SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 1999

                        Commission File Number: 333-42441

                       MID-AMERICA CAPITAL PARTNERS, L.P.
               (Exact Name of Registrant as Specified in Charter)



           TENNESSEE                                  62-1717980
     (State of Incorporation)                (I.R.S. Employer Identification
                                                       Number)



                          6584 POPLAR AVENUE, SUITE 340
                            MEMPHIS, TENNESSEE 38138
                    (Address of principal executive offices)

                                 (901) 682-6600
               Registrant's telephone number, including area code

          Securities registered pursuant to Section 12 (b) of the Act:


                               Title of Each Class
          Commercial Mortgage Pass Through Certificates, Series 1998 -1
        Representing Benefical Ownership in Mid-America Capital Partners,
                   L.P. 6.376% First Mortgage Bonds, Due 2003

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


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. [ x ] Yes [ ] 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 ]

<PAGE>

                       MID-AMERICA CAPITAL PARTNERS, L.P.


                                TABLE OF CONTENTS

   Item
                                     PART I

   1.         Business
   2.         Properties
   3.         Legal Proceedings
   4.         Submission of Matters to Vote of Security Holders

                                    PART II

   5.         Market for Registrant's Common Equity and Related Stockholder
               Matters
   6.         Selected Financial Data
   7.         Management's Discussion and Analysis of Financial Condition and
               Results of Operations
              Quantitative and Qualitative Disclosures About Market Risk
   7A.
   8.         Financial Statements and Supplementary Data
   9.         Changes in and Disagreements with Accountants on Accounting and
               Financial Disclosure

                                    PART III

   10.        Directors and Executive Officers of the Registrant
   11.        Executive Compensation
   12.        Security Ownership of Certain Beneficial Owners and Management
   13.        Certain Relationships and Related Transactions

                                     PART IV

   14.        Exhibits, Financial Statement Schedule and Reports on Form 8-K

<PAGE>

                                     PART I
ITEM 1.  BUSINESS

THE COMPANY

Mid-America  Capital  Partners,  L.P.  (the  Partnership)  is a special  purpose
Delaware  limited  partnership.  The Partnership was formed on November 24, 1997
for the sole purpose to own and operate 26 apartment  communities (the Mortgaged
Properties) and manage,  renovate,  improve,  lease, sell,  transfer,  exchange,
mortgage and  otherwise  deal with the  Mortgaged  Properties.  The sole limited
partner of the Partnership is Mid-America Apartments,  L.P., a Tennessee limited
partnership  (MAALP),  which  is a  majority  owned  subsidiary  of  Mid-America
Apartment  Communities,   Inc.  (MAAC).  MAAC  owns,  directly  or  through  its
subsidiaries,  all of the outstanding units of partnership  interest.  MAAC is a
self-administered  and self-managed  umbrella partnership real estate investment
trust  (REIT).  MAAC conducts a substantial  portion of its  operations  through
MAALP and  subsidiaries of MAALP. The sole general partner of the Partnership is
MAACP, Inc., a Tennessee corporation (MAACP), a wholly-owned subsidiary of MAAC.
The term of the  Partnership  shall be to December 31, 2020,  unless  terminated
earlier as provided in the  Partnership  Agreement or as  otherwise  provided by
law.

The Partnership was formed to succeed substantially all the interests in Capital
Properties Group (predecessor to the Partnership, "Predecessor").  Distributions
to the Partners relating to operations of the Mortgaged Properties will be based
upon net cash flow as defined in the Partnership  Agreement.  Profits and losses
are allocated to the Partners in proportion with their ownership interests.

Subsequent to the Partnership formation, MAALP contributed its interest in 20 of
the Mortgaged Properties, and the right to acquire the Reorganization Properties
(as defined below) to the  Partnership  in exchange for 99% limited  partnership
interest in the Partnership. MAACP contributed cash in exchange for a 1% general
partnership interest in the Partnership.

The  Mortgaged  Properties  consist of (i) 20  properties  contributed  by MAALP
comprising the Predecessor;  (ii) 5 properties  acquired on November 25, 1997 by
the  Partnership in connection  with the  consummation of the merger of Flournoy
Development  Company  (FDC)  with  and  into  MAAC  and the  other  transactions
(collectively,  the Reorganization Properties) as described in the Agreement and
Plan  of   Reorganization   dated  as  of  September   15,  1997  (the  Plan  of
Reorganization)  between FDC, MAAC and MAALP consisting of 4 properties acquired
from  Brown-Flournoy  Equity Income Fund Limited Partnership (the Brown-Flournoy
Properties)  and Willow Creek;  and (iii) one property  (Hermitage at Beechtree)
which was  acquired  November  25,  1997  through  the  merger of  Hermitage  at
Beechtree,  L.L.C. with and into the Partnership.  The Partnership  recorded the
five properties acquired in connection with the Plan of Reorganization using the
purchase method of accounting.

OPERATING PHILOSOPHY

INTENSIVE MANAGEMENT FOCUS. The Partnership strongly emphasizes on-site property
management.  Particular  attention is paid to  opportunities  to increase rents,
raise average  occupancy  rates, and control costs,  with property  managers and
regional  management being given the responsibility for monitoring market trends
and the discretion to react to such trends.

DEDICATION TO CUSTOMER  SERVICE.  Management's  experience is that maintaining a
consistently high level of customer satisfaction leads to greater demand for the
Partnership's  apartment units, higher occupancy and rental rates, and increased
long-term  profitability.  The  Partnership,  as part of its intense  management
focus, has established  regional  training  facilities to produce highly trained
property managers,  leasing  consultants and service technicians on-site at each
of the  Mortgaged  Properties.  Management  believes  that  this  commitment  to
training and excellence in associates  ultimately  translates to higher customer
satisfaction.  Also,  management  undertakes frequent resident surveys and focus
groups, in order to measure customer satisfaction.
<PAGE>

DECENTRALIZED  OPERATIONAL STRUCTURE. The Partnership's operational structure is
organized on a decentralized  basis. The  Partnership's  property  managers have
overall  operating  responsibility  for  their  specific  Mortgaged  Properties.
Property  managers  report to area  managers  or regional  managers.  Management
believes that its  decentralized  operating  structure  capitalizes  on specific
market knowledge,  increases personal  accountability  relative to a centralized
structure and is beneficial in the  acquisition,  redevelopment  and development
process.

GROWTH STRATEGIES

Management's  goal is to maximize  its return on  investment  in each  apartment
community  by  increasing  rental rates and reducing  operating  expenses  while
maintaining  high  occupancy  levels.  The  Partnership  seeks higher net rental
revenues by enhancing  and  maintaining  the  competitiveness  of the  Mortgaged
Properties  and  manages  expenses  through  its system of  detailed  management
reporting and  accountability  in order to achieve  increases in operating  cash
flow. The steps taken to meet these objectives include:

o    empowering the Partnership's  property managers to adjust rents in response
     to local market  conditions  and to concentrate  resident  turnover in peak
     rental demand months;

o    implementing programs to control expenses through investment in cost-saving
     initiatives;

o    ensuring that, through monthly  inspections of all Mortgaged  Properties by
     senior management and prompt attention to maintenance and recurring capital
     needs  as  well  as  defined  preventive   maintenance  programs  conducted
     quarterly  at  each  property,   the  Mortgaged   Properties  are  properly
     maintained;

o    improving the "curb appeal" of the Mortgaged  Properties  through extensive
     landscaping  and  exterior   improvements   and   repositioning   Mortgaged
     Properties from time to time to maintain market leadership positions;

o    investing heavily in training programs for its property level personnel;

o    compensating  employees  through  performance-based  compensation and stock
     ownership programs; and

o    maintaining a hands-on management style and "flat" organizational structure
     that emphasizes senior management's continued close contact with the market
     and employees.


