<PAGE>
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB
(Mark One)

       X        QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 1996

                                       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 33-42663

                      Winthrop Apartment Investors Limited Partnership 
                         (Exact name of small business issuer
                             as specified in its charter)

             Maryland                                04-3129840
      (State or other jurisdiction of    (I.R.S. Employer Identification No.) 
       incorporation or organization)

               One International Place, Boston, MA            02110
                (Address of principal executive office)     (Zip Code)

       Registrant's telephone number, including area code (617) 330-8600


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.     Yes X     No ___


                                    1 of 12



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        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB

                              SEPTEMBER 30, 1996

                        PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements                                   


Balance Sheets  (Unaudited)

(In Thousands, Except Unit Data)

<TABLE>
<CAPTION>


                                                                     September 30,            December 31,
Assets                                                                   1996                     1995
                                                                  ---------------------    --------------------

<S>                                                               <C>                      <C>  

Real estate, at cost:

Land                                                              $              3,666     $             3,666
Buildings and improvements, net of accumulated
   depreciation of $2,110 (1996) and $1,706 (1995)                              12,997                  13,273
                                                                  ---------------------    --------------------

                                                                                16,663                  16,939

Other Assets:

Deferred costs, net of accumulated amortization of
   $441 (1996) and $293 (1995)                                                   2,332                   1,799
Cash and cash equivalents                                                        1,714                   3,455
Other assets                                                                       989                     306
                                                                  ---------------------    --------------------


     Total assets                                                 $             21,698     $            22,499
                                                                  =====================    ====================

Liabilities and Partners' Capital

Liabilities:
                                                                                              
Mortgage payable                                                  $             15,934     $                 -
Accrued expenses and other liabilities                                             409                     336
Security deposits                                                                  128                     125

Accounts payable                                                                     8                      45
                                                                  ---------------------    --------------------

     Total liabilities                                                          16,479                     506
                                                                  ---------------------    --------------------

Partners' Capital:

     Limited partners' capital (250 units authorized, issued
        and outstanding)                                                         5,246                  22,013
     General partner's (deficit)                                                   (27)                    (20)
                                                                  ---------------------    --------------------

               Total partners' capital                                           5,219                  21,993
                                                                  ---------------------    --------------------

               Total liabilities and partners'  capital           $             21,698     $            22,499
                                                                  =====================    ====================

</TABLE>


                      See notes to financial statements.

                                    2 of 12

<PAGE>

         WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB

                               SEPTEMBER 30, 1996

<TABLE>                                     
<CAPTION>

Statements of Operations  (Unaudited)
                                                              For the Nine Months Ended
(In Thousands, Except Unit Data)                        September 30,            September 30,
                                                            1996                     1995
                                             ---------------------------------------------

<S>                                          <C>                      <C>  
Income:

     Rental                                  $            3,653       $             3,493
     Other                                                  196                       166
     Interest                                                52                       161
                                             ---------------------    --------------------

         Total revenues                                   3,901                     3,820
                                             ---------------------    --------------------


Expenses:

     Mortgage interest                                      896                       -
     Leasing                                                156                       143
     General and administrative                             293                       223
     Management fees                                        190                       180
     Utilities                                              288                       291
     Repairs and maintenance                                472                       480
     Painting and decorating                                116                       104
     Insurance                                              133                       135
     Taxes                                                  417                       377
     Amortization                                           122                        62
     Depreciation                                           404                       387
                                             ---------------------    --------------------

         Total expenses                                   3,487                     2,382
                                             ---------------------    --------------------

         Net income                          $              414       $             1,438
                                             =====================    ====================

Net income allocated:

     General Partner                         $                  4     $                57

     Limited Partners                                         410                   1,381
                                             ---------------------    --------------------


                                             $                414     $             1,438
                                             =====================    ====================


Net income per limited partnership unit      $           1,640.00     $          5,524.00
                                             =====================    ====================

Distributions per limited partnership unit   $          68,708.00     $          8,700.00
                                             =====================    ====================

