Exhibit 99.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350.
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection  with the Annual Report of Investment  Properties  Associates (the
"Company")  on Form 10-K for the period  ending  December 31, 2002 as filed with
the Securities  and Exchange  Commission on the date hereof (the  "Report"),  I,
Robert Hecht,  Chief Financial Officer of the Company,  certify,  pursuant to 18
U.S.C.  ss. 1350, as adopted  pursuant to ss. 906 of the  Sarbanes-Oxley  Act of
2002, that:

      (1) The Report fully  complies with the  requirements  of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

      (2) The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.

/s/ Robert Hecht
---------------------------------------
Robert Hecht
Chief Financial Officer

March 24, 2003

<PAGE>

                           Annual Report On Form 10-K

                          Items 8 and 15(A)(1) and (2)

          List Of Financial Statements And Financial Statement Schedule

              Financial Statements And Financial Statement Schedule

                          Year Ended December 31, 2002

                        Investment Properties Associates
                        (A New York Limited Partnership)

                               New York, New York

<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

         Index Of Financial Statements And Financial Statement Schedule

                                                                            Page
                                                                            ----
Report of Independent Auditors...............................................S-1
Balance Sheets-December 31, 2002 and 2001....................................S-2
Statements of Income-Years Ended December 31, 2002,
  2001 and 2000......................................................S-3 and S-4
Statements of Changes in Partners' Capital (Deficiency)-
  Years Ended December 31, 2002, 2001 and 2000...............................S-5
Statements of Cash Flows-Years Ended December 31, 2002,
  2001 and 2000..............................................................S-6
Notes to Financial Statements........................................S-7 to S-16

The following financial statement schedule of Investment  Properties  Associates
is included in Item 15 (A)(2):

Schedule III-Real Estate and Accumulated Depreciation..............S-17 and S-18

All other  schedules for which  provision is made in the  applicable  accounting
regulation of the Securities and Exchange  Commission are not required under the
related  instructions,  are inapplicable or have been otherwise  disclosed,  and
therefore have been omitted.

<PAGE>

                         Report of Independent Auditors

Investment Properties Associates

We have  audited  the  accompanying  balance  sheets  of  Investment  Properties
Associates  (a New York Limited  Partnership)  as of December 31, 2002 and 2001,
and the related statements of income,  changes in partners' capital (deficiency)
and cash flows for each of the three  years in the  period  ended  December  31,
2002. Our audits also included the financial  statement  schedule  listed in the
index at Item 15. These financial statements and schedule are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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  Investment   Properties
Associates at December 31, 2002 and 2001,  and the results of its operations and
its cash flows for each of the three  years in the  period  ended  December  31,
2002, in conformity with accounting  principles generally accepted in the United
States.  Also, in our opinion,  the related financial statement  schedule,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.

                                                           /s/ Ernst & Young LLP

New York, New York
January 31, 2003


                                      S-1
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                                 Balance Sheets

                                                            December 31,
                                                      -------------------------
                                                        2002             2001
                                                      --------         --------
Assets
Real estate held for sale, at cost (Note 3)           $8,033,347     $8,033,347
  Less accumulated depreciation and
    amortization                                       5,880,040      5,880,040
                                                      -------------------------
                                                       2,153,307      2,153,307
                                                      -------------------------

Cash and cash equivalents                              1,516,410      2,788,292

Due from managing agent (Helmsley-
  Spear Inc.) (Note 5)                                    47,380        229,291

Receivables, principally for rentals                          --          3,553

Other assets, (Note 4)                                    16,881        457,515

                                                      -------------------------
Total assets                                          $3,733,978     $5,631,958
                                                      =========================

                                                            December 31,
                                                      -------------------------
                                                        2002             2001
                                                      --------         --------

Liabilities and partners' capital
  (deficiency)
Accounts payable                                      $    6,547     $    7,903
Distributions payable to General Partners,
  Special Limited Partners and Limited
  Partner (Note 8)                                       457,752        698,179
Guaranteed payments due to General
  Partners, Special Limited Partners and
  Limited Partner (Note 6)                               146,500        146,500

Due to managing agent (Helmsley-
  Spear, Inc.) (Note 5)                                       --         35,661
Sundry and accrued liabilities                           105,230        233,638
Deposits (Note 3)                                             --      1,500,000
                                                      -------------------------
Total liabilities                                        716,029      2,621,881
                                                      -------------------------
Commitments and contingencies
  (Note 11)

Partners' capital (deficiency)
  (Notes 1, 6, 7, and 8):
    General Partners                                  (2,495,163)    (2,495,206)
    Special Limited Partners                           3,290,185      3,286,292
    Limited Partner (represented by
      the equivalent of 820,000
      Participation Interests)                         2,222,927      2,218,991
                                                      -------------------------
                                                       3,017,949      3,010,077
                                                      -------------------------
Total liabilities and partners'
  capital (deficiency)                                $3,733,978     $5,631,958
                                                      =========================

See accompanying notes.