COMPETITION

All of the Partnership's  Mortgaged Properties are located in areas that include
other  apartment  communities.  Occupancy  and rental  rates are affected by the
number  of  competitive   apartment   communities  in  a  particular  area.  The
Partnership's properties compete with numerous other multifamily properties, the
owners  of which  may have  greater  resources  than the  Partnership  and whose
management may have more experience than the Partnership's management. Moreover,
single-family rental housing, manufactured housing, condominiums and the new and
existing home markets  provide housing  alternatives  to potential  residents of
apartment communities.
<PAGE>

ITEM 2.  PROPERTIES

The  following  table  sets  forth  certain  historical  information  on  the 26
Mortgaged Properties owned at December 31, 1999:


The following table presents  information  concerning the properties at December
31, 1999:

<TABLE>

                                                                                    Approximate   Average   Rent Per    Occupancy
                                                      Year      Year                 Rentable      Unit      Unit at      % at
                                                      Comp-   Management  Number      Area         Size    December 31, December 31,
Property (1)              Location                    leted   Commenced  Of Units   (Square Ft.)(Square Ft.)   1999        1999
------------              --------                    -----   ---------  --------   ----------- ------------   ----        ----
<S>                       <C>                         <C>       <C>        <C>       <C>            <C>        <C>         <C>
 Belmere ..............   Tampa, FL                    1984      1994       210       202,440         964       $649        92.9%
 Crosswinds ...........   Jackson, MS             1988/1990      1996       360       443,200       1,231       $606        96.1%
 Fairways at Royal Oak    Cincinnati, OH               1988      1994       214       214,477       1,002       $627        92.5%
 Hermitage at Beechtree   Cary, NC                     1988      1997       194       169,776         875       $687        89.2%
 Hidden Lake II .......   Union City, GA               1987      1997       160       154,000         963       $670        95.6%
 High Ridge ...........   Athens, GA                   1987      1997       160       186,608       1,166       $765        94.4%
 Howell Commons .......   Greenville, SC            1986/88      1997       348       292,840         841       $509        95.7%
 Kirby Station ........   Memphis, TN                  1978      1994       371       310,173         836       $589        98.4%
 Lakepointe ...........   Lexington, KY                1986      1994       118        90,614         768       $562        99.2%
 Lakeside .............   Jacksonville, FL             1985      1996       416       344,192         827       $605        91.3%
 Marsh Oaks ...........   Atlantic Beach, FL           1986      1995       120        93,280         777       $560        94.2%
 Napa Valley ..........   Little Rock, AR              1984      1996       240       183,216         763       $548        92.9%
 Park Haywood .........   Greenville, SC               1983      1993       208       156,776         754       $537        98.1%
 Park Place ...........   Spartanburg, SC              1987      1997       184       195,312       1,061       $604        91.8%
 Pear Orchard .........   Jackson, MS                  1985      1994       389       338,400         870       $577        94.1%
 Savannah Creek .......   Memphis, TN                  1989      1996       204       237,200       1,162       $624        96.1%
 Shenandoah Ridge .....   Augusta, GA                  1982      1994       272       222,800         819       $477        97.1%
 Somerset Place .......   Jackson, MS                  1981      1995       144       126,848         881       $519        94.4%
 Southland Station I ..   Warner Robins, GA            1987      1997       160       186,704       1,167       $642        97.5%
 Steeplechase .........   Chattanooga, TN              1986      1991       108        98,602         913       $566        92.6%
 Sutton Place .........   Memphis, TN                  1991      1996       253       267,600       1,062       $595        95.7%
 Tiffany Oaks .........   Altamonte Springs, FL        1985      1996       288       234,224         813       $607        97.6%
 Village, The .........   Lexington, KY                1989      1994       252       182,716         725       $593        95.6%
 Westside Creek I .....   Little Rock, AR              1984      1997       142       148,030       1,042       $604        89.4%
 Williamsburg Village .   Jackson, TN                  1987      1994       148       121,412         820       $539        90.5%
 Willow Creek .........   Columbus, GA              1971-77      1997       285       246,668         866       $504        97.2%

                                                 ===================================================================================
  Total Properties                                                        5,948     5,448,108         916       $586       94.82%
                                                 ===================================================================================
</TABLE>


(1)  All 26 of these  communities  are  encumbered  by the Bonds of $142 million
     which mature on March 3, 2003 and have an interest rate of 6.376%.

<PAGE>

TEM 3.  LEGAL PROCEEDINGS

The Partnership is not presently subject to any material  litigation nor, to the
Partnership's  knowledge,  is any  material  litigation  threatened  against the
Partnership,  other than routine  litigation  arising in the ordinary  course of
business,  some of which is expected to be covered by  liability  insurance  and
none of which is expected  to have a material  adverse  effect on the  business,
financial condition, liquidity or results of operations of the Partnership.

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

              None.

                                    PART II.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

              None.

ITEM 6.  SELECTED FINANCIAL DATA

The following  table sets forth selected  financial data on an historical  basis
for  the  Partnership.  This  data  should  be  read  in  conjunction  with  the
consolidated financial statements and notes thereto and "Management's Discussion
and  Analysis  of  Financial  Condition  and  Results  of  Operations"  included
elsewhere in this Annual Report on Form 10-K.

<TABLE>

                                          Mid - America Capital Partners, L.P.
                                                (a limited partnership)
                                                Selected Financial Data
                                      (Dollars in thousands except per share data)

                                                                         Year Ended December 31,
                                                   ----------------------------------------------------------------------
                                                   ----------------------------------------------------------------------
                                                                                                     (Predecessor)
                                                             1999          1998           1997        1996          1995
<S>                                                     <C>            <C>            <C>         <C>          <C>
Operating Data:
Total revenues                                           $ 39,683      $ 38,742       $ 30,949    $ 20,251      $ 14,497
Expenses:
    Property expenses                                      14,517        14,207         10,985       7,207         5,306
    General and administrative                              1,596         1,515          1,238         810           580
    Interest                                                9,083         9,162          1,671       2,169         2,225
    Depreciation and amortization                           8,853         8,324          6,389       4,000         2,614
    Amortization of deferred financing costs                  990         1,026            152          58            48
                                                   ----------------------------------------------------------------------

Income before extraordinary item                            4,644         4,508         10,514       6,007         3,724
Extraordinary item - loss on debt extinguishment                -           (86)           (16)          -             -
                                                   ----------------------------------------------------------------------
Net income                                                $ 4,644       $ 4,422       $ 10,498     $ 6,007       $ 3,724
                                                   ======================================================================


Balance Sheet Data:
Real estate owned, at cost                              $ 238,319     $ 233,164      $ 227,608   $ 158,285      $ 87,240
Real estate owned, net                                  $ 207,157     $ 210,855      $ 213,623   $ 150,699      $ 83,653
Total assets                                            $ 230,447     $ 224,324      $ 219,363   $ 151,257      $ 84,216
Total debt                                              $ 142,000     $ 142,000      $ 140,000    $ 16,461      $ 22,830
Partners' capital                                        $ 82,855      $ 78,211       $ 73,789   $ 131,951      $ 59,978
Other Data (at end of period):
Number of properties owned                                     26            26             26          18            12
Number of apartment units owned                             5,948         5,948          5,948       4,314         2,554

</TABLE>

<PAGE>


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

OVERVIEW

The  following  is a  discussion  of the  financial  condition  and  results  of
operations of the  Partnership  and its Predecessor for the years ended December
31, 1999, 1998 and 1997. This discussion  should be read in conjunction with the
financial statements included in this report.

