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

                                    FORM 10-K405

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

      For the fiscal year ended           December 31, 1998
                                 -----------------------------------------------

                                       OR

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

     For the transition period from ______________ to_____________

     Commission file number  0-14267
                            --------


                       McNEIL REAL ESTATE FUND XXIV, L.P.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         California                                    74-2339537
--------------------------------------------------------------------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                         Identification No.)


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


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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days. Yes X No___

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

All of the registrant's 40,000 outstanding limited partnership units are held by
non-affiliates.  The aggregate market value of units held by  non-affiliates  is
not determinable since there is no public trading market for limited partnership
units and transfers of units are subject to certain restrictions.


Documents Incorporated by Reference:     See Item 14, Page 38


                                TOTAL OF 39 PAGES


<PAGE>
                                     PART I

ITEM 1.   BUSINESS
-------   --------

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

McNeil  Real Estate  Fund XXIV,  L.P.  (the  "Partnership"),  formerly  known as
Southmark Equity Partners,  Ltd., was organized on October 19, 1984 as a limited
partnership under the provisions of the California  Revised Limited  Partnership
Act to acquire and operate  commercial and residential  properties.  The general
partner of the Partnership is McNeil Partners,  L.P. (the "General Partner"),  a
Delaware limited partnership,  an affiliate of Robert A. McNeil ("McNeil").  The
General Partner was elected at a meeting of limited  partners on March 30, 1992,
at which  time an amended  and  restated  partnership  agreement  (the  "Amended
Partnership  Agreement")  was  adopted.  Prior to March 30,  1992,  the  general
partner of the Partnership was Southmark  Investment  Group, Inc. (the "Original
General   Partner"),   a  wholly-owned   subsidiary  of  Southmark   Corporation
("Southmark").  The  principal  place of business  for the  Partnership  and the
General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

On January 8, 1985, the Partnership  registered with the Securities and Exchange
Commission  ("SEC")  under the  Securities  Act of 1933 (File No.  2-93979)  and
commenced a public offering for sale of $40,000,000 of limited partnership units
("Units").  The Units represent  equity interests in the Partnership and entitle
the holders thereof to participate in certain  allocations and  distributions of
the Partnership. The sale of Units closed on December 15, 1985 with 40,000 Units
sold at $1,000 each, or gross proceeds of $40,000,000  to the  Partnership.  The
Partnership  subsequently  filed a Form 8-A Registration  Statement with the SEC
and  registered  its Units under the  Securities  Exchange Act of 1934 (File No.
0-14267).

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

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

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

On February 14,  1991,  pursuant to the asset  purchase  agreement as amended on
that date,  McNeil Real Estate  Management,  Inc.  ("McREMI"),  an  affiliate of
McNeil,  acquired the assets relating to the property management and partnership
administrative business of Southmark and its affiliates and commenced management
of the  Partnership's  properties  pursuant  to an  assignment  of the  existing
property management agreements from the Southmark affiliates.


<PAGE>
On March 30, 1992, the limited partners  approved a restructuring  proposal that
provided  for (i) the  replacement  of the Original  General  Partner with a new
general  partner,  McNeil  Partners,  L.P.;  (ii) the  adoption  of the  Amended
Partnership  Agreement which substantially alters the provisions of the original
partnership   agreement   relating   to,  among  other   things,   compensation,
reimbursement  of expenses and voting  rights;  (iii) the approval of an amended
property management  agreement with McREMI, the Partnership's  property manager;
and (iv) the  approval  to change the  Partnership's  name to McNeil Real Estate
Fund XXIV, L.P. Under the Amended Partnership  Agreement,  the Partnership began
accruing an asset  management  fee,  retroactive to February 14, 1991,  which is
payable  to  the  General  Partner.  For a  discussion  of the  methodology  for
calculating  the asset  management  fee, see Item 13 Certain  Relationships  and
Related Transactions.  The proposals approved at the March 30, 1992 meeting were
implemented as of that date.

Concurrent with the approval of the restructuring,  the General Partner acquired
from Southmark and its affiliates,  for aggregate  consideration of $43,193, (i)
the right to receive  payment on the  advances  owing  from the  Partnership  to
Southmark  and its  affiliates  in the amount of $642,581,  and (ii) the general
partner interest of the Original General Partner. None of the Units are owned by
the General Partner or its affiliates.

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

General:

The  Partnership  is engaged  in the  ownership,  operation  and  management  of
residential and retail real estate.  At December 31, 1998, the Partnership owned
five  revenue-producing  properties  as  described  in  Item 2 -  Properties.  A
mortgage  note payable was obtained in 1998 to fund the  expansion of a tenant's
space at  Riverbay  Plaza as further  described  in Item 8 - Note 5 -  "Mortgage
Notes Payable."

The  Partnership  does not directly  employ any personnel.  The General  Partner
conducts the business of the  Partnership  directly and through its  affiliates.
The Partnership  reimburses  affiliates of the General Partner for such services
rendered in accordance with the Amended Partnership Agreement. See Item 8 - Note
2 "Transactions With Affiliates."

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

Business Plan:

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

The Partnership  placed Springwood Plaza on the market for sale effective August
1, 1997. Island Plaza and Southpointe Plaza were sold in 1998.


<PAGE>
Competitive Conditions:

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

Forward-Looking Information:

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

Environmental Matters:

Environmental laws create potential liabilities that may affect property owners.
The environmental  laws of Federal and certain state  governments,  for example,
impose liability on current and certain past owners of property from which there
is a release  or threat of  release  of  hazardous  substances.  This  liability
includes costs of investigation and remediation of the hazardous  substances and
natural resource  damages.  Liability for costs of investigation and remediation
is strict and may be imposed  irrespective  of whether the property owner was at
fault,  although  there are a number of  defenses.  Both  governments  and third
parties may seek recoveries under these laws.

Third parties also may seek  recovery  under the common law for damages to their
property  or person,  against  owners of  property  from which  there has been a
release of hazardous and other substances.

The presence of  contamination  or the failure to remediate  contaminations  may
adversely  affect the owner's  ability to sell or lease real estate or to borrow
using the real estate as collateral.


<PAGE>
Various  buildings at properties do or may contain  building  materials that are
the subject of various  regulatory  programs  intended to protect  human health.
Such building materials include,  for example,  asbestos,  lead-based paint, and
lead plumbing components.  The Company has implemented programs to deal with the
presence  of those  materials,  which  include,  as  appropriate,  reduction  of
potential  exposure  situations.  The Company does not believe that the costs of
such programs are likely to have a material adverse effect. Failure to implement
such programs can result in regulatory  violations or liability claims resulting
from alleged exposure to such materials.

In connection with the proposed sale  transaction as more fully described above,
Phase I  environmental  site  assessments  have been completed for each property
owned  by the  Partnership.  Such  environmental  assessments  performed  on the
properties  have not revealed any  environmental  liability that the Partnership
believes  would have a material  adverse effect on the  Partnership's  business,
assets,  or results of operations.  The Partnership has not been notified by any
governmental  authority  of any  non-compliance,  liability  or  other  claim in
connection with any of its properties. There can be no assurances, however, that
environmental   liabilities   have  not  developed   since  such   environmental
assessments were prepared, or that future uses or conditions (including, without
limitation,  changes in applicable  environmental laws and regulations) will not
result in imposition of environmental liability.

Other information:

In August 1995, High River Limited  Partnership,  a Delaware limited partnership
controlled by Carl C. Icahn ("High River") made an  unsolicited  tender offer to
purchase from holders of Units up to approximately  45% of the outstanding Units
of the  Partnership  for a purchase  price of $150 per Unit. In September  1996,
High River made another  unsolicited tender offer to purchase any and all of the
outstanding  Units of the  Partnership for a purchase price of $268.13 per unit.
In  addition,  High River made  unsolicited  tender  offers  for  certain  other
partnerships controlled by the General Partner. The Partnership recommended that
the  limited  partners  reject  the  tender  offers  made  with  respect  to the
Partnership and not tender their Units.  The General Partner believes that as of
February  1,  1999,  High  River has  purchased  9.1% of the  outstanding  Units
pursuant to the tender offers. In addition,  all litigation filed by High River,
Mr.  Icahn and his  affiliates  in  connection  with the tender  offers has been
dismissed without prejudice.


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

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

<TABLE>
<CAPTION>
                                            Net Basis                              1998           Date
Property              Description           of Property          Debt        Property Taxes     Acquired
--------              -----------        --------------         ------       --------------     --------
Real Estate Investments:

Pine Hills            Apartments
<S>                   <C>                <C>                 <C>             <C>                  <C>  
Livingston, TX        128 units          $  2,275,511        $           -   $      34,303        10/85

Riverbay Plaza        Retail Center
Riverview, FL         79,298 sq. ft.        4,635,098            1,650,000          71,917         4/85

Sleepy Hollow         Apartments
Cleveland, TX         112 units             2,386,862                    -          41,999         8/85

Towne Center          Retail Center
Derby, KS             94,320 sq. ft.        1,837,750                    -          34,763         7/85
                                           ----------         ------------     -----------
                                         $ 11,135,221        $   1,650,000   $     182,982
                                           ==========         ============     ===========
Asset Held for Sale:

Springwood Plaza      Retail Center
Dellwood, MO          88,323 sq. ft.     $  2,737,114        $           -   $      79,054     9/85
                                           ==========         ============    ============
</TABLE>

---------------------------------------
Total:    Apartments  -  240 units
          Retail Centers - 261,941 sq. ft.


