of Units by an  affiliate of
Carl  Icahn  by  disseminating  purportedly  false,  misleading  and  inadequate
information.  Plaintiffs  further allege that Defendants  acted to advance their
own personal  interests at the expense of the Partnerships'  public unit holders
by failing to sell Partnership  properties and failing to make  distributions to
unitholders.


<PAGE>
On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs  are suing for breach of  fiduciary  duty,  breach of contract and an
accounting,  alleging,  among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive,  that these fees should
be reduced retroactively and that the respective Amended Partnership  Agreements
governing the Partnerships are invalid.

Defendants  filed a demurrer to the  consolidated  and amended  complaint  and a
motion to strike on February 14, 1997,  seeking to dismiss the  consolidated and
amended complaint in all respects.  A hearing on Defendant's demurrer and motion
to strike  was held on May 5,  1997.  The Court  granted  Defendants'  demurrer,
dismissing  the  consolidated  and  amended  complaint  with leave to amend.  On
October  31,  1997,  the  Plaintiffs  filed a second  consolidated  and  amended
complaint. The case was stayed pending settlement discussions.  A Stipulation of
Settlement dated September 15, 1998 has been signed by the parties.  Preliminary
Court  approval was received on October 6, 1998. A hearing for Final Approval of
Settlement, initially scheduled for December 17, 1998, has been continued to May
25, 1999.

Because McNeil Real Estate Fund XXIII,  L.P., Hearth Hollow  Associates,  McNeil
Midwest  Properties I, L.P. and Regency North Associates,  L.P. would be part of
the  transaction  contemplated  in the settlement  and Plaintiffs  claim that an
effort should be made to sell the McNeil Partnerships,  Plaintiffs have included
allegations with respect to McNeil Real Estate Fund XXIII,  L.P.,  Hearth Hollow
Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P.
in the third consolidated and amended complaint.

Plaintiff's  counsel  intends  to seek an  order  awarding  attorney's  fees and
reimbursements  of their  out-of-pocket  expenses.  The  amount of such award is
undeterminable  until  final  approval  is  received  from the  court.  Fees and
expenses shall be allocated amongst the Partnerships on a pro rata basis,  based
upon  tangible  asset value of each such  partnership,  less total  liabilities,
calculated in accordance with the Amended Partnership Agreements for the quarter
most recently ended.

<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.
                                  SCHEDULE III
      REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
                                December 31, 1998


<TABLE>
<CAPTION>
                                                                                                        Costs
                                                       Initial Cost (b)           Cumulative         Capitalized
                            Related (b)                       Buildings and     Write-down for       Subsequent
Description                Encumbrances           Land         Improvements      Impairment (d)     To Acquisition
-----------               ---------------         ----        --------------    ---------------     --------------
APARTMENTS:

Embarcadero Club
<S>                       <C>               <C>               <C>                <C>              <C>           
   College Park, GA       $     7,501,825   $     1,216,712   $    12,806,176    $           -    $    2,724,603

Tanglewood Village
   Carson City, NV              2,642,890           705,859         5,173,959                -         1,169,565

Thunder Hollow
   Bensalem
     Township, PA               9,152,945         1,837,539        13,357,311                -         2,944,590

Windrock
   El Paso, TX                  3,360,064           903,718         5,899,561          (97,632)        1,507,192
                           --------------    --------------    --------------     ------------     -------------

                          $    22,657,724   $     4,663,828   $    37,237,007    $     (97,632)   $    8,345,920
                           ==============    ==============    ==============     ============     =============

ASSET HELD FOR SALE (c):

Redwood Plaza
   Salt Lake City, UT     $       808,574
                           ==============
</TABLE>

(b)  The initial cost and encumbrances  reflect the present value of future loan
     payments  discounted,  if  appropriate,  at a  rate  estimated  to  be  the
     prevailing interest rate at the date of acquisition or refinancing.

(c)  The asset held for sale is carried at the lower of depreciated cost or fair
     value less costs to sell. Historical cost, net of accumulated  depreciation
     and amortization and write-downs, becomes the new cost basis when the asset
     is classified as "held for sale."  Depreciation and  amortization  cease at
     the time the asset is placed on the market for sale.

(d) The carrying  value of Windrock  Apartments  was written down by $97,632 for
impairment in 1991.


