<PAGE>   1
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED                  SEPTEMBER 30, 2000
                               -------------------------------------------------

                                       OR

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

FOR THE TRANSITION PERIOD FROM                       N/A
                               -------------------------------------------------

COMMISSION FILE NUMBER                             0-15680
                       ---------------------------------------------------------

              JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

        MASSACHUSETTS                                     04-2921566
-------------------------------             ------------------------------------
(STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

                     200 CLARENDON STREET, BOSTON, MA 02116
--------------------------------------------------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                   (ZIP CODE)

                                 (800) 722-5457
--------------------------------------------------------------------------------
               REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:

                                      N/A
--------------------------------------------------------------------------------
   (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
                                     REPORT)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.

                              Yes [X]         No [ ]


<PAGE>   2


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)


                                     INDEX


PART I:   FINANCIAL INFORMATION                                         PAGE
                                                                        ----
     Item 1    -    Financial Statements:

                    Balance Sheets at September 30, 2000 and
                    December 31, 1999                                    3

                    Statements of Operations for the Three and Nine
                    Months Ended September 30, 2000 and 1999             4

                    Statements of Partners' Equity for the
                    Nine Months Ended September 30, 2000 and
                    Year Ended December 31, 1999                         5

                    Statements of Cash Flows for the Nine
                    Months Ended September 30, 2000 and 1999             6

                    Notes to Financial Statements                      7-11

     Item 2    -    Management's Discussion and Analysis of
                    Financial Condition and Results of Operations      12-14


PART II:  OTHER INFORMATION                                              15


                                       2



<PAGE>   3


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                          PART I: FINANCIAL INFORMATION

                          ITEM 1: FINANCIAL STATEMENTS

                                 BALANCE SHEETS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,          DECEMBER 31,
                                                                     2000                   1999
                                                                 -------------          ------------

<S>                                                              <C>                    <C>
Cash and cash equivalents                                         $ 1,906,421           $ 2,476,260
                                                                  -----------           -----------

       Total assets                                               $ 1,906,421           $ 2,476,260
                                                                  ===========           ===========


                        LIABILITIES AND PARTNERS' EQUITY

Liabilities:

Accounts payable and accrued expenses                             $    68,524           $   266,759
Accounts payable to affiliates                                        284,099               480,542
                                                                  -----------           -----------
       Total liabilities                                              352,623               747,301

Partners' equity/(deficit):

   General Partners' deficit                                         (241,743)             (239,991)
   Limited Partners' equity                                         1,795,541             1,968,950
                                                                  -----------           -----------

       Total partners' equity                                       1,553,798             1,728,959
                                                                  -----------           -----------

       Total liabilities and partners' equity                     $ 1,906,421           $ 2,476,260
                                                                  ===========           ===========
</TABLE>


                        See Notes to Financial Statements


                                       3
<PAGE>   4


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED                          NINE MONTHS ENDED
                                                             SEPTEMBER 30,                              SEPTEMBER 30,
                                                      2000                  1999                 2000                   1999
                                                      ----                  ----                 ----                   ----
<S>                                               <C>                   <C>                   <C>                   <C>
Income:

     Rental income                                $        --           $    33,352           $        --           $   886,422
     Interest income                                   31,413                85,795                95,995               197,375
     Gain (loss) on sale of property                       --              (357,150)                   --             1,320,278
                                                  -----------           -----------           -----------           -----------

       Total income                                    31,413              (238,003)               95,995             2,404,075

Expenses:

     General and administrative expenses               53,618               150,978               270,481               526,294
     Property operating expenses                           --                26,532                   675               136,413
     Management fee                                        --                (2,043)                   --                14,738
                                                  -----------           -----------           -----------           -----------

       Total expenses                                  53,618               175,467               271,156               677,445
                                                  -----------           -----------           -----------           -----------

       Net income/(loss)                          $   (22,205)          $  (413,370)          $  (175,161)          $ 1,726,630
                                                  ===========           ===========           ===========           ===========

Allocation of net income/(loss):

     General Partner                              $      (222)          $    (4,135)          $    (1,752)          $    17,266
     John Hancock Limited Partner                          --               (48,770)                   --               180,286
     Investors                                        (21,983)             (360,565)             (173,409)            1,529,078
                                                  -----------           -----------           -----------           -----------
                                                  $   (22,205)          $  (413,470)          $  (175,161)          $ 1,726,630
                                                  ===========           ===========           ===========           ===========
Net income/(loss) per Unit                        $     (0.24)          $     (3.94)          $     (1.89)          $     16.68
                                                  ===========           ===========           ===========           ===========
</TABLE>