<PAGE>

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

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

Real Estate Investments:

Pine Hills
<S>                                       <C>             <C>            <C>            <C>             <C>
   Occupancy Rate............             95%             98%            94%            99%             99%
   Rent Per Square Foot......           $7.40           $7.10          $6.93          $6.76           $6.44

Riverbay Plaza
   Occupancy Rate............            100%            100%            94%            94%             92%
   Rent Per Square Foot......           $9.14           $7.97          $7.15          $6.85           $8.55

Sleepy Hollow
   Occupancy Rate............             94%            100%            92%           100%             99%
   Rent Per Square Foot......           $7.60           $7.24          $7.14          $7.32           $6.91

Towne Center
   Occupancy Rate............             74%             56%           100%           100%            100%
   Rent Per Square Foot......           $3.36           $3.30          $3.21          $3.59           $3.21

Asset Held for Sale:

Springwood Plaza
   Occupancy Rate............             79%             87%            96%            80%             72%
   Rent Per Square Foot......           $5.68           $5.95          $6.03          $4.49           $4.59
</TABLE>

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

Competitive Conditions
----------------------

Real Estate Investments:

Pine Hills
----------

Pine  Hills is a  two-story  apartment  community  located  in the small town of
Livingston,  approximately  60  miles  north  of  Houston,  Texas.  There  is no
comparable competition within the area at present, however there is an abundance
of  affordable  alternative  housing  such as mobile  homes and  rental  houses.
Although  the  property  is located on a busy  thoroughfare  near an  interstate
highway,  visibility  is poor as the property  frontage is limited to a driveway
which  leads to the main  entrance.  The  vacant  land in front of Pine Hills is
currently on the market for sale. If the property is developed, it could have an
impact on Pine Hills' future  performance.  The Partnership  expects to maintain
occupancy  in the mid 90% range in 1999 by  offering  discounts  to attract  and
maintain  tenants  and by  working  to renew  leases 90 days  prior to the lease
expiration.


<PAGE>

Riverbay Plaza
--------------

Riverbay Plaza is a single-story  retail  shopping center located at the busiest
intersection  of a rural  area near  Riverview,  Florida.  It is  anchored  by a
grocery  store and a  drugstore  and there are two  out-parcels  in front of the
center that draw customers to the center. The Partnership renovated and expanded
the  grocery  anchor  tenant's  space  in  1997.  Currently,  there  is only one
competing  shopping  center in the  area,  and it is not as well  maintained  as
Riverbay Plaza.  There are currently two proposed  shopping center  developments
within five miles of Riverbay Plaza.  Any future  development is not expected to
have a significant impact on the property due to the high occupancy rates in the
area and the renovation and expansion of the grocery anchor tenant's space.  The
Partnership expects to maintain occupancy in the high 90% range in 1999.

Sleepy Hollow
-------------

Sleepy Hollow is a two-story  apartment  community  located in the small town of
Cleveland, approximately 30 miles north of Houston, Texas. Although the property
is located on a busy thoroughfare  approximately  three miles from an interstate
highway,  visibility  is poor as the property  frontage is limited to a driveway
which leads to the main  entrance.  The  driveway  is shared  with a  comparable
apartment community that completed exterior renovations, resulting in a decrease
in Sleepy Hollow's  occupancy in 1996.  Occupancy  improved in 1997 after Sleepy
Hollow completed its own exterior  upgrades.  A new luxury  apartment  community
opened in 1997 and another  community opened in 1998. In addition,  low interest
rates and the  availability  of  affordable  alternative  housing such as mobile
homes and  rental  houses  have  softened  the local  real  estate  market.  The
Partnership  expects  to  maintain  occupancy  in the low 90%  range  in 1999 by
offering discounts and concessions to tenants.

Towne Center
------------

Towne  Center is a retail  strip  shopping  center  located in a suburb 10 miles
south of Wichita,  Kansas.  The property is one of five strip  shopping  centers
located in Derby, and it is by far the largest.  In 1994, the center became 100%
occupied due to the leasing of a large space that  comprised 42% of the leasable
area and had been vacant for several  years.  The lease on this space expired in
1997 and was not renewed.  Although demand for retail space in Derby is limited,
space  available is also limited and smaller  spaces are not difficult to lease.
However, since there is a shortage of tenants requiring large spaces, management
divided the large  vacated  space into three  smaller  spaces.  One of the three
spaces  was  leased in late 1998 and  another  was  leased  in early  1999.  The
remaining  space  (approximately  13% of the leasable  area of the  property) is
expected to remain vacant  throughout  1999. Four leases are scheduled to expire
in 1999 and all are expected to be renewed at the same or higher  rental  rates.
The Partnership expects to increase occupancy up to the mid 80% range in 1999.

Asset Held for Sale:

Springwood Plaza
----------------

Springwood Plaza is a multi-leveled strip shopping center located in a suburb of
St. Louis, Missouri. The center is anchored by a popular local grocery chain and
contains fifteen other retail spaces. The area surrounding the property has been
in a slow  state  of  decline  for the past few  years.  Most of the  comparable
properties in the area are superior to Springwood Plaza;  however,  the center's
grocery  anchor  tenant has  continued to draw  shoppers to the  property.  This
anchor  tenant's lease expires in 1999 and management  expects it to be renewed.
With  continued  attention  to the  appearance  of the property and rental rates
lower  than the  newer  centers  in the area,  management  expects  to  increase
occupancy to the mid to high 80% range in 1999.


<PAGE>
The following  schedule shows lease  expirations  for each of the  Partnership's
commercial properties for 1999 through 2008:

<TABLE>
<CAPTION>
                           Number of                                   Annual            % of Gross
                           Expirations              Square Feet         Rent             Annual Rent
                           -----------              -----------        -------          ------------
Real Estate Investments:

Riverbay Plaza
<C>                           <C>                          <C>     <C>                        <C>
1999                          2                            755     $       9,950              1%
2000                          5                          8,720            75,853             11%
2001                          1                            750             8,250              1%
2002                          1                          1,201            13,812              2%
2003                          3                          4,425            50,700              7%
2004                          1                            900            10,701              2%
2005 - 2008                   -                              -                 -              -

Towne Center
1999                          4                          6,250     $      48,128             13%
2000                          3                          3,916            26,441              7%
2001                          4                          9,866            59,598             17%
2002                          2                         25,660            91,736             26%
2003                          1                          2,847            21,353              6%
2004                          1                          2,979            19,223              5%
2005-2008                     -                              -                 -              -

Asset Held for Sale:

Springwood Plaza
1999                          4                         54,335     $     273,536             70%
2000                          4                          7,161            53,012             14%
2001                          3                          6,475            48,808             12%
2002                          -                              -                 -              -
2003                          1                          1,800            16,200              4%
2004 - 2008                   -                              -                 -              -
</TABLE>


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

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

Real Estate Investments:

Riverbay Plaza

<S>                                 <C>                            <C>                          <C> 
Grocery Store                       49,047                         $   422,500                  2013
Drugstore                           13,500                             101,250                  2042

Towne Center

Grocery Store                       22,660                         $    61,616                  2002
Department Store                    17,280                              69,120                  2009
Hardware Store                      10,064                              24,238                  2009

Asset Held for Sale:

Springwood Plaza

Grocery Store                       46,558                         $   217,679                  1999
</TABLE>


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

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

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

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

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

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

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

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


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

None.

                                     PART II

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

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

(B)     Title of Class                         Number of Record Unit Holders

        Limited partnership units              2,744 as of February 1, 1999

(C)      The Partnership  distributed  $4,644,400 to the  limited   partners  in
         1998,  of which  $3,144,250  was net cash  proceeds  from the  sales of
         Southpointe  Plaza and Island Plaza shopping  centers and the remaining
         $1,500,150  was cash from  operations.  Distributions  paid to  limited
         partners  totaled  $500,000  in 1997  from  cash  from  operations.  No
         distributions  were paid to the General Partner in 1998 or 1997. During
         the last week of March 1999, the Partnership distributed  approximately
         $250,000  to the limited  partners  of record as of March 1, 1999.  See
         Item 7 - Management's  Discussion  and Analysis of Financial  Condition
         and  Results of  Operations,  and Item 8 - Note 1 -  "Organization  and
         Summary of Significant Accounting Policies - Distributions."

ITEM 6.  SELECTED FINANCIAL DATA
-------  -----------------------

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

<TABLE>
<CAPTION>
Statements of                                                 Years Ended December 31,
Operations                              1998           1997            1996           1995           1994
------------------                  -------------   ------------   -------------   ------------  ------------

<S>                                 <C>             <C>            <C>             <C>           <C>         
Rental revenue...............       $   3,255,378   $  4,186,633   $   4,136,447   $  4,058,503  $  4,127,396
Write-down for impairment
   of real estate                        (126,080)      (220,000)       (700,000)    (1,500,085)            -
Net income (loss)............            (473,023)       430,179        (608,182)    (1,694,787)      (65,511)

Net income (loss) per limited
   partnership unit..........       $      (11.71)  $      10.65   $      (15.05)  $     (41.95) $      (1.62)
                                     ============    ===========    ============    ===========    ==========

Distributions per limited
   partnership unit..........       $      116.11   $      12.50   $       18.75   $          -  $          -
                                     ============    ===========    ============    ===========   ===========


                                                                   As of December 31,
Balance Sheets                          1998            1997            1996           1995           1994
--------------                      -------------   ------------   -------------   ------------  ------------
Real estate investments, net...     $  11,135,221   $ 11,397,918   $  12,971,315   $ 22,816,356  $ 25,251,693
Assets held for sale...........         2,737,114     10,935,647       8,408,672              -             -
Total assets...................        15,504,391     25,301,732      23,771,150     25,912,389    27,674,971
Mortgage notes payable.........         1,650,000      5,293,017       5,421,763      5,538,527     5,660,558
Partners' equity...............        12,793,861     17,911,284      17,981,105     19,339,303    21,034,090

</TABLE>

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-------  -----------------------------------------------------------
         AND RESULTS OF OPERATIONS
         -------------------------

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

The  Partnership was formed to engage in the business of acquiring and operating
revenue-producing  real  properties and holding the  properties for  investment.
Since  completion of its capital  formation and property  acquisition  phases in
1985,  when it completed the purchase of seven  properties,  the Partnership has
operated its properties for production of income.