</TABLE>

 
                      See notes to financial statements.
                                       
                                    3 of 12


<PAGE>
        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB
                                       
                              SEPTEMBER 30, 1996

<TABLE>
<CAPTION>

Statements of Operations  (Unaudited)
                                                  For the Three Months Ended
(In Thousands, Except Unit Data)             September 30,           September 30,
                                                  1996                   1995
                                             ---------------------------------------
<S>                                          <C>                       <C>

Income:

     Rental                                  $       1,253             $       1,188
     Other                                              72                        70
     Interest                                           12                        55
                                             --------------             ---------------

         Total revenues                              1,337                     1,313
                                             --------------            ---------------


Expenses:

     Mortgage interest                                 305                         -
     Leasing                                            51                        73
     General and administrative                         72                        44
     Management fees                                    66                        60
     Utilities                                          97                        96
     Repairs and maintenance                           145                       191
     Painting and decorating                            38                        44
     Insurance                                          43                        44
     Taxes                                             162                       152
     Amortization                                       41                        21
     Depreciation                                      134                       129
                                             --------------            ---------------

         Total expenses                              1,154                       854
                                             ---------------          ----------------

         Net income                          $         183             $         459
                                             ===============          ===============

Net income allocated:

     General Partner                         $           2             $          18

     Limited Partners                                  181                       441
                                             ---------------           --------------


                                              $        183             $         459
                                              ==============           ==============


Net income per limited partnership unit       $     724.00             $    1,764.00
                                              ==============           ==============

Distributions per limited partnership unit    $          -             $    4,500.00
                                              ===============         ===============
</TABLE>
 
                      See notes to financial statements.
                                       
                                    4 of 12

<PAGE>

        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB

                              SEPTEMBER 30, 1996

Statements of Partners' Capital  (Unaudited)

(In Thousands, Except Unit Data)

<TABLE>
<CAPTION>


                                              Units of
                                              Limited                General                 Limited                  Total
                                            Partnership             partner's               partners'               partners'
                                              Interest              (deficit)                capital                 capital
                                       --------------------    ---------------------   ---------------------   --------------------


<S>                                    <C>                     <C>                     <C>                     <C>               
Balance - January 1, 1996                              250     $                (20)   $             22,013    $            21,993

    Net income                                          -                         4                     410                    414

    Distributions                                       -                       (11)                (17,177)               (17,188)
                                       --------------------    ---------------------   ---------------------   --------------------

Balance - September 30, 1996                           250     $                (27)   $              5,246    $             5,219
                                       ====================    =====================   =====================   ====================
</TABLE>


                      See notes to financial statements.

                                    5 of 12


<PAGE>

        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB

                              SEPTEMBER 30, 1996

Statements of Cash Flows  (Unaudited)

<TABLE>
<CAPTION>
                        
                                                                      For the Nine Months Ended
(In Thousands)                                                   September 30,            September 30,
                                                                       1996                  1995
                                                             ---------------------------------------------

<S>                                                          <C>                      <C>           <C>   
Cash Flows from Operating Activities:

Net income                                                   $                414     $             1,438
Adjustments to reconcile net income to net cash
 provided by operating activities:
     Depreciation                                                             404                     387
     Amortization                                                             148                      62

     Changes in assets and liabilities:
         Increase in other assets                                            (496)                     (8)
         (Decrease) Increase in accounts payable                              (37)                     18
         Increase (Decrease) in security deposits liability                     3                      (1)
         Increase in accrued expenses and
             other liabilities                                                 73                      94
                                                             ---------------------    --------------------

Net cash provided by operating activities                                     509                   1,990
                                                             ---------------------    --------------------

Cash Flows from Investing Activities:

     Additions to real estate                                                (128)                   (135)
     Increase in replacement reserve accounts                                (187)                      -
                                                             ---------------------    --------------------

Cash used in investing activities                                            (315)                   (135)
                                                             ---------------------    --------------------

Cash Flows from Financing Activities:

