<PAGE>

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

                                  FORM 10-QSB

(Mark One)

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

              For the quarterly period ended September 30, 1998

                                      OR

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

           For the transition period from             to
                                          -----------    -----------

                        Commission file number 0-10404

                   Winthrop Partners 81 Limited Partnership
                   ----------------------------------------
       (Exact name of small business issuer as specified in its charter)

            Massachusetts                              04-2720480
--------------------------------------     ------------------------------------
  (State or other jurisdiction of          (I.R.S. Employer Identification No.)
   incorporation or organization)

 Five Cambridge Center, Cambridge, MA                  02142-1493
--------------------------------------     ------------------------------------
(Address of principal executive office)                (Zip Code)

       Registrant's telephone number, including area code (617) 234-3000

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

                                    1 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

                        PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements.

<TABLE>
<CAPTION>
Balance Sheets (Unaudited)

(In Thousands, Except Unit Data)
                                                             September 30,   December 31,
                                                                1998            1997
                                                               -------         -------
<S>                                                          <C>             <C>
Assets

Real Estate:

Accounted for under the operating method,
     at cost, net of accumulated depreciation of $906          $  --           $ 1,353
Accounted for under the operating method
     and held for sale                                             554            --
Accounted for under the financing method                          --               147
                                                               -------         -------

                                                                   554           1,500

Other Assets:

Cash and cash equivalents                                          557             518
Other assets                                                         5              21
                                                               -------         -------

         Total Assets                                          $ 1,116         $ 2,039
                                                               =======         =======

Liabilities and Partners' Capital

Liabilities:

Accounts payable and accrued expenses                          $     9         $    50
                                                               -------         -------

         Total Liabilities                                           9              50
                                                               -------         -------

Partners' Capital:

Limited Partners -

   Units of Limited Partnership Interest,
   $500 stated value per Unit; authorized-70,010 Units;
   issued and outstanding - 25,109 Units                         1,372           2,268
General Partners' Deficit                                         (265)           (279)
                                                               -------         -------

         Total Partners' Capital                                 1,107           1,989
                                                               -------         -------

         Total Liabilities and Partners' Capital               $ 1,116         $ 2,039
                                                               =======         =======
</TABLE>
                      See notes to financial statements.

                                    2 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
Statements of Income (Unaudited)

(In Thousands, Except Unit Data)
                                                               For The Three Months Ended    For The Nine Months Ended
                                                               September 30,   September 30,  September 30,  September 30,
                                                                   1998           1997           1998           1997
                                                                  ------         ------         ------         ------
<S>                                                            <C>            <C>             <C>            <C>
Income:

Rental income from real estate leases accounted
     for under the operating method                               $   27         $   11        $   77        $  117
Interest on short-term investments                                    17              7            40            19
Interest income on real estate leases accounted
     for under the financing method                                 --                4             2            12
Other income                                                          19           --              19           --
Gain on sale of building                                            --             --             967           --
                                                                  ------         ------        ------        ------

         Total income                                                 63            22          1,105           148
                                                                  ------        ------         ------        ------

Expenses:

Operating                                                           --            --               24          --
Depreciation                                                        --              12           --              36
Management fees                                                        1          --                1             2
General and administrative                                            21            19             52            55
                                                                  ------        ------         ------        ------

         Total expenses                                               22            31             77            93
                                                                  ------        ------         ------        ------

Net income (loss)                                                 $   41        $   (9)        $1,028        $   55
                                                                  ======        ======         ======        ======

Net income (loss) allocated to general partners                   $    3        $   (1)        $   14        $    4
                                                                  ======        ======         ======        ======

Net income (loss) allocated to limited partners                   $   38        $   (8)        $1,014        $   51
                                                                  ======        ======         ======        ======

Net income (loss) per Unit of Limited Partnership Interest        $ 1.51        $(0.32)        $40.38        $ 2.03
                                                                  ======        ======         ======        ======

Distributions per Unit of Limited Partnership Interest            $ --          $ --           $76.07        $ --
                                                                  ======        ======         ======        ======
</TABLE>
                      See notes to financial statements.

                                   3 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP

                        FORM 10-QSB SEPTEMBER 30, 1998

Statement of Partners' Capital (Unaudited)

(In Thousands, Except Unit Data)

                                Units of
                                Limited      General      Limited
                              Partnership   Partners'    Partners'      Total
                                Interest     Deficit      Capital      Capital
                                 -------     -------      -------      -------
Balance - January 1, 1998 ..      25,109     $  (279)     $ 2,268      $ 1,989

   Net income ..............                      14        1,014        1,028

   Distributions ...........                    --         (1,910)      (1,910)
                                 -------     -------      -------      -------

Balance - September 30, 1998      25,109     $  (265)     $ 1,372      $ 1,107
                                 =======     =======      =======      =======

                      See notes to financial statements.

