UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the quarterly period ended
March 31, 2011
 
 OR
  o
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:
000-24816
 
 National Property Analysts Master Limited Partnership
 (Exact name of registrant as specified in its charter)
 
 Delaware

23-2610414(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)230 South Broad Street, MezzaninePhiladelphia, Pennsylvania

19102(Address of principal executive offices)

(Zip Code)
 
 (215) 790-4700
 (Registrant’s telephone number, including area code)
 
 [None]
 (Former name, former address and former fiscal year, if changed since last report)
 
 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 Yes
þ
No
 ̈
 
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
 Yes
 ̈
No
 ̈
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large accelerated filer
 ̈

Accelerated filer
 ̈Non-accelerated filer
 ̈
(Do not check if a smaller reporting company)
Smaller reporting company
þ
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 Yes
 ̈
No
þ
 
 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
 Class

Outstanding at May 16, 2011Units of Limited Partnership Interest

97,752 units
 
 
 
 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 
 INDEX
 
 Page No.PART I.  FINANCIAL INFORMATIONItem 1.  Combined Condensed Financial Statements (Unaudited)Combined Condensed Balance Sheets - March  31, 2011 and December 31, 2010

1Combined Condensed Statements of Operations and Changes in Partners’ Deficit - Three months ended March  31, 2011 and 2010

2Combined Condensed Statements of Cash Flows - Three months ended March 31, 2011 and 2010

3Notes to Combined Condensed Financial Statements

4Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

9Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

11Item 4.  Controls and Procedures.

11PART II.  OTHER INFORMATIONItem 1.  Legal Proceedings.

12Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

12Item 3.  Defaults Upon Senior Securities.

12Item 4.  Removed and reserved.

12Item 5.  Other Information.

12Item 6.  Exhibits.

12SIGNATURESSignatures

13
  
  NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 Combined Condensed Balance Sheets
 (in thousands)
 
 March 31,


December 31,2011


2010(Unaudited)AssetsRental property, at cost:Land

$
7,568


$
7,568Buildings


107,448



107,418Tenant-in-common property


22,662



22,662137,678



137,648Less: accumulated depreciation


79,063



78,051Rental property, net


58,615



59,957Cash and cash equivalents


664



611Restricted cash


173



108Investment securities available for sale, at market


2,678



3,221Tenant accounts receivable, net of allowance of $30 as of March 31, 2011 and December 31, 2010, respectively


386



188Unbilled rent receivable


1,261



1,261Accounts receivable and other assets, net (1)


376



404Total assets

$
64,153


$
65,390Liabilities and Partners' DeficitWraparound mortgages payable (1)

$
146,704


$
148,730Less: unamortized discount based on imputed interest rate of 12% (1)


35,034



38,044Wraparound mortgages payable less unamortized discount (1)


111,670



110,686Due to NPAEP (1)


3,335



3,335Other borrowings (1)


194



194Accounts payable and other liabilities (1)


3,677



3,373Deferred revenue


171



254Finance lease obligation


1,750



1,750Total liabilities


120,797



119,592Partners' deficit


(56,644
)


(54,202
)Total liabilities and partners' deficit

$
64,153


$
65,390
 (1)See Note 3:  Related Party Transactions.
 See accompanying notes to Combined Condensed Financial Statements (unaudited).
  1
  NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 Combined Condensed Statements of Operations and Changes in Partners' Deficit (unaudited)
 (in thousands, except per-unit data)
 
 Three months ended

March 31,2011


2010Income:Rental income

$
3,089


$
3,235Other charges to tenants


905



930Interest and dividend income


34



35Total income


4,028



4,200Operating expenses:Interest expense (1)


3,420



3,196Real estate taxes


819



759Management fees (1)


131



145Common area maintenance expenses


573



560Ground rent(1)


198



194Repairs and maintenance


182



135General and administrative (1)


162



127Depreciation


1,012



1,010Amortization


18



18Total operating expenses


6,515



6,144Operating loss


(2,487
)


(1,944
)Other gain  (loss):Realized gain on investment securities


27



38Loss from continuing operations


(2,460
)


(1,906
)Partners' deficit:Beginning of period


(54,202
)


(46,394
)Net change in unrealized loss on investment securities


18



16End of period

$
(56,644
)

$
(48,284
)Net loss per unit

$
(25.17
)