                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.
                                  SCHEDULE III
      REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
                                December 31, 1998

<TABLE>
<CAPTION>

                                            Gross Amount at
                                     Which Carried at Close of Period                     Accumulated
                                                 Buildings and                           Depreciation
Description                      Land            Improvements          Total (a)       and Amortization
-----------                      ----            -------------         ---------       ----------------
APARTMENTS:

Embarcadero Club
<S>                           <C>                <C>              <C>                <C>             
   College Park, GA           $    1,216,712     $   12,806,176   $     14,022,888   $    (7,980,799)

Tanglewood Village
   Carson City, NV                   705,859          5,173,959          5,879,818        (2,952,658)

Thunder Hollow
   Bensalem
     Township, PA                  1,837,539         13,357,311         15,194,850        (8,010,096)

Windrock
   El Paso, TX                       903,718          5,899,561          6,803,279        (3,559,350)
                               -------------      -------------    ---------------    --------------

                              $    4,663,828     $   37,237,007   $     41,900,835   $   (22,502,903)
                               =============      =============    ===============    ==============

ASSET HELD FOR SALE (c):

Redwood Plaza
   Salt Lake City, UT                                             $      2,192,549
                                                                   ===============
</TABLE>


(a)  For Federal income tax purposes,  the properties are depreciated over lives
     ranging from 5-27.5 years using ACRS or MACRS  methods.  The aggregate cost
     of the real  estate  investments  and the asset  held for sale for  Federal
     income tax  purposes  was  $39,415,903  and  accumulated  depreciation  and
     amortization was $24,273,909 at December 31, 1998.

(c)  The asset held for sale is carried at the lower of depreciated cost or fair
     value less costs to sell. Historical cost, net of accumulated  depreciation
     and amortization and write-downs, becomes the new cost basis when the asset
     is classified as "held for sale."  Depreciation and  amortization  cease at
     the time the asset is placed on the market for sale.


                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.
                                  SCHEDULE III
      REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
                                December 31, 1998

<TABLE>
<CAPTION>

                                 Date of                    Date                Depreciable
Description                   Construction                Acquired              lives (years)
-----------                   ------------                --------              -------------

APARTMENTS:

Embarcadero Club
<S>                             <C>                         <C>                     <C> 
   College Park, GA             1970/74                     09/84                   5-25

Tanglewood Village
   Carson City, NV              1979                        06/86                   5-25

Thunder Hollow
   Bensalem
     Township, PA               1973                        11/84                   5-25

Windrock
   El Paso, TX                  1971                        10/84                   5-25

ASSET HELD FOR SALE (c):

Redwood Plaza
   Salt Lake City, UT           1976                        06/84

</TABLE>

(c)  The asset held for sale is carried at the lower of depreciated cost or fair
     value less costs to sell. Historical cost, net of accumulated  depreciation
     and amortization and write-downs, becomes the new cost basis when the asset
     is classified as "held for sale."  Depreciation and  amortization  cease at
     the time the asset is placed on the market for sale.


                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                              Notes to Schedule III

      Real Estate Investments and Accumulated Depreciation and Amortization


A  summary  of  activity  for the  Partnership's  real  estate  investments  and
accumulated depreciation and amortization is as follows:

<TABLE>
<CAPTION>
                                                                   For the Years Ended December 31,
                                                        -----------------------------------------------------
                                                             1998               1997                 1996
                                                        ------------        -------------        ------------
Real estate investments:

<S>                                                     <C>                 <C>                  <C>         
Balance at beginning of year ...................        $ 40,883,986        $ 40,608,707         $ 52,787,046

Improvements ...................................           1,016,849             656,932              771,475

Replacements ...................................                  --            (381,653)                  --

Reclassification of assets held
   for sale ....................................                  --                  --          (12,949,814)
                                                        ------------        ------------         ------------

Balance at end of year .........................        $ 41,900,835        $ 40,883,986         $ 40,608,707
                                                        ============        ============         ============


Accumulated depreciation and amortization:

Balance at beginning of year ...................        $ 20,632,796        $ 18,951,741         $ 21,836,162

Depreciation and amortization ..................           1,870,107           1,882,343            2,185,099

Replacements ...................................                  --            (201,288)                  --