     Proceeds from mortgage financing                                      16,000                       -
     Principal payments on mortgage notes                                     (66)                      -
     Deferred financing costs paid                                           (681)                      -
     Distributions to partners                                            (17,188)                 (2,265)
                                                             ---------------------    --------------------

Net cash used in financing activities                                      (1,935)                 (2,265)

                                                             ---------------------    --------------------

Net (Decrease) in cash and cash equivalents                                (1,741)                   (410)

Cash and Cash Equivalents at Beginning of the Period                        3,455                   3,581
                                                             ---------------------    --------------------

Cash and Cash Equivalents at End of the Period               $              1,714     $             3,171
                                                             =====================    ====================


Supplemental Disclosure of Cash Flow Information-
     Cash paid for interest                                  $            809,000     $                 -
     
                                                             =====================    ====================

</TABLE>

                       See notes to financial statements.

                                    6 of 12



<PAGE>


        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10 - QSB

                               SEPTEMBER 30, 1996

                         NOTES TO FINANCIAL STATEMENTS


1.       General

         The accompanying financial statements, footnotes and discussions
         should be read in conjunction with the financial statements, related
         footnotes and discussions contained in the Partnership's annual report
         for the year ended December 31, 1995.

         The financial information contained herein is unaudited. In the
         opinion of management, all adjustments necessary for a fair
         presentation of such financial information have been included. All
         adjustments are of a normal recurring nature. Certain amounts have
         been reclassified to conform to the September 30, 1996 presentation.
         The balance sheet at December 31, 1995 was derived from audited
         financial statements at such date.

         The results of operations for the three and nine months ended
         September 30, 1996 and 1995 are not necessarily indicative of the
         results to be expected for the full year.

2.       Accounting Change

         On January 1, 1996, the Partnership adopted Statement of Financial
         Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
         of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
         which requires impairment losses to be recognized for long-lived
         assets used in operations when indicators of impairment are present
         and the undiscounted cash flows are not sufficient to recover the
         asset's carrying amount. The impairment loss is measured by comparing
         the fair value of the asset to its carrying amount. The adoption of
         the SFAS has no effect on the Partnership's financial statements.

3.       Related Party Transactions

         Winthrop Management, an affiliate of the Managing General Partner, is
         entitled to receive 5% of gross receipts from all Partnership
         properties they manage. For the nine months ended September 30, 1996
         and 1995, Winthrop Management earned approximately $190,000 and
         $180,000, respectively. Winthrop Management was also paid an $80,000
         fee relating to the mortgage financing.

4.       Mortgage Payable

         On January 5, 1996, the Partnership closed a new first mortgage loan
         in the amount of $16,000,000 secured by all of the properties. The

         loan amount was allocated $2,080,000, $4,320,000, $5,120,000 and
         $4,480,000 to Chesapeake Apartments, Covington Creek Apartments,
         Northside Circle Apartments and Webb Crossing Apartments,
         respectively. The mortgage loan bears interest at an initial rate of
         7.27% (until the "Optional Prepayment Date", as defined), requires
         monthly principal

                                    7 of 12


<PAGE>

        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10 - QSB

                               SEPTEMBER 30, 1996

NOTES TO FINANCIAL STATEMENTS

4.       Mortgage Payable (Continued)

         and interest payments of approximately $109,000 and is fully amortized
         on February 11, 2026. The Partnership has the option to prepay the
         mortgage loan without penalty on, or three months before, February 1,
         2003 (the "Optional Prepayment Date"). If the Partnership does not
         elect to prepay the loan, the interest rate will be adjusted to the
         greater of 12.27% or a "Treasury Rate" (as defined) plus 7.75
         percentage points. The Partnership was required to fund approximately
         $278,000 in reserves at closing to complete certain required capital
         improvements to the properties, and establish tax and insurance
         escrows. The Partnership is also required to fund an ongoing
         replacement reserve. In connection with the closing, Two Winthrop was
         replaced as the Managing General Partner of the Partnership with WAI
         Associates Limited Partnership. The lender required the transfer of
         the general partnership interest as a condition to making the loan to
         assure that the Partnership and its general partner are single purpose
         entities, formed solely for the purpose of owning and operating the
         properties. Approximately $14,923,000 of the proceeds from the
         financing were distributed (see Note 5) to the partners.