The General Partner placed  Southpointe  Plaza Shopping Center on the market for
sale  effective  October 1,  1996.  Based on an offer  from a  non-affiliate  to
purchase  the  center,  the  Partnership  recorded  a  $700,000  write-down  for
impairment  of value  during the fourth  quarter of 1996 to record the  shopping
center at its fair value less  estimated  costs to sell. On March 31, 1998,  the
Partnership sold Southpointe Plaza for a gross sales price of $6.8 million.  The
Partnership recognized a $118,750 loss on the sale.

The General  Partner placed Island Plaza Shopping  Center on the market for sale
effective April 1, 1996.  Based on an offer from a non-affiliate to purchase the
center, the Partnership  recorded a $220,000  write-down for impairment of value
during the fourth  quarter  of 1997 to record  the  shopping  center at its fair
value less  estimated  costs to sell.  On April 1, 1998,  the  Partnership  sold
Island Plaza for a gross sales price of $1.85 million. A $126,080 write-down for
impairment  of real estate was recorded in the first quarter of 1998 and no gain
or loss was recorded on the sale.

In 1997,  improvements  totaling  approximately  $1.6 million were  performed at
Riverbay Plaza to renovate and expand an anchor tenant's space. These costs were
paid by the tenant and reimbursed by the  Partnership  in 1998. The  Partnership
obtained  a  mortgage  loan  secured by  Riverbay  Plaza to pay these  costs and
received  such  funds  in  June  1998.  See  Item 8 - Note 5 -  "Mortgage  Notes
Payable."

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

1998 compared to 1997

Revenue:

Total revenue decreased by $1,110,294 in 1998 as compared to 1997, mainly due to
the sales of  Southpointe  Plaza and  Island  Plaza  shopping  centers  in 1998.
Excluding  total revenue of  Southpointe  Plaza and Island Plaza,  total revenue
increased by $109,050 in 1998.

Rental  revenue in 1998  decreased  by $931,255  as compared to 1997.  Excluding
rental revenue of Southpointe  Plaza and Island Plaza,  rental revenue increased
by $218,280 in 1998.  This increase was mainly due to increased  rent charged to
an anchor tenant at Riverbay Plaza Shopping Center after its space was expanded.

Interest  income  increased by $40,246 in 1998 as compared to 1997. The increase
was mainly due to an increase in cash  available  for  short-term  investment in
1998 due to proceeds  received  from the sales of  Southpointe  Plaza and Island
Plaza on March 31, 1998 and April 1, 1998, respectively.

A gain on involuntary  conversion of $149,585 was recognized in 1997 relating to
fire damage that occurred at Riverbay  Plaza  Shopping  Center.  No such gain on
involuntary conversion was recorded in 1998.


<PAGE>

In 1997, the assessed  taxable value of Southpointe  Plaza was reduced by taxing
authorities,  resulting in a $39,700 refund of prior years'  property  taxes. No
refunds of prior years' property taxes were received in 1998.

In 1997, the Partnership  received $30,000 in deposits  forfeited by prospective
buyers of  Southpointe  Plaza and Island  Plaza.  No such income was received in
1998.

Expenses:

Total  expenses  decreased  by $207,092  in 1998 as compared to 1997.  Excluding
total expenses of Southpointe  Plaza and Island Plaza,  which were sold in 1998,
total expenses  increased by $504,785.  This increase in expenses was mainly due
to an increase in depreciation and  amortization and general and  administrative
expenses. In addition, interest expense, utilities, and other property operating
expenses showed significant increases in 1998, partially offset by a decrease in
general and administrative-affiliates, as discussed below.

Interest  expense in 1998  decreased  by $211,414 as compared to 1997.  Interest
expense  related to the  Southpointe  Plaza  mortgage note payable  decreased by
$290,143  due to the  repayment  of the  loan  as a  result  of the  sale of the
property.  In June 1998, the Partnership  received $1,650,000 in proceeds from a
mortgage note payable secured by Riverbay Plaza Shopping Center. The Partnership
recorded $78,729 of interest expense related to this loan in 1998.

Depreciation and  amortization  increased by $151,260 in 1998 in relation to the
prior year. The increase was mainly due to the  amortization  of improvements at
Riverbay Plaza completed at the end of 1997 to expand an anchor tenant's space.

Property  taxes,   repairs  and  maintenance  and  property  management  fees  -
affiliates decreased by $124,595, $114,356 and $53,249, respectively, mainly due
to the sales of Southpointe Plaza and Island Plaza in 1998.

In 1998,  utilities  expense decreased by $17,910 as compared to the prior year.
Excluding  expenses for utilities at  Southpointe  Plaza and Island  Plaza,  the
remaining  properties  experienced an increase in utilities  expense of $25,235.
This  increase in utilities  was  partially due to an increase in water usage at
Riverbay  Plaza due to the expansion of a major  tenant's  space at the shopping
center. In addition,  there was an increase in electricity costs at Towne Center
Shopping  Center due to a tenant  vacating a large space in the third quarter of
1997.  Since this space was vacant  for most of 1998,  the  shopping  center was
responsible for paying for the electricity used in this space.

Other property  operating  expenses  decreased by $61,202 in 1998 as compared to
1997.  Excluding  other property  operating  expenses at  Southpointe  Plaza and
Island Plaza,  other  property  operating  expenses  increased by $19,604.  This
increase is due to a tenant  receivable at Springwood Plaza that was written off
as uncollectible in 1998.

In 1998, general and  administrative  expenses increased by $285,955 in relation
to 1997.  The  increase  was  mainly  due to costs  incurred  in 1998 to explore
alternatives to maximize the value of the Partnership (see Liquidity and Capital
Resources).

General and administrative - affiliates decreased by $76,617 in 1998 as compared
to 1997,  mainly due to a decrease in asset  management  fees.  Asset management
fees  decreased  as a result of a decline  in the  tangible  asset  value of the
Partnership,  on which the fees are based, due to the sales of Southpointe Plaza
and Island Plaza.

The  Partnership  recognized a $118,750  loss on the sale of  Southpointe  Plaza
Shopping  Center in the first  quarter of 1998.  No such loss was  recognized in
1997.

Island Plaza Shopping Center was sold to an unaffiliated buyer on April 1, 1998.
The Partnership  recorded a $126,080 write-down for impairment of real estate in
the first  quarter  of 1998 to record  the  property  at its  sales  price  less
estimated costs to sell. In 1997, the Partnership recorded a $220,000 write-down
for impairment of Island Plaza Shopping Center.


<PAGE>
1997 compared to 1996

Revenue:

Total  revenue  increased by $197,959 in 1997 as compared to 1996.  The increase
was mainly due to a greater gain on involuntary conversion,  property tax refund
and other revenue being recorded in 1997, as discussed below.

Rental  revenue in 1997  increased  by $50,186 as compared  to 1996.  The slight
increase  was  mainly due to  increased  rental  rates at all of the  properties
except for Southpointe  Plaza where expiring leases were renewed at lower market
rates in 1997.

A gain on involuntary  conversion of $149,585 was recognized in 1997 relating to
fire damage that occurred at Riverbay Plaza Shopping Center.  In 1996, a $45,134
gain on involuntary conversion relating to wind and hail damage suffered at Pine
Hills Apartments was recorded.

In 1997, the assessed  taxable value of Southpointe  Plaza was reduced by taxing
authorities,  resulting in a $39,700 refund of prior years' property taxes.  The
Partnership received $20,433 in refunds of prior years' property taxes for Towne
Center Shopping Center in 1996.

In 1997, the Partnership  received $30,000 in deposits  forfeited by prospective
buyers of  Southpointe  Plaza and Island  Plaza.  No such income was received in
1996.

Expenses:

Total  expenses  decreased by $840,402 in 1997 as compared to 1996. The decrease
was mainly due to a $700,000  write-down for impairment of real estate  recorded
in 1996 as compared  to a  write-down  for  impairment  of $220,000 in 1997.  In
addition,  there was a decrease in  depreciation  and  amortization  expense and
general  and  administrative  expenses,  partially  offset  by  an  increase  in
utilities, as discussed below.

Depreciation and amortization  expense in 1997 decreased by $281,194 in relation
to 1996. The decrease was due to Island Plaza,  Southpointe Plaza and Springwood
Plaza  being  classified  as assets held for sale by the  Partnership  effective
April 1, 1996, October 1, 1996 and August 1, 1997,  respectively.  In accordance
with  the  Financial   Accounting   Standards  Board's  Statement  of  Financial
Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of Long-Lived
Assets and for  Long-Lived  Assets to be Disposed  Of," the  Partnership  ceased
recording  depreciation  on these  assets at the time  they  were  placed on the
market for sale.

In 1997,  utilities  increased by $31,190 as compared to 1996,  mainly due to an
increase in water and sewer rates at a majority of the properties.  In addition,
there was an increase in water usage at Riverbay Plaza due to the expansion of a
major tenant's space at the shopping center.

General and administrative  expenses decreased by $93,903 in 1997 as compared to
1996.  The decrease was mainly due to a decrease in costs  incurred  relating to
evaluation  and  dissemination  of information  regarding an unsolicited  tender
offer.  This decrease was  partially  offset by  approximately  $18,000 of costs
incurred for investor  services  which were paid to an unrelated  third party in
1997. In 1996,  such costs were paid to an affiliate of the General  Partner and
were included in general and  administrative  - affiliates on the  Statements of
Operations.

In 1997, the Partnership recorded a $220,000 write-down for impairment of Island
Plaza Shopping Center. In 1996, the Partnership  recorded a $700,000  write-down
for impairment of Southpointe Plaza Shopping Center.


<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The  Partnership's  primary  source of cash flows is from  operating  activities
which generated $1,290,112 of cash in 1998, $1,504,410 in 1997 and $1,153,592 in
1996.

Cash flows from operating  activities  decreased by $214,298 in 1998 as compared
to 1997. Excluding  Southpointe Plaza and Island Plaza , cash flows increased by
$187,628.  This increase in cash provided by operating activities was mainly due
to an increase in cash received  from tenants (see above  discussion of increase
in rental revenue) and a decrease in cash paid to affiliates. These increases in
cash  provided were  partially  offset by an increase in cash paid to suppliers,
mainly due to an increase in general and administrative  expenses,  as discussed
above.