                                      S-2
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                              Statements of Income

<TABLE>
<CAPTION>
                                                          Years ended December 31,
                                                    2002           2001            2000
                                                 ------------------------------------------
<S>                                              <C>            <C>            <C>
Revenues:
Gross revenues from real estate (Note 10)        $       --     $  143,887     $  5,969,098
Interest and other income                         1,627,677      1,607,060        1,174,914
                                                 ------------------------------------------
                                                  1,627,677      1,750,947        7,144,012
                                                 ------------------------------------------
Expenses:
  Real estate taxes                                 307,759        258,100          547,845
  Interest                                               --             --           43,584
  Management fees (Note 5)                               --             --          109,737
  Payroll and related expenses                      124,383        128,403          431,153
  Repairs and maintenance expenses                       --             --          239,056
  Other property expenses                           204,949        133,753          825,410
  Administrative expenses                           415,676        833,226          636,900
  Depreciation and amortization of real estate           --             --          598,174
  Amortization of leasing commissions                    --             --          232,160
                                                 ------------------------------------------
                                                  1,052,767      1,353,482        3,664,019
                                                 ------------------------------------------
Income before items shown below                     574,910        397,465        3,479,993


Gain on sales of real estate (Note 3)                    --         95,096      150,500,239
                                                 ------------------------------------------

Income before guaranteed payments required
 under the Limited Partnership Agreement         $  574,910     $  492,561     $153,980,232
</TABLE>

See accompanying notes.


                                      S-3
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                        Statements of Income (continued)

<TABLE>
<CAPTION>
                                                          Years ended December 31,
                                                    2002           2001            2000
                                                 ------------------------------------------
<S>                                              <C>            <C>            <C>
Guaranteed payments required under
  the Limited Partnership agreement
  (Note 6):
    To the Limited Partner                       $ 15,000       $ 15,000       $     15,000
    To General and Special
      Limited Partners                            101,500        101,500            101,500
    To General Partners                                --             --             34,054
                                                 ------------------------------------------
                                                  116,500        116,500            150,554
                                                 ------------------------------------------

Net income                                       $458,410       $376,061       $153,829,678
                                                 ==========================================
Net income allocable as follows (Note 7):

  General Partners                                  2,521          2,591          1,103,106

  Special Limited Partners                        226,684        232,987         99,179,316

  Limited Partner                                 229,205        140,483         53,547,256
                                                 ------------------------------------------
                                                 $458,410       $376,061       $153,829,678
                                                 ==========================================
Net Income Per Limited Partner
  Participation Interest (820,000
  units outstanding):                            $ 0.2795       $ 0.1713       $    65.3015
                                                 ==========================================
</TABLE>

See accompanying notes.


                                      S-4
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

             Statements of Changes in Partners' Capital (Deficiency)

<TABLE>
<CAPTION>
                                                                            Special
                                                               General      Limited         Limited
                                               Total          Partners      Partners        Partner
                                          ------------------------------------------------------------
<S>                                       <C>              <C>            <C>             <C>
Partners' Capital (Deficiency)
  January 1 2000                          $  15,603,535    $(2,683,508)   $(13,643,808)   $ 31,930,851
Distribution to General Partners,
  Special Limited Partners and Limited
  Partner (Note 8)                         (160,908,232)      (884,995)    (79,569,121)    (80,454,116)
  Net income for the year ended
  December 31, 2000 (Note 7)                153,829,678      1,103,106      99,179,316      53,547,256
                                          ------------------------------------------------------------
Partners' Capital (Deficiency)
  December 31, 2000                           8,524,981     (2,465,397)      5,966,387       5,023,991
Distribution to General Partners,
  Special Limited Partners and Limited
  Partner (Note 8)                           (5,890,965)       (32,400)     (2,913,082)     (2,945,483)
Net income for the year ended
  December 31, 2001 (Note 7)                    376,061          2,591         232,987         140,483
                                          ------------------------------------------------------------

Partners' Capital (Deficiency)
  December 31, 2001                           3,010,077     (2,495,206)      3,286,292       2,218,991
Distribution to General Partners,
  Special Limited Partners and Limited
  Partner (Note 8)                             (450,538)        (2,478)       (222,791)       (225,269)
Net income for the year ended
  December 31, 2001 (Note 7)                    458,410          2,521         226,684         229,205
                                          ------------------------------------------------------------
Partners' Capital (Deficiency)
  December 31, 2002                       $   3,017,949    $(2,495,163)   $  3,290,185    $  2,222,927
                                          ============================================================
</TABLE>

See accompanying notes.