5.       Distributions

         The Partnership distributed $68,708 per unit ($17,177,000 in total) to
         the holders of limited partnership units during the nine month period
         ended September 30, 1996. The general partner received $11,000 of the
         approximate $172,000 distribution due them for the nine month period
         ended September 30, 1996. In October 1996, the Partnership distributed
         $1,532 per unit ($383,000 in total) to the holders of limited
         partnership units. The general partner received $200,000, which
         included the $161,000 balance due from the 1996 distribution and
         $35,000 due from 1995 distributions.


6.       Allocation of Income, Losses and Cash Flow


         In accordance with the partnership agreement, cash flow shall be
         allocated 99% to the investor limited partners and 1% to the general
         partner, until the investor limited partners have received a 6%
         noncumulative, noncompounded annual rate of return on their invested
         capital, at which point the remainder shall be distributed 90% to the
         investor limited partners and 10% to the general partner. Income shall
         be allocated to the partners in proportion to the cash available for
         distribution distributable to the partners; losses shall be allocated
         90% to the investor limited partners and 10% to the general partner.
         If there is no such cash available for distribution, income will be
         allocated 90% to the investor limited partner and 10% to the general
         partner.

                                    8 of 12


<PAGE>

        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10 - QSB

                               SEPTEMBER 30, 1996


Item 2.  Management's Discussion and Analysis or Plan of Operation

Liquidity and Capital Resources

All of the Registrant's real estate properties are residential properties with
apartments leased to tenants subject to leases of up to one year. The
Registrant receives rental income from its apartments and is responsible for
operating expenses, administrative expenses, capital improvements and debt
service payments. The Registrant uses working capital reserves provided from
any undistributed cash flow from operations and financing of properties as its
primary sources of liquidity. In January 1996, the Registrant distributed to
the holders of limited partnership units $68,708 per unit ($17,177,000 in
total, before deducting state withholding taxes) of which approximately $60,000
per unit represented net proceeds available for distribution from the January
1996 property financing (see Item 1, Note 4). The general partner received
$11,000 of the approximate $172,000 distribution due them for the nine month
period ended September 30, 1996. In October 1996, the Partnership distributed
$1,532 per unit ($383,000 in total, before deducting state withholding taxes)
to the holders of limited partnership units. The general partner received
$200,000 which included the $161,000 balance due from the 1996 distribution and
$35,000 due from the 1995 distributions. Future distributions from operations
will be reduced due to the 1996 property financing which will require annual
debt service payments of approximately $1,300,000, until the anticipated
optional prepayment date of the loan in February 2003.

The level of liquidity based upon the Registrant's cash experienced a
$1,741,000 decrease at September 30, 1996, as compared to December 31, 1995.
The decrease was due to $1,935,000 of net cash used in financing activities and
$315,000 of cash used in investing activities, which was partially offset by
$509,000 of net cash provided by operating activities. Financing activities
consisted of $16,000,000 of proceeds from the mortgage financing, which was

offset by $17,188,000 of distributions to partners, $681,000 of deferred
financing costs incurred in connection with the mortgage financing and $66,000
of notes payable principal payments. Investing activities consisted of $128,000
of improvements to real estate and a $187,000 increase in replacement reserve
accounts in connection with the mortgage financing. All other increases
(decreases) in certain assets and liabilities are the result of the timing of
receipt and payment of various operating activities.

Working capital reserves are currently being invested in short term money
market funds. The General Partner believes that, if market conditions remain
relatively stable, cash flow from operations when combined with working capital
reserves, will be sufficient to fund required capital improvements and debt
service payments in 1996 and the foreseeable future. The Registrant has no
available lines of credit.