The increased cash generated through operating activities in 1997 as compared to
1996 was mainly due to an  increase  in cash  received  from  tenants  due to an
increase  in  rental  revenue  and an  increase  in  collections  of prior  year
receivables.  In addition,  there was a decrease in cash paid to  affiliates  in
1997.

In 1997, the Partnership  received $226,747 of net insurance proceeds for damage
caused by a fire at Riverbay Plaza  Shopping  Center.  In 1996, the  Partnership
received $75,000 of net insurance  proceeds for wind and hail damage suffered at
Pine Hills Apartments. No insurance proceeds were received in 1998.

The Partnership expended $2,469,527,  $537,986 and $484,810 on capital additions
to its real estate  investments and assets held for sale in 1998, 1997 and 1996,
respectively.  The increase in expenditures in 1998 in relation to 1997 and 1996
was primarily due to  approximately  $1.6 million  expended at Riverbay Plaza to
expand an anchor tenant's space. These costs were paid by the tenant in 1997 and
reimbursed by the  Partnership in 1998. In addition,  approximately  $566,000 of
costs were incurred in 1998 for  improvements  to a new tenant's  space at Towne
Center Shopping Center. In 1997,  repairs totaling  approximately  $233,000 were
completed to repair damage caused by a fire at Riverbay Plaza.

In April 1998, the  Partnership  received a total of $8,438,530 in proceeds from
the sales of Southpointe Plaza and Island Plaza shopping centers.  $5,261,942 of
the proceeds was used to repay the Southpointe Plaza mortgage note payable.

The  Partnership  made  $31,075,  $128,746 and  $116,764 in regularly  scheduled
principal  payments on the Southpointe Plaza mortgage note payable in 1998, 1997
and 1996, respectively. The decrease in 1998 was due to the sale of the property
and the repayment of the loan on April 1, 1998.

In June 1998, the  Partnership  received  $1,650,000 in proceeds from a mortgage
note payable secured by Riverbay Plaza Shopping  Center.  The proceeds were used
to pay for  improvements  made in 1997 to renovate and expand an anchor tenant's
space.

In 1996, the Partnership repaid $642,581 of advances from affiliates.

The  Partnership  distributed  $4,644,400  to  the  limited  partners  in  1998,
$3,144,250 of which was net cash proceeds  from the sales of  Southpointe  Plaza
and Island Plaza and the  remaining  $1,500,150  was cash from  operations.  The
Partnership  distributed  $500,000 and $750,016 of cash from  operations  to the
limited partners in 1997 and 1996, respectively.

Short-term liquidity:

At  December  31,  1998,  the  Partnership  held  cash and cash  equivalents  of
$1,103,846.  This balance provides a reasonable level of working capital for the
Partnership's immediate needs in operating its properties.

For the  Partnership  as a whole,  management  projects  positive cash flow from
operations in 1998.  The  Partnership  has budgeted  approximately  $382,000 for
necessary capital improvements for all properties in 1999, which are expected to
be funded from available cash reserves or from operations of the properties. The
present  cash  balance is believed to provide an adequate  reserve for  property
operations.


<PAGE>
Additional efforts to maintain and improve  partnership  liquidity have included
continued attention to property management activities. The objective has been to
obtain maximum  occupancy  rates while holding  expenses to levels  necessary to
maximize  cash flows.  The  Partnership  has made  capital  expenditures  on its
properties where improvements were expected to increase the  competitiveness and
marketability of the properties.

Under the terms of the Amended  Partnership  Agreement,  the Partnership  pays a
disposition  fee to the General Partner equal to 3% of the gross sales price for
brokerage  services  performed in connection with the sale of the  Partnership's
properties.  The fee is due  and  payable  at the  time  the  sale  closes.  The
Partnership incurred $204,000 and $55,500 of such fees during 1998 in connection
with  the  sale  of  Southpointe   Plaza  and  Island  Plaza  shopping  centers,
respectively. These fees were paid by the Partnership subsequent to December 31,
1998 and are included in payable to  affiliates on the Balance Sheet at December
31, 1998.

During the last week of March 1999, the  Partnership  distributed  approximately
$250,000 to the limited partners of record as of March 1, 1999.

Long-term liquidity:

Only one property,  Riverbay Plaza Shopping Center,  is encumbered with mortgage
debt. The mortgage is not due until 2001.

While the outlook for  maintenance of adequate levels of liquidity is favorable,
should operations  deteriorate and present cash resources become insufficient to
fund current  needs,  the  Partnership  would  require  other sources of working
capital.  No  such  sources  have  been  identified.   The  Partnership  has  no
established  lines of credit from outside  sources.  Other  possible  actions to
resolve cash deficiencies include refinancings, deferral of capital expenditures
on Partnership properties except where improvements are expected to increase the
competitiveness  and marketability of the properties,  arranging  financing from
affiliates or the ultimate sale of the properties.
Sales and refinancings are possibilities only.

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


<PAGE>
YEAR 2000 DISCLOSURE
--------------------

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

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

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

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

Cost
----

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

Risks
-----

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

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

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

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

Not Applicable.
<PAGE>
ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------    -------------------------------------------

<TABLE>
<CAPTION>

                                                                                                      Page
                                                                                                      Number
                                                                                                      ------

INDEX TO FINANCIAL STATEMENTS
-----------------------------

Financial Statements:

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

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

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

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

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

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

   Financial Statement Schedule -

      Schedule III - Real Estate Investments and Accumulated
         Depreciation and Amortization............................................                       33

</TABLE>





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


<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Partners of McNeil Real Estate Fund XXIV, L.P.:

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

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

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

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


/s/  Arthur Andersen LLP


Dallas, Texas
   March 19, 1999

<PAGE>
                       McNEIL REAL ESTATE FUND XXIV, L.P.

                                 BALANCE SHEETS

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

Real estate investments:
<S>                                                               <C>                  <C>         
   Land ..................................................        $  1,624,347         $  1,624,347
   Buildings and improvements ............................          18,569,845           17,771,163
                                                                  ------------         ------------
                                                                    20,194,192           19,395,510
   Less:  Accumulated depreciation and amortization ......          (9,058,971)          (7,997,592)
                                                                  ------------         ------------
                                                                    11,135,221           11,397,918

Assets held for sale .....................................           2,737,114           10,935,647

Cash and cash equivalents ................................           1,103,846            2,180,029
Cash segregated for security deposits ....................              62,227               84,737
Accounts receivable, net of allowance for doubtful
   accounts of $38,811 and $24,095 at December 31,
   1998 and 1997, respectively ...........................             306,898              588,578
Prepaid expenses and other assets, net ...................             159,085              114,823
                                                                  ------------         ------------
                                                                  $ 15,504,391         $ 25,301,732
                                                                  ============         ============

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

Mortgage notes payable ...................................        $  1,650,000         $  5,293,017
Accounts payable and accrued expenses ....................             193,779              181,540
Payable to tenant ........................................                  --            1,622,873
Payable to affiliates ....................................             793,128              192,735
Security deposits and deferred rental revenue ............              73,623              100,283
                                                                  ------------         ------------
                                                                     2,710,530            7,390,448
                                                                  ------------         ------------

Partners' equity (deficit):
   Limited partners - 40,000 limited partnership
     units authorized and outstanding at
     December 31, 1998 and 1997 ..........................          12,823,151           17,935,844
   General Partner .......................................             (29,290)             (24,560)
                                                                  ------------         ------------
                                                                    12,793,861           17,911,284
                                                                  ------------         ------------
                                                                  $ 15,504,391         $ 25,301,732
                                                                  ============         ============
</TABLE>


                 See accompanying notes to financial statements.
<PAGE>
                       McNEIL REAL ESTATE FUND XXIV, L.P.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             For the Years Ended December 31,
                                                     --------------------------------------------------
                                                        1998                1997                1996
                                                     -----------         -----------        -----------

Revenue:
<S>                                                  <C>                 <C>                <C>        
   Rental revenue ...........................        $ 3,255,378         $ 4,186,633        $ 4,136,447
   Interest .................................            140,023              99,777            105,722
   Gain on involuntary conversion ...........                 --             149,585             45,134
   Property tax refund ......................                 --              39,700             20,433
   Other revenue ............................                 --              30,000                 --
                                                     -----------         -----------        -----------
     Total revenue ..........................          3,395,401           4,505,695          4,307,736
                                                     -----------         -----------        -----------

Expenses:
   Interest .................................            176,018             387,432            427,365
   Depreciation and amortization ............          1,061,379             910,119          1,191,313
   Property taxes ...........................            288,516             413,111            423,275
   Personnel costs ..........................            287,861             297,655            273,780
   Repairs and maintenance ..................            320,935             435,291            399,778
   Property management fees -
     affiliates .............................            187,776             241,025            226,592
   Utilities ................................            226,328             244,238            213,048
   Other property operating expenses ........            235,523             296,725            316,234
   General and administrative ...............            388,022             102,067            195,970
   General and administrative -
     affiliates .............................            451,236             527,853            548,563
   Loss on disposition of real estate........            118,750                  --                 --
   Write-down for impairment
     of real estate .........................            126,080             220,000            700,000
                                                     -----------         -----------        -----------
     Total expenses .........................          3,868,424           4,075,516          4,915,918
                                                     -----------         -----------        -----------

Net income (loss) ...........................        $  (473,023)        $   430,179        $  (608,182)
                                                     ===========         ===========        ===========

Net income (loss) allocable to
   limited partners .........................        $  (468,293)        $   425,877        $  (602,100)
Net income (loss) allocable to
   General Partner ..........................             (4,730)              4,302             (6,082)
                                                     -----------         -----------        -----------
Net income (loss) ...........................        $  (473,023)        $   430,179        $  (608,182)
                                                     ===========         ===========        ===========

Net income (loss) per limited
   partnership unit .........................        $    (11.71)        $     10.65        $    (15.05)
                                                     ===========         ===========        ===========

Distributions per limited partnership
   unit .....................................        $    116.11         $     12.50        $     18.75
                                                     ===========         ===========        ===========
</TABLE>


                 See accompanying notes to financial statements.
<PAGE>
                       McNEIL REAL ESTATE FUND XXIV, L.P.