                                    4 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
Statements of Cash Flows (Unaudited)

(In Thousands)
                                                             For The Nine Months Ended
                                                           September 30,    September 30,
                                                               1998             1997
                                                              -------          -------
<S>                                                        <C>              <C>
Cash Flows From Operating Activities:

Net income                                                    $ 1,028          $    55
Adjustments to reconcile net income to net cash
  provided by operating activities:

     Depreciation                                                --                 36
     Gain on sale of building                                    (967)            --

Changes in assets and liabilities:

     Decrease in other assets                                      16                2
     Decrease in accounts payable and
       accrued expenses                                           (41)             (29)
                                                              -------          -------

     Net cash provided by operating activities:                    36               64
                                                              -------          -------

Cash Flows From Investing Activities:

     Minimum lease payments received, net of interest
        income earned, on leases accounted for under
        the financing method                                        3               28
     Net proceeds from sale of property                         1,910             --
                                                              -------          -------

     Cash provided by investing activities                      1,913               28
                                                              -------          -------

Cash Flows From Financing Activities:

     Cash distributions                                        (1,910)            --
                                                              -------          -------

     Cash used in financing activities                         (1,910)            --
                                                              -------          -------

Net increase in cash and cash equivalents                          39               92

Cash and cash equivalents, beginning of period                    518              419
                                                              -------          -------

Cash and cash equivalents, end of period                      $   557          $   511
                                                              =======          =======
</TABLE>

Change in lease classification - see Note 4

                      See notes to financial statements.

                                    5 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

                         NOTES TO FINANCIAL STATEMENTS

1.        General

          The accompanying financial statements, footnotes and discussions
          should be read in conjunction with the financial statements, related
          footnotes and discussions contained in the Partnership's annual
          report on Form 10-KSB for the year ended December 31, 1997.

          The financial information contained herein is unaudited. In the
          opinion of management, all adjustments necessary for a fair
          presentation of such financial information have been included. All
          adjustments, except as discussed in Notes 3 and 4, are of a normal
          recurring nature. Certain reclassifications have been made to the
          June 30, 1998 amounts to conform to the September 30, 1998
          presentation. The balance sheet at December 31, 1997, was derived
          from audited financial statements at such date.

          The results of operations for the nine months ended September 30,
          1998 and 1997, are not indicative of the results to be expected for
          the full year.

2.        Related Party Transactions

          Management fees paid or accrued by the Partnership to an affiliate
          of the Managing General Partner, totaled $1,000 and $2,000 for the
          nine months ended September 30, 1998 and 1997, respectively.

3.        Sale of Property

          On May 21, 1998, the Partnership sold its Columbus, Ohio property
          (formerly leased to GTE North Incorporated) for $1,910,000 (net of
          closing costs of $93,000), resulting in a gain of $967,000.

4.        Significant Tenant

          The sole tenant at the Partnership's remaining property exercised an
          option to extend the term of its lease for five years, at an
          increase in rent of 8%. In accordance with Statement of Financial
          Accounting Standards No. 13, the lease was reclassified as an
          operating lease from a direct financing lease on renewal. The
          Partnership is currently marketing this property for sale and as a
          result no depreciation is being recorded.

                                    6 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

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

          The matters discussed in this Form 10-QSB contain certain
          forward-looking statements and involve risks and uncertainties
          (including changing market conditions, competitive and regulatory
          matters, etc.) detailed in the disclosure contained in this Form
          10-QSB and the other filings with the Securities and Exchange
          Commission made by the Partnership from time to time. The discussion
          of the Partnership's liquidity, capital resources and results of
          operations, including forward-looking statements pertaining to such
          matters, does not take into account the effects of any changes to
          the Partnership's operations. Accordingly, actual results could
          differ materially from those projected in the forward-looking
          statements as a result of a number of factors, including those
          identified herein.

          This Item should be read in conjunction with the financial
          statements and other items contained elsewhere in the report.