The Partnership had 26 communities consisting of 5,948 total apartment units at
December 31, 1999, 1998 and 1997.

RESULTS OF OPERATIONS

COMPARISON OF THE  PARTNERSHIP'S  YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED
DECEMBER 31, 1998

Total  revenues  increased  $941,000 in 1999 due to increased  rental  revenues.
Rental  revenues  increased  as compared  to 1998 due to a 2.4%  increase in the
average rental rate and a .5% increase in the average  occupancy during 1999 for
the total 5,948 units owned.

Property  operating  expenses include costs for personnel,  building repairs and
maintenance, real estate taxes and insurance,  utilities,  landscaping and other
operating  costs.  Property  operating  expenses for 1999  increased by $310,000
mainly due to increases of $218,000 in real estate taxes and insurance, $112,000
in  landscaping,  and $107,000 in other  operating  costs.  These increases were
partially  offset  by costs  reductions  of  $89,000  in  building  repairs  and
maintenance and $38,000 in utilities.

COMPARISON  OF  THE   PARTNERSHIP'S   YEAR  ENDED   DECEMBER  31,  1998  TO  THE
PREDECESSOR'S YEAR ENDED DECEMBER 31, 1997

Total revenues for 1998 increased by $7,793,000 due primarily to $7,217,000 from
the  communities  acquired  in 1997  and  $576,000  from the  communities  owned
throughout both periods.

Property   operating   expenses   include  costs  for  personnel,   repairs  and
maintenance, real estate taxes and insurance,  utilities,  landscaping and other
operating costs.  Property  operating  expenses for 1998 increased by $3,222,000
due primarily to $2,735,000 from the  communities  acquired in 1997 and $487,000
from the communities owned throughout both periods.

Depreciation and amortization  expense increased $2,809,000 for 1998 compared to
the same period a year  earlier  primarily  due to (i)  depreciation  expense of
$1,427,000 from the communities  acquired in 1997, (ii) depreciation  expense of
$508,000 from the communities owned throughout both periods,  and (iii) $874,000
of additional  amortization expense for the deferred financing costs incurred on
the March 6, 1998 issuance of Bonds.

Interest expense increased  $7,491,000 in 1998 as compared to 1997 primarily due
to the issuance of the Bonds.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Net cash  provided by  operating  activities  increased  to $17,128 in 1999 from
$12,285 in 1998.  The increase was primarily due to changes in operating  assets
and liabilities  during the period  primarily  related to timing of payments for
real estate taxes and amounts due to affiliates.

The Partnership used $5,155,000 in cash for investing activities. The funds were
used  for  preventive  maintenance  and  recurring  capital  needs,  as well as,
improving the "curb appeal" of the properties  through  landscaping and exterior
improvements.

The Partnership used $8,306,000 in financing activities during 1999,  $7,639,000
of which was  related to payments of excess  flows to the  Limited  Partner.  An
additional $667,000 was used to repay a bank overdraft from December 1998.

The  Partnership  believes  that cash  provided by  operations  is adequate  and
anticipates that it will continue to be adequate in both the short and long-term
to meet operating requirements  (including recurring capital expenditures at the
Mortgaged Properties).

INSURANCE

In the opinion of management,  property and casualty insurance is in place which
provides  adequate  coverage  to provide  financial  protection  against  normal
insurable risks such that it believes that any loss experienced would not have a
significant  impact  on the  Partnership's  liquidity,  financial  position,  or
results of operations.

INFLATION

Substantially  all of the resident leases at the Mortgaged  Properties allow, at
the time of renewal,  for adjustments in the rent payable  thereunder,  and thus
may enable the Partnership to seek rent increases.  The substantial  majority of
these  leases are for one year or less.  The  short-term  nature of these leases
generally serves to reduce the risk to the Partnership of the adverse effects of
inflation.

YEAR 2000

During  1999 the  Company  completed  all phases of an action  plan  designed to
minimize  the impact of Year 2000  ("Y2K")  issue.  Currently  the  Company  has
experienced no internal or external business disruptions associated with the Y2K
issue.  There can be, however,  no assurance that future unforeseen Y2K problems
will not cause  disruptions to our internal  business  systems,  or those of our
vendors. In the event that these disruptions are significant,  they could have a
material impact on the Company.

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS

The Management's  Discussion and Analysis of Financial  Condition and Results of
Operations  contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe  harbors  created  thereby.  These  statements  include  the  plans and
objectives of management for future  operations,  including plans and objectives
relating  to capital  expenditures  and  rehabilitation  costs on the  apartment
Mortgaged  Properties.  Although the  Partnership  believes that the assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could  be  inaccurate  and,  therefore,  there  can  be no  assurance  that  the
forward-looking statements included in this report will prove to be accurate. In
light  of  the  significant   uncertainties   inherent  in  the  forward-looking
statements  included  herein,  the inclusion of such  information  should not be
regarded as a  representation  by the  Partnership  or any other person that the
objectives and plans of the Partnership will be achieved.
<PAGE>


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Partnership's  primary market risk exposure is to changes in interest rates
obtainable on the Bonds.  The  Partnership's  interest rate risk objective is to
limit the impact of interest rate fluctuations on earnings and cash flows and to
lower its overall  borrowing  costs. To achieve this objective,  the Partnership
manages its exposure to fluctuations in market interest rates for its borrowings
through the use of fixed rate debt  instruments  to the extent  that  reasonably
favorable  rates are  obtainable  with  such  arrangements  and may  enter  into
derivative financial  instruments such as interest rate swaps, caps and treasury
locks to mitigate its interest rate risk on a related financial instrument or to
effectively  lock the  interest  rate on a portion  of its  variable  debt.  The
Partnership  does not enter into  derivative or interest rate  transactions  for
speculative  purposes.  The Bonds  outstanding at December 31, 1999 have a fixed
interest rate of 6.376% and mature in 2003.  When the Bonds mature in 2003,  the
Partnership  will have  exposure to interest  rate risk  related to the expected
refinincing  of the the Bond  principal.  As of December 31, 1999,  the interest
rate on the Bonds reasonably approximated the rate attainable by the Partnership
on debt  instruments with similar terms. The Partnership does not have any other
material market-sensitive financial instruments.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Independent Auditors' Report, Consolidated Financial Statements and Selected
Quarterly Financial Information are set forth herein.


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

There have been no disagreements with the Partnership's  independent accountants
on any matter of  accounting  principles  or practices  or  financial  statement
disclosure.

                                    PART III.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated herein by reference to the Registrant's filing on Form S-3 relating
to the issuance of the Bonds, filed with the Securities and Exchange  Commission
December 17, 1997.


ITEM 11.  EXECUTIVE COMPENSATION

Incorporated herein by reference to the Registrant's filing on Form S-3 relating
to the issuance of the Bonds, filed with the Securities and Exchange  Commission
December 17, 1997.


<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated herein by reference to the Registrant's filing on Form S-3 relating
to the issuance of the Bonds, filed with the Securities and Exchange  Commission
December 17, 1997.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MAALP provides the Mortgaged Properties management and other services (including
employee  benefits)  for a 4% management  fee.  MAALP also  provides  funds,  as
needed, for the capital improvements made to the Mortgaged Properties.