The markets in which the Registrant's properties are located (Atlanta, Dallas
and Austin) remain relatively stable. The Atlanta market is becoming more
competitive as a result of new apartment complexes that were completed in 1995.
Despite new construction activity the Austin market continues to remain stable.
The Registrant spent $128,000 on capital improvements during the nine months
ended September 30, 1996. The Registrant anticipates it will spend
approximately $85,000 for capital improvements during the balance of 1996.
Other than cash and cash equivalents, the Registrant has no other available
sources of liquidity.


                                    9 of 12

<PAGE>


        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10 - QSB

                               SEPTEMBER 30, 1996


Item 2.  Management's Discussion and Analysis or Plan of Operation (Continued)


Results of Operations

The Registrant's investment properties consist of four apartment complexes. The
following table sets forth the average occupancy of the properties for the nine
months ended September 30, 1996 and 1995:

                                            Average Occupancy
                            --------------------------------------------------
     Property                         1996                     1995
-----------------                --------------           ---------

Chesapeake                             93%                      96%

Covington Creek                        95%                      93%


Northside Circle                       88%                      91%

Webb Bridge                            89%                      90%


Registrant's net income for the nine months ended September 30, 1996, was
approximately $414,000, as compared to net income of approximately $1,438,000
for the nine months ended September 30, 1995. The net income for the three
months ended September 30, 1996 was approximately $183,000, as compared to net
income of approximately $459,000 for the three months ended September 30, 1995.
These decreases were primarily attributable to interest expense associated with
the loan financing.

Rental revenues increased by $160,000 for the nine months ended September 30,
1996, as compared to 1995, primarily due to increases in rental rates and
decreases in concessions, which were partially offset by a decrease in
occupancy. The decline in occupancy at Chesapeake is primarily due to an
upgrade in tenant profile and was effectively offset by an increase in rental
rates. Other income increased by $30,000 primarily due to an increase in
corporate unit income of $27,000 at Webb Bridge Crossing. Interest income
decreased by $109,000 due to a decrease in average working capital reserves
available for investment.

Expenses increased by $1,105,000 for the nine months ended September 30, 1996,
as compared to 1995, primarily due to increases in mortgage interest expense of
$896,000, leasing expense of $13,000, general and administrative expenses of
$70,000, painting and decorating expense of $12,000, real estate taxes of
$40,000, amortization expense of $60,000 and depreciation expense of $17,000.
Interest expense increased due to the mortgage financing in January 1996.
Leasing expenses increased primarily due to an increase in corporate unit
expenses at Webb Bridge Crossing. General and administrative expenses increased
primarily due to an increase in professional and other related costs. Real
estate taxes increased primarily due to an increase at Covington Creek. These
taxes are currently under appeal. Amortization expense increased due to the
additional amortization of the deferred legal and other fees associated with
the January 1996 refinancing.  All other expenses remained relatively constant.


                                    10 of 12

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       WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10 - QSB

                               SEPTEMBER 30, 1996



Part II - Other Information


Item 6.          Exhibits and Reports on Form 8-K


           (a)   Exhibits

                 27.  Financial Data Schedule

           (b)   Reports on Form 8-K

                 On September 23, 1996, a current report on Form 8-K was filed
                 with respect to the Registrant's change of independent
                 auditors.

                                    11 of 12



<PAGE>


        WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10 - QSB

                               SEPTEMBER 30, 1996

                                   SIGNATURES

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

                       WINTHROP APARTMENT INVESTORS
                       LIMITED PARTNERSHIP

                     BY:      WAI Associates A Limited Partnership
                              Its General Partner

                              BY:      WAI Properties, Inc.
                                       Its General Partner

                                       BY:      /s/ Michael L.  Ashner
                                                Michael L. Ashner
                                                Chief Executive Officer

                                       BY:      /s/ Edward V.  Williams
                                                Edward V. Williams
                                                Chief Financial Officer

                                                DATED: November 13, 1996

                                    12 of 12