                        See Notes to Financial Statements


                                       4
<PAGE>   5


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                         STATEMENTS OF PARTNERS' EQUITY
                                   (UNAUDITED)


                    NINE MONTHS ENDED SEPTEMBER 30, 2000 AND
                          YEAR ENDED DECEMBER 31, 1999


<TABLE>
<CAPTION>
                                                             GENERAL               LIMITED
                                                             PARTNER               PARTNERS                 TOTAL
                                                             -------               --------                 -----

<S>                                                       <C>                    <C>                    <C>
Partners' equity/(deficit) at January 1, 1999
   (91,647 Units outstanding)                             $   (253,231)          $ 20,653,314           $ 20,400,083

Less:     Cash distributions                                      (795)           (20,073,849)           (20,074,644)

Add:      Net income                                            14,035              1,389,485              1,403,520
                                                          ------------           ------------           ------------

Partners' equity/(deficit) at December 31, 1999
   (91,647 Units outstanding)                                 (239,991)             1,968,950              1,728,959

Less:     Cash distributions                                        --                     --                     --

Add:      Net loss                                              (1,752)              (173,409)              (175,161)
                                                          ------------           ------------           ------------

Partners' equity/(deficit) at September 30, 2000
   (91,647 Units outstanding)                             $   (241,743)          $  1,795,541           $  1,553,798
                                                          ============           ============           ============
</TABLE>


                        See Notes to Financial Statements


                                       5
<PAGE>   6


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                  NINE MONTHS ENDED
                                                                                    SEPTEMBER 30,

                                                                             2000                   1999
                                                                             ----                   ----

<S>                                                                     <C>                    <C>
Operating activities:

   Net income/(loss)                                                    $   (175,161)          $  1,726,630

   Adjustments to reconcile net income/(loss) to net
   cash provided by operating activities:

      Depreciation                                                                --                     --
      Amortization of deferred expenses                                           --                     --
      Gain on sale of property                                                                   (1,320,277)
                                                                        ------------           ------------
                                                                            (175,161)               406,353

                                                                                               ------------
   Changes in operating assets and liabilities:
      Decrease/(increase) in restricted cash                                      --                 63,879
      Decrease/(increase) in other assets                                         --                 77,433
      Increase/(decrease) in accounts payable and accrued
         expenses                                                           (198,235)              (140,331)
      Increase/(decrease) in accounts payable to affiliates                 (196,443)               236,226
                                                                        ------------           ------------

           Net cash provided by (used in) operating activities              (569,839)               643,560

Investing activities:

   Proceeds from sales of properties                                              --             20,172,395
   Increase in deferred expenses                                                  --                (22,434)
                                                                        ------------           ------------

           Net cash provided by investing activities                              --             20,149,961

Financing activities:

   Cash distributed to Partners                                                   --            (17,945,278)
                                                                        ------------           ------------

           Net cash used in financing activities                                  --            (17,945,278)
                                                                        ------------           ------------

           Net increase (decrease) in cash
               and cash equivalents                                         (569,839)             2,848,243

           Cash and cash equivalents at
               beginning of year                                           2,476,260              2,055,017
                                                                        ------------           ------------

           Cash and cash equivalents at
               end of period                                            $  1,906,421           $  4,903,260
                                                                        ============           ============
</TABLE>


                        See Notes to Financial Statements


                                       6
<PAGE>   7


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. ORGANIZATION OF PARTNERSHIP

     John Hancock Realty Income Fund Limited Partnership (the "Partnership") was
     formed under the Massachusetts Uniform Limited Partnership Act on June 12,
     1986. As of September 30, 2000, the Partnership consisted of John Hancock
     Realty Equities, Inc. (the "General Partner"), a wholly-owned, indirect
     subsidiary of John Hancock Mutual Life Insurance Company; John Hancock
     Realty Funding, Inc. (the "John Hancock Limited Partner"); and 3,611
     Investor Limited Partners (the "Investors"), owning 91,647 Units of
     Investor Limited Partnership Interests (the "Units"). The John Hancock
     Limited Partner and the Investors are collectively referred to as the
     Limited Partners. The initial capital of the Partnership was $2,000,
     representing capital contributions of $1,000 from the General Partner and
     $1,000 from the John Hancock Limited Partner. The Amended Agreement of
     Limited Partnership of the Partnership (the "Partnership Agreement")
     authorized the issuance of up to 100,000 Units of Limited Partnership
     Interests at $500 per unit. During the offering period, which terminated on
     September 9, 1987, 91,647 Units were sold and the John Hancock Limited
     Partner made additional capital contributions of $7,330,760. There have
     been no changes in the number of Units outstanding subsequent to the
     termination of the offering period.