                                      S-5
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                  Years ended December 31,
                                                             2002          2001           2000
                                                        --------------------------------------------
<S>                                                     <C>            <C>            <C>
Operating activities:
Net income                                              $   458,410    $   376,061    $ 153,829,678
Adjustments to reconcile net income to net cash
  (used in) provided by operating activities:
Depreciation and amortization                                    --             --          830,334
Gain on sale of real estate                                      --        (95,096)    (150,500,239)
Changes in operating assets and liabilities:
Due from managing agent                                     181,911        501,287        2,091,590
Receivables                                                   3,553          4,662          459,017
Other assets                                                440,634         95,835          676,101
Accounts payable                                             (1,356)      (105,465)        (564,809)
Accrued real estate tax                                          --        (11,086)          11,088
Accrued interest                                                 --             --          (29,278)
Guaranteed payments due to General Partners,
  Special Limited Partners and Limited Partner                   --        (34,053)        (120,168)
Due to managing agent                                       (35,661)        (6,159)        (189,293)
Sundry and accrued liabilities                             (128,408)        61,093         (438,167)
Deposits and rents received in advance                           --             --       (1,696,853)
Deposits                                                 (1,500,000)     1,500,000               --
                                                        --------------------------------------------
Net cash (used in) provided by operating activities        (580,917)     2,287,079        4,359,001
                                                        --------------------------------------------
Investing activities:
Property improvements                                            --             --         (595,995)
Net proceeds from sale of real estate                            --         95,096      164,953,897
                                                        --------------------------------------------
Net cash provided by investing activities                        --         95,096      164,357,902
                                                        --------------------------------------------

Financing activities:
Distributions to General Partners, Special Limited
   Partners and Limited Partner                            (690,965)    (9,108,232)    (234,972,567)
Principal payments on mortgages payable                          --             --       (4,000,000)
                                                        --------------------------------------------
Net cash used in financing activities                      (690,965)    (9,108,232)    (238,972,567)
                                                        --------------------------------------------

Decrease in cash and cash equivalents                    (1,271,882)    (6,726,057)     (70,255,664)
Cash and cash equivalents at beginning of year            2,788,292      9,514,349       79,770,013
                                                        --------------------------------------------
Cash and cash equivalents at end of year                $ 1,516,410    $ 2,788,292    $   9,514,349
                                                        ============================================

Supplemental disclosure of cash flow information
Cash paid during the year for interest                  $        --    $        --    $      72,862
                                                        ============================================

Supplemental disclosure of non-cash investing and
   financing activities
Deferred leasing commissions charged to cost of sales   $        --    $        --    $   2,350,881
                                                        ============================================
</TABLE>

See accompanying notes.


                                      S-6
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                          Notes to Financial Statements

                                December 31, 2002

1. Description of Business

Investment  Properties Associates ("IPA") was formed as a limited partnership on
May 15, 1969 to acquire and operate  commercial  properties.  Through January 4,
1997,  the General  Partners of IPA were Mr. Harry B.  Helmsley  and Mr.  Irving
Schneider and two corporations  owned or controlled by them.  Collectively,  the
General Partners owned a 1.5% interest in IPA. Upon the death of Mr. Helmsley on
January 4, 1997, the general  partnership  interest  owned by him  automatically
converted to a Special Limited  Partnership  Interest owned by his estate.  As a
result of this  conversion,  the total  interests of the General  Partners  were
reduced to .55%. The Special  Limited  Partners are Mrs. Leona M. Helmsley,  Mr.
Irving  Schneider,  and the  Estate of Mr.  Harry B.  Helmsley  and the  Limited
Partner is Mr. John Bailey.  Undivided  interests in the limited partnership are
represented by 820,000 Participation  Interests ("PPI's").  Changes in ownership
subsequent to January 4, 1997 are described below.