$
(19.50
)Weighted average units outstanding


97,752



97,752
 (1) See Note 3: Related Party Transactions.
 See accompanying notes to Combined Condensed Financial Statements (unaudited).
  2
 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 Combined Condensed Statements of Cash Flows (unaudited)
 (in thousands, except per-unit data)
 
 Three months ended March 31,2011


2010Cash flows from operating activities:Net loss

$
(2,460
)

$
(1,906
)Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization


1,030



1,028Amortization of discount (1)


3,010



2,726Realized gain on investment securities


(27
)


(38
)Change in assets and liabilitiesIncrease in tenant accounts receivable


(198
)


(252
)Increase in unbilled rent receivable


-



(11
)Decrease (increase) in accounts receivable and other assets (1)


10



(203
)Increase in accounts payable and other liabilities (1)


304



458Decrease in deferred revenue


(83
)


(125
)Net cash provided by operating activities


1,586



1,677Cash flows from investing activities:Improvements to rental property


(30
)


-Increase in restricted cash


(65
)


(68
)Purchases of investment securities


(2,046
)


(1,267
)Sales of investment securities


2,634



1,203Net cash provided (used) by investing activities


493



(132
)Cash flows from financing activities:Payments on wraparound mortgages (1)


(2,026
)


(2,005
)Net cash used in financing activities


(2,026
)


(2,005
)Increase (decrease) in cash and cash equivalents


53



(460
)Cash and cash equivalents:Beginning of period


611



787End of period

$
664


$
327Supplemental disclosure of cash flow information:Cash paid during the period for interest

$
335


$
395
 
 (1)See Note 3:  Related Party Transactions.
 See accompanying notes to Combined Condensed Financial Statements (unaudited).
  3
 
 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 Notes to Combined Condensed Financial Statements (Unaudited)
 March 31, 2011
 (dollars in thousands)
 Note 1:   Basis of Presentation
  The accompanying unaudited Combined Condensed Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America and with the instructions to Form 10-Q.  Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such instructions, although NPAMLP believes that the included disclosures are adequate for a fair presentation.  The information furnished reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations and cash flows for the interim periods presented.  These Combined Condensed Financial Statements should be read in conjunction with the Combined Condensed Financial Statements and notes thereto filed with our Form 10-K for the year ended December 31, 2010.
 
 Note 2:   Formation and Description of Business
 
 National Property Analysts Master Limited Partnership (NPAMLP), a limited partnership, was formed effective January 1, 1990.  NPAMLP is owned 99% by the limited partners and 1% collectively by EBL&S, Inc., the managing general partner, and Feldman International, Inc. (“FII”), the equity general partner.
 
 The properties included in NPAMLP consist primarily of regional shopping centers or malls with national retailers as anchor tenants.  The ownership and operations of these properties have been combined in NPAMLP.
 
 The financial statements include the accounts of partnerships that contributed their interests to NPAMLP and certain partnerships whose partnership interests were not contributed as of the effective date of NPAMLP’s formation on January 1, 1990, but were allocated their interests in NPAMLP as if their partnership interests had been contributed on January 1, 1990.
 
 Note 3:   Related Party Transactions
 
 Management fees, leasing commissions and certain administrative services, including legal fees are paid to EBL&S Property Management, Inc (“EBL&S”), which is owned entirely by E&H Properties, Inc (“E&H”), a corporation owned and controlled by Edward B. Lipkin (“Lipkin”), a related party.  Management fees are paid exclusively to EBL&S and are included in Management fees in the Combined Condensed Statements of Operations.  Leasing commissions are deferred over the life of their respective leases and are included in Accounts receivable and other assets on the Combined Condensed Balance Sheet at March 31, 2011. Certain administrative services, including legal fees, are reimbursed to EBL&S and are included in General and administrative expense on the Combined Condensed Statements of Operations. National Property Analysts Employee Partnership (“NPAEP”) holds the Wraparound mortgages payable.  Lipkin controls NPAEP, which owns 100% of the outstanding balance of the Wraparound mortgages payable.  Due to NPAEP, unamortized discount and interest expense are all financial statement accounts that relate directly to the Wraparound mortgages payable.  Other borrowings represent amounts due to E&H Properties of Delaware, Inc, (“EHD”), an affiliate of E&H, and controlled by Lipkin.  Included within Accounts payable and other liabilities are $2,636 and $2,608 due EBL&S at March 31, 2011 and December 31, 2010, respectively.
 