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  The  following  documents  are filed as part of this Annual  Report on Form
     10-K:

1.        Independent Auditors' Report
          Balance Sheets as of December 31, 1999 and 1998
          Statements of Operations for the years ended
               December 31, 1999, 1998 and 1997
            Statements of Partners' Capital for the years ended
               December 31, 1999, 1998  and 1997
          Statement of Cash Flows for the years ended
               December 31, 1999, 1998  and 1997
          Notes to Financial Statements for the years ended
               December 31, 1999, 1998 and 1997



2.        Financial  Statement  Schedule  required  to be  filed  by  item 8 and
          Paragraph (d) of this item 14: Schedule III - Real Estate  Investments
          and Accumulated Depreciation as of December 31, 1999


3.        The  exhibits  required  by Item  601 of  Regulation  S-K,  except  as
          otherwise  noted,  have  been  filed  with  previous  reports  by  the
          registrant and are herein incorporated by reference.


<PAGE>


Exhibit
Numbers Exhibit Description
------- -------------------
1.1*    Underwriting Agreement
3.1*    Certificate of Limited Partnership of Mid-America Capital Partners, L.P.
3.2*    Limited  Partnership  Agreement  between MAAC, Inc., as General Partner
         and Mid-America  Apartments,  L.P., a limited  partner  relating to the
         formation  of  Mid-America  Capital  Partners,  L.P.,  a Delaware
         limited partnership
3.3*    Certificate of Incorporation of MAACP, Inc.
3.4*    Bylaws of MAACP, Inc.
3.5*    Certificate of Incorporation of Mid-America Finance, Inc.
3.6*    Bylaws of Mid-America Finance, Inc.
4.1*    Form of Amended and Restated Indenture among Mid-America Capital
          Partners, L.P. and Mid-America Apartments, as issuer and La Salle
          National Bank, as Trustee
4.2*    Form of Trust Agreement between Mid-America Finance,  Inc. as depositor
          and La Salle National  Bank, as Trustee
4.3*    Form of  Certificate
4.4*    Form of Bond
5.1*    Opinion of Baker, Donelson,  Bearman & Caldwell, a professional
          corporation
10.1*   Cash Collateral  Account Security,  Pledge and Assignment  Agreement
          among Mid-America Capital Partners, L.P. and Mid-America Apartments,
          L.P. and First Union Bank, and Morgan Stanley Mortgage Capital, Inc.,
          and La Salle National Bank dated November 21, 1997
10.2*   Form of Deed of Trust, Assignment of Leases and Rents and Security
          Agreement
25.1*   Statement of Eligibility and Qualification of Indenture Trustee on
          Form T-1
27.1    Financial Data Schedule for the period ended 12/31/99
----------------------------------------

*    Previously filed as exhibits to the Partnership's Registration Statement on
     Form S-3, filed with the  Commission on December 17, 1997 under  Commission
     File No. 333-42441.


(b)      Reports on Form 8-K
         The following reports were filed on Form 8-K by  the registrant
         during the fourth quarter of 1999:

                    None.


(c)      Exhibits:
         See Item 14(a)(3) above.
(d)      Financial Statement Schedules:
         See Item 14(a)(2) above.


<PAGE>


                                   SIGNATURES

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.


                                       MID-AMERICA CAPITAL PARTNERS, L.P.


Date:                                              Simon R.C. Wadsworth
                                                   President
                                                  (Principal Executive Officer)

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



Date:     3/29/00                                /s/Simon R.C. Wadsworth
          -------                                ------------------------
                                                    Simon R.C. Wadsworth
                                                    President
                                                   (Principal Executive Officer)


Date:     3/29/00                                /s/Mark S. Martini
          -------                                ------------------------
                                                    Mark S. Martini
                                                   (Principal Financial and
                                                    Accounting Officer)


Date:     3/29/00                                /s/George E. Cates
          -------                                ------------------------
                                                    George E. Cates
                                                    Director


Date:     3/29/00                                /s/H. Eric Bolton, Jr.
          -------                                ------------------------
                                                    H. Eric Bolton, Jr.
                                                    Director

Date:      3/27/00                                /s/Stephen M. Carpenter
          -------                                ------------------------
                                                    Stephen M. Carpenter
                                                    Director

Date:      3/27/00                                /s/Howard Eddings, Jr.
          -------                                ------------------------
                                                    Howard Eddings, Jr.
                                                    Director

<PAGE>



                          Independent Auditors' Report


The Partners
Mid-America Capital Partners, L.P.:


We have audited the accompanying balance sheets of Mid-America Capital Partners,
L.P.  (the  "Partnership")  as of December  31,  1999 and 1998,  and the related
statements of operations, partners' capital and cash flows for each of the years
in the three-year  period ended December 31, 1999. In connection with our audits
of the  financial  statements  we also  have  audited  the  financial  statement
Schedule  III,  Real Estate  Investments  and  Accumulated  Depreciation.  These
financial statements and the financial statement schedule are the responsibility
of the  management  of the  Partnership.  Our  responsibility  is to  express an
opinion on these financial  statements and financial statement 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 the Partnership as of December
31,  1999  and  1998,  and the  results  of  operations  and  cash  flows of the
Partnership  for each of the years in the  three-year  period ended December 31,
1999, in conformity with generally accepted accounting principles.  Also, in our
opinion,  the related financial statement schedule,  when considered in relation
to the financial  statements taken as a whole,  presents fairly, in all material
respects, the information set forth therein.



                                                              KPMG LLP

Memphis, Tennessee
February 25, 2000

<PAGE>

                      PART I. Financial Information
                                     ITEM 1.

                       Mid-America Capital Partners, L.P.
                             (a limited partnership)
                                 Balance Sheets
                           December 31, 1999 and 1998
                             (Dollars in thousands)
<TABLE>

                                                       1999          1998
                                                       ----          ----
Assets:
<S>                                                 <C>           <C>
Real estate assets:
       Land .....................................   $  21,305    $  21,305
       Buildings and improvements ...............     210,761      204,886
       Furniture, fixtures and equipment ........       5,439        4,603
       Construction in progress .................         814        2,370
--------------------------------------------------------------------------------
                                                      238,319      233,164
       Less accumulated depreciation ............     (31,162)     (22,309)
--------------------------------------------------------------------------------
            Real estate assets, net .............     207,157      210,855

       Cash .....................................       3,667         --
       Restricted cash ..........................          34          406
       Deferred financing costs, net ............       3,258        4,248
       Other assets .............................          79          202
--------------------------------------------------------------------------------
          Total assets ..........................   $ 214,195    $ 215,711
================================================================================
Liabilities and Partners' Capital

Liabilities:
       Bonds payable ............................   $ 142,000    $ 142,000
       Bank overdraft ...........................        --            667
       Accounts payable .........................         404          438
       Accrued expenses and other liabilities ...       2,895        1,828
       Due to affiliate .........................       1,499          474
       Security deposits ........................         794          706
--------------------------------------------------------------------------------
          Total liabilities .....................     147,592      146,113

Partners' Capital:

       General Partner ..........................       2,453        2,407
       Limited Partner ..........................      80,402       75,804
       Due from Limited Partner .................     (16,252)     (8,613)
--------------------------------------------------------------------------------
          Total partners' capital ...............      66,603       69,598
--------------------------------------------------------------------------------
          Total liabilities and partners' capital   $ 214,195    $ 215,711
================================================================================
</TABLE>


                 See accompanying notes to financial statements.

