<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                   FORM 10-Q

               Quarterly Report Pursuant to Section 13 or 15 (d)
                    of the Securities Exchange Act of 1934

               For the quarterly period ended September 30, 1999
                       Commission File Number 33-06419-A

                       CONDEV LAND GROWTH FUND '86, LTD.
                       ---------------------------------
            (Exact name of registrant as specified in its charter)

          FLORIDA                                    59-2766359
          -------                                    ----------
 (State or other jurisdiction of                 (I.R.S. Employer
  incorporation of organization)                 Identification No.)


                               2479 Aloma Avenue
                          Winter Park, Florida 32792
                   (Address of principal executive offices)

Registrant's telephone number, including area code: (407) 679-1748


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.  YES  X     NO ______.
                                        ---
<PAGE>

                       CONDEV LAND GROWTH FUND '86, LTD.

                                     INDEX


PART I.   FINANCIAL INFORMATION:

          Statement of Assets, Liabilities and
          Partner's Capital - September 30, 1999
          and December 31, 1998                                                1

          Statement of Income & Expense -
          Three Months Ended September 30, 1999
          and September 30, 1998                                               2

          Statement of Income & Expense -
          Nine Months Ended September 30, 1999
          and September 30, 1998                                               3

          Statement of Cash Flows -
          Nine months ended September 30, 1999
          and September 30, 1998                                               4

          Notes to Financial Statements                                    5 - 7

          Management's Discussion and Analysis
          of Financial Condition and Results of Operations                 7 - 9

PART II.  OTHER INFORMATION:

          Item 1.   Legal Proceedings                                         10

          Item 6    Exhibits and Reports on Form 8-K                          10

Signatures                                                                    10

Third Quarter 1999 report to Limited Partners                                 11
<PAGE>

                        PART I.  FINANCIAL INFORMATION


                       CONDEV LAND GROWTH FUND '86, LTD.
            STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
                   SEPTEMBER 30, 1999 AND DECEMBER 31, 1998

                                    ASSETS
                                    ------
<TABLE>
<CAPTION>
                           September 30, 1999       December 31, 1998
                           ------------------       ---------------------
                              (Unaudited)                    *
<S>                        <C>                      <C>
Cash & Cash Equivalents            $   23,099             $   39,457
Accounts Receivable                     1,222                  7,300
Land, at Cost (Note 2)                313,390                308,857
Investment in Joint
 Venture  (Note 3)                  1,528,486              1,532,361
Organization Costs, Net                13,439                 13,439
                                   ----------             ----------

             Total Assets          $1,879,636             $1,901,414
                                   ==========             ==========

                       LIABILITIES AND PARTNERS' CAPITAL
                       ---------------------------------

Accounts Payable                   $        -             $        -
                                   ----------             ----------

    Total Liabilities              $        -             $        -
                                   ----------             ----------

Partners' Capital -
  General Partner                       2,809                  3,027
  Limited Partners                  1,876,827              1,898,387
                                   ----------             ----------

    Total Partners' Capital        $1,879,636             $1,901,414
                                   ----------             ----------

Total Liabilities and
          Partners' Capital        $1,879,626             $1,901,414
                                   ==========             ==========
</TABLE>

* Condensed from audited financial statements

     The accompanying notes are an integral part of these financial statements

                                       1
<PAGE>

                       CONDEV LAND GROWTH FUND '86, LTD.
                        STATEMENT OF INCOME AND EXPENSE
         THREE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                              September 30, 1999  September 30, 1998
                              ------------------  ------------------
<S>                           <C>                 <C>
INCOME
------
Gain on Sale of Land                $        -          $  33,171

Interest and Other Income                  239                775
                                    ----------          ---------
Total Income                        $      239          $  33,946
                                    ----------          ---------

OPERATING EXPENSES
------------------

Professional Services                        -                  -

Equity in loss of joint venture              -         (      443)

Management Fees                          2,124              2,124

Other Expense                                -              3,385

Office Expense                           1,008              1,959
                                    ----------          ---------

Total Operating Expense             $    3,132          $   7,025
                                    ----------          ---------

Net Income/(Loss)                  ($    2,893)         $  26,921
                                    ==========          =========
</TABLE>

 The accompanying notes are an integral part of these financial statements

                                       2
<PAGE>

                       CONDEV LAND GROWTH FUND '86, LTD.
                        STATEMENT OF INCOME AND EXPENSE
          NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                   September 30, 1999   September 30, 1998
                                   ------------------   ------------------
<S>                                <C>                  <C>
INCOME
------

Gain on Sale of Land                     $       -             $347,668

Interest and Other Income                      837                4,132
                                         ---------             --------
Total Income                             $     837             $351,800
                                         ---------             --------