     The Partnership is engaged in the business of acquiring, improving, holding
     for investment and disposing of existing, income-producing, commercial and
     industrial properties on an all-cash basis, free and clear of mortgage
     indebtedness. Although the Partnership's properties were acquired and are
     held free and clear of mortgage indebtedness, the Partnership may incur
     mortgage indebtedness on its properties under certain circumstances, as
     specified in the Partnership Agreement.

     The latest date on which the Partnership is due to terminate is December
     31, 2016, unless it is sooner terminated in accordance with the terms of
     the Partnership Agreement. It is expected that in the ordinary course of
     the Partnership's business, the properties of the Partnership will be
     disposed of, and the Partnership terminated, before December 31, 2016.

     As initially stated in its Prospectus, it was expected that the Partnership
     would be dissolved upon the sale of its last remaining property, which at
     that time was expected to be within seven to ten years following the date
     such property was acquired by the Partnership. During 1999, the Partnership
     sold the last four properties in its portfolio resulting in the termination
     of the operations of the Partnership. The Partnership will be dissolved in
     accordance with the terms of the Partnership Agreement, as soon as
     reasonably practicable.

2. SIGNIFICANT ACCOUNTING POLICIES

     The accompanying unaudited financial statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information and with the instructions to Form 10-Q and Rule 10-01
     of Regulation S-X. Accordingly, they do not include all of the information
     and footnotes required by generally accepted accounting principles for
     complete financial statements. In the opinion of management, all
     adjustments (consisting of normal recurring accruals) considered necessary
     for a fair presentation have been included. Operating results for the
     nine-month period ended September 30, 2000 are not necessarily indicative
     of the results that may be expected for the year ending December 31, 2000.
     For further information, refer to the financial statements and footnotes
     thereto included in the Partnership's Annual Report on Form 10-K for the
     year ended December 31, 1999.

     The preparation of financial statements in conformity with generally
     accepted accounting principles 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 revenue and expenses
     during the reporting period. Actual results may differ from those
     estimates.

     Cash equivalents are highly liquid investments with maturities of three
     months or less when purchased. These investments are recorded at cost plus
     accrued interest, which approximates market value. Restricted cash
     represents funds restricted for tenant security deposits and other escrows.

     Property held for sale is recorded at the lower of its carrying amount, at
     the time the property is listed for sale, or its fair value, less cost to
     sell. Carrying amount includes the property's cost, as described below,
     less any accumulated depreciation thereon and less any property write-downs
     for impairment in value and plus any related unamortized deferred expenses.


                                       7
<PAGE>   8


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Investments in property are recorded at cost less any property write-downs
     for permanent impairment in values. Cost includes the initial purchase
     price of the property plus acquisition and legal fees, other miscellaneous
     acquisition costs, and the cost of significant improvements.

     The Partnership measures impairment in value in accordance with Financial
     Accounting Standards Board Statement No. 121, "Accounting for the
     Impairment of Long-Lived Assets to Be Disposed Of" ("Statement 121").
     Statement 121 requires impairment losses to be recorded on long-lived
     assets used in operations where indicators of impairment are present and
     the undiscounted cash flows estimated to be generated by those assets are
     less than the assets' carrying amounts.

     Depreciation has been provided on a straight-line basis over the estimated
     useful lives of the various assets: thirty years for the buildings and five
     years for related improvements. Maintenance and repairs are charged to
     operations as incurred.

     Deferred expenses relating to tenant improvements and lease commissions are
     amortized on a straight-line basis over the terms of the leases to which
     they relate. During 1993, the Partnership reduced the period over which its
     remaining deferred acquisition fees are amortized from thirty years, the
     estimated useful life of the buildings owned by the Partnership, to four
     and one-half years, the then estimated remaining life of the Partnership.

     The net income per Unit for the periods hereof are computed by dividing the
     Investors' share of net income by the number of Units outstanding at the
     end of such periods.

     No provision for income taxes has been made in the financial statements as
     such taxes are the responsibility of the individual partners and not of the
     Partnership.

3. THE PARTNERSHIP AGREEMENT

     Distributable Cash from Operations (defined in the Partnership Agreement)
     is distributed 99% to the Limited Partners and 1% to the General Partner.
     The Limited Partners' share of Distributable Cash from Operations is
     distributed as follows: first, to the Investors until they receive a 7%
     non-cumulative, non-compounded annual cash return on their Invested Capital
     (defined in the Partnership Agreement); second, to the John Hancock Limited
     Partner until it receives a 7% non-cumulative, non-compounded annual cash
     return on its Invested Capital; and third, to the Investors and the John
     Hancock Limited Partner in proportion to their respective Capital
     Contributions (defined in the Partnership Agreement). However, any
     Distributable Cash from Operations which is available as a result of the
     reduction of working capital reserves funded by Capital Contributions of
     the Investors will be distributed 100% to the Investors.