          Liquidity and Capital Resources

          The Partnership's remaining property is a retail store, which is
          leased to a single tenant pursuant to a triple net lease. The
          Partnership is currently marketing its remaining property for sale.
          If the Partnership is successful in obtaining a purchaser, the
          Partnership will be liquidated. The recently extended lease with
          Frank's Nursery and Crafts, Inc. expires in January 2003, subject to
          extension. The lease was extended during 1998 at an increase in rent
          of 8%. On May 21, 1998, the Partnership sold its Columbus, Ohio
          property, which was formerly leased to GTE North Incorporated (the
          "GTE Lease"), for $1,910,000 (net of closing costs of $93,000)
          resulting in a gain of $967,000 for financial reporting purposes.
          The Partnership distributed the net sale proceeds of $1,910,000
          ($76.07 per Unit) during August 1998 and has made no other
          distributions during 1997 or 1998.

          The Partnership receives rental income from its leased property
          which is its primary source of liquidity. Pursuant to the terms of
          the lease, the tenant is responsible for substantially all of the
          operating expenses with respect to the property including
          maintenance, capital improvements, insurance and taxes. The
          Partnership would be responsible for similar expenses if the
          property were not re-let upon the expiration of such lease.

          The level of liquidity based on cash and cash equivalents
          experienced a $39,000 increase at September 30, 1998, as compared to
          December 31, 1997. The Partnership's $36,000 of cash provided by
          operating activities and $1,913,000 of cash provided by investing
          activities was significantly offset by cash used in financing
          activities of $1,910,000. The Partnership received $1,910,000 of
          proceeds on the sale of its Columbus, Ohio property which were
          subsequently distributed. At September 30, 1998, the Partnership had
          approximately $557,000 in cash and cash equivalents which has been
          invested primarily in money market mutual funds.

                                    7 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

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

          Liquidity and Capital Resources (Continued)

          The Partnership requires cash primarily to pay general and
          administrative expenses. In addition, if the Partnership is unable
          to sell its remaining property prior to its lease expiration, extend
          the current lease or re-let the property upon the expiration of the
          lease terms, the Partnership would be responsible for operating
          expenses, such as real estate taxes, insurance and utility expenses
          associated with the property.

          Results of Operations

          Net income increased by $973,000 for the nine months ended September
          30, 1998, as compared to 1997, due to the gain of $967,000 on the
          sale of the Columbus, Ohio property.

          Revenues, excluding the gain on sale, decreased for the nine months
          ended September 30, 1998, as compared to 1997, primarily due to the
          expiration of the GTE Lease in April 1997. For the three months
          ended September 30, 1998, as compared to 1997, revenues increased by
          $41,000, primarily due to increases in rental income of $16,000,
          interest income on short-term investments of $10,000 and other
          income of $19,000. Rental income increased due to the recently
          extended lease with Frank's Nursery and Crafts, Inc., which was
          reclassified as an operating lease from a direct financing lease on
          renewal. Interest on short-term investments increased due to the net
          proceeds received from the sale of the property. Expenses declined
          by $16,000, for the nine months ended September 30, 1998, as
          compared to 1997, due to decreases in depreciation expense of
          $36,000, management fees of $1,000 and general and administrative
          expense of $3,000, which were only partially offset by $24,000 of
          operating costs associated with the Columbus, Ohio property, which
          was vacant prior to its sale. Depreciation expense declined due to
          the Partnership not recording depreciation on the Columbus, Ohio
          property during 1998, as a result of the Partnership marketing the
          property for sale.

                                    8 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

Part II - Other Information

Item 6.   Exhibits and Reports on Form 8-K.

          (a) Exhibits

              27. Financial Data Schedule

              99. Supplementary Information Required Pursuant to Section 9.4
                  of the Partnership Agreement.

          (b) Reports on Form 8-K:

              No reports on Form 8-K were filed during the three months ended
              September 30, 1998.

                                    9 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

                                  SIGNATURES

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

                    WINTHROP PARTNERS 81 LIMITED PARTNERSHIP

                    BY:    ONE WINTHROP PROPERTIES, INC.
                           Managing General Partner

                           BY:   /s/ Michael L. Ashner
                                 -------------------------------------
                                 Michael L. Ashner
                                 Chief Executive Officer and Director

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

                                 Dated: November 6, 1998

                                   10 of 12

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                   WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
                        FORM 10-QSB SEPTEMBER 30, 1998

Exhibit Index

     Exhibit                                                         Page No.
      -------                                                         --------

27.   Financial Data Schedule                                             -

99.   Supplementary Information Required Pursuant to
      Section 9.4 of the Partnership Agreement.                          12

                                   11 of 12