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

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


<TABLE>
<CAPTION>
                                                                                               Total
                                                    General             Limited              Partners'
                                                    Partner             Partners              Equity
                                                 -------------        -------------        ------------
<S>                                              <C>                  <C>                  <C>         
Balance at December 31, 1995 ............        $    (22,780)        $ 19,362,083         $ 19,339,303

Net loss ................................              (6,082)            (602,100)            (608,182)

Distributions to limited partners .......                  --             (750,016)            (750,016)
                                                 ------------         ------------         ------------

Balance at December 31, 1996 ............             (28,862)          18,009,967           17,981,105

Net income ..............................               4,302              425,877              430,179

Distributions to limited partners........                  --             (500,000)            (500,000)
                                                 ------------         ------------         ------------

Balance at December 31, 1997 ............             (24,560)          17,935,844           17,911,284

Net loss ................................              (4,730)            (468,293)            (473,023)

Distributions to limited partners .......                  --           (4,644,400)          (4,644,400)
                                                 ------------         ------------         ------------

Balance at December 31, 1998 ............        $    (29,290)        $ 12,823,151         $ 12,793,861
                                                 ============         ============         ============
</TABLE>



                 See accompanying notes to financial statements.
<PAGE>
                       McNEIL REAL ESTATE FUND XXIV, L.P.

                            STATEMENTS OF CASH FLOWS

                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                                   For the Years Ended December 31,
                                                       ----------------------------------------------------
                                                            1998               1997                1996
                                                       ------------        ------------        ------------

Cash flows from operating activities:
<S>                                                    <C>                 <C>                 <C>        
   Cash received from tenants .................        $ 3,353,156         $ 4,177,736         $ 3,977,657
   Cash paid to suppliers .....................         (1,416,124)         (1,363,390)         (1,370,950)
   Cash paid to affiliates ....................           (298,119)           (650,486)           (760,339)
   Interest received ..........................            140,023              99,777             105,722
   Interest paid ..............................           (188,669)           (380,361)           (398,254)
   Property taxes paid ........................           (300,155)           (408,866)           (420,677)
   Property tax refund ........................                 --                  --              20,433
   Other revenue ..............................                 --              30,000                  --
                                                       -----------         -----------         -----------
Net cash provided by operating
   activities .................................          1,290,112           1,504,410           1,153,592
                                                       -----------         -----------         -----------

Cash flows from investing activities:
   Net proceeds received from
     insurance company ........................                 --             226,747              75,000
   Additions to real estate investments
     and assets held for sale .................         (2,469,527)           (537,986)           (484,810)
   Proceeds from disposition of real
     estate ...................................          8,438,530                  --                  --
                                                       -----------         -----------         -----------
Net cash provided by (used in)
   investing activities .......................          5,969,003            (311,239)           (409,810)
                                                       -----------         -----------         -----------

Cash flows from financing activities:
   Deferred borrowing costs paid ..............            (47,881)                 --                  --
   Principal payments on mortgage
     note payable .............................            (31,075)           (128,746)           (116,764)
   Retirement of mortgage note payable ........         (5,261,942)                 --                  --
   Proceeds from mortgage note
     payable ..................................          1,650,000                  --                  --
   Repayment of advances from
     affiliates ...............................                 --                  --            (642,581)
   Distributions to limited partners ..........         (4,644,400)           (500,000)           (750,016)
                                                       -----------         -----------         -----------
Net cash used in financing activities .........         (8,335,298)           (628,746)         (1,509,361)
                                                       -----------         -----------         -----------

Net increase (decrease) in cash
   and cash equivalents .......................         (1,076,183)            564,425            (765,579)

Cash and cash equivalents at
   beginning of year ..........................          2,180,029           1,615,604           2,381,183
                                                       -----------         -----------         -----------

Cash and cash equivalents at end
   of year ....................................        $ 1,103,846         $ 2,180,029         $ 1,615,604
                                                       ===========         ===========         ===========
</TABLE>


See discussion of noncash  investing and financing  activities in Note 4 - "Real
Estate  Investments,"  Note 7 - "Gains on Involuntary  Conversions" and Note 8 -
"Disposition of Real Estate."

                 See accompanying notes to financial statements.
<PAGE>
                       McNEIL REAL ESTATE FUND XXIV, L.P.

                            STATEMENTS OF CASH FLOWS


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

<TABLE>
<CAPTION>
                                                                   For the Years Ended December 31,
                                                          ----------------------------------------------------
                                                              1998                1997                1996
                                                          ------------        -----------         ------------
<S>                                                       <C>                 <C>                 <C>         
Net income (loss) ................................        $  (473,023)        $   430,179         $  (608,182)
                                                          -----------         -----------         -----------

Adjustments to reconcile net income
   (loss) to net cash provided by
   operating activities:
   Depreciation and amortization .................          1,061,379             910,119           1,191,313
   Allowance for doubtful accounts ...............             14,716             (17,056)             41,151
   Amortization of deferred borrowing
     costs .......................................              8,312               7,770              31,079
   Gain on involuntary conversion ................                 --            (149,585)            (45,134)
   Loss on disposition of real estate ............            118,750                  --                  --
   Write-down for impairment
     of real estate ..............................            126,080             220,000             700,000
   Changes in assets and liabilities:
     Cash segregated for security deposits........             22,510              (2,271)             12,314
     Accounts receivable .........................            136,791             (20,770)           (158,323)
     Prepaid expenses and other
       assets, net ...............................            (51,875)             19,748              13,070
     Accounts payable and accrued
       expenses ..................................             12,239             (20,505)            (27,583)
     Payable to affiliates .......................            340,893             118,392              14,816
     Security deposits and deferred
       rental revenue ............................            (26,660)              8,389             (10,929)
                                                          -----------         -----------         -----------

         Total adjustments .......................          1,763,135           1,074,231           1,761,774
                                                          -----------         -----------         -----------

Net cash provided by operating
   activities ....................................        $ 1,290,112         $ 1,504,410         $ 1,153,592
                                                          ===========         ===========         ===========
</TABLE>



                 See accompanying notes to financial statements.
 <PAGE>
                       McNEIL REAL ESTATE FUND XXIV, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998

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

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

McNeil  Real Estate  Fund XXIV,  L.P.  (the  "Partnership"),  formerly  known as
Southmark Equity Partners, Ltd., was organized on October 19, 1984, as a limited
partnership under the provisions of the California  Revised Limited  Partnership
Act to acquire and operate  commercial and residential  properties.  The general
partner of the Partnership is McNeil Partners,  L.P. ( the "General Partner"), a
Delaware  limited  partnership,  an affiliate  of Robert A. McNeil.  The General
Partner was elected at a meeting of limited partners on March 30, 1992, at which
time an amended and restated  partnership  agreement  (the "Amended  Partnership
Agreement") was adopted. The principal place of business for the Partnership and
the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

The Partnership is engaged in diversified real estate activities,  including the
ownership, operation and management of residential and commercial properties. At
December 31, 1998, the Partnership  owned five  revenue-producing  properties as
described  in  Note 4 -  "Real  Estate  Investments."  All of the  Partnership's
remaining properties were acquired in transactions involving payment of all cash
to the  sellers.  A  mortgage  note  payable  was  obtained  in 1998 to fund the
expansion of a tenant's space at Riverbay Plaza as further described in Note 5 -
"Mortgage Notes Payable."

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

The Partnership  placed Springwood Plaza on the market for sale effective August
1, 1997.

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

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


<PAGE>
Adoption of Recent Accounting Pronouncements
--------------------------------------------

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

Real Estate Investments
-----------------------

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

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

Assets Held for Sale
--------------------

Assets held for sale are stated at the lower of  depreciated  cost or fair value
less costs to sell.  Depreciation  and amortization on these assets cease at the
time they are placed on the market for sale.

Depreciation and Amortization
-----------------------------

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

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

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

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

Loan fees and other related costs incurred to obtain long-term financing on real
property are capitalized  and are included in prepaid  expenses and other assets
on the Balance Sheets. Amortization is recorded using a method that approximates
the  effective  interest  method  over the  term of the  related  mortgage  note
payable.  Amortization  of  deferred  borrowing  costs is  included  in interest
expense on the Statements of Operations.


<PAGE>
Rental Revenue
--------------

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

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

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

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

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

The Amended  Partnership  Agreement  generally  provides that net income and net
loss  (other  than  net  income  arising  from  sales or  refinancing)  shall be
allocated 1% to the General Partner and 99% to the limited partners.

For financial statement  purposes,  net income arising from sales or refinancing
shall be allocated 1% to the General Partner and 99% to the limited partners.

For tax reporting  purposes,  net income arising from sales or refinancing shall
be  allocated  as  follows:  (a)  first,  amounts  of such net  income  shall be
allocated among the General  Partner and limited  partners in proportion to, and
to the extent of, the  portion of such  partners'  share of the net  decrease in
Partnership Minimum Gain determined under Treasury  Regulations,  (b) second, to
the General Partner and limited partners in proportion to, and to the extent of,
the amount by which their  respective  capital account  balances are negative by
more than their respective  remaining shares of the  Partnership's  Minimum Gain
attributable  to properties  still owned by the Partnership and (c) third, 1% of
such net income shall be  allocated  to the General  Partner and 99% of such net
income shall be allocated to the limited partners.