 As of March 31, 2011, NPAMLP had an outstanding line of credit (the “NPAMLP Line”) with EHD, under which EHD has agreed to advance up to $2,500 to NPAMLP for the purposes of making capital and tenant improvements to the properties.  The line bears interest at a variable rate, based on the prime rate (3.25% at March 31, 2011), and expires in May 2011.  Any amounts advanced to NPAMLP are not directly secured by any collateral. Pursuant to the terms of the NPAMLP Line, the obligation of EHD to make advances to NPAMLP is at all times in the sole and absolute discretion of EHD.  As of March 31, 2011, there were $194 of advances and $134 of related accrued interest due under the NPAMLP Line.
  4
 
 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 Notes to Combined Condensed Financial Statements (Unaudited)
 March 31, 2011
 (dollars in thousands)
  In October 2007, NPAEP acquired from the unrelated third party owners, approximately 82% of the undivided interest in one of  the parcels in Marquette, Michigan that is ground leased by NPAMLP. The terms of the ground lease were unchanged. As a result of the purchase, NPAEP receives $18 annually in ground rental payments from NPAMLP.
 
 Note 4:   Major Tenants
 
 NPAMLP’s primary anchor tenants are Sun Microsystems (the tenant at the tenant-in-common property), Sears Holdings Corporation and its subsidiaries (“Sears”) and CVS Corporation (“CVS”).  The number of locations, gross leasable area (“GLA”) and percentage of minimum rent for these tenants for the three-month period ended March 31, 2011 and 2010 are detailed in the table below.  As of March 31, 2011, Sears had outstanding balances on 5 of its 6 locations, totaling $213.  Of this amount, $211 was for annual lump-sum real estate tax invoices for four Sears locations, billed during the first quarter of 2011.  Neither Sun Microsystems nor CVS had outstanding balances due under any leases with NPAMLP.
  As of March 31, 2011


As of March 31, 2010Tenant

No. of

Locations


GLA


% of

Minimum

Rent


No. of

Locations


GLA


% of

Minimum

RentSun Microsystems


1



249,832



26
%


1



249,832



24
%Sears


6



619,120



17
%


6



619,120



18
%CVS


5



56,770



15
%


5



56,770



14
%
 
 Note 5:   Future Interest Agreement
 
 In March 2003, NPAMLP, NPAEP and PVPG, entered into an Agreement, effective as of January 1, 2003 (the “2003 Agreement”), in which NPAEP and PVPG agreed with NPAMLP to modify the terms of Wrap Mortgages held by NPAEP and PVPG.  The terms of the 2003 Agreement provided that NPAEP and PVPG: (a) reduce to 4.1% per year the annual interest rate payable on any NPAEP Wrap Note or PVPG Wrap Note that bears a stated annual interest rate in excess of that amount (the reduction in the interest rate was evaluated by NPAMLP in accordance with FASB authoritative guidance, and was determined not to be a substantial modification of terms as defined therein); (b) remove certain of the properties secured by the NPAEP and PVPG Wrap Mortgages from the burden of the cross-default and cross-collateralization provisions currently contemplated by the Restructuring Agreement effective as of January 1, 1990 by and among MLPG, NPAMLP, National Property Analysts, Inc. and others; and (c) agree to release the lienof the Wrap Mortgages from the Properties upon a sale of or the agreement of a leasehold estate in any Property prior to the maturity of the applicable Wrap Note.  In consideration for the above, NPAMLP modified the NPAEP Wrap Mortgages and the PVPG Wrap Mortgages to provide that (i) there is an event of default under the applicable NPAEP Wrap Mortgages or PVPG Wrap Mortgages, as the case may be, if a judgment or other lien isentered against the title or lease-holding entity thereby entitling NPAEP or PVPG, as the case may be, to avail itself of the post-default rights or remedies under the relevant security document; and (ii) for cross-default and cross-collateralization among certain partnerships comprising NPAMLP.  In addition NPAMLP shall execute and deliver to NPAEP or PVPG, as the case may be, a currently recordable deed of future interest (or assignment of future leasehold interest) sufficient to convey to NPAEP or PVPG, as the case may be, all of NPAMLP’s right, title, interest and estate in and to its fee or leasehold interest in the encumbered properties effective upon the maturity on December 31, 2013 of the NPAEP Wrap Mortgages and the PVPG Wrap Mortgages unless the Wrap Mortgages have previously been paid in full.
 