<PAGE>

                       Mid-America Capital Partners, L.P.
                             (a limited partnership)
                            Statements of Operations
                  Years ended December 31, 1999, 1998 and 1997
                             (Dollars in thousands)

<TABLE>


                                                       1999      1998     1997
                                                       ----      ----     ----
<S>                                                   <C>      <C>      <C>

Revenues:
       Rental .......................................$39,260   $38,316   $30,691
       Other ........................................    423       426       258
--------------------------------------------------------------------------------
       Total revenues ............................... 39,683    38,742    30,949
--------------------------------------------------------------------------------

Expenses:
       Personnel ....................................  4,251     4,251     3,148
       Building repairs and maintenance .............  1,964     2,053     1,519
       Real estate taxes and insurance ..............  4,044     3,826     2,985
       Utilities ....................................  1,516     1,554     1,173
       Landscaping ..................................  1,090       978       869
       Other operating ..............................  1,652     1,545     1,291
       Depreciation and amortization real estate
         assets .....................................  8,825     8,284     6,360
       Depreciation and amortization non-real
         estate assets ..............................     28        40        29
       General and administrative ...................  1,596     1,515     1,238
       Interest .....................................  9,083     9,162     1,671
       Amortization of deferred financing costs .....    990     1,026       152
--------------------------------------------------------------------------------
       Total expenses ............................... 35,039    34,234    20,435

--------------------------------------------------------------------------------
Income before extraordinary item ....................  4,644     4,508    10,514
--------------------------------------------------------------------------------
Extraordinary item:
       Loss on debt extinguishment ..................   --          86        16

--------------------------------------------------------------------------------
Net income ..........................................$ 4,644   $ 4,422   $10,498
================================================================================
</TABLE>


    See accompanying notes to financial statements.

<PAGE>
                       Mid-America Capital Partners, L.P.
                             (a limited partnership)
                         Statements of Partners' Capital
                  Years ended December 31, 1999, 1998 and 1997

                             (Dollars in thousands)

<TABLE>

                                                                CPG
                                                              Partners'    Due
                                                              Capital     From      Total
                                          General  Limited    (Prede-    Limited   Partners'
                                          Partner  Partner    (cessor)   Partner    Capital
                                          -------  -------    --------  --------   -------
<S>                                       <C>     <C>        <C>                    <C>

Balance December 31, 1996 .............. $   --   $     --  $ 131,951   $     --  $ 131,951

      Capital contributions, net
        (prior to Partnership formation)     --         --     24,359         --     24,359
      Formation contribution ...........  2,271    166,630   (166,630)        --      2,271
      Merger with Hermitage
         at Beechtree, LLC ............      90      8,890         --         --      8,980
      Capital distributions, net .......     --   (104,270)        --         --   (104,270)
      Net cash payments to Limited
         Partner........................                                 (1,264)     (1,264)
      Net income .......................      2        176     10,320                10,498
-------------------------------------------------------------------------------------------
Balance December 31, 1997 ..............  2,363     71,426         --    (1,264)     72,525
      Net cash payments to Limited
         Partner........................                                 (7,349)     (7,349)
      Net income .......................     44      4,378         --                 4,422
-------------------------------------------------------------------------------------------
Balance December 31, 1998 .............. $2,407  $  75,804  $      --    (8,613)   $ 69,598
      Net cash payments to Limited
         Partner........................                                 (7,639)     (7,639)
      Net income .......................     46      4,598         --                 4,644
--------------------------------------------------------------------------------------------
Balance December 31, 1998 .............. $2,453  $  80,402  $      --  $(16,252)   $ 66,603
============================================================================================
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>

                       Mid-America Capital Partners, L.P.
                             (a limited partnership)
                            Statements of Cash Flows
                  Years ended December 31, 1999, 1998 and 1997
                             (Dollars in thousands)

<TABLE>

                                                         1999         1998        1997
                                                         ----         ----        ----
<S>                                                  <C>          <C>         <C>
Cash flows from operating activities:
       Net income ...............................   $   4,644    $   4,422    $  10,498
       Adjustments to reconcile net income
          to net cash provided by operating
          activities:
               Depreciation and amortization ....       9,843        9,350        6,541
               Extraordinary item ...............        --             86           16
               Changes in assets and liabilities:
                   Restricted cash ..............         372          526         (654)
                   Due to/from affiliate ........       1,025       (1,122)       1,596
                   Other assets .................         123           29         (120)
                   Accounts payable .............         (34)          48         (197)
                   Accrued expenses and other
                     liabilities ................       1,067       (1,047)       1,166
                   Security deposits ............          88           (7)         164
----------------------------------------------------------------------------------------
               Net cash provided by operating
                 activities .....................      17,128       12,285       19,010

Cash flows from investing activities:
               Purchases of real estate assets ..        --           --        (33,280)
               Improvements to properties .......      (5,155)      (5,556)      (4,951)
----------------------------------------------------------------------------------------
               Net cash used in investing
                 activities .....................      (5,155)      (5,556)     (38,231)

Cash flows from financing activities:
               Bank overdraft ...................        (667)         667         --
               Proceeds from notes payable ......        --        142,000      140,000
               Principal payments on bridge
                 notes payable ..................        --       (140,000)        --
               Principal payments on
                 notes payable ..................        --           --        (38,589)
               Deferred financing costs .........        --         (3,617)      (1,850)
               Due from limited partner .........      (7,639)      (7,349)      (1,264)
               Capital contributions,
                 net (Predecessor) ..............        --           --         24,359
               Formation contribution ...........        --           --          2,271
               Capital distributions, net .......        --           --       (104,270)
----------------------------------------------------------------------------------------
               Net cash used in financing
                 activities .....................      (8,306)      (8,299)      20,657
----------------------------------------------------------------------------------------
               Net increase (decrease) in cash
                 and cash equivalents ...........       3,667       (1,570)       1,436
----------------------------------------------------------------------------------------
Cash, beginning of period .......................        --          1,570          134
----------------------------------------------------------------------------------------
Cash, end of period .............................   $   3,667    $    --      $   1,570
========================================================================================

Supplemental disclosure of cash flow information:
   Interest paid ................................   $   9,083    $   9,276    $     947
----------------------------------------------------------------------------------------
   Noncash investing activities:
      Asumption of debt related to
        property acquisitions ...................   $    --      $    --      $  22,112
----------------------------------------------------------------------------------------
</TABLE>

                      See accompanying notes to financial statements.
<PAGE>



                       MID-AMERICA CAPITAL PARTNERS, L.P.
                             (a limited partnership)

                          Notes to Financial Statements

                        December 31, 1999, 1998 and 1997



(1)      Organization and Summary of Significant Accounting Policies

         Organization

         Mid-America  Capital  Partners,  L.P.  (the  Partnership)  is a special
         purpose  Delaware  limited  partnership.  The Partnership was formed on
         November  24, 1997 for the sole purpose to own and operate 26 apartment
         communities (the Mortgaged Properties) and manage,  renovate,  improve,
         lease, sell, transfer,  exchange,  mortgage and otherwise deal with the
         Mortgaged  Properties.  The sole limited  partner of the Partnership is
         Mid-America Apartments,  L.P., a Tennessee limited partnership (MAALP),
         which  is  a  majority  owned   subsidiary  of  Mid-America   Apartment
         Communities,   Inc.  (MAAC).   MAAC  owns,   directly  or  through  its
         subsidiaries,  all of the  outstanding  units of partnership  interest.
         MAAC is a self-administered  and self-managed umbrella partnership real
         estate investment trust (REIT).  MAAC conducts a substantial portion of
         its operation through MAALP and subsidiaries of MAALP. The sole general
         partner of the  Partnership  is MAACP,  Inc.,  a Tennessee  corporation
         (MAACP), a wholly-owned subsidiary of MAAC. The term of the Partnership
         shall be to December 31, 2020, unless terminated earlier as provided in
         the Partnership Agreement or as otherwise provided by law.