Under  the  terms of the  Partnership  Agreement  in  effect  on the date of Mr.
Helmsley's  death,  the General  Partners  were required to create a new limited
partnership  with  the  same  attributes  as  IPA  and  convey  all  assets  and
liabilities  of IPA to that  entity.  Because such a course of action would have
resulted  in  substantial  expense  to IPA and no benefit  to the  partners  and
holders of PPI's,  the General Partners  obtained  approval of a majority of the
holders  of the PPI's to  continue  the  business  of IPA,  and the  Partnership
Agreement was amended to that effect effective May 30, 1997.

Effective July 3, 1997, the Partnership Agreement was further amended to admit a
newly formed  limited  liability  company  owned by Mrs.  Leona M. Helmsley as a
General  Partner of IPA.  This  entity was  allocated  a portion of the  general
partner interest owned by one of the corporate general partners.

On June 10, 1998, the General  Partner  interests of the corporation and limited
liability  company  owned by Mrs.  Leona M.  Helmsley,  and the Special  Limited
Partner  interests  owned by Mrs.  Leona M.  Helmsley and the Estate of Harry B.
Helmsley were acquired by ScogBell  Acquisition,  L.L.C.  ("ScogBell").  Also on
June 10, 1998,  ScogBell  acquired 282,377 PPI's from Mrs. Leona M. Helmsley and
28,550 PPI's in the over-the-counter market.

As of  December  31,  2002 and 2001,  IPA's sole real  estate  asset is a vacant
office  property  located in Newark,  New Jersey (see Note 3). IPA is continuing
its efforts to dispose of this property and wind down its affairs.


                                      S-7
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

2. Significant Accounting Policies

      a.    The   preparation  of  financial   statements  in  conformity   with
            accounting  principles  generally  accepted  in  the  United  States
            requires  management to make estimates and  assumptions  that affect
            the reported  amount 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.

      b.    Rental revenue from tenant leases was recognized on a  straight-line
            basis over the terms of the associated leases.

      c.    Depreciation of buildings and building improvements was provided for
            by the straight-line  method over estimated useful lives of 19 to 39
            years.  Leaseholds,  leasehold improvements and tenants' alterations
            were  amortized  over  the  terms  of the  related  leases.  Amounts
            applicable  to  tenants'  alterations  and the  related  accumulated
            amortization  were  eliminated  from  the  accounts  at the time the
            related lease expired or, if the tenant  vacated the premises  prior
            thereto,  unamortized  assets were charged to operations in the year
            the premises were vacated.

      d.    Leasing  commissions  were  amortized  over the terms of the related
            leases.

      e.    IPA's   employees   are   covered   under   multi-employer   defined
            contribution  pension plans. All  contributions are funded currently
            based upon negotiated union  contracts.  Information from the plans'
            administrators is not available to permit IPA to determine its share
            of unfunded  vested  benefits.  During 2002, 2001 and 2000, IPA paid
            approximately  $15,000,  $18,000  and  $93,000,   respectively,  for
            employees to union plans for pension, welfare and other benefits.

      f.    For the purpose of determining cash  equivalents,  IPA considers all
            highly liquid  investments  with a maturity of three months or less,
            when purchased, to be cash equivalents.


                                      S-8
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

2. Significant Accounting Policies (continued)

      g.    Financial  Accounting  Standards  Board ("FASB")  Statement No. 107,
            "Disclosures  About Fair Value of  Financial  Instruments",  defines
            fair  value of a  financial  instrument  as the  amount at which the
            instrument  could be  exchanged  in a  current  transaction  between
            willing  parties.  The methods and assumptions  used to estimate the
            fair value of  financial  instruments  at December 31, 2002 and 2001
            are as follows:

            (i)   The  carrying  value of cash and  cash  equivalents,  accounts
                  receivable,  accounts  payable  and  accrued  liabilities  and
                  deposits approximate fair value due to the short maturities of
                  these items.

      h.    Gains  on  sales  of  real  estate  are  recognized  at  closing  in
            accordance with FASB Statement No. 66, "Accounting for Sales of Real
            Estate".

      i.    FASB Statement No. 144,  "Accounting  for the Impairment or Disposal
            of Long-Lived Assets (FASB 144)," supersedes FASB Statement No. 121,
            "Accounting  for  the  Impairment  of  Long-Lived   Assets  and  for
            Long-Lived  Assets  to be  Disposed  Of,"  and  the  accounting  and
            reporting  provisions of APB opinion No. 30,  "Reporting the Results
            of Operations"  for a disposal of a segment of a business.  FASB 144
            is effective for fiscal years  beginning after December 15, 2001 and
            requires  impairment losses to be recorded on long-lived assets used
            in operations  when  indicators  of  impairment  are present and the
            undiscounted cash flow estimates to be generated by those assets are
            less than the assets'  carrying amount or on long-lived  assets held
            for sale when the assets'  carrying  amount is greater than the fair
            market  value less costs of disposal  for those assets on a property
            by property  basis.  IPA evaluates its  properties for indicators of
            impairment  by  reference  to  the  undiscounted  cash  flows  to be
            generated  from  the  operation  and  sale  of  the  properties.  No
            indicators  of  impairment  were  present,  and,   accordingly,   no
            provisions for  impairment  have been recorded in any of the periods
            presented.