     Cash from Sales or Financings (defined in the Partnership Agreement) is
     first used to pay all debts and liabilities of the Partnership then due and
     is then used to fund any reserves for contingent liabilities. Cash from
     Sales or Financings is then distributed as follows: first, to the Limited
     Partners until they receive an amount equal to their Invested Capital with
     the distribution being made between the Investors and the John Hancock
     Limited Partner in proportion to their respective Capital Contributions;
     second, to the Investors until they have received, with respect to all
     previous distributions during the year, their Cumulative Return on
     Investment (defined in the Partnership Agreement); third, to the John
     Hancock Limited Partner until it has received, with respect to all previous
     distributions during the year, its Cumulative Return on Investment; fourth,
     to the General Partner to pay any Subordinated Disposition Fees (defined in
     the Partnership Agreement); and fifth, 99% to the Limited Partners and 1%
     to the General Partner, with the distribution being made between the
     Investors and the John Hancock Limited Partner in proportion to their
     respective Capital Contributions.


                                       8
<PAGE>   9


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

3. THE PARTNERSHIP AGREEMENT (CONTINUED)

     Cash from the sale of the last of the Partnership's properties is to be
     distributed in the same manner as Cash from Sales or Financings, except
     that before any other distribution is made to the Partners, each Partner
     shall first receive from such cash, an amount equal to the then positive
     balance, if any, in such Partner's Capital Account after crediting or
     charging to such account the profits or losses for tax purposes from such
     sale. To the extent, if any, that a Partner is entitled to receive a
     distribution of cash based upon a positive balance in its capital account
     prior to such distribution, such distribution will be credited against the
     amount of such cash the Partner would have been entitled to receive based
     upon the manner of distribution of Cash from Sales or Financings, as
     specified in the previous paragraph.

     Profits from the normal operations of the Partnership for each fiscal year
     are allocated to the Limited Partners and General Partner in the same
     amounts as Distributable Cash from Operations for that year. If such
     profits are less than Distributable Cash from Operations for any year, they
     are allocated in proportion to the amounts of Distributable Cash from
     Operations for that year. If such profits are greater than Distributable
     Cash from Operations for any year, they are allocated 99% to the Limited
     Partners and 1% to the General Partner, with the allocation made between
     the John Hancock Limited Partner and the Investors in proportion to their
     respective Capital Contributions. Losses from the normal operations of the
     Partnership are allocated 99% to the Limited Partners and 1% to the General
     Partner, with the allocation made between the John Hancock Limited Partner
     and the Investors in proportion to their respective Capital Contributions.
     Depreciation deductions are allocated 1% to the General Partner and 99% to
     the Investors, and not to the John Hancock Limited Partner.

     Profits and Losses from Sales or Financings are generally allocated 99% to
     the Limited Partners and 1% to the General Partners. In connection with the
     sale of the last of the Partnership's properties, and therefore the
     dissolution of the Partnership, profits will be allocated to any Partners
     having a deficit balance in their Capital Account in an amount equal to the
     deficit balance. Any remaining profits will be allocated in the same order
     as cash from the sale would be distributed.

     Neither the General Partner nor any Affiliate (as defined in the
     Partnership Agreement) of the General Partner shall be liable, responsible
     or accountable in damages to any of the Partners or the Partnership for any
     act or omission of the General Partner in good faith on behalf of the
     Partnership within the scope of the authority granted to the General
     Partner by the Partnership Agreement and in the best interest of the
     Partnership, except for acts or omissions constituting fraud, negligence,
     misconduct or breach of fiduciary duty. The General Partner and its
     Affiliates performing services on behalf of the Partnership shall be
     entitled to indemnity from the Partnership for any loss, damage, or claim
     by reason of any act performed or omitted to be performed by the General
     Partner in good faith on behalf of the Partnership and in a manner within
     the scope of the authority granted to the General Partner by the
     Partnership Agreement and in the best interest of the Partnership, except
     that they shall not be entitled to be indemnified in respect of any loss,
     damage, or claim incurred by reason of fraud, negligence, misconduct, or
     breach of fiduciary duty. Any indemnity shall be provided out of and to the
     extent of Partnership assets only. The Partnership shall not advance any
     funds to the General Partner or its Affiliates for legal expenses and other
     costs incurred as a result of any legal action initiated against the
     General Partner or its Affiliates by a Limited Partner in the Partnership,
     except under certain specified circumstances.