OPERATING EXPENSES
------------------

Professional Services                        9,000                9,200

Equity in loss of joint venture              3,875                  386

Management Fees                              6,372                6,372

Other Expense                                    -               10,864

Office Expense                               3,368                4,308
                                         ---------             --------

Total Operating Expense                  $  22,615             $ 31,130
                                         ---------             --------

Net Income/(Loss)                       ($  21,778)            $320,670
                                         =========             ========
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       3
<PAGE>

                       CONDEV LAND GROWTH FUND '86, LTD.
                            STATEMENT OF CASH FLOWS
          NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998


<TABLE>
<CAPTION>
                                                       September 30, 1999    September 30, 1998
                                                       ------------------    ------------------
<S>                                                    <C>                   <C>
Cash flows from operating activities:
  Net Income (Loss)                                         ($   27,778)          $   320,670
    Adjustments to reconcile net loss
    to net cash used for operating activities:
        Equity in loss of Joint Venture, net                      3,875                   386
        Gain on land sale                                             -           (   347,668)
    Cash used for changes:
         Deposits on land                                             -           (     2,100)
         Due from related entity                                      -                   460
         Accounts Receivable                                      6,078           (     1,242)
                                                            -----------           -----------
  Net cash used in operating activities:                    (    11,825)          (    29,494)
                                                            -----------           -----------

Cash flows from investing activities:
  Land development costs                                    (     4,533)                5,830
  Investment in Joint Venture                                         -           (     2,359)
  Proceeds from land sale                                             -             1,484,189
                                                            -----------           -----------
Net cash from investing activities:                         (     4,533)            1,487,660
                                                            -----------           -----------

Cash flows from financing activities:
  Distributions to partners                                 (         -)          ( 1,417,500)
                                                            -----------           -----------
Net cash used in financing activities:                      (         -)          ( 1,417,500)
                                                            -----------           -----------
Net increase (decrease) in cash                             (    16,358)               40,666

Cash and cash equivalents at beginning of year                   39,457                19,062
                                                            -----------           -----------
Cash and cash equivalents at end of period                  $    23,099           $    59,728
                                                            ===========           ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       4
<PAGE>

                       CONDEV LAND GROWTH FUND '86, LTD.

                         NOTES TO FINANCIAL STATEMENTS


Note 1         BASIS OF PRESENTATION
               ---------------------

               The accompanying financial statements, in the opinion of Condev
               Associates, the general partner of Condev Land Growth Fund '86,
               Ltd., reflect all adjustments (which include only normal
               recurring adjustments) necessary to a fair statement of the
               financial position, the results of operations and the changes in
               cash position for the periods presented. For a full description
               of accounting policies, see notes to financial statements in the
               1998 annual report on Form 10-K.

Note 2         INVESTMENT IN LAND:
               -------------------

               At September 30, 1999, land consisted of the following:

                     6.00 acre parcel (zoned commercial) in
                          Brevard County, Florida              $313,390

               On October 10, 1998, the Partnership contracted with a developer
               of retail centers for the sale of this parcel. The contract calls
               for a 180-day inspection period, with appropriate performance
               standards, and a closing following issuance of required
               development permits. The inspection period was extended to May
               10, 1999, and was further extended to July 15, 1999. This was
               done to allow the contract buyer additional time to conclude
               arrangements with a tenant for the property. The buyer has made a
               $30,000 non-refundable deposit on the contract, and is proceeding
               with applications for development permits. The contract provides
               that the closing may be extended by the buyer for up to six
               months upon payment of an agreed monthly extension fee. If all
               extensions are requested, closing would be February 1, 2000.

               In November, 1998, the general partner received notification from
               St. Johns River Water Management District that this property
               contains some jurisdictional wetlands, and that the area in
               question had been disturbed when the property was cleared of
               underbrush as part of the normal maintenance routine. The general
               partner engaged an environmental consultant to assist in
               resolving the matter. The area in question was flagged and
               surveyed, and it was determined that approximately 1.23 acres of
               the site are in fact jurisdictional wetlands. The General Partner
               is in the process of working with the Water Management District
               to mitigate the wetlands so the entire site will be useable by
               the prospective buyer. The ultimate cost of such mitigation and
               fines, if any, is unknown at this time, but it is not expected to
               be material in relation to the total value of the parcel.