      j.    Basic  earnings  per share has been  calculated  by dividing the net
            income  allocated  to  the  Limited  Partner  by the  820,000  PPI's
            outstanding.  As IPA  has no  potentially  dilutive  securities,  no
            presentation of diluted earnings per share is required.

      k.    Effective  January 1, 1998,  IPA  adopted  FASB  Statement  No. 131,
            "Disclosures   About   Segments   of  an   Enterprise   and  Related
            Information."  IPA is  engaged in the  ownership  and  operation  of
            commercial  office  properties and has one reportable  segment.  IPA
            evaluates real estate  performance and allocates  resources based on
            net operating income.


                                      S-9
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

2. Significant Accounting Policies (continued)

            The primary  sources of revenue are generated from tenant base rents
            and  escalations  of  operating  expenses  and  real  estate  taxes.
            Operating expenses primarily consist of common area maintenance. The
            commercial office property segment meets the quantitative  threshold
            for  determining  reportable  segments.  IPA  has no  investment  in
            foreign operations.

3. Real Estate

IPA's sole remaining property is held for sale and is summarized as follows:

              Classification                        2002            2001
   -------------------------------------------------------------------------
   Land                                         $  502,032       $  502,032
   Leaseholds and leasehold improvements         7,531,315        7,531,315
                                                ----------------------------
                                                $8,033,347       $8,033,347
                                                ============================

On October  22,  2001,  IPA entered  into a contract to sell its only  remaining
property,  a vacant  commercial  office building  located at 570 Broad Street in
Newark,  New Jersey,  for  $11,500,000.  In connection  with this contract,  IPA
received non-refundable deposits from the buyer aggregating $1,500,000 which was
included in Deposits in the accompanying  balance sheet at December 31, 2001. In
January 2002,  due to the buyer's  inability to satisfy the closing  conditions,
the  contract  expired  and IPA  retained  the  deposit  and  resumed  marketing
activities with respect to the property.

On July 11,  2001,  IPA sold its  undeveloped  land in Texas  for  $100,000.  In
connection  with  this  transaction,  IPA  recognized  a  gain  on the  sale  of
approximately $95,000.

On May 8,  2000,  IPA sold the 245 Fifth  Avenue and the 261 Fifth  Avenue,  New
York, New York, properties for $135,000,000. The sales proceeds were used to pay
closing costs of  approximately  $4,400,000 and a sales commission to one of the
general   partners  of  approximately   $5,110,000.   In  connection  with  this
transaction, IPA recognized a gain on the sale of approximately $113,570,000. In
addition,  distributions  of $60,000,000  were paid to the General  Partners and
Special  Limited  Partners  in May 2000 and  $60,000,000  was paid to holders of
Participation Interest in June 2000.


                                      S-10
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

3. Real Estate (continued)

On January 18, 2000,  IPA sold its 50% undivided  interest in the 1328 Broadway,
New York, New York,  property for  $43,500,000.  The sales proceeds were used to
repay IPA's 50% share of the $8,000,000  mortgage loan  encumbering its interest
in the  property,  pay closing  costs of  approximately  $1,400,000  and a sales
commission  to one of the  general  partners  of  approximately  $1,650,000.  In
connection  with  this  transaction,  IPA  recognized  a  gain  on the  sale  of
approximately $36,930,000.  In addition,  distributions of $18,500,000 were paid
to the  General  Partners  and  Special  Limited  Partners  in January  2000 and
$18,500,000 was paid to the holders of Participation Interests in February 2000.

4. Other Assets

Other assets consisted principally of amounts held in escrow by the buyer of the
Partnership's  Chicago  properties,  which were sold in 1998.  During 2002,  IPA
received these amounts from the buyer.

5. Management of Properties

The  properties  are managed by  Helmsley-Spear,  Inc. Mr.  Irving  Schneider is
co-chairman and Chief Operating Officer of Helmsley-Spear, Inc., and owns 50% of
its outstanding  stock.  In addition to providing  general  property  management
services,  Helmsley-Spear,  Inc.  locates tenants and negotiates  leases for its
properties.  Management fees are based upon  negotiated  percentages of revenues
for each property in the portfolio.