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


<PAGE>
Distributions
-------------

At the discretion of the General  Partner,  distributable  cash (other than cash
from sales or  refinancing)  shall be distributed to the limited  partners until
the limited partners have received distributions of cash flow equal to a 10% per
annum cumulative return on their Adjusted Invested Capital, as defined, and then
100% to the  limited  partners  as a class.  At the  discretion  of the  General
Partner,  cash  from  sales or  refinancing  shall  be  distributed  to  limited
partners:  (first) in an amount which when added to prior distributions from all
sources to such limited  partners is equal to a cumulative  preferred  return of
10% per annum; and (second) to limited partners in an amount which when added to
prior  distributions of cash from sales and refinancing to such limited partners
is equal to such limited partners'  Original Invested Capital,  as defined;  and
(third) to the  limited  partners  on a per limited  partnership  unit  ("Unit")
basis.

In connection  with a Terminating  Disposition,  as defined,  cash from sales or
refinancing and any remaining reserves shall be allocated among, and distributed
to, the General Partner and limited partners in proportion to, and to the extent
of,  their  positive  capital  account  balances  after the net  income has been
allocated pursuant to the above.

The  Partnership  distributed  $4,644,400,  $500,000 and $750,016 to the limited
partners  in 1998,  1997 and 1996,  respectively.  During the last week of March
1999, the Partnership distributed approximately $250,000 to the limited partners
of record as of March 1, 1999.

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

Net income  (loss) per limited  partnership  unit is  computed  by dividing  net
income (loss)  allocated to the limited  partners by the weighted average number
of Units  outstanding.  Per Unit  information  has been computed based on 40,000
Units outstanding in 1998, 1997 and 1996.

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

The  Partnership  pays property  management fees equal to 5% of the gross rental
receipts for its residential  properties and 6% of gross rental receipts for its
commercial  properties to McNeil Real Estate  Management,  Inc.  ("McREMI"),  an
affiliate of the General Partner, for providing property management services for
the Partnership's residential and commercial properties and leasing services for
its residential  properties.  McREMI may also choose to provide leasing services
for the Partnership's  commercial properties,  in which case McREMI will receive
property  management  fees from such  commercial  properties  equal to 3% of the
property's  gross  rental  receipts  plus  leasing   commissions  based  on  the
prevailing market rate for such services where the property is located.

Under the terms of the Amended  Partnership  Agreement,  the Partnership  pays a
disposition  fee to the General Partner equal to 3% of the gross sales price for
brokerage  services  performed in connection with the sale of the  Partnership's
properties.  The fee is due  and  payable  at the  time  the  sale  closes.  The
Partnership incurred $204,000 and $55,500 of such fees during 1998 in connection
with  the  sale  of  Southpointe   Plaza  and  Island  Plaza  shopping  centers,
respectively. These fees were paid by the Partnership subsequent to December 31,
1998 and are included in payable to  affiliates on the Balance Sheet at December
31, 1998.

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

Under the terms of the Amended Partnership Agreement,  the Partnership is paying
an  asset  management  fee to the  General  Partner.  Through  1999,  the  asset
management  fee is calculated as 1% of the  Partnership's  tangible asset value.
Tangible  asset  value is  determined  by using  the  greater  of (i) an  amount
calculated by applying a capitalization  rate of 9 percent to the annualized net
operating  income of each property or (ii) a value of $10,000 per apartment unit
for  residential  properties  and $50  per  gross  square  foot  for  commercial
properties to arrive at the property tangible asset value. The property tangible
asset  value is then  added to the book  value  of all  other  assets  excluding
intangible items. The fee percentage decreases to .75% in 2000, .50% in 2001 and
 .25% thereafter.


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

<TABLE>
<CAPTION>
                                                                   For the Years Ended December 31,
                                                              ----------------------------------------
                                                                1998            1997            1996
                                                              --------        --------        --------
<S>                                                           <C>             <C>             <C>     
Property management fees .............................        $187,776        $241,025        $226,592
Charged to general and administrative -
   affiliates:
   Partnership administration ........................         212,274         210,751         233,066
   Asset management fee ..............................         238,962         317,102         315,497
Charged to loss on disposition of real estate:
   Disposition fee ...................................         204,000              --              --
Charged to write-down for impairment
   of real estate:
   Disposition fee ...................................          55,500              --              --
                                                              --------        --------        --------
                                                              $898,512        $768,878        $775,155
                                                              ========        ========        ========
</TABLE>

Payable to  affiliates  at December  31, 1998 and 1997  consisted  primarily  of
unpaid  property  management  fees,  disposition  fees (1998 only),  Partnership
general and  administrative  expenses and asset  management  fees and is due and
payable from current operations.

NOTE 3 - TAXABLE INCOME (LOSS)
------------------------------

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

The  Partnership's  net assets and liabilities for tax purposes exceeded the net
assets and liabilities for financial  reporting  purposes by $5,099,178 in 1998,
$5,529,886 in 1997 and $6,081,071 in 1996.


<PAGE>
NOTE 4 - REAL ESTATE INVESTMENTS
--------------------------------

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

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

Pine Hills Apartments
<S>                            <C>                 <C>                 <C>                 <C>           
   Livingston, TX              $      605,145      $    3,809,382      $   (2,139,016)     $    2,275,511
Riverbay Plaza
   Riverview, FL                      294,546           7,583,702          (3,243,150)          4,635,098
Sleepy Hollow Apartments
   Cleveland, TX                      363,051           4,394,014          (2,370,203)          2,386,862
Towne Center
   Derby, KS                          361,605           2,782,747          (1,306,602)          1,837,750
                                -------------       -------------       -------------       -------------

                               $    1,624,347      $   18,569,845      $   (9,058,971)     $   11,135,221
                                =============       =============       =============       =============

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

Pine Hills Apartments          $      605,145      $    3,764,012      $   (1,949,488)     $    2,419,669
Riverbay Plaza                        294,546           7,451,775          (2,705,777)          5,040,544
Sleepy Hollow Apartments              363,051           4,370,296          (2,162,469)          2,570,878
Towne Center                          361,605           2,185,080          (1,179,858)          1,366,827
                                -------------       -------------       -------------       -------------

                               $    1,624,347      $   17,771,163      $   (7,997,592)     $   11,397,918
                                =============       =============       =============       =============
</TABLE>


<PAGE>
On August 1, 1997 the  General  Partner  placed  Springwood  Plaza,  located  in
Dellwood,  Missouri,  on the market for sale. Springwood Plaza was classified as
such at  December  31,  1998 and 1997 with a net book  value of  $2,737,114  and
$2,691,777, respectively.

The  General  Partner  placed  Southpointe  Plaza  Shopping  Center,  located in
Sacramento,  California on the market for sale effective  October 1, 1996. Based
on an offer  from a  non-affiliate  to  purchase  the  center,  the  Partnership
recorded a $700,000 write-down for impairment of value during the fourth quarter
of 1996 to record the shopping  center at its fair value less estimated costs to
sell. Southpointe Plaza was classified as an asset held for sale at December 31,
1997 with a net book value of  $6,433,611.  On March 31, 1998,  the  Partnership
sold  Southpointe  Plaza for a gross  sales  price of $6.8  million  as  further
discussed in Note 8 - "Disposition of Real Estate."

The General Partner placed Island Plaza Shopping  Center,  located in Ft. Myers,
Florida,  on the market for sale effective April 1, 1996. Based on an offer from
a  non-affiliate  to purchase the center,  the  Partnership  recorded a $220,000
write-down  for  impairment of value during the fourth quarter of 1997 to record
the shopping center at its fair value less estimated costs to sell. Island Plaza
was  classified  as an asset held for sale at December  31, 1997 with a net book
value of $1,810,259.  An additional  $126,080 write-down for impairment of value
was recorded in the first  quarter of 1998.  On April 1, 1998,  the  Partnership
sold Island Plaza for a gross sales price of $1.85 million as further  discussed
in Note 8 - "Disposition of Real Estate."

The results of operations for the assets held for sale were  $329,990,  $626,063
and $317,577 for the years ended December 31, 1998, 1997 and 1996, respectively.
Results of operations are operating  revenues less operating  expenses including
depreciation and amortization and interest expense.

In 1997,  improvements  totaling  approximately  $1.6 million were  performed at
Riverbay Plaza to renovate and expand an anchor tenant's space. These costs were
paid by the tenant and reimbursed by the  Partnership  in 1998. The  Partnership
obtained  a  mortgage  loan  secured by  Riverbay  Plaza to pay these  costs and
received such funds in June 1998. See Note 5 - "Mortgage Notes Payable."

The Partnership leases its commercial properties under non-cancelable  operating
leases.  Future  minimum  rents to be received  as of  December  31, 1998 are as
follows:

                                              Real Estate     Asset Held
                                              Investments      For Sale

      1999........................        $   1,023,822      $   299,689
      2000........................              950,006          109,031
      2001........................              882,842           49,010
      2002........................              810,055           17,925
      2003........................              710,534            1,500
      Thereafter..................            8,847,137                -
                                           ------------       ----------
       Total                              $  13,224,396      $   477,155
                                           ============       ==========


<PAGE>
Future minimum rents do not include  contingent rentals based on sales volume of
tenants. No contingent rents were recognized in 1998.  Contingent rents amounted
to  $38,404  and  $32,518  for the  years  ended  December  31,  1997 and  1996,
respectively.  Future minimum rents also do not include  expense  reimbursements
for common area  maintenance,  property taxes and other expenses.  These expense
reimbursements  amounted to $268,396,  $526,529 and $548,716 for the years ended
December 31,  1998,  1997 and 1996,  respectively.  These  contingent  rents and
expense  reimbursements,  which include  amounts  related to the assets held for
sale, are included in rental revenue on the Statements of Operations.

NOTE 5 - MORTGAGE NOTES PAYABLE
-------------------------------

The  following  sets forth the  mortgage  notes  payable of the  Partnership  at
December  31,  1998 and 1997.  The  mortgage  notes  payable  are secured by the
related real estate investment.