 5
 
 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 Notes to Combined Condensed Financial Statements (Unaudited)
 March 31, 2011
 (dollars in thousands)
 
 The Managing General Partner believes that the execution and delivery of the 2003 Agreement has had the following effects for NPAMLP as a result of the reduction in the annual interest rate on the NPAEP Wrap Notes and The PVPG Wrap Notes (i) NPAMLP has realized reductions in interest that it otherwise would have been obligated to pay during the period between January 1, 2003 and December 31, 2013 when these loans mature and (ii) NPAMLP will be able to allocate a greater portion of its available cash flow to principal repayments.  As a result of the faster repayment of principal, the Limited Partners will recognize additional taxable income (or smaller tax losses) in each year from 2003 until the maturity of the NPAEP Wrap Mortgages and the PVPG Wrap Mortgages.  In addition, the anticipated date of dissolution of NPAMLP will now occur in 2013 rather than 2015.  Further, because the reduced interest rate is below the Applicable Federal Rate (“AFR”) prescribed under Section 1274, Internal Revenue Code of 1986, as amended, investors in certain Partnerships recognized non-recurring ordinary income (forgiveness of indebtedness) in 2003.  The tax impact of this recognition depended upon numerous factors related to each investor’s particular tax situation, including his marginal tax rate and his suspended passive losses from prior years.
 
 The Wrap Mortgages owned by NPAEP or PVPG are due and payable in substantial “balloon” amounts on December 31, 2013.  Assuming no sales of Properties by NPAMLP in the interim period (2011 through 2013) the projected balance due for all of the Wrap Mortgages at December 31, 2013 is expected to approximate $109,000.  As described above, in return for the reduction in interest rate and other consideration set forth above, including the satisfaction of the Wrap Mortgages due on December 31, 2013, NPAMLP’s Managing General Partner has agreed to deliver deeds of future interest and assignments of leasehold interest, to be recorded currently, effective December 31, 2013, to NPAEP and PVPG.  NPAMLP’s Managing General Partner has determined that it is in the best interests of NPAMLP and its partners to do so.  The effect of these deeds and assignments will be to facilitate a transfer of fee and leasehold ownership to the holders of the Wrap Mortgages at maturity (unless the Wrap Mortgages have been previously paid in full).  Notwithstanding the foregoing, NPAEP and PVPG have agreed in the 2003 Agreement to (a) release the liens of the Wrap Mortgages and (b) deliver such deeds of future interest, assignments of leasehold interests, or other documents or instruments as are necessary to facilitate or effect such sales of the Properties prior to December 31, 2013 as the Managing General Partner shall otherwise deem desirable.  The costs incurred arising from the recordation of any of the documents described in the 2003 Agreement shall be borne by NPAEP or PVPG, as the case may be.  The Managing General Partner believes that the result of the forgoing actions taken pursuant to the 2003 Agreement will preserve all rights of the Limited Partners under the Restructuring Agreement, including their right to share in certain sales proceeds or cash flows prior to maturity of the Wrap Mortgages.
 
 Note 6:  Commitments and Contingencies
 
 In June 2006, NPAMLP and a limited liability company controlled by Lipkin (ARJAX) entered into an agreement with an anchor tenant (the “Agreement”), whereby the lease with the anchor tenant would be assigned to NPAMLP or ARJAX effective February 2009 (the “Effective Date”).  In June 2008, the Agreement was amended extending the Effective Date to January 31, 2011. In December 2010, the Agreement was further amended extending the Effective Date to February 28, 2014.  In consideration for the assignment, the anchor tenant would receive payments totaling $2,550 during the period from June 2006 through the Effective Date.  To date, ARJAX has remitted $1,400 to the anchor tenant in accordance with the terms of the Agreement. In addition, the anchor tenant will be obligated to complete, by the Effective Date, $500 in repairs or improvements which would otherwise be the responsibility of NPAMLP to six other stores leased from NPAMLP. Under the Agreement, the commitment to the anchor tenant is borne by ARJAX and NPAMLP, however it is anticipated that ARJAX shall fund all of the consideration due. In September 2006, NPAMLP sold the property encumbered by the affected anchor tenant lease to ARJAX.  NPAMLP would be liable for the payments required under the Agreement should ARJAX fail to do so.  Lipkin has personally guaranteed the obligations to the anchor tenant under the Agreement.
 