Leasing  commissions are based upon varying  percentages of the annual rent paid
by  tenants  obtained  by  Helmsley-Spear,  Inc.  Management  fees  and  leasing
commissions  charged to IPA by  Helmsley-Spear,  Inc.  aggregated $0 (2002),  $0
(2001), and $393,447 (2000).


                                      S-11
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

6. Guaranteed Payments Due to Partners

The Limited  Partnership  Agreement requires that certain guaranteed payments be
made to partners and deducted as expenses in determining net income. The General
Partners and Special Limited  Partners  receive  guaranteed  payments equal to 8
3/4% per annum of their "Remaining  Original Cash  Contribution"  ($1,160,000 at
December 31, 2002, 2001 and 2000).  In addition,  the General  Partners  receive
guaranteed  payments  equal to 1/2% of  gross  revenues  from  real  estate,  as
defined, and the Limited Partner receives $15,000 per annum.

7. Allocations of Partnership Income

In accordance with the terms of the Limited Partnership  Agreement,  elements of
income for financial  reporting  purposes were credited (but not  distributed in
cash) to the  capital  accounts  of the  partners  through  January 3, 1997,  as
follows (see Note 8 for the basis on which cash distributions are determined):

<TABLE>
<CAPTION>
                                                                         Special
                                                          General        Limited      Limited
                                                          Partners      Partners      Partner
                                                        ----------------------------------------
<S>                                                       <C>             <C>          <C>
A. Net income before items C, D, E and F below              1.5%          48.5%         50.0%
B. Net losses, before items below                         100.0%            --            --
C. Depreciation and amortization of real estate:
     1. Equal to mortgage amortization (as defined)         1.5%          48.5%         50.0%
     2. Balance                                             3.0%          97.0%           --
D. Bond discount amortization                                --             --         100.0%
E. Gain on disposition of property:
     1. To the extent of the aggregate depreciation
          and amortization of such property included
          in C(2) above                                     3.0%          97.0%           --
     2. Balance                                             1.5%          48.5%         50.0%
F. Loss on disposition of property                        100.0%            --            --
</TABLE>


                                      S-12
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

7. Allocations of Partnership Income (continued)

Upon the death of Mr.  Helmsley on January 4, 1997,  and the  conversion  of his
General Partner interest into a Special Limited Partner  interest,  the elements
of income for  financial  reporting  purposes are  generally  credited  (but not
distributed in cash) to the capital accounts of the partners as follows:

<TABLE>
<CAPTION>
                                                                        Special
                                                          General       Limited          Limited
                                                          Partners     Partners          Partner
                                                       ---------------------------------------------
<S>                                                         <C>          <C>              <C>
A. Net income before items C, D, E and F below              .55%         49.45%           50.0%
B. Net losses, before items below                         36.67%         63.33%             --
C. Depreciation and amortization of real estate:
     1. Equal to mortgage amortization (as defined)         .55%         49.45%           50.0%
     2. Balance                                             1.1%          98.9%             --
D. Bond discount amortization                                --             --           100.0%
E. Gain on disposition of property:
     1. To the extent of the aggregate depreciation
          and amortization of such property included
          in C(2) above                                     1.1%          98.9%             --
     2. Balance                                             .55%         49.45%           50.0%
F. Loss on disposition of property                        36.67%         63.33%             --
</TABLE>

8. Cash Distributions

Net Operating Revenues,  as defined,  are distributable at the discretion of the
General Partners, as follows:

                                           Through                 From
                                       January 3, 1997       January 4, 1997
                                       -------------------------------------
    General Partners                         1.5%                    .55%
    Special Limited Partners                48.5%                  49.45%
    Limited Partner                         50.0%                  50.00%

Notwithstanding the foregoing,  if with respect to any calendar year the Limited
Partner's  distributive  share  (computed  on the  same  basis  as that  used in
preparing  IPA's  Federal  income tax return) of income  (loss) plus one-half of
such partner's  distributive  share of long-term  capital gains exceeds the cash
distributions  referred to above, IPA must distribute an additional amount equal
to such excess to the Holders of the Participation Interests.


                                      S-13
<PAGE>
                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

8. Cash Distributions (continued)

In 2002,  2001 and 2000,  Net  Operating  Revenues,  as defined  in the  Limited
Partnership   Agreement,   amounted  to  $450,538,   $280,965  and   $3,908,231,
respectively.  At  December  31,  2002,  2001 and  2000,  accrued  distributions
amounted  to  $457,752,  $698,179  and  $3,915,446,  respectively.  The  accrued
distribution at December 31, 2002 consists principally of $450,538 in respect of
2002 Net Operating Revenues.