                                       9
<PAGE>   10


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


4. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES

     Fees and expenses incurred or paid by the General Partner or its Affiliates
     on behalf of the Partnership and to which the General Partner or its
     Affiliates are entitled to reimbursement from the Partnership were as
     follows:

<TABLE>
<CAPTION>
                                                            Nine Months Ended
                                                              September 30,
                                                          2000              1999
                                                          ----              ----
<S>                                                     <C>               <C>
          Reimbursement for operating expenses          $ 42,455          $102,692
          Partnership management fee expense                  --            14,738
                                                        --------          --------

                                                        $ 42,455          $117,430
                                                        ========          ========
</TABLE>

     These expenses are included in expenses on the Statements of Operations.

     The Partnership provides indemnification to the General Partner and its
     Affiliates for any acts or omissions of the General Partner in good faith
     on behalf of the Partnership, except for acts or omissions constituting
     fraud, negligence, misconduct or breach of fiduciary duty. The General
     Partner believes that this indemnification applies to the legal proceedings
     described in Note 6. Accordingly, included in the Statements of Operations
     for the nine months ended September 30, 2000 and 1999 is $0 and $170,899,
     respectively, representing the Partnership's share of costs incurred by the
     General Partner and its Affiliates relating to such legal proceedings.
     Through September 30, 2000, the Partnership has accrued a total of $534,961
     as its share of the costs incurred by the General Partner and its
     Affiliates resulting from this matter.

     Accounts payable to affiliates represents amounts due to the General
     Partner or its Affiliates for various services provided to the Partnership,
     including amounts to indemnify the General Partner or its Affiliates for
     claims incurred by them in connection with their actions as General Partner
     of the Partnership. All amounts accrued by the Partnership to indemnify the
     General Partner or its Affiliates for legal fees incurred by them shall not
     be paid unless or until all conditions set forth in the Partnership
     Agreement for such payment have been fulfilled.

     The General Partner serves in a similar capacity for two other affiliated
     real estate limited partnerships.

5. FEDERAL INCOME TAXES

     A reconciliation of the net income reported on the Statements of Operations
     to the net income reported for federal income tax purposes is as follows:
<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                                2000                   1999
                                                                                ----                   ----
<S>                                                                         <C>                    <C>
              Net income per Statements of Operations                       $   (175,161)          $  1,726,630
              Add/(deduct):
                                    Excess tax loss over book loss
                                       on disposition of assets                       --            (11,492,810)
                                    Excess of tax depreciation
                                      over book depreciation                          --               (258,379)
                                    Excess of tax amortization
                                      over book amortization                          --                 (6,945)
                                                                            ------------           ------------
              Net income for federal income tax purposes                    $   (175,161)          $(10,031,504)
                                                                            ============           ============
</TABLE>


                                       10
<PAGE>   11


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


6. CONTINGENCIES

     In February 1996, a putative class action complaint was filed in the
     Superior Court in Essex County, New Jersey by a single investor in a
     limited partnership affiliated with the Partnership. The complaint named as
     defendants the Partnership, the General Partner, certain other Affiliates
     of the General Partner, and certain unnamed officers, directors, employees
     and agents of the named defendants. The plaintiff sought unspecified
     damages stemming from alleged misrepresentations and omissions in the
     marketing and offering materials associated with the Partnership and two
     limited partnerships affiliated with the Partnership. On March 18, 1997,
     the court certified a class of investors who were original purchasers in
     the Partnership.

     A settlement agreement was approved by the court on December 22, 1999.
     Under the terms of the settlement, the defendants guaranteed certain
     minimum returns to class members on their investments and have paid fees
     and expenses for class counsel in an amount determined by the court to be
     $1.5 million. Payment under the settlement agreement will have no financial
     impact on the Partnership.

     In September 1997, a complaint for damages was filed in the Superior Court
     of the State of California for the County of Los Angeles by an investor in
     John Hancock Realty Income Fund-II Limited Partnership ("RIF-II"), a
     limited partnership affiliated with the Partnership. The complaint named
     the General Partner as a defendant. The plaintiff sought unspecified
     damages that allegedly arose from the General Partner's refusal to provide,
     without reasonable precautions on plaintiffs' use of, a list of investors
     in the Partnership and in RIF-II. Plaintiff alleges that the General
     Partner's refusal unconditionally to provide a list was a breach of
     contract and a breach of the General Partner's fiduciary duty.

     A settlement agreement was reached on February 18, 2000 terminating all
     litigation between the parties. The settlement will not have a material
     adverse impact on the Partnership's financial position.