 As of March 31, 2011, NPAMLP was not obligated for any capital commitments within its property portfolio.
  6
 
 NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 Notes to Combined Condensed Financial Statements (Unaudited)
 March 31, 2011
 (dollars in thousands)
 
 Note 7:  Recent Accounting Pronouncements
 
 In January 2011, the FASB issued ASU No. 2011-01 ("ASC Update 2011-01"), Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20.This ASU temporarily delays the effective date for public entities of thedisclosures about troubled debt restructurings (TDRs)in ASU No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.Currently, that guidance is anticipated to be effective for interim and annual periods ending after June 15, 2011.  NPAMLP hasdetermined that this ASU will not have a material impact on its financial statements.
 
 Note 8:  Disclosure of Fair Value of Financial Instruments
 
 In addition to the disclosures in Note 9 for assets which are recorded at fair value, GAAP also requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. The following disclosure of estimated fair value was determined by NPAMLP using available market information and appropriate valuation methodologies.  However, considerable judgment is necessary to interpret market data and develop estimated fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amounts NPAMLP could realize on disposition of the financial instruments at March 31, 2011and December 31, 2010.  The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
 
 Cash equivalents, receivables, accounts payable, accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values due to their short term nature as of March 31, 2011 and December 31, 2010. Investment securities available for sale are carried at fair value and valued based on quoted market prices in an exchange and active markets.
 
 The fair value of the NPAMLP’s wraparound mortgages aggregate approximately $112 million and $111 million at March 31, 2011 and December 31, 2010, respectively.  Management estimates that the carrying value approximates the estimated fair value of the wraparound mortgages at March 31, 2011 and December 31, 2010.  In accordance with FASB authoritative guidance, NPAMLP has determined the estimated fair value of its wraparound mortgages based on discounted future cash flows at a current market rate.  Disclosure about fair value of financial instruments is based on pertinent information available to management as of March 31, 2011 and December 31, 2010.  Although NPAMLP is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2010 and current estimates of fair value may differ significantly from the amounts presented herein.
  7
  NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 Notes to Combined Condensed Financial Statements (Unaudited)
 March 31, 2011
 (dollars in thousands)
 
 Note 9:  Fair Value Measurements
 
 NPAMLP applies the guidance of the FASB regarding fair value measurements.   The guidance establishes a common definition for fair value to be applied to U.S. GAAP guidance requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.  This guidance does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements.
  The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
  ·
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
  ·
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
  ·
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions
  The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy:
  Level 1 Fair Value Measurements
  Mutual funds and common stock are valued based on quoted market prices in active markets, which represent the net asset values of shares held by NPAMLP at period end and are classified as Level 1 investments.
  Level 2 Fair Value Measurements
  There were no Level 2 inputs used in the valuation
  Level 3 Fair Value Measurements
  There were no Level 3 inputs used in the valuation.
 
 Fair Value Measurements at March 31, 2011

Using Fair Value HierarchyFair Value as of

March 31, 2011


Level 1


Level 2


Level 3Mutual funds

$
1,250


$
1,250


$
-


$
-Common stock


1,428



1,428



-



-Investment securities available for sale

$
2,678


$
2,678


$
-


$
-Fair Value Measurements at December 31, 2010

Using Fair Value HierarchyFair Value as of

December 31, 2010


Level 1


Level 2


Level 3Mutual funds

$
2,026


$
2,026


$
-


$
-Common stock


1,195



1,195



-



-Investment securities available for sale

$
3,221


$
3,221


$
-


$
-
  8
  NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 March 31, 2011
 (dollars in thousands)
  Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 Liquidity and Capital Resources
 
 Net cash provided by operating and investing activities for the three-month period ended March 31, 2011 was $1,586 and $493, respectively.  The primary sources of cash were operating activities and the sale of investment securities.  Net cash used in financing activities was $2,026.  The primary uses of cash were the purchase of investment securities and payments on wraparound mortgages.  As a result of the above, there was a $53 increase in cash and cash equivalents for the three months ended March 31, 2011.
 