Reclassification of assets held
   for sale ....................................                  --                  --           (5,069,520)
                                                        ------------        ------------         ------------

Balance at end of year .........................        $ 22,502,903        $ 20,632,796         $ 18,951,741
                                                        ============        ============         ============


Assets held for sale:

Balance at beginning of year ...................        $  1,932,910        $  7,942,855         $         --

Reclassification of assets held
    for sale ...................................                  --                  --            7,880,294

Improvements ...................................             259,639              11,194               62,561

Sale of assets held for sale ...................                  --          (6,021,139)                  --
                                                        ------------        ------------         ------------

Balance at end of year .........................        $  2,192,549        $  1,932,910         $  7,942,855
                                                        ============        ============         ============
</TABLE>

<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
-------  -----------------------------------------------------------
         AND FINANCIAL DISCLOSURE
         ------------------------

None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------- --------------------------------------------------

Neither the  Partnership  nor the General Partner has any directors or executive
officers.  The names and ages of, as well as the positions held by, the officers
and  directors of McNeil  Investors,  Inc.,  the general  partner of the General
Partner, are as follows:

                                       Other Principal Occupations and Other
Name and Position             Age      Directorships During the Past 5 Years
-----------------             ---      -------------------------------------

Robert A. McNeil,              78       Mr.  McNeil  is also  Chairman  of   the
Chairman of the                         Board and Director of McNeil Real Estate
Board and Director                      Management,  Inc. ("McREMI") which is an
                                        affiliate of the General Partner. He has
                                        held the foregoing  positions  since the
                                        formation of such an entity in 1990. Mr.
                                        McNeil  received  his B.A.  degree  from
                                        Stanford  University  in  1942  and  his
                                        L.L.B.  degree from  Stanford Law School
                                        in 1948. He is a member of the State Bar
                                        of  California  and has been involved in
                                        real  estate  financing  since  the late
                                        1940's and in real estate  acquisitions,
                                        syndications  and   dispositions   since
                                        1960. From 1986 until active  operations
                                        of  McREMI  and  McNeil  Partners,  L.P.
                                        began in February 1991, Mr. McNeil was a
                                        private investor. Mr. McNeil is a member
                                        of the International  Board of Directors
                                        of the Salk  Institute,  which  promotes
                                        research in improvements in health care.


<PAGE>
Carole J. McNeil               55       Mrs. McNeil is Co-Chairman, with husband
Co-Chairman of the                      Robert A. McNeil,  of McNeil  Investors,
Board                                   Inc.  Mrs.  McNeil has  twenty  years of
                                        real estate experience, most recently as
                                        a private investor from 1986 to 1993. In
                                        1982, she founded Ivory & Associates,  a
                                        commercial real estate brokerage firm in
                                        San  Francisco,  CA. Prior to that,  she
                                        was a commercial  real estate  associate
                                        with the Madison Company and, earlier, a
                                        commercial  sales  associate and analyst
                                        with   Marcus  and   Millichap   in  San
                                        Francisco.    In   1978,   Mrs.   McNeil
                                        established   Escrow  Training  Centers,
                                        California's first accredited commercial
                                        training   program  for  title   company
                                        escrow  officers and real estate  agents
                                        needing  college  credits to qualify for
                                        brokerage  licenses.  She  began in real
                                        estate as Manager and Marketing Director
                                        of Title  Insurance  and  Trust in Marin
                                        County,  CA. Mrs.  McNeil  serves on the
                                        International  Board of Directors of the
                                        Salk Institute.

Ron K. Taylor                  41       Mr.  Taylor is the  President  and Chief
President and Chief                     Executive  Officer of McNeil Real Estate
Executive Officer                       Management  which is an affiliate of the
                                        General Partner.  Mr. Taylor has been in
                                        this capacity  since the  resignation of
                                        Donald K. Reed on March 4,  1997.  Prior
                                        to       assuming       his      current
                                        responsibilities, Mr. Taylor served as a
                                        Senior  Vice  President  of McREMI.  Mr.
                                        Taylor has been in this  capacity  since
                                        McREMI  commenced  operations  in  1991.
                                        Prior  to  joining  McREMI,  Mr.  Taylor
                                        served as an  Executive  Vice  President
                                        for  a   national   syndication/property
                                        management  firm. In this capacity,  Mr.
                                        Taylor  had the  responsibility  for the
                                        management  and leasing of a  21,000,000
                                        square  foot   portfolio  of  commercial
                                        properties. Mr. Taylor has been actively
                                        involved  in the  real  estate  industry
                                        since 1983.