     The Partnership provides indemnification to the General Partner and its
     Affiliates for acts or omissions of the General Partner in good faith on
     behalf of the Partnership, except for acts or omissions constituting fraud,
     negligence, misconduct or breach of fiduciary duty. The General Partner
     believes that this indemnification applies to the complaints described
     above.

     The Partnership has incurred an aggregate of approximately $1,432,577 in
     legal expenses in connection with these legal proceedings. Of this amount,
     approximately $897,716 relates to the Partnership's own defense and
     approximately $534,861 relates to the indemnification of the General
     Partner and its Affiliates for their defense. These expenses are funded
     from the operations of the Partnership.

     During August 1998, the General Partner became aware that the Crossroads
     Square Shopping Center was environmentally contaminated with certain
     hazardous materials. The General Partner then sought to determine the scope
     of the contamination and to determine the impact on the future operating
     costs, repair and maintenance expenses and market value of the property.
     The General Partner estimated that to remediate the contamination would
     cost approximately $450,000. The Partnership sold the property on July 13,
     1999 to a non-affiliated buyer for a net sales price of $8,733,420 after
     deductions for commissions and selling expenses incurred in connection with
     the sale of the property. The sale was not contingent upon the
     environmental issues, the costs of which were factored into the purchase
     price by the buyer. The General Partner has no reason to believe, as of the
     date of this report, that the Partnership will be held responsible for any
     further environmental costs associated with this property. No assurances
     can be given that no environmental liabilities will arise in the future.


                                       11
<PAGE>   12


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

During the offering period from September 9, 1986 to September 9, 1987, the
Partnership sold 91,647 Units representing gross proceeds (exclusive of the John
Hancock Limited Partner's contribution which was used to pay sales commissions,
acquisition fees and organizational and offering expenses) of $45,823,500. The
proceeds of the offering were used to acquire investment properties and fund
reserves.

FORWARD-LOOKING STATEMENTS
In addition to historical information, certain statements contained herein
contain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Those statements appear in a number of places in this
Report and include statements regarding the intent, belief or expectations of
the General Partner with respect to, among other things, the prospective winding
up of the Partnership business, actions that would be taken in the event of lack
of liquidity, litigation expenses and indemnification claims, distributions to
the General Partner and to Investors, and the impact of inflation.

Forward-looking statements involve numerous known and unknown risks and
uncertainties, and they are not guarantees of future performance. The following
factors, among others, could cause actual results or performance of the
Partnership and future events to differ materially from those expressed or
implied in the forward-looking statements: general economic and business
conditions; any and all general risks of real estate ownership, including
without limitation adverse changes in general economic conditions and adverse
local conditions, and other factors detailed from time to time in the filings
with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on forward-looking statements,
which reflect the General Partner's analysis only as of the date hereof. The
Partnership assumes no obligation to update forward-looking statements. See also
the Partnership's reports to be filed from time to time with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.

LIQUIDITY AND CAPITAL RESOURCES

As initially stated in its Prospectus, it was expected that the Partnership
would be dissolved upon the sale of its last remaining property, which at that
time was expected to be within seven to ten years following the date such
property was acquired by the Partnership. The Partnership sold the last property
in its portfolio, Crossroads Square Shopping Center, on July 13, 1999. The sale
of this last remaining property resulted in the termination of the operations of
the Partnership, and the Partnership will be dissolved, in accordance with the
terms of the Partnership Agreement, as soon as reasonably practicable. At such
time as all liabilities with respect to the Partnership are resolved, the
General Partner will make a final distribution of net assets to the Limited
Partners, as soon as practicable. No assurances can be given as to whether any
distribution can be made after all liabilities of the Partnership are resolved.
Such final distribution, if any, will result in the liquidation and termination
of the Partnership. At such time of such final distribution, the outstanding
Units will be cancelled, and, in accordance with federal securities laws, they
will be de-registered with the Securities and Exchange Commission, after which
time the Partnership will no longer be required to file periodic reports with
the Commission.

At September 30, 2000, the Partnership had $1,906,421 in cash and cash
equivalents.

The Partnership has established a working capital reserve the current balance of
which is approximately $1,554,000. The General Partner anticipates that such
amount should be sufficient to satisfy the Partnership's general liquidity
requirements as the Partnership's business is wound down. Liquidity would,
however, be materially adversely affected by significant unanticipated operating
and liquidation costs (including but not limited to litigation expenses). If any
or all of these events were to occur, to the extent that the working capital
reserve would be insufficient to satisfy the cash requirements of the
Partnership, it is anticipated that additional funds would be obtained through a
reduction of cash distributions to Investors, bank loans, or short-term loans
from the General Partner or its Affiliates.