         The Partnership was formed to succeed  substantially  all the interests
         in  Capital   Properties   Group   (predecessor  to  the   Partnership,
         "Predecessor"). Distributions to the Partners relating to operations of
         the Mortgaged Properties will be based upon net cash flow as defined in
         the  Partnership  Agreement.  Profits and losses are  allocated  to the
         Partners in proportion with their ownership. Distributions from ongoing
         operations of the Partnership are distributed 100% to MAALP and charged
         to its capital account.

         Subsequent to the Partnership formation, MAALP contributed its interest
         in 20 of the  Mortgaged  Properties,  and  the  right  to  acquire  the
         Reorganization  Properties  (as defined  below) to the  Partnership  in
         exchange for 99% limited partnership interest in the Partnership. MAACP
         contributed cash in exchange for a 1% general  partnership  interest in
         the Partnership.

         The Mortgaged  Properties consist of (i) 20 properties  contributed by
         MAALP  comprising  the  Predecessor;  (ii) 5  properties  acquired  on
         November  25,  1997  by  the   Partnership  in  connection   with  the
         consummation of the merger of Flournoy  Development  Partnership (FDC)
         with  and into  MAAC and the  other  transactions  (collectively,  the
         Reorganization  Properties)  as described in the Agreement and Plan of
         Reorganization   dated  as  of   September   15,  1997  (the  Plan  of
         Reorganization) between FDC, MAAC and MAALP consisting of 4 properties
         acquired from  Brown-Flournoy  Equity Income Fund Limited  Partnership
         (the  Brown-Flournoy  Properties)  and  Willow  Creek;  and  (iii) one
         property (Hermitage at Beechtree) which was acquired November 25, 1997
         through the merger of Hermitage at Beechtree, L.L.C. with and into the
         Partnership.  The Partnership recorded the five properties acquired in
         connection with the Plan of  Reorganization  using the purchase method
         of accounting.
<PAGE>


         Basis of Presentation

         The  accompanying  statement  of  operations,  statement  of  partners'
         capital,  and  statement  of cash flows  include  the  accounts  of the
         Partnership  from November 24, 1997 (the  Partnership  Formation  Date)
         through  December 31, 1997 and the accounts of the  Predecessor for the
         period from January 1, 1997 through the Partnership  Formation Date. As
         part of the Partnership  formation,  the  contribution of all Mortgaged
         Property interests was reflected at historical cost in a manner similar
         to that used in pooling-of-interests accounting.

         All  significant  intercompany  accounts  and  transactions  have been
         eliminated in consolidation.

         Revenue Recognition

         The Partnership  leases  residential  apartments under operating leases
         with terms  generally one year or less.  Rental and other  revenues are
         recorded when earned.

         Rental Operations

         The Partnership  owns and operates  apartment units which are leased to
         tenants  on terms of one year or less,  with  monthly  payments  due in
         advance.  In management's  opinion,  due to the number of tenants,  the
         type and  diversity of  submarkets  in which the  Mortgaged  Properties
         operate,  and the collection terms, there is no concentration of credit
         risk.

         Restricted Cash

         Restricted  cash  consists  of  escrow  deposits  held by  lenders  for
         property taxes, insurance, debt service and replacement reserves.

         Real Estate Assets and Depreciation

         Real  estate  assets are  carried at the lower of  depreciated  cost or
         estimated fair value, less cost to sell.  Interest,  property taxes and
         other  development  costs incurred  during  construction is capitalized
         until  completion.  Repairs  and  maintenance  costs  are  expensed  as
         incurred while significant  improvements,  renovations and replacements
         are  capitalized.  The cost of interior  painting,  vinyl  flooring and
         blinds are expensed as incurred.

         In  conjunction  with  acquisitions  of properties,  the  Partnership's
         policy is to  provide  in its  acquisition  budgets  adequate  funds to
         complete any deferred  maintenance items to bring the properties to the
         required  standards,  including  the  cost of  replacement  appliances,
         carpet,  interior painting,  vinyl flooring and blinds. These costs are
         capitalized.

         Depreciation  is computed on a  straight-line  basis over the estimated
         useful  lives of the related  assets which range from 8 to 40 years for
         land improvements and buildings and 5 years for furniture, fixtures and
         equipment.

         Deferred Financing Costs

         Deferred  financing  costs are amortized  over the terms of the related
         debt using a method which approximates the interest method.


<PAGE>

         Due from Limited Partner

         The  Partnership  periodically  makes payments to the Limited  Partner
         based upon the excess cash flows of the  Mortgaged  Properties  (other
         than the five properties  discussed  below) from rental  operations or
         receives cash from the limited partner to fund capital improvements on
         the Mortgaged Properties.  These payments and receipts are recorded as
         a receivable or payable to the Limited  Partner and are presented as a
         reduction  of  partners'   capital  in  the   accompanying   financial
         statements as there are no defined repayment terms between the Limited
         Partner and the Partnership.

         Due to Affiliate

         The Partnership has five properties,  Hidden Lake II, High Ridge,  Park
         Place,  Southland  Station I and  Willow  Creek that make  payments  or
         receive cash from MAAC in a manner  similar to that of the  Partnership
         and Limited Partner  described  above.  These payments and receipts are
         recorded on the balance  sheet of the  Partnership  as a receivable  or
         payable to an affiliate, MAAC.

         Capital Contributions, Net

         MAALP provided cash management and vendor  remittance  services for the
         Predecessor.  Net cash flows  resulting from these services are treated
         as capital contributions or distributions.  In addition, MAALP provided
         funding for the  Predecessor's  property  acquisition  and  improvement
         projects and for debt service related to the notes payable  included in
         the  Predecessor  combined  financial  statements.  The amount of these
         funded  activities  are  contributed  by  MAALP to the  Predecessor  as
         capital contributions.  Capital  contributions,  net for the year ended
         December  31,  1997,   consisted  of  funds  utilized  by  (dollars  in
         thousands):


              Acquisitions and improvements of properties        $19,064
              Principal payments on notes payable                 16,461
              Intercompany remittances, net                      (11,166)
                                                                 --------

                                                                 $24,359
                                                                 ========



         Income Taxes

         No provision for federal income taxes has been made in the accompanying
         financial  statements.  Each partner is  responsible  for reporting his
         share of taxable income or loss from the real estate investments.


         Use of Estimates

         Management  of the  Partnership  has made a number  of  estimates  and
         assumptions  relating to the reporting of assets and liabilities,  the
         disclosure  of  contingent  assets and  liabilities,  and the  repoted
         amounts of revenues and expenses to prepare these financial statements
         in conformity with generally accepted  accounting  principles.  Actual
         results could differ from those estimates.

         Reclassification

         Certain prior year amounts have been  reclassified to conform with the
         1999 presentation.

<PAGE>


(2)      Bridge Notes and Bonds Payable

         On November  24, 1997 the  Mortgaged  Properties  were  acquired by the
         Partnership and were pledged to secure a $140 million loan (the "Bridge
         Notes") received from Morgan Stanley Mortgage Capital Inc. A portion of
         the proceeds from the Bridge Notes were utilized in connection with the
         acquisition of certain of the Reorganization Properties, the funding of
         deferred financing costs, the establishment of replacement reserves and
         the remainder being distributed to MAALP.