                                       5
<PAGE>

Note 3         INVESTMENT IN JOINT VENTURE:
               ----------------------------

               The Partnership owns a 59% interest in West 50 Joint Venture (A
               Florida Joint Venture) whose purpose is to acquire and hold a
               133-acre parcel of land in Lake County, Florida for investment
               purposes. The remaining 41% interest is owned by Condev West 50,
               Ltd., an affiliate of the general partner. The operations of West
               50 Joint Venture consist primarily of professional services and
               real estate taxes. The Partnership's investment is carried at its
               equity in the net underlying assets. A summary of the assets,
               liabilities, and venturers' capital of West 50 Joint Venture as
               of September 30, 1999 is as follows :

<TABLE>
                                     Assets
                                     ------
               <S>                                           <C>
               Cash                                          $      456
               Investment in land                             2,765,064
                                                              ---------
                                                             $2,765,520
                                                             ==========

                      Liabilities and Venturers' Capital
                      ----------------------------------

                                  Liabilities
                                  -----------

               Mortgage note payable                         $  173,865
               Other liabilities                                  1,000
                                                             ----------

               Total liabilities                             $  174,865


                              Venturers' capital
                              ------------------

               Venturers' capital                            $ 2,597,223
               Current profit (loss)                        (      6,568)
                                                             -----------

               Total Venturers' capital                        2,590,655

               Total liabilities and venturers' capital      $ 2,765,520
                                                             ===========
</TABLE>

               On September 17, 1999, West 50 Joint Venture entered into a
               contract for the sale of this entire property. Terms of the
               contract include an inspection period until November 18, 1999 and
               closing on or before December 5, 1999. The prospective buyer is
               currently conducting its due diligence investigation of the
               property. Because of the short inspection period and closing
               under this contract, the Partnership has suspended the
               improvements to the property which include the extension of sewer
               and water service to the site, and construction of both on site
               and off site access improvements. Permits for these improvements
               will be assigned to the buyer at closing, or construction will be
               reactivated if closing does not occur.

                                       6
<PAGE>

Note 4         DISTRIBUTIONS TO PARTNERS:
               --------------------------

               Pursuant to the partnership agreement, cash flow generated each
               year by the Partnership is to be distributed 99% to the limited
               partners and 1% to the general partner. There were no cash flow
               distributions during the first nine months of 1999.

               Pursuant to the partnership agreement, proceeds realized from the
               sale of properties, after the establishment of reserves for
               future operating costs, are to be distributed at least annually.
               During the first nine months of 1999 there were no distributions
               to limited partners as there were no sales of land.

Note 5         RELATED PARTY TRANSACTIONS:
               ---------------------------

               The Partnership Agreement provides for the reimbursement to the
               general partner of administrative expenses incurred in the direct
               operation of the partnership. For the nine months ended September
               30, 1999, $7,297 was reimbursed to the general partner for direct
               expenses incurred.

               When properties are sold, under certain circumstances an
               affiliate of the general partner may be paid real estate
               commissions in amounts customarily charged by others rendering
               similar services with such commissions plus commissions paid to
               nonaffiliates not to exceed 10% of the gross sales price. No real
               estate commissions have been paid to the general partner or any
               affiliate of the general partner during the first nine months of
               1999.

               The general partner is obligated to loan up to $100,000 to the
               Partnership during its term to meet working capital requirements.
               The General Partner has previously advanced $156,048.27 of
               working capital to the Partnership, which advance was repaid in
               December, 1993. Since the General Partner has met its obligation
               to advance funds, it is not required to make further advances.

Item 2         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               ---------------------------------------------------------------
               RESULTS OF OPERATIONS
               ---------------------

               During the quarter ended September 30, 1999, the Partnership
               continued to manage the portfolio properties with the objective
               of selling the properties at fair market prices. As of September
               30, 1999, the Partnership had contracts for sale of both of its
               two remaining properties.

               Year 2000
               ---------

               The Partnership is heavily dependent upon a computer system to
               accurately maintain limited partner records, including name and
               address information, number of units owned, and distribution
               historical records. The Partnership is utilizing a system which
               was specially designed for the

                                       7
<PAGE>

               Partnership in 1990, and it is possible that the system will be
               affected by the date change which will occur at the end of 1999.
               The Partnership has engaged a computer consultant to evaluate the
               potential problems, and make system changes if necessary so the
               operation of the Partnership will not be affected by the date
               change. Work on modifying the computer system was completed in
               June, 1999. The cost of evaluating the current system and
               bringing it up to date to be year 2000 compliant was less than
               $1,000. The Partnership's computer records are backed up on a
               weekly basis, so all of the stored information is available from
               a secondary source. Even if the system were to be completely shut
               down by the date change at the end of 1999, the data necessary to
               continue operation of the Partnership is available and could
               readily be adapted to a new system which is year 2000 compliant,
               so no significant interruption in the operations of the
               Partnership is anticipated.