 As of March 31, 2011, NPAMLP had an outstanding line of credit (the “NPAMLP Line”) with EHD, a related party, under which EHD has agreed to advance up to $2,500 to NPAMLP for the purposes of making capital and tenant improvements to the properties.  The line bears interest at a variable rate, based on the prime rate (3.25% at March 31, 2011), and expires in May 2011.  Although there is no assurance that an extension will be granted, NPAMLP anticipates that the NPAMLP Line will be extended by EHD. Any amounts advanced to NPAMLP are not directly secured by any collateral. Pursuant to the terms of the NPAMLP Line, the obligation of EHD to make advances to NPAMLP is at all times in the sole and absolute discretion of EHD.  As of March 31, 2011, there were $194 of advances and $134 of related accrued interest under the NPAMLP Line.
 
 As of March 31, 2011, the third party underlying mortgages were current for all the properties.
 
 As of March 31, 2011, NPAMLP was not obligated for any capital commitments within its property portfolio.
 
 Critical Accounting Policies
 
 There were no significant changes to NPAMLP’s critical accounting policies and estimates during the three-month period ended March 31, 2011.
  Results of Operations
 
 NPAMLP owned 24 properties at March 31, 2011 and 2010.
 
 The loss from continuing operations for the three-month period ended March 31, 2011 versus March 31, 2010, increased by $554.  The increase in the loss from continuing operations was primarily due to an increase in interest expense, and loss of the anchor tenant at the Kalamazoo, Michigan property.  The increase in interest expense for the three-month period ended March 31, 2011 versus March 31, 2010 was $224, and is consistent with an increase in the balance of the wraparound mortgages, net of the unamortized discount, as the amortization of the discount was greater than the principal reduction on wraparound mortgages payable for the three-month period ending March 31, 2011. The anchor tenant’s lease at the Kalamazoo, Michigan property ended on February 28, 2010, resulting in a reduction in rental income for the three-month period ended March 31, 2011 of $41 vs. the corresponding period in 2010.  NPAMLP is actively marketing this vacant space to major regional and national retailers.  In addition, in order to prepare the vacant anchor space in Kalamazoo for a new tenant, NPAMLP is in the process of removing any asbestos containing material from the tenant space. As a result NPAMLP has incurred $55 in such removal costs in the three-month period ending March 31, 2011 which are included in Repairs and maintenance in the Combined Condensed Statement of Operations. During the first quarter of 2011, NPAMLP ceased operation of the antique mall located in the North Augusta, South Carolina property. The closing of this store resulted in a reduction in minimum rent for the three-month period ended March 31, 2011 of $88.
  9
  NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 March 31, 2011
 (dollars in thousands)
 
 Factors That May Influence Future Results of Operations
 
 Economic Conditions.    In the United States, recent market and economic conditions have resulted in tighter credit conditions and limited growth through the first quarter of 2011.  As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets. Concern about the stability of the markets has led many lenders and institutional investors to reduce, and in some cases, cease to provide funding to borrowers. Since there are no balloon payments due on the third party underlying mortgages until 2012, NPAMLP has less exposure to these credit conditions. Continued turbulence in the U.S. and international markets and economies may adversely affect the liquidity and financial condition of our tenants and consequently, NPAMLP’s liquidity. If these market conditions continue, they may limit the ability of our tenants, to timely refinance maturing liabilities and access the capital markets to meet liquidity needs.
 
 Real Estate Asset Valuation.    General economic conditions and the resulting impact on market conditions or a downturn in tenants’ businesses may adversely affect the value of NPAMLP’s assets. Periods of economic slowdown or recession in the U.S., a decrease in market rental rates and/or market values of real estate assets, could have a negative impact on the value of NPAMLP properties and related tenant improvements.  If NPAMLP was required under Generally Accepted Accounting Pronouncements to write down the carrying value of any properties to the lower of cost or market due to impairment, or if as a result of an early lease termination we were required to remove and dispose of material amounts of tenant improvements that are not reusable to another tenant, NPAMLP’s results of operations would be negatively affected.
 