         On March  6,  1998,  the  Partnership  issued  $142  million  aggregate
         principal amount of 6.376% Bonds due 2003 (the "Bonds").  The Bonds are
         secured  by a first  priority  deed of trust,  security  agreement  and
         assignment  of  rents  and  leases  in  respect  of  the  26  mortgaged
         properties,  with a net book value of $207.2  million at  December  31,
         1999.  The net proceeds  from the sale of the Bonds were applied to the
         Bridge Notes and utilized to fund costs of the issuance.

         In anticipation of the March 6, 1998 Bond issuance discussed above, the
         Partnership  entered  four  separate  interest  rate swaps in 1997 with
         notional amounts  aggregating $140 million,  the effect of which was to
         lock the interest  rate on $140 million of the Bonds at an average rate
         of 6.62%. On March 6, 1998 the Company  realized a $1.4 million loss on
         the interest  rate  contracts.  The realized  loss  resulting  from the
         change in the market value of these  contracts is being  amortized into
         interest expense over the life of the related debt issuance.  Thus, the
         effective  borrowing cost of the Bonds is 6.62% until maturity in March
         2003.

(3)      Fair Value Disclosure of Financial Instruments

         Cash,  accounts payable,  bank overdrafts,  accrued expenses and other
         liabilities  and  security  deposits  are  carried  at  amounts  which
         reasonably approximate their fair value.

         The fixed rate Bonds had a carrying  value at  December  31,  1999 and
         1998 of $142  million  which  reasonably  estimated  their  fair value
         (excluding  prepayment  penalties) based upon interest rates available
         for the issuance of debt with similar terms and  remaining  maturities
         as of  December  31,  1999  and  1998.  These  notes  are  subject  to
         prepayment  penalties  which would be  required to retire  these notes
         prior to maturity.

         The fair value  estimates  presented  herein are based on  information
         available to  management  as of December  31, 1999 and 1998.  Although
         management is not aware of any factors that would significantly affect
         the  estimated  fair  value  amounts,   such  amounts  have  not  been
         comprehensively  revalued for purposes of these  financial  statements
         since  that  date,  and  current  estimates  of fair  value may differ
         significantly from the amounts presented herein.

(4)      Recent Pronouncements

         In June 1998, the Financial Accounting Standards Board issued Statement
         of  Financial  Accounting  Standards  (SFAS) No.  133,  Accounting  for
         Derivative  Instruments  and  Hedging  Activity,  effective  for  years
         beginning after June 15, 1999. In June 1999, SFAS No. 137 was issued to
         defer the  implementation of SFAS No. 133 to all fiscal years beginning
         after June 15, 2000. The accounting statement is not expected to have a
         material impact on the Partner's financial statements.  The Partnership
         will adopt this accounting standard in 2001.
<PAGE>

(5)      Commitments and Contingencies

         The  Partnership  is not presently  subject to any material  litigation
         nor,  to  the  Partnership's  knowledge,  is  any  material  litigation
         threatened against the Partnership or any of the Mortgaged  Properties,
         other  than  routine  litigation  arising  in the  ordinary  course  of
         business,  some  of  which  is  expected  to be  covered  by  liability
         insurance  and none of which is  expected  to have a  material  adverse
         effect on the financial statements of the Partnership.

(7)      Related Party Transactions

         The accompanying  financial statements include the revenues and certain
         direct operating expenses of the Mortgaged  Properties.  MAALP provides
         the  Properties  management  and  other  services  (including  employee
         benefits)  at a 4%  management  fee and  also  provides  funds  for the
         improvement of the Mortgaged  Properties.  Management  fees incurred by
         the  Partnership  under  the terms of the  agreement  with  MAALP  were
         approximately  $1,587,000,  $1,530,000,  and  $1,228,000  for the years
         ended 1999, 1998 and 1997, respectively.

         MAALP  employees at the Mortgaged  Properties  participate  in employee
         benefit plans sponsored by MAAC.

(8)      Financial Instruments with Off-Balance Sheet Risk

         The Partnership has only limited involvement with derivative  financial
         instruments and does not use them for trading purposes. The Partnership
         occasionally  utilizes  derivative  financial  instruments as hedges in
         anticipation  of  future  debt  transactions  to  manage   well-defined
         interest rate risk.

(9)      Segment Information

         At  December  31,  1999,  the   Partnership   owned  and  operated  26
         multifamily   apartment   communities   from  which  it  derives   all
         significant   sources  of  earnings  and  operating  cash  flows.  The
         Partnership's  operational  structure is organized on a  decentralized
         basis, with individual property managers having overall responsibility
         and authority regarding the operations of their respective properties.
         Each property manager  individually  monitors local and area trends in
         rental rates,  occupancy  percentages,  and operating costs.  Property
         managers are given the on-site  responsibility and discretion to react
         to  such  trends  in  the  best  interest  of  the  Partnership.   The
         Partnership's chief operating decision maker evaluates the performance
         of each individual property based on its contribution to net operating
         income in order to ensure that the  individual  property  continues to
         meet the Partnership's return criteria and long term investment goals.
         The  Partnership  defines each of its  multifamily  communities  as an
         individual  operating segment.  It has also determined that all of its
         communities  have similar economic  characteristics  and also meet the
         other criteria which permit the  communities to be aggregated into one
         reportable segment, which is acquisition,  development,  and operation
         of the multifamily communities owned.

         The revenues,  net operating income,  assets and real estate investment
         capital  expenditures  for  the  aggregated   multifamily  segment  are
         summarized as follows for the years ended  December 31, 1999,  1998 and
         1997 (in 000's):
<PAGE>

(9)      Segment Information-(continued)

                                         1999       1998       1997
                                         ----       ----       ----

Multifamily rental revenues           $ 39,683    $ 38,742     $ 30,949
                                     ========== =========== ============

Multifamily net operating income        25,166      24,535       19,964
Reconciling items to net income:
  Interest expense                      (9,083)     (9,162)      (1,671)
  General and administrative expenses   (1,596)     (1,515)      (1,238)
  Depreciation and amortization         (8,853)     (8,324)      (6,389)
  Amortization of deferred
    financing costs                       (990)     (1,026)        (152)
  Extraordinary items, net                   -         (86)         (16)

                                     ========== =========== ============
    Net income                         $ 4,644     $ 4,422     $ 10,498
                                     ========== =========== ============

Assets                                   1999        1998
------                                   ----        ----

Multifamily real estate assets       $ 238,319   $ 233,164
Accumulated depreciation -
  multifamily assets                   (31,162)    (22,309)
                                    ----------- -----------
                                       207,157     210,855
Cash and Restricted Cash                 3,701         406
Other assets                            19,589      13,063
                                    =========== ===========
    Total Assets                     $ 230,447   $ 224,324
                                    =========== ===========


                                         1999        1998      1997
                                         ----        ----      ----

Total expenditures for
  property additions                   $ 5,155     $ 5,556    $ 4,951
                                    =========== =========== ==========


<PAGE>

(10)    Selected Quarterly Financial Data (Unaudited)

(Dollars in thousands)

                                      Year Ended December 31, 1999
                                      ----------------------------
                            First          Second         Third          Fourth
                            -----          ------         -----          ------
Total revenues             $ 9,655        $ 9,874        $10,063        $10,091
Net income                 $ 1,088        $ 1,220        $ 1,104        $ 1,232

                                       Year Ended December 31, 1998
                                       ----------------------------
                            First          Second         Third          Fourth
Total revenues             $ 9,706        $ 9,567        $ 9,819        $ 9,650
Income before
  extraordinary item       $ 1,213        $ 1,157        $ 1,100        $ 1,038
Extraordinary item           $ (86)           $ -            $ -
Net income                 $ 1,127        $ 1,157        $ 1,100        $ 1,038