                                       12
<PAGE>   13


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

There were no cash distributions to the Limited Partners and General Partner
during the nine months ended September 30, 2000. As a result of the disposition
by the Partnership of all of its remaining properties during 1999, the General
Partner has determined that it was in the best interests of the Partnership to
retain, rather than distribute to the Limited Partners, net cash provided by the
Partnership's normal operations in order to fund cash reserves for
contingencies, as is permitted by the Partnership Agreement. Accordingly, no
cash distributions will be made to the Limited Partners until the final
distribution, if any, as discussed above.

The Partnership has incurred approximately $532,173 in legal expenses in
connection with the class action lawsuit (see Part II, Item 1 of this Report).
Of this amount, approximately $322,075 relates to the Partnership's own defense
and approximately $210,098 relates to the indemnification of the General Partner
and its Affiliates for their defense. These expenses are funded from the
operations of the Partnership. In addition, the Partnership incurred
approximately $900,404 in legal expenses in connection with the lawsuit filed in
the Superior Court of the State of California for the County of Los Angeles by
an investor in the Partnership. Of this amount, approximately $575,641 relates
to the Partnership's own defense and approximately $324,763 relates to the
indemnification of the General Partner and its Affiliates for their defense.
These expenses are funded from the operations of the Partnership.

RESULTS OF OPERATIONS

The Partnership generated a net loss of $175,161 for the nine months ended
September 30, 2000 as compared to net income of $1,726,630 for the same period
in 1999. Included in the results for the nine months ended September 30, 2000 is
a net non-recurring gain of $1,320,278 from the sales of the Carnegie Center,
Marlboro Square, Warner Plaza and Crossroads Square properties. Excluding the
results of this gain, net income for the nine months ended September 30, 2000
decreased by $581,512, or 143%, as compared to the prior year. This decrease is
due to the sales of these four properties during 1999.

Rental income for the nine months ended September 30, 2000, decreased by
$886,422, or 100%, as compared to the same period in 1999. This decrease is due
to the sales of the Carnegie Center, Marlboro Square, Warner Plaza and
Crossroads Square properties during 1999.

Interest income for the nine months ended September 30, 2000 decreased by
$101,381, or 51%, as compared to the same period in 1999. This decrease was
primarily due to a decrease in the balance of the Partnership's working capital
reserves. The Partnership's working capital reserves have decreased as a result
of the sales of the Partnership's properties and a need for fewer reserves as
the Partnership is wound down.

The Partnership's share of property operating expenses for the nine months ended
September 30, 2000 decreased by $135,739, or 99%, as compared to the same period
in 1999. This decrease is due to the sales of the Carnegie Center, Marlboro
Square, Warner Plaza and Crossroads Square properties.

General and administrative expenses for the nine months ended September 30, 2000
decreased by $255,813, or 49%, as compared to the same period during 1999. This
decrease is primarily due to a decrease in legal fees incurred by the
Partnership in connection with the legal proceedings described in Item 1 of Part
II of this Report and to a decrease in the time required by the General Partner
in managing the activities of the Partnership resulting from the sales of the
last four properties in the portfolio during 1999.


                                       13
<PAGE>   14


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS (CONTINUED)

Management fee expense, which is equal to 3.5% of Cash from Operations (as
defined in the Partnership Agreement), decreased by $14,738, or 100%, for the
nine months ended September 30, 2000 as compared to the same period in 1999.
This decrease was due to a decline in Cash from Operations between periods
primarily resulting from the sale of the Partnership's four properties during
1999.

The General Partner believes that inflation has had no significant impact on the
Partnership's operations during the nine months ended September 30, 2000, and
the General Partner anticipates that inflation will not have a significant
impact during the remainder of 2000.

CASH FLOW

The following table provides the calculations of Cash from Operations and
Distributable Cash from Operations which are calculated in accordance with
Section 17 of the Partnership Agreement:
<TABLE>
<CAPTION>
                                                                  Nine Months Ended
                                                                    September 30,

                                                               2000               1999
                                                               ----               ----
<S>                                                         <C>                 <C>
Net cash provided by operating activities (a)               $(569,839)          $ 643,560
Net change in operating assets and liabilities (a)            394,678            (237,207)
                                                            ---------           ---------
Cash provided by operations (a)                              (175,161)            406,353
Increase in working capital reserves                               --            (406,353)
Add:       Accrual basis Partnership
           management fee                                          --              14,738
                                                            ---------           ---------
Cash from operations (b)                                     (175,161)             14,738
Decrease in working capital reserves                          175,161                  --
Less:      Accrual basis Partnership
           management fee                                          --             (14,738)
                                                            ---------           ---------
Distributable cash from operations (b)                      $       0           $       0
                                                            =========           =========

Allocation to General Partner                               $      --           $      --
Allocation to John Hancock Limited Partner                         --                  --
Allocation to Investors                                            --                  --
                                                            ---------           ---------
Distributable cash from operations (b)                      $      --           $      --
                                                            =========           =========
</TABLE>

     (a)  Net cash provided by operating activities, net change in operating
          assets and liabilities, and cash provided by operations are as
          calculated in the Statements of Cash Flows included in Item 1 of this
          Report.