<TABLE>
<CAPTION>
                         Mortgage         Annual          Monthly
                         Lien             Interest        Payments/                     December 31,
Property                 Position (a)Rate %               Maturity                1998                1997
--------                 ------------------            -----------------     ---------------     -------------
<S>                      <C>              <C>             <C>      <C>       <C>                <C>           
Southpointe Plaza(b)     First            Variable (b)    $41,931  9/97      $             -    $    5,293,017

Riverbay Plaza           First            Variable (c)       (c)   4/01            1,650,000                 -
                                                                                ------------      ------------
                                                              Total          $     1,650,000    $    5,293,017
                                                                                ============      ============
</TABLE>
<PAGE>

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

(b)    Southpointe  Plaza   was  sold and the mortgage  was paid off on April 1,
       1998. See Note 8 - "Disposition of Real Estate."

(c)    In June 1998,  the  Partnership  received  $1,650,000 in proceeds  from a
       mortgage note payable  secured by Riverbay  Plaza  Shopping  Center.  The
       proceeds were used to pay for  improvements  made in 1997 to renovate and
       expand  an  anchor  tenant's  space.  The  mortgage  note  payable  to an
       unaffiliated lender bears interest at a variable rate equal to 1.75% plus
       the  London  Interbank  Offered  Rate per annum and  matures on April 15,
       2001.  At December 31, 1998,  the interest  rate of the mortgage note was
       7.2965%.  Interest-only  payments are due monthly  until July 1, 1999, at
       which time monthly  principal  and interest  payments of $13,301 are due.
       The remaining  principal  balance of  approximately  $1,577,000 is due at
       maturity. The Partnership incurred $47,881 of deferred borrowing costs in
       connection with the financing of the property.

Scheduled principal maturities of the mortgage note payable under existing terms
are as follows:

                           1999                  $      18,896
                           2000                         39,955
                           2001                      1,591,149
                           Thereafter                        -
                                                  ------------
                           Total                 $   1,650,000
                                                  ============

Based on borrowing rates  currently  available to the Partnership for a mortgage
loan with similar terms and average  maturities,  the fair value of the mortgage
notes payable was  approximately  $1,589,000 at December 31, 1998 and $4,953,000
at December 31, 1997.

NOTE 6 - LEGAL PROCEEDINGS
--------------------------

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

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


<PAGE>

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

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

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

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

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


<PAGE>
NOTE 7 - GAINS ON INVOLUNTARY CONVERSIONS
-----------------------------------------

In December 1995, wind and hail damage occurred at Pine Hills Apartments. During
1996,  reimbursements totaling $75,000 were received from the insurance carrier,
and repairs to the property were completed.  In 1996, the Partnership recognized
a  $45,134  gain on  involuntary  conversion,  which  represents  the  amount of
insurance  reimbursements  received  in  excess  of the  basis  of the  property
damaged.

In February  1997,  a fire  occurred  at Riverbay  Plaza  Shopping  Center.  One
tenant's space (less than 3% of the total leasable square footage of the center)
was completely destroyed. In addition,  there was damage to the roof and several
tenant  spaces  incurred  water and smoke  damage.  During 1997,  reimbursements
totaling  $226,747 were  received  from the  insurance  carrier and repairs were
completed.  The Partnership recognized a $149,585 gain on involuntary conversion
which  represents the amount of insurance  reimbursements  received in excess of
the basis of the property damaged.

NOTE 8 - DISPOSITION OF REAL ESTATE
-----------------------------------

On March 31, 1998, the  Partnership  sold  Southpointe  Plaza  Shopping  Center,
located in  Sacramento,  California,  to an  unaffiliated  purchaser  for a cash
purchase price of $6,800,000. Cash proceeds from the sale were received on April
1, 1998.  Sales  proceeds  received,  as well as the resulting loss on sale, are
detailed below.

<TABLE>
<CAPTION>
                                                                        Loss                    Sales
                                                                   on Disposition              Proceeds
                                                                  -----------------       ------------------
<S>                                                               <C>                     <C>              
Sales price..........................................             $      6,800,000        $       6,800,000

Selling costs........................................                     (389,990)               (185,990)
Straight-line rents receivable written off...........                      (48,601)
Prepaid leasing commissions written off..............                      (43,913)
Carrying value.......................................                   (6,436,246)
                                                                   ----------------        ---------------
Loss on disposition of real estate...................             $       (118,750)
                                                                   ===============

Proceeds from sale of real estate....................                                            6,614,010
Retirement of mortgage note payable..................                                           (5,261,942)
Accrued interest paid................................                                              (32,338)
                                                                                            --------------
Net cash proceeds....................................                                      $     1,319,730
                                                                                            ==============

</TABLE>


<PAGE>
As  discussed  in  Note 2 -  "Transactions  With  Affiliates,"  the  Partnership
incurred a $204,000 disposition fee payable to the General Partner in connection
with the sale of Southpointe Plaza. This fee increased the amount of the loss on
disposition of real estate and is included in selling costs above.  However,  as
the fee was not paid until  subsequent  to December 31, 1998,  it did not reduce
the amount of net cash proceeds  received  from the sale.  The net cash proceeds
from  the  sale  of  Southpointe  Plaza  are  $1,115,730  after  payment  of the
disposition fee.


On April 1, 1998, the Partnership sold Island Plaza Shopping Center,  located in
Ft. Myers,  Florida,  to an unaffiliated  purchaser for a cash purchase price of
$1,850,000.  The  Partnership  recorded a $126,080  write-down for impairment of
real estate in the first  quarter of 1998 to record the  property at the pending
sales price less estimated costs to sell. Sales proceeds are detailed below.

<TABLE>
<CAPTION>
                                                                         Loss               Sales
                                                                    on Disposition         Proceeds
                                                                  ----------------      ---------------
<S>                                                               <C>                   <C>           
Sales price..........................................             $      1,850,000      $    1,850,000

Selling costs .......................................                      (80,980)            (25,480)
Straight-line rents receivable written off...........                      (81,572)
Prepaid leasing commissions written off..............                       (3,269)
Carrying value.......................................                   (1,684,179)
                                                                   ----------------      -------------

Loss on disposition of real estate...................             $               -
                                                                   ================

Net cash proceeds....................................                                   $    1,824,520
                                                                                         =============
</TABLE>

As  discussed  in  Note 2 -  "Transactions  With  Affiliates,"  the  Partnership
incurred a $55,500  disposition fee payable to the General Partner in connection
with the sale of Island Plaza.  This fee increased the amount of the  write-down
for  impairment of real estate and is included in selling costs above.  However,
as the fee was not paid until subsequent to December 31, 1998, it did not reduce
the amount of net cash proceeds  received  from the sale.  The net cash proceeds
from the sale of Island Plaza are  $1,769,020  after payment of the  disposition
fee.

NOTE 9 - COMMITMENTS AND CONTINGENCIES
--------------------------------------

Environmental laws create potential liabilities that may affect property owners.
The environmental  laws of Federal and certain state  governments,  for example,
impose liability on current and certain past owners of property from which there
is a release  or threat of  release  of  hazardous  substances.  This  liability
includes costs of investigation and remediation of the hazardous  substances and
natural resource  damages.  Liability for costs of investigation and remediation
is strict and may be imposed  irrespective  of whether the property owner was at
fault,  although  there are a number of  defenses.  Both  governments  and third
parties may seek recoveries under these laws.


<PAGE>
Third parties also may seek  recovery  under the common law for damages to their
property  or person,  against  owners of  property  from which  there has been a
release of hazardous and other substances.

The presence of  contamination  or the failure to remediate  contaminations  may
adversely  affect the owner's  ability to sell or lease real estate or to borrow
using the real estate as collateral.

Various  buildings at properties do or may contain  building  materials that are
the subject of various  regulatory  programs  intended to protect  human health.
Such building materials include,  for example,  asbestos,  lead-based paint, and
lead plumbing components.  The Company has implemented programs to deal with the
presence  of those  materials,  which  include,  as  appropriate,  reduction  of
potential  exposure  situations.  The Company does not believe that the costs of
such programs are likely to have a material adverse effect. Failure to implement
such programs can result in regulatory  violations or liability claims resulting
from alleged exposure to such materials.

In connection with the proposed sale transaction as more fully described in Note
1 -  "Organization  and Summary of  Significant  Accounting  Policies",  Phase I
environmental  site  assessments  have been completed for each property owned by
the Partnership. Such environmental assessments performed on the properties have
not revealed any  environmental  liability that the  Partnership  believes would
have a material adverse effect on the Partnership's business, assets, or results
of  operations.  The  Partnership  has not  been  notified  by any  governmental
authority of any non-compliance, liability or other claim in connection with any
of its  properties.  There can be no  assurances,  however,  that  environmental
liabilities  have  not  developed  since  such  environmental  assessments  were
prepared,  or that future uses or  conditions  (including,  without  limitation,
changes in applicable  environmental  laws and  regulations)  will not result in
imposition of environmental liability.

NOTE 10 - PRO FORMA INFORMATION (UNAUDITED)
-------------------------------------------

The following  unaudited pro forma  information for the years ended December 31,
1998 and 1997 reflects the results of operations  of the  Partnership  as if the
sales of Southpointe  Plaza and Island Plaza had occurred as of January 1, 1997.
The unaudited pro forma information is not necessarily indicative of the results
of  operations  which  actually  would have  occurred  or those  which  might be
expected to occur in the future.

                                                        1998            1997
                                                   -------------    ------------
    Total revenue...........................       $  3,079,948     $  2,970,898
    Net income (loss).......................           (292,131)         103,604

    Net income (loss) per limited
      partnership unit......................              (7.23)            2.56

<PAGE>


                       McNEIL REAL ESTATE FUND XXIV, L.P.

      REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
                                December 31, 1998

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

APARTMENTS:

Pine Hills
<S>                        <C>               <C>               <C>               <C>               <C>          
   Livingston, TX          $            -    $      605,145    $    3,917,607    $    (692,000)    $     583,775

Sleepy Hollow
   Cleveland, TX                        -           363,051         4,010,076                -           383,938

RETAIL CENTERS:

Riverbay Plaza
   Riverview, FL                1,650,000           294,546         4,736,097                -         2,847,605

Towne Center
   Derby, KS                            -           361,605         2,359,900         (500,000)          922,847
                           --------------    --------------    --------------     ------------     -------------

                          $     1,650,000    $    1,624,347    $   15,023,680    $  (1,192,000)    $   4,738,165
                           ==============    ==============    ==============     ============     =============

Asset Held for Sale (c):

Springwood Plaza
   Dellwood, MO           $             -
                           ==============
</TABLE>


(b)  The carrying  values of Pine Hills  Apartments  and Towne  Center  Shopping
     Center were reduced by $692,000 and $500,000, respectively, in 1991.