<PAGE>


                       MID-AMERICA CAPITAL PARTNERS, L.P.
                                  Schedule III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

                                December 31, 1999
                             (Dollars in thousands)
<TABLE>


                                                                                          Cost Capitalized    Gross Amount
                                                                        Initial Cost        Acquisition      December 31, 1999
                                                                     ------------------  ------------------  -----------------
                                                                              Building            Building
                         Metropolitan                                           and                 and
Property Name            Area                     Encumbrances       Land     Fixtures    Land    Fixtures            Land
-------------            ----                     ------------       ----     -------     ----    --------            ----
<S>                     <C>                      <C>                <C>        <C>        <C>    <C>                  <C>

Belmere ..............   Tampa, FL                    --   (1)         851       7,667              808                851
Crosswinds ...........   Jackson, MS                  --   (1)       1,535      13,826              830              1,535
Fairways at Royal Oak    Cincinnati, OH               --   (1)         814       7,335              617                814
Hermitage at Beechtree   Cary, NC                     --   (1)         900       8,099                7                900
Hidden Lake II .......   Union City, GA               --   (1)         621       5,587                3                621
High Ridge ...........   Athens, GA                   --   (1)         884       7,958                2                884
Howell Commons .......   Greenville, SC               --   (1)       1,304      11,740              316              1,304
Kirby Station ........   Memphis, TN                  --   (1)       1,148      10,337            1,753              1,148
Lakepointe ...........   Lexington, KY                --   (1)         411       3,699              571                411
Lakeside .............   Jacksonville, FL             --   (1)       1,431      12,883     289    2,034              1,720
Marsh Oaks ...........   Atlantic Beach, FL           --   (1)         244       2,829              459                244
Napa Valley ..........   Little Rock, AR              --   (1)         960       8,642              448                960
Park Haywood .........   Greenville, SC               --   (1)         325       2,925      35    2,250                360
Park Place ...........   Spartanburg, SC              --   (1)         723       6,504                2                723
Pear Orchard .........   Jackson, MS                  --   (1)       1,352      12,168              982              1,352
Savannah Creek .......   Memphis, TN (4)              --   (1)         778       7,013              365                778
Shenandoah Ridge .....   Augusta, GA                  --   (1)         650       5,850       8    1,678                658
Somerset .............   Jackson, MS                  --   (1)         477       4,294              523                477
Southland Station I ..   Warner Robins, GA            --   (1)         777       6,992               14                777
Steeplechase .........   Chattanooga, TN              --   (1)         217       1,957            1,087                217
Sutton Place .........   Memphis, TN (4)              --   (1)         894       8,053              537                894
The Village ..........   Lexington, KY                --   (1)         900       8,097              757                900
Tiffany Oaks .........   Altamonte Springs, FL        --   (1)       1,024       9,219              500              1,024
Westside Creek I .....   Little Rock, AR              --   (1)         616       5,559              180                616
Williamsburg Village .   Jackson, TN                  --   (1)         523       4,711              407                523
Willow Creek .........   Columbus, GA                 --   (1)         623       5,523                3                614
-----------------------------------------------------------------------------------------------------------------------------------
Total ................                          $ 142,000        $  20,982   $ 189,467  $  332 $ 17,133           $ 21,305
===================================================================================================================================

                      Gross Amount
                       Carried at                                                          Life Used
                    December 31, 1999                                                         to
                    -----------------                                                       Compute
                          Building                                                       Depreciation
                             and                  Accumulated                               in Latest
Property Name             Fixtures      Total    Depreciation       Net    Construction  Income Statement
-------------             --------      -----    ------------       ---    ------------  ----------------
<S>                          <C>        <C>           <C>          <C>      <C>            <C>

Belmere ..............       9,396      10,247       (1,698)       8,549        1984        5 - 40
Crosswinds ...........      14,971      16,506       (1,917)      14,589     1988/1990      5 - 40
Fairways at Royal Oak        8,299       9,113       (1,559)       7,554        1988        5 - 40
Hermitage at Beechtree       8,950       9,850         (675)       9,175        1988        5 - 40
Hidden Lake II .......       5,811       6,432         (432)       6,000        1987        5 - 40
High Ridge ...........       8,247       9,131         (611)       8,520        1987        5 - 40
Howell Commons .......      12,412      13,716       (1,302)      12,414     1986/1988      5 - 40
Kirby Station ........      12,654      13,802       (2,443)      11,359        1978        5 - 40
Lakepointe ...........       4,364       4,775         (879)       3,896        1986        5 - 40
Lakeside .............      15,338       17,058       (2,418)     14,640        1985        5 - 40
Marsh Oaks ...........       3,429       3,673         (630)       3,043        1986        5 - 40
Napa Valley ..........       9,342      10,302       (1,083)       9,219        1984        5 - 40
Park Haywood .........       5,520        5,880       (1,004)      4,876        1983        5 - 40
Park Place ...........       7,316       8,039         (550)       7,489        1987        5 - 40
Pear Orchard .........      13,612      14,964       (2,792)      12,172        1985        5 - 40
Savannah Creek .......       7,622       8,400         (973)       7,427        1989        5 - 40
Shenandoah Ridge .....       7,797       8,455       (1,628)       6,827        1982        5 - 40
Somerset .............       4,988       5,465         (969)       4,496        1981        5 - 40
Southland Station I ..       7,563       8,340         (565)       7,775        1987        5 - 40
Steeplechase .........       3,262       3,479         (816)       2,663        1986        5 - 40
Sutton Place .........       9,030       9,924       (1,152)       8,772        1991        5 - 40
The Village ..........       9,164      10,064       (1,825)       8,239        1989        5 - 40
Tiffany Oaks .........      10,418      11,442       (1,140)      10,302        1985        5 - 40
Westside Creek I .....       6,054       6,670         (612)       6,058        1984        5 - 40
Williamsburg Village .       5,254       5,777       (1,016)       4,761        1987        5 - 40
Willow Creek .........       6,201       6,815         (473)       6,342     1971/1977      5 - 40
---------------------------------------------------------------------------------------------------------
Total ................      $ 217,014    $238,319   ($ 31,162)  $207,157
========================================================================================================

</TABLE>

-------------------------
(1) These 26  communities  are encumbered by the $142 million Bonds
     which mature on March 3, 2003 and have an interest rate of 6.376%.


<PAGE>
                       MID AMERICA CAPITAL PARTNERS, L.P.

              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

                  Years ended December 31, 1999, 1998 and 1997



A summary of activity for real estate  investments and accumulated  depreciation
is as follows:

                      Mid - America Capital Partners, L.P.
                             (a limited partnership)
              Real Estate Investments and Accumulated Depreciation
                             (Dollars in thousands)

                                            1999         1998          1997
                                            ----         ----          ----
Real estate investments:
       Balance at beginning of year     $ 233,164    $ 227,608    $ 158,285
       Acquisitions                             -            -       64,372
       Improvements                         5,155        5,556        4,951

                                    -------------- ------------ ------------
      Balance at end of year            $ 238,319    $ 233,164    $ 227,608
                                    ============== ============ ============

Accumulated depreciation:
       Balance at beginning of year      $ 22,309     $ 13,985      $ 7,596
       Depreciation                         8,853        8,324        6,389

                                    -------------- ------------ ------------
       Balance at end of year            $ 31,162     $ 22,309     $ 13,985
                                    ============== ============ ============

          See accompanying independentauditor's report.