     (b)  As defined in the Partnership Agreement. Distributable Cash from
          Operations should not be considered as an alternative to net income
          (i.e. not an indicator of performance) or to reflect cash flows or
          availability of discretionary funds.

The amount of future cash distributions will be dependent upon the need to draw
down working capital reserves. As of the date of this report, all of the
properties in the Partnership have been sold. In order to adequately provide for
all future contingencies, the General Partner has determined (as permitted by
the Partnership Agreement) to retain rather than distribute to the Limited
Partners, net cash provided by the Partnership's normal operations in order to
fund cash reserves for contingencies. Accordingly, no cash distributions with
respect to Distributable Cash from Operations will be made to the Limited
Partners. At such time as all liabilities with respect to the Partnership are
resolved, the General Partner will make a final distribution of net assets to
the Limited Partners, in accordance with the terms of the Partnership Agreement.
No assurances can be given as to whether any distribution can be made after all
liabilities of the Partnership are resolved. Such final distribution, if any,
will result in the liquidation and termination of the Partnership.


                                       14
<PAGE>   15


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                           PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        In February 1996, a putative class action complaint was filed in the
        Superior Court in Essex County, New Jersey by a single investor in a
        limited partnership affiliated with the Partnership. The complaint named
        as defendants the Partnership, the General Partner, certain other
        affiliates of the General Partner, and certain unnamed officers,
        directors, employees and agents of the named defendants.

        The plaintiff sought unspecified damages stemming from alleged
        misrepresentations and omissions in the marketing and offering materials
        associated with the Partnership and two limited partnerships affiliated
        with the Partnership. The complaint alleged, among other things, that
        the marketing materials for the Partnership and the affiliated limited
        partnerships did not contain adequate risk disclosures.

        On March 18, 1997, the court certified a class of investors who were
        original purchasers in the Partnership.

        A settlement agreement was approved by the court on December 22, 1999.
        Under the terms of the settlement, the defendants guaranteed certain
        minimum returns to class members on their investments and paid fees and
        expenses to class counsel in an amount determined by the court to be
        $1.5 million. These terms of the settlement will have no financial
        impact on the Partnership.

        In September 1997, a complaint for damages was filed in the Superior
        Court of the State of California for the County of Los Angeles by an
        investor in John Hancock Realty Income Fund-II Limited Partnership
        ("RIF-II"), a limited partnership affiliated with the Partnership. The
        complaint named the General Partner as a defendant.

        The plaintiff sought unspecified damages that allegedly arose from the
        General Partner's refusal to provide, without reasonable precautions on
        plaintiff's use of, a list of investors in the Partnership and in
        RIF-II. Plaintiff alleges that the General Partner's refusal
        unconditionally to provide a list was a breach of contract and a breach
        of the General Partner's fiduciary duty.

        A settlement agreement was reached on February 18, 2000 terminating all
        litigation between the parties. The settlement will not have a material
        adverse impact on the Partnership's financial position.

        There are no other material pending legal proceedings, other than
        ordinary routine litigation incidental to the business of the
        Partnership, to which the Partnership is a party or to which any of its
        properties is subject.

ITEM 2. CHANGES IN SECURITIES

        There were no changes in securities during the third quarter of 2000.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        There were no defaults upon senior securities during the third quarter
        of 2000.

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

        There were no matters submitted to a vote of security holders of the
        Partnership during the third quarter of 2000.

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) There are no exhibits to this report.
        (b) There were no Reports on Form 8-K filed during the third quarter
            of 2000.


                                       15
<PAGE>   16


               JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
                      (A MASSACHUSETTS LIMITED PARTNERSHIP)

                                   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, thereunto duly authorized, on the 14th day of November, 2000.


                                        John Hancock Realty Income Fund
                                        Limited Partnership


                                        By:  John Hancock Realty Equities, Inc.,
                                             General Partner


                                             By: /s/ John M. Garrison
                                                 -------------------------------
                                                 John M. Garrison, President


                                             By: /s/ Virginia H. Lomasney
                                                 -------------------------------
                                                 Virginia H. Lomasney, Treasurer
                                                 (Chief Accounting Officer)


                                       16