9. Income Taxes

IPA has  obtained a ruling from the  Internal  Revenue  Service that IPA will be
classified as a partnership for Federal income tax purposes, and has received an
opinion of tax counsel  that IPA, as a  partnership,  will not be subject to any
Federal income taxes,  and that each holder of  Participation  Interests will be
treated for Federal  income tax purposes as if he were a limited  partner of IPA
to the extent of his proportionate interest in the Limited Partnership Interest.
Each  partner  of IPA and each  holder of  Participation  Interests  at any time
during the taxable year of IPA must take into account his distributive  share of
all items of IPA's income,  gain, loss,  deduction or credit,  without regard to
whether such partner or holder of  Participation  Interests has received or will
receive any distributions from IPA.  Accordingly,  no provision for income taxes
has been made in the accompanying statements of income.

The  amount of income  (loss)  for  federal  tax  purposes  for the years  ended
December 31, 2002,  2001, and 2000 was $234,562,  $(452,532)  and  $146,534,487,
respectively,  as  compared  with  the net  income  of  $458,410,  $376,061  and
$153,829,678,  respectively, shown in the statements of income. A reconciliation
of the differences between income


                                      S-14
<PAGE>
                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

9. Income Taxes (continued)

as reflected in the  accompanying  statements of income and the amount of income
for Federal tax purposes is as follows:

                                                     December 31,
                                           2002         2001          2000
                                       ----------------------------------------
Net income per statements of income     $ 458,410    $ 376,061    $ 153,829,678
Depreciation and amortization            (215,976)    (229,480)         153,124
Gain on sale of property                       --           --       (7,414,167)
Loss on sale of property                       --     (599,113)              --
Deferred rental income                         --           --               --
Other, net                                 (7,872)          --          (34,148)
                                       -----------------------------------------
Income (loss) for Federal tax
  purposes                              $ 234,562    $(452,532)   $ 146,534,487
                                       =========================================

10. Gross Revenue From Real Estate

IPA earns rental income under leases principally with commercial tenants located
in its office  buildings.  Such leases  generally  provide for the tenant to pay
minimum  rentals  plus,  in certain  instances,  a portion of  increases in real
estate taxes,  operating  expenses and/or  increases in the consumer price index
based on lease escalation clauses. Office leases generally range from 5 years to
15 years and contain  various  renewal  options.  In addition,  IPA earns rental
income from retail stores.  Such leases  generally  provide for minimum  rentals
plus percentage rentals based on the store sales.  Retail store leases generally
range  from  1 to 5  years  and  contain  various  renewal  options.  All of the
aforementioned  leases are accounted for as operating leases.  Included in Gross
Revenues  from Real Estate for the years  ended 2002,  2001 and 2000 are $0, $0,
and $1,839,  respectively,  representing revenue from escalations and percentage
rentals.  For the years ended  2002,  2001 and 2000,  approximately  $0, $0, and
$259,290, respectively, was received in connection with lease cancellations with
former tenants.

Since disposing of its remaining  income  producing  properties  during the year
ended December 31, 2000, IPA has no minimum future rentals due on  noncancelable
operating  leases as its remaining  properties  included  vacant land located in
Houston,  Texas, which was sold during 2001, and a vacant office property at 570
Broad Street, Newark, NJ (see Note 3).


                                      S-15
<PAGE>

                        Investment Properties Associates
                        (A New York Limited Partnership)

                    Notes to Financial Statements (continued)

11. Contingencies

IPA is involved in various  legal  matters  and  disputes  arising in the normal
course of  operations,  the ultimate  outcome of which is not expected to have a
material effect on the financial statements.

12. Summary of Quarterly Financial Information (Unaudited)

The separate  results of operations of IPA for the years ended December 31, 2002
and 2001 are as follows:

<TABLE>
<CAPTION>
                                                               2002
                                        --------------------------------------------------
                                                       Three Months Ended
                                         March 31      June 30   September 30  December 31
                                        --------------------------------------------------
<S>                                     <C>           <C>          <C>          <C>
Gross revenue from real estate          $       --    $      --    $      --    $      --
Net income (loss)                        1,220,205     (186,522)    (204,905)    (370,368)
Net income (loss) credited to the
  partners capital accounts:
General Partners                             6,711       (1,026)      (1,127)      (2,037)
Special Limited Partners                   603,391      (92,235)    (101,325)    (183,147)
Limited Partner                            610,103      (93,261)    (102,453)    (185,184)
                                        --------------------------------------------------
                                        $1,220,205    $(186,522)   $(204,905)   $(370,368)
                                        ==================================================
Net income (loss) per Limited
  Partner Participation Interest        $   0.7440    $ (0.1137)   $ (0.1249)   $ (0.2258)
                                        ==================================================
</TABLE>