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




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

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

Pine Hills
<S>                           <C>                <C>              <C>                 <C>            
   Livingston, TX             $      605,145     $    3,809,382   $      4,414,527    $   (2,139,016)

Sleepy Hollow
   Cleveland, TX                     363,051          4,394,014          4,757,065        (2,370,203)

RETAIL CENTERS:

Riverbay Plaza
   Riverview, FL                     294,546          7,583,702          7,878,248        (3,243,150)

Towne Center
   Derby, KS                         361,605          2,782,747          3,144,352        (1,306,602)
                               -------------      -------------    ---------------     -------------

                              $    1,624,347     $   18,569,845   $     20,194,192    $   (9,058,971)
                               =============      =============    ===============     =============

Asset Held for Sale (c):

Springwood Plaza
   Dellwood, MO                                                   $      2,737,114
                                                                   ===============

</TABLE>


(a)  For Federal income tax purposes,  the properties are depreciated over lives
     ranging from 7-39 years using ACRS or MACRS methods.  The aggregate cost of
     real estate investments for Federal income tax purposes was $25,688,939 and
     accumulated depreciation was $12,592,596 at December 31, 1998.

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



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


<TABLE>
<CAPTION>

                                 Date of                    Date                 Depreciable
Description                   Construction                Acquired              Lives (Years)
-----------                   ------------                --------              -------------

APARTMENTS:

   Pine Hills
<S>                             <C>                         <C>                     <C> 
   Livingston, TX               1984                        10/85                   5-25

Sleepy Hollow
   Cleveland, TX                1983                        08/85                   5-25

RETAIL CENTERS:

Riverbay Plaza
   Riverview, FL                1983                        04/85                   5-25

Towne Center
   Derby, KS                    1976                        07/85                   5-25

Asset Held for Sale (c):

Springwood Plaza
   Dellwood, MO                 1974                        09/85


</TABLE>



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












                     See accompanying notes to Schedule III.

<PAGE>
                       McNEIL REAL ESTATE FUND XXIV, L.P.

                              Notes to Schedule III
      Real Estate Investments and Accumulated Depreciation and Amortization


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


<TABLE>
<CAPTION>
                                                                    For the Years Ended December 31,
                                                         -------------------------------------------------------
                                                              1998                1997                 1996
                                                         ------------         ------------         -------------

Real estate investments:

<S>                                                      <C>                  <C>                  <C>         
Balance at beginning of year ....................        $ 19,395,510         $ 21,858,487         $ 35,244,771

Improvements ....................................             798,682            2,052,205              458,752

Reclassification to assets held for sale ........                  --           (4,368,709)         (13,794,699)

Write-off of damaged basis ......................                  --             (146,473)             (50,337)
                                                         ------------         ------------         ------------

Balance at end of year ..........................        $ 20,194,192         $ 19,395,510         $ 21,858,487
                                                         ============         ============         ============


Accumulated depreciation and amortization:

Balance at beginning of year ....................        $  7,997,592         $  8,887,172         $ 12,428,415

Depreciation ....................................           1,061,379              910,119            1,191,313

Reclassification to assets held for sale ........                  --           (1,730,388)          (4,712,085)

Write-off of damaged basis ......................                  --              (69,311)             (20,471)
                                                         ------------         ------------         ------------

Balance at end of year ..........................        $  9,058,971         $  7,997,592         $  8,887,172
                                                         ============         ============         ============


Assets Held for Sale:

Balance of beginning of year ....................        $ 10,935,647         $  8,408,672         $         --

Reclassification to assets held for sale ........                  --            2,638,321            9,082,614

Improvements ....................................              47,972              108,654               26,058

Write-down for impairment
   of real estate ...............................            (126,080)            (220,000)            (700,000)

Disposition of real estate ......................          (8,120,425)                  --                   --
                                                         ------------         ------------         ------------

Balance at end of year ..........................        $  2,737,114         $ 10,935,647         $  8,408,672
                                                         ============         ============         ============

</TABLE>


<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------  ---------------------------------------------------------------
         FINANCIAL DISCLOSURES
         ---------------------

None.

                                    PART III

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

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

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

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


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

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

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


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

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

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

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

(A) Security ownership of certain beneficial owners.

      No individual or group,  as defined by Section  13(d)(3) of the Securities
      Exchange Act of 1934, was known by the  Partnership to own more than 5% of
      the  Units,  other than High River  Limited  Partnership  which owns 3,648
      Units at February 1, 1999 (9.1% of the  outstanding  Units).  The business
      address for High River  Limited  Partnership  is 100 South  Bedford  Road,
      Mount Kisco, New York 10549.

(B) Security ownership of management.

       Neither the General  Partner nor any of the  officers or directors of its
       general partner own any limited partnership units.

(C)    Change in control.

       None.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------  ----------------------------------------------

The amendments to the Partnership compensation structure included in the Amended
Partnership  Agreement  provide for an asset management fee to replace all other
forms of general partner  compensation  other than property  management fees and
reimbursements  of certain  costs.  Through 1999,  the asset  management  fee is
calculated as 1% of the Partnership's tangible asset value. Tangible asset value
is  determined  by using the greater of (i) an amount  calculated  by applying a
capitalization  rate of 9 percent to the annualized net operating income of each
property  or  (ii) a  value  of  $10,000  per  apartment  unit  for  residential
properties and $50 per gross square foot for commercial  properties to arrive at
the property  tangible  asset value.  The property  tangible asset value is then
added to the book value of all other assets excluding  intangible items. The fee
percentage decreases to .75% in 2000, .50% in 2001 and .25% thereafter.  For the
year ended December 31, 1998, the Partnership  paid or accrued  $238,962 of such
asset management fees.


<PAGE>
The  Partnership  pays property  management fees equal to 5% of the gross rental
receipts of residential  properties and 6% for commercial  properties to McREMI,
an affiliate of the General Partner, for providing property management services.
Additionally,  the  Partnership  reimburses  McREMI  for  its  costs,  including
overhead,  of  administering  the  Partnership's  affairs.  For the  year  ended
December 31, 1998,  the  Partnership  paid or accrued  $400,050 of such property
management fees and reimbursements. See Item 1 - Business, Item 7 - Management's
Discussion  and Analysis of Financial  Condition and Results of  Operations  and
Item 8 - Note 2 - "Transactions With Affiliates."

Under the terms of the Amended  Partnership  Agreement,  the Partnership  pays a
disposition  fee to the General Partner equal to 3% of the gross sales price for
brokerage  services  performed in connection with the sale of the  Partnership's
properties.  The fee is due  and  payable  at the  time  the  sale  closes.  The
Partnership incurred $204,000 and $55,500 of such fees during 1998 in connection
with  the  sale  of  Southpointe   Plaza  and  Island  Plaza  shopping  centers,
respectively. These fees were paid by the Partnership subsequent to December 31,
1998 and are included in payable to  affiliates on the Balance Sheet at December
31, 1998.




<PAGE>
                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
--------   -----------------------------------------------------------------
See accompanying Index to Financial  Statements at Item 8 - Financial Statements
and Supplementary Data.

(A)     Exhibits


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

        4.                         Amended   and  Restated  Limited  Partnership
                                   Agreement  of McNeil  Real  Estate Fund XXIV,
                                   L.P.  dated March 30, 1992  (incorporated  by
                                   reference  to  the  Current   Report  of  the
                                   registrant  on Form 8-K dated March 30, 1992,
                                   as filed on April 10, 1992).

        4.1                        Amendment  No.  1 to the Amended and Restated
                                   Limited Partnership  Agreement of McNeil Real
                                   Estate  Fund  XXIV,   L.P.  dated  June  1995
                                   (incorporated  by reference to the  Quarterly
                                   Report of the  registrant  on Form 10-Q dated
                                   June 30, 1995, as filed on August 14, 1995).

        10.4                       Property  Management  Agreement dated   March
                                   30,  1992,  between  McNeil  Real Estate Fund
                                   XXIV, L.P. and McNeil Real Estate Management,
                                   Inc. (2)

        10.5                       Amendment of Property  Management   Agreement
                                   dated  March 5, 1993,  by McNeil  Real Estate
                                   Fund  XXIV,   L.P.  and  McNeil  Real  Estate
                                   Management, Inc. (2)

        10.6                       Promissory Note dated June 1, 1998,   between
                                   Barnett Bank,  N.A. and River Bay Plaza XXIV,
                                   L.P.

        11.                        Statement regarding computation of net income
                                   (loss) per limited partnership unit (see Item
                                   8 - Note 1 -  "Organization  and  Summary  of
                                   Significant Accounting Policies").


              (1)                  Incorporated  by reference  to the  Quarterly
                                   Report of the registrant on Form 10-Q for the
                                   period ended March 31, 1991,  as filed on May
                                   14, 1991.

              (2)                  Incorporated  by reference   to   the  Annual
                                   Report of the registrant on form 10-K for the
                                   period ended  December 31, 1992,  as filed on
                                   March 30, 1993.


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


<PAGE>
                       McNEIL REAL ESTATE FUND XXIV, L.P.
                              A Limited Partnership

                                 SIGNATURE PAGE


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                           McNEIL REAL ESTATE FUND XXIV, L.P.

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

                                By: McNeil Investors, Inc., General Partner



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


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



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



March 31, 1999                  By:  /s/  Carol A. Fahs
--------------                     ---------------------------------------------
Date                                 Carol A. Fahs
                                     Vice President of McNeil Investors, Inc.
                                     (Principal Accounting Officer)