 Leasing Activity and Rental Rates.     The amount of net rental income generated by NPAMLP properties depends principally on the ability to maintain the occupancy rates of currently leased space and to lease currently available space, and space available from unscheduled lease terminations. The amount of rental income generated also depends on the ability to maintain or increase rental rates at the properties. Negative trends in one or more of these factors could adversely affect rental income in future periods.
 
 Forward Looking Statements
 
 From time to time, management may provide information, whether orally or in writing, including certain statements in this Quarterly Report on Form 10-Q, which are deemed to be “forward-looking” within the meaning of the federal securities laws.  These forward-looking statements reflect management’s current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties and other factors outside management’s control that may cause actual results to differ materially from those projected.
 
 The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such statements reflect management’s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended or using other similar expressions. Management does not intend to update these forward-looking statements, except as required by law. In accordance with the provisions of the federal securities laws, we are making the limited partners aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated by the forward-looking statements contained in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K and any exhibits hereto or thereto. Such factors include, but are not limited to: the outcome of litigation and regulatory proceedings to which NPAMLP may be a party; actions of competitors; changes and developments affecting our industry; quarterly or cyclical variations in financial results; the ability to attract and retain tenants at market rates; interest rates and cost of borrowing; management’s ability to maintain and improve cost efficiency of operations; changes in economic conditions, political conditions, and other factors that are set forth in the “Legal Proceedings” section, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other sections of this Quarterly Report on Form 10-Q, as well as in our Annual Report on Form 10-K and Current Reports on Form 8-K.
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  NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
 (a limited partnership)
 
 March 31, 2011
 (dollars in thousands)
  Item 3.  Quantitative and Qualitative Disclosures About Market Risk
 
 Not applicable.
 
 Item 4.  Controls and Procedures
 
 NPAMLP’s managing general partner, equity general partner and its agent’s chief financial officer, after evaluating the effectiveness of the design and operation of NPAMLP’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this quarterly report, have concluded, based on the evaluation of these controls and procedures required by paragraph (b) of the Exchange Act Rules 13a-15 or 15d-15, that NPAMLP’s disclosure controls and procedures were effective for the three month period ending March 31, 2011.  Disclosure controls and procedures ensure that information to be disclosed in reports that the NPAMLP files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and terms of the Securities and Exchange Commission, and ensure that information required to be disclosed in the reports that NPAMLP files or submits under the Exchange Act is accumulated and communicated to  NPAMLP's management, including its managing general partner, equity general partner and its agent's chief financial officer, to allow timely decisions regarding required disclosure.
 
 There were no changes in NPAMLP’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during NPAMLP’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, NPAMLP’s internal control over financial reporting.
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  PART II - OTHER INFORMATION
  Item 1.  Legal Proceedings
 
 NPAMLP is involved in various claims and legal actions arising in the ordinary course of property operations.  In the opinion of the General Partners, the ultimate disposition of these matters will not have a material adverse effect on NPAMLP's financial position, results of operations or liquidity.
 
 In 2005 NPAMLP sold the property in Ardmore, Oklahoma to an unrelated third party.  In connection with this sale, NPAMLP accepted a $480,000 promissory note in consideration of a portion of the sale price. The note was due in October 2010. In October 2010 NPAMLP filed suit to collect the balance due. The obligor of this note has challenged the legality of the note and has not made any required payments of principal or interest since September 2010. NPAMLP is vigorously pursuing this matter and will attempt to ultimately collect the full balance due on this note. NPAMLP has recognized a provision for bad debt for this note receivable in the amount of $240,000 at March 31, 2011 and December 31, 2010, respectively.
  Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
  Not applicable.
  Item 3.  Defaults Upon Senior Securities
  Not applicable.
  Item 4.  Removed and reserved
  Not applicable.
 
 Item 5.  Other Information
 
 None.
 
 Item 6.  Exhibits
  Exhibit No.

Description31.1

Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.2

Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.3

Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.32.1

Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.32.2

Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.32.3

Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
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 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.
 
 National Property Analysts Master Limited Partnership(Registrant)Date:
May 16, 2011By:
EBL&S, Inc., its managing general partnerBy:
/s/ Edward B. LipkinName:
Edward B. LipkinTitle:
PresidentBy:
Feldman International, Inc., its equity general partnerBy:
/s/ Robert McKinneyName:
Robert McKinneyTitle:
President
 
 13