Each director  shall serve until his successor  shall have been duly elected and
qualified.


<PAGE>
ITEM 11.  EXECUTIVE COMPENSATION
--------  ----------------------

No direct  compensation  was paid or payable by the  Partnership to directors or
officers  (since it does not have any  directors or officers) for the year ended
December  31,  1998,  nor was any  direct  compensation  paid or  payable by the
Partnership  to  directors  or officers  of the  general  partner of the General
Partner for the year ended  December 31, 1998. The  Partnership  has no plans to
pay any such remuneration to any directors or officers of the general partner of
the General Partner in the future.

See Item 13 - Certain  Relationships  and  Related  Transactions  for amounts of
compensation and  reimbursements  paid by the Partnership to the General Partner
and its affiliates.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------  --------------------------------------------------------------

(A) Security ownership of certain beneficial owners.

      No individual or group,  as defined by Section  13(d)(3) of the Securities
      Exchange Act of 1934,  known to the Partnership is the beneficial owner of
      more than 5% of the Partnership's securities except for the following:

      High River  Limited  Partnership,  100 S. Bedford Road,  Mount Kisco,  New
      York, 10549,  which owns 10,631 (12.3%) of the  Partnership's  Units as of
      February 1, 1999.

(B) Security ownership of management.

      As of February 1, 1999, the General  Partner and its affiliates own 872 of
      the  Partnership's   Units,  which  is  approximately  1%  of  the  86,534
      outstanding Units.

(C)   Change in control.

      None.

<PAGE>
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------  ----------------------------------------------

Under terms of the Amended  Partnership  Agreement,  the Partnership is paying a
MID to the General Partner.  The maximum MID is calculated as 1% of the tangible
asset value of the Partnership.  Tangible asset value is determined by using the
greater of (i) an amount  calculated by applying a capitalization  rate of 9% to
the annualized net operating  income of each property or (ii) a value of $10,000
per apartment  unit for  residential  property and $50 per gross square foot for
commercial property to arrive at the property tangible asset value. The property
tangible  asset  value  is then  added to the book  value  of all  other  assets
excluding  intangible  assets.  The maximum MID percentage  decreases to .75% in
2000, .50% in 2001 and .25% thereafter.


The MID will be paid to the  extent of the  lesser of the  Partnership's  excess
cash flow, as defined, or net operating income (the "Entitlement  Amount"),  and
may  be  paid  (i) in  cash,  unless  there  is  insufficient  cash  to pay  the
distribution,  in which  event any  unpaid  portion  not taken in Units  will be
deferred and is payable,  without interest, from the first available cash and/or
(ii) in Units.  A maximum of 50% of the MID may be paid in Units.  The number of
Units  issued in payment  of the MID is based on the  greater of $50 per Unit or
the net tangible asset value, as defined,  per Unit. For the year ended December
31, 1998, the Partnership accrued MID in the amount of $545,928.

The  Partnership  pays  property  management  fees  equal to 5% of gross  rental
receipts of the Partnership's  properties to McREMI, an affiliate of the General
Partner,  for  providing  property  management  services  for the  Partnership's
residential and commercial properties and leasing services for the Partnership's
residential  properties.  The  Partnership  reimburses  McREMI  for  its  costs,
including  overhead,  of administering the Partnership's  affairs.  For the year
ended  December  31,  1998,  the  Partnership   incurred  $642,341  of  property
management fees and reimbursements.

See  Item 1 -  Business,  Item  7 -  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations,  and  Item  8  -  Note  2  -
"Transactions with Affiliates."



<PAGE>
                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
--------  -----------------------------------------------------------------

See accompanying Index to Financial  Statements at Item 8 - Financial Statements
and Supplementary Data.