               Results of Operations
               ---------------------

               Total revenues for the nine months ended September 30, 1999 were
               $837, compared with total revenues of $351,800 for the nine
               months ended September 30, 1998. Income is generated from short-
               term cash investments, and income can be expected to fluctuate,
               depending on the level of cash reserves in the Partnership and
               prevailing interest rates. In the 1998 period, total revenues
               included a gain on sale of land in the amount of $347,668 and
               interest and other income of $4,132. There were no sales of land
               in the 1999 period. Operating expenses (excluding equity in the
               losses of the Partnership's joint venture) for the nine months
               ended September 30, 1999 were $18,740, a decrease from $30,744
               for the nine months ended September 30, 1998. In both periods,
               operating expenses represent the normal costs of operating the
               Partnership and managing the Partnership properties. However, in
               the 1998 period, real estate taxes paid on the properties which
               were sold amounted to $8,718. Real estate taxes on the
               Partnership's properties are normally paid in November each year.
               The total real estate tax amount will decrease as properties are
               sold.

               West 50 Joint Venture, in which the Partnership holds a 59%
               interest, had a loss of $6,568 for the nine months ended
               September 30, 1999 compared with a loss of $2,805 for the nine
               months ended September 30, 1998. The larger loss in 1999 resulted
               from the refund of billboard rental income because of a decision
               to terminate existing billboard leases. As discussed under
               Liquidity and Capital Resources and West 50 Joint Venture below,
               -------------------------------     ---------------------
               the joint venture has borrowed money under a secured line of
               credit with a commercial bank to pay for engineering, planning
               and construction expenses related to the extension of water and
               sewer facilities to the property. Since these expenses are
               incurred to develop land for sale, interest charges incurred on
               outstanding debt will be capitalized. These additional

                                       8
<PAGE>

               expenses are expected to be offset by higher sales prices for the
               Joint Venture's land.

               Liquidity and Capital Resources at September 30, 1999
               -----------------------------------------------------

               Total assets decreased slightly from $1,901,414 at December 31,
               1998 to $1,879,636 at September 30, 1999. This reflects the net
               results of operations for the period. Assets can be expected to
               decline in the future as properties are sold and distributions
               are made to limited partners. The Partnership currently holds
               contracts for sale of all remaining portfolio properties which
               are expected to close during the fourth quarter of 1999 and the
               first quarter of 2000.

               Liquidity remained at a relatively low level. Cash and
               equivalents decreased from $39,457 at 1998 year-end to $23,099 at
               September 30, 1999. As provided in the Partnership Agreement, the
               general partner intends to add to reserves from the net proceeds
               of future land sales if necessary.

               West 50 Joint Venture
               ---------------------

               The area of Lake County, Florida in which the West 50 Joint
               Venture's 132.7-acre parcel is located has experienced heightened
               activity in recent months, with significant new residential
               development beginning in the immediate area. The City of Clermont
               has extended sewer facilities to one such development which is
               directly across from the property on the south side of State Road
               50. Water service has been extended to the Joint Venture's
               property. In order to insure that the Joint Venture's property
               will have adequate sewer capacity for future development of its
               property, the Joint Venture has paid $38,623 to the City of
               Clermont to upgrade the facilities which have been installed. The
               Partnership has engaged an engineer to design and permit the
               extension of sewer utilities under SR 50 to the site and to
               design and permit the construction of access points and related
               highway improvements from SR 50 to the site. The general partner
               is in the process of bidding the related construction contracts.
               All necessary development permits have been obtained. In
               addition, the Joint Venture has entered into a contract with an
               excavation and grading company to remove up to 366,000 yards of
               excess fill from the site and to grade a majority of the site.
               The Joint Venture has arranged a $500,000 secured line of credit
               with a commercial bank to pay for the Joint Venture's cost of
               these improvements. Borrowings under the line of credit will be
               repaid from future land sales.

                                       9
<PAGE>

                                    PART II


Item 1.  LEGAL PROCEEDINGS
         -----------------

          As of September 30, 1999, there were no legal proceedings in process,
          nor to the knowledge of the general partner, threatened against the
          Partnership

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K:
         ---------------------------------

         (A)  Exhibits

              Third Quarter 1999 Report to Limited Partners

         (B)  Reports on Form 8-K

              There were no reports of Form 8-K for the period ended September
              30, 1999

                           CONDEV LAND FUND II, LTD.
                                  SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned.


                       CONDEV LAND GROWTH FUND `86, LTD.
                    BY: Condev Associates, General Partner




October 26, 1999                 /s/ Robert N. Gardner
---------------------            ----------------------------------
     DATE                        Robert N. Gardner, Partner


October 26, 1999                 /s/ Joseph J. Gardner
---------------------            ----------------------------------
     DATE                        Joseph J. Gardner, Partner

                                       10