<TABLE>
<CAPTION>
                                                               2001
                                        ------------------------------------------------------
                                                         Three Months Ended
                                         March 31       June 30     September 30   December 31
                                        ------------------------------------------------------
<S>                                      <C>           <C>             <C>         <C>
Gross revenue from real estate           $  3,232      $   8,020       $ 51,536    $  81,099
Net income (loss)                         415,103       (123,590)       451,852     (367,304)
Net income (loss) credited to the
  partners capital accounts:
General Partners                            2,283           (680)         2,485       (1,497)
Special Limited Partners                  205,268        (61,115)       223,441     (134,607)
Limited Partner                           207,552        (61,795)       225,926     (231,200)
                                        ------------------------------------------------------
                                         $415,103      $(123,590)      $451,852    $(367,304)
                                        ======================================================
Net income (loss) per Limited
  Partner Participation Interest         $ 0.2531      $ (0.0753)      $ 0.2755    $ (0.2819)
                                        ======================================================
</TABLE>


                                      S-16

<PAGE>

                        Investment Properties Associates

                        (A New York Limited Partnership)

             Schedule III - Real Estate and Accumulated Depreciation

                                December 31, 2002
<TABLE>
<CAPTION>

    Col. A                 Col. B              Col. C               Col. D                     Col. E
-----------------------------------------------------------------------------------------------------------------------
                                                                                             Gross Amount
                                       Initial Cost of Company    Improvements     at Which Carried Close of Period
                                       -----------------------    Capitalized     ----------------------------------
                                                 Buildings and   Subsequent to             Buildings and
  Description           Encumbrances    Land     Improvements     Acquisition     Land      Improvements     Total
-----------------------------------------------------------------------------------------------------------------------
<S>                         <C>        <C>         <C>            <C>            <C>         <C>           <C>
570 Broad Street
  Building Newark,
  New Jersey                $ --       $502,032    $5,937,404     $1,593,911     $502,032    $7,531,315    $8,033,347
                         ----------------------------------------------------------------------------------------------
Totals                      $ --       $502,032    $5,937,404     $1,593,911     $502,032    $7,531,315    $8,033,347
                         ==============================================================================================

    Col. A                Col. F         Col. G        Col. H
--------------------------------------------------------------------
                                                    Life on which
                                                    Depreciation in
                                                     Latest Income
                         Accumulated    Date of      Statements is
  Description           Depreciation  Construction   Computed (1)
--------------------------------------------------------------------
570 Broad Street
  Building Newark,
  New Jersey             $5,880,040        1962          34.3
                         ----------
Totals                   $5,880,040
                         ==========
</TABLE>

(1)   At  December  31,  2002,  the  property  is  classified  as held for sale.
      Accordingly depreciation has not been recorded in 2002.


                                      S-17
<PAGE>

                        Investment Properties Associates

                        (A New York Limited Partnership)

             Schedule III - Real Estate and Accumulated Depreciation

                                December 31, 2002

Reconciliation of "Real Estate and Accumulated Depreciation":

                                                Year ended December 31,
                                       ---------------------------------------
                                          2002         2001           2000
                                       ----------   ----------    ------------
Investment in Real Estate
Balance at beginning of year           $8,033,347   $8,033,347    $ 40,649,960
Sale of real estate                            --           --     (33,212,608)
Abandonment of real estate                     --           --              --
Improvements and additions                     --           --         595,995
                                       ----------   ----------    ------------
Balance at end of year                 $8,033,347   $8,033,347    $  8,033,347
                                       ==========   ==========    ============

Accumulated Depreciation
Balance at beginning of year           $5,880,040   $5,880,040    $ 26,391,697
Depreciation charged to costs
  and expenses                                 --           --         598,174
Less amounts applicable to sale of
  real estate                                  --           --     (21,109,831)
                                       ----------   ----------    ------------
Balance at end of year                 $5,880,040   $5,880,040    $  5,880,040
                                       ==========   ==========    ============

The  aggregate  basis of real  estate  assets for  Federal  income tax  purposes
amounted to $7,298,926 (2002), $7,298,926 (2001) and $7,898,039 (2000).


                                      S-18