(A)        Exhibits

           Exhibit
           Number                           Description
           -------                          -----------
     
           3.                               Partnership  Agreement dated   April
                                            30, 1982, and amended  September 15,
                                            1982, October 13, 1982, and February
                                            1, 1983. (1)

           3.1                              Amended     and    Restated  Limited
                                            Partnership      Agreement     dated
                                            September 20, 1991. (3)

           3.2                              Amendment  No. 1 to  the Amended and
                                            Restated  Partnership  Agreement  of
                                            McNeil Real  Estate Fund XIV,  Ltd.,
                                            dated to be effective as of July 31,
                                            1993. (5)

           3.3                              Amendment  No. 2 to the Amended  and
                                            Restated  Partnership  Agreement  of
                                            McNeil Real  Estate Fund XIV,  Ltd.,
                                            dated March 8, 1994. (5)

           10.1                             Security  Deed Note, dated  November
                                            16,   1988,   between    Embarcadero
                                            Associates  and American  Mortgages,
                                            Inc. (1)

           10.2                             Property Management Agreement, dated
                                            September 12, 1991,  between  McNeil
                                            Real  Estate  Fund  XIV,   Ltd.  and
                                            McNeil Real Estate Management,  Inc.
                                            (3)

           10.3                             Property   Management     Agreement,
                                            dated  September  12, 1991,  between
                                            Embarcadero  Associates  and  McNeil
                                            Real Estate Management, Inc. (3)

           10.4                             Property    Management    Agreement,
                                            dated  September  12, 1991,  between
                                            Tanglewood  Village  Associates  and
                                            McNeil Real Estate Management,  Inc.
                                            (3)

           10.5                             Termination       Agreement,   dated
                                            September 20, 1991,  between  McNeil
                                            Real  Estate  Fund  XIV,   Ltd.  and
                                            McNeil Real Estate Management,  Inc.
                                            (3)

           10.6                             Termination   Agreement,       dated
                                            September    20,    1991,    between
                                            Embarcadero  Associates  and  McNeil
                                            Real Estate Management, Inc. (3)

           10.7                             Termination     Agreement,     dated
                                            September    20,    1991,    between
                                            Tanglewood  Village  Associates  and
                                            McNeil Real Estate Management,  Inc.
                                            (3)




<PAGE>


            Exhibit
            Number                          Description
            -------                         -----------

           10.8                             Asset Management  Agreement,   dated
                                            September 20, 1991,  between  McNeil
                                            Real  Estate  Fund  XIV,   Ltd.  and
                                            McNeil Partners, L.P. (3)

           10.9                             Assignment and  Assumption Agreement
                                            Relating  to McNeil Real Estate Fund
                                            XIV, Ltd., dated September 20, 1991,
                                            between  McNeil  Partners,  L.P. and
                                            Pacific Investors Corporation. (3)

           10.10                            Assignment     and        Assumption
                                            Agreement  Relating  to  Embarcadero
                                            Associates,   dated   September  20,
                                            1991, between McNeil Partners,  L.P.
                                            and Pacific  Investors  Corporation.
                                            (3)

           10.11                            Assignment and  Assumption Agreement
                                            Relating   to   Tanglewood   Village
                                            Associates,   dated   September  20,
                                            1991, between McNeil Partners,  L.P.
                                            and Pacific  Investors  Corporation.
                                            (3)

           10.12                            Amendment to Certificate  of Limited
                                            Partnership   filed   September  25,
                                            1991, with the Secretary of State of
                                            the State of California. (3)

           10.14                            Amendment  of  Property   Management
                                            Agreement   dated   March  5,   1993
                                            between McNeil Real Estate Fund XIV,
                                            Ltd.    and   McNeil   Real   Estate
                                            Management, Inc. (2)

           10.15                            Loan Agreement dated  June  24, 1993
                                            between  Lexington  Mortgage Company
                                            and  McNeil  Real  Estate  Fund XIV,
                                            Ltd., et. al. (4)

           10.16                            Master  Property   Management Agree-
                                            ment,  dated  as of June  24,  1993,
                                            between     McNeil    Real    Estate
                                            Management,  Inc. and Thunder Hollow
                                            Fund XIV, Ltd. (5)

            10.17                           Multifamily   Note  dated  March 13,
                                            1995  between  Washington   Mortgage
                                            Financial  Group,  Ltd. and Windrock
                                            Fund XIV, L.P. (6)

            10.18                           Property  Management Agreement dated
                                            February  2, 1995  between  Windrock
                                            Fund  XIV,   L.P.  and  McNeil  Real
                                            Estate Management, Inc. (6)

            10.19                           Promissory Note, dated May 22, 1976,
                                            between  Price  Rentals,   Inc.  and
                                            Aetna Life Insurance Company. (6)

            10.22                           Deed of Trust Note,  dated   October
                                            1, 1993, between Tanglewood Fund XIV
                                            Associates  Limited  Partnership and
                                            Love Funding Corporation. (6)

            11.                             Statement  regarding  computation of
                                            Net  Income   (Loss)   per   Limited
                                            Partnership  Unit (see Item 8 - Note
                                            1 -  "Organization  and  Summary  of
                                            Significant Accounting Policies").


<PAGE>
           Exhibit
           Number                          Description
           --------                        -----------
             22.                           Following is a list   of subsidiaries
                                           of the Partnership:

<TABLE>
<CAPTION>
                                                                                                Names Under
                                                                         Jurisdiction of        Which It Is
                                            Name of Subsidiary            Incorporation        Doing Business
                                            ------------------           ---------------       --------------
                                            <S>                              <C>                    <C>
                                            Embarcadero Associates           Georgia                None

                                            Tanglewood Fund XIV
                                               Associates, L.P.              Nevada                 None

                                            Thunder Hollow Fund XIV
                                               Limited Partnership           Delaware               None

                                            Windrock Fund XIV, L.P.          Texas                  None
</TABLE>

             27.                            Financial Data Schedule for the year
                                            ended December 31, 1998.

                   The  Partnership  has  omitted  instruments  with  respect to
                   long-term   debt  where  the  total   amount  of   securities
                   authorized thereunder does not exceed 10% of the total assets
                   of the Partnership.  The Partnership agrees to furnish a copy
                   of each such instrument to the Commission upon request.

                    (1)                     Incorporated  by reference  to   the
                                            Annual  Report of McNeil Real Estate
                                            Fund XIV, Ltd., on Form 10-K for the
                                            period ended  December 31, 1990,  as
                                            filed on March 29, 1991.

                    (2)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XIV,  Ltd.,  (Commission  file
                                            number 0-12915) on Form 10-K for the
                                            period ended  December 31, 1992,  as
                                            filed   with  the   Securities   and
                                            Exchange  Commission  on  March  30,
                                            1993.

                    (3)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XIV,  Ltd.   (Commission  file
                                            number 0-12915) for the period ended
                                            December 31, 1991, as filed with the
                                            Securities  and Exchange  Commission
                                            on March 30, 1992.

                    (4)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XI,  Ltd.   (Commission   file
                                            number 0-9783), on Form 10-K for the
                                            period ended  December 31, 1993,  as
                                            filed   with  the   Securities   and
                                            Exchange  Commission  on  March  30,
                                            1994.

                    (5)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XIV,  Ltd.   (Commission  file
                                            number 0-12915) for the period ended
                                            December 31, 1993, as filed with the
                                            Securities  and Exchange  Commission
                                            on March 30, 1994.

                    (6)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XIV,  Ltd.   (Commission  file
                                            number 0-12915) for the period ended
                                            December 31, 1994, as filed with the
                                            Securities  and Exchange  Commission
                                            on March 30, 1995.

(B)         Reports  on Form  8-K.  There  were no  reports  on Form 8-K for the
            quarter ended December 31, 1998.


<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.
                              A Limited Partnership

                                 SIGNATURE PAGE


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.


                          McNEIL REAL ESTATE FUND XIV, LTD.


                          By:  McNeil Partners, L.P., General Partner

                               By: McNeil Investors, Inc., General Partner


March 31, 1999                 By:  /s/  Robert A. McNeil
--------------                    ----------------------------------------------
Date                                Robert A. McNeil
                                    Chairman of the Board and Director
                                    (Principal Executive Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.



March 31, 1999                 By:  /s/  Ron K. Taylor
--------------                    ----------------------------------------------
Date                                Ron K. Taylor
                                    President and Director of McNeil
                                      Investors, Inc.
                                    (Principal Financial Officer)




March 31, 1999                 By:  /s/  Brandon K. Flaming
--------------                    ----------------------------------------------
Date                                Brandon K. Flaming
                                    Vice President of McNeil Investors, Inc.
                                    (Principal Accounting Officer)