UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

For the quarterly period ended      September 30, 1996

                                                            OR

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

For the transition period from               to               .

Commission File Number              33-15427

                   Retail Equity Partners Limited Partnership
             (Exact name of registrant as specified in its charter)


     North Carolina                                56-1590235
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

              3710 One First Union Center, Charlotte, NC 28202-6032
                    (Address of principal executive offices)
                                   (Zip Code)

                                  704/333-1367
              (Registrant's telephone number, including area code)


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








                                                Total number of pages:  11

                                       1
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
  Item No.                                                                              Page No.

  <S>          <C>                                                                         <C>
                PART I - Financial Information
   1            Financial Statements                                                        3
   2            Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                                   8

                PART II - Other Information
   6            Exhibits and Reports on Form 8-K                                            9
</TABLE>


                                       2
<PAGE>


                                     PART I

Item 1. Financial Statements

RETAIL EQUITY PARTNERS LIMITED PARTNERSHIP
------------------------------------------------------------------------------
Consolidated Balance Sheets
<TABLE>
<CAPTION>


                                                                                   September 30,    December 31,
                                                                                       1996             1995
                                                                                 ---------------- ----------------
                                                                                    (Unaudited)
<S>                                                                              <C>              <C> 
Assets
Investments in shopping centers:
   Land                                                                           $    2,094,634   $    2,094,634
   Buildings and improvements                                                          5,795,381        5,769,651
   Personal property                                                                      32,181           32,181
                                                                                 ---------------- ----------------
                                                                                       7,922,196        7,896,466
   Less accumulated depreciation                                                      (1,653,138)      (1,520,349)
                                                                                 ---------------- ----------------
                                                                                       6,269,058        6,376,117
New Market Square Shopping Center                                                              -        6,363,530
Cash and cash equivalents                                                                117,675           16,467
Restricted cash - tenant security deposits                                                25,305           32,695
Accounts receivable, net                                                                  43,130          113,140
Prepaids and other assets                                                                 67,926           47,507
Deferred financing costs, net                                                             33,779           79,938
                                                                                 ---------------- ----------------

         Total assets                                                             $    6,556,873   $   13,029,394
                                                                                 ================ ================

Liabilities and Partners' Equity
Mortgage notes payable                                                            $    6,889,314   $    6,931,348
Mortgage loan and accrued interest payable - New Market
     Square Shopping Center                                                                    -        5,909,756
Trade accounts payable and accrued expenses                                               46,040           31,905
Amounts due to general partner                                                                 -                -
Accrued interest payable                                                                  53,429           53,429
Escrowed security deposits and deferred revenue                                           22,898           33,852
Advances and accrued interest due to affiliates                                                -           80,846
                                                                                 ---------------- ----------------
      Total liabilities                                                                7,011,681       13,041,136
                                                                                 ---------------- ----------------

Partners' equity (deficit):
   Limited partners                                                                     (387,516)          54,099
   General partner                                                                       (67,292)         (65,841)
                                                                                 ---------------- ----------------
      Total partners' equity                                                            (454,808)         (11,742)
                                                                                 ---------------- ----------------
         Total liabilities and partners' equity                                   $    6,556,873   $   13,029,394
                                                                                 ================ ================

</TABLE>

                                       3
<PAGE>



RETAIL EQUITY PARTNERS LIMITED PARTNERSHIP
------------------------------------------------------------------------------
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>

                                                      Three months ended                 Nine months ended
                                                         September 30,                     September 30,
                                                    1996             1995              1996             1995
                                               --------------- ----------------  ---------------- ----------------
<S>                                             <C>              <C>               <C>              <C>
Revenue
Rental revenue                                   $    254,626     $    387,072      $    825,278     $  1,182,913
Interest and other income                               3,211            2,755            10,363           90,881
                                               --------------- ----------------  ---------------- ----------------
                                                      257,837          389,827           835,641        1,273,794
                                               --------------- ----------------  ---------------- ----------------

Expenses
Property operations                                    27,485           58,658           121,263          156,997
General and administrative expense                     10,974            4,593            46,127           51,626
Property taxes and insurance                           24,912           41,082            81,240          123,090
Property management fees                                7,253           11,686            27,194           39,461
Depreciation                                           44,259           97,810           132,789          294,102
Amortization                                            4,803            7,972            15,997           23,916
Interest                                              159,537          294,718           537,405          856,337
Provision for estimated loss on sale
   of New Market Square                                     -                -            18,707                -
                                               --------------- ----------------  ---------------- ----------------
                                                      279,223          516,519           980,722        1,545,529
                                               --------------- ----------------  ---------------- ----------------
Net loss                                         $    (21,386)    $   (126,692)     $   (145,081)    $   (271,735)
                                               =============== ================  ================ ================

Net loss allocated to
   limited partners (99%)                        $    (21,172)    $   (125,425)     $   (143,630)    $   (269,018)
                                               =============== ================  ================ ================
Net loss allocated to
   general partner (1%)                          $       (214)    $     (1,267)     $     (1,451)    $     (2,717)
                                               =============== ================  ================ ================

Net loss per limited
   partnership unit                              $      (0.06)    $      (0.38)     $      (0.43)    $      (0.81)
                                               =============== ================  ================ ================

Weighted average number of
   limited partnership units outstanding              333,577          333,577           333,577          333,577
                                               =============== ================  ================ ================
</TABLE>


                                       4
<PAGE>


RETAIL EQUITY PARTNERS LIMITED PARTNERSHIP
------------------------------------------------------------------------------
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>

                                                                                         Nine months ended
                                                                                           September 30,
                                                                                       1996             1995
                                                                                 ---------------- ----------------
<S>                                                                               <C>              <C>
Cash flows from operating activities
Net loss                                                                           $    (145,081)   $    (271,735)
Adjustments to reconcile net income to
   net cash provided by operating activities:
   Depreciation and amortization                                                         148,786          318,018
   Write-off of deferred costs at sale of New Market Square                               18,576                -
   Changes in operating assets and liabilities:
      Rent and other receivables                                                          70,010           60,759
      Prepaid expenses and other assets                                                  (31,833)         (59,924)
      Accounts payable and accrued expenses                                               (6,858)          21,321
      Escrowed security deposits and deferred revenue                                     (3,564)          (7,338)
                                                                                 ---------------- ----------------
Net cash provided by operating activities                                                 50,036           61,101
                                                                                 ---------------- ----------------

Cash flows from investing activities
Proceeds from sale of New Market Square                                                6,363,530                -
Additions to properties                                                                  (25,730)               -
                                                                                 ---------------- ----------------
Net cash provided by investing activities                                              6,337,800                -
                                                                                 ---------------- ----------------


Cash flows from financing activities
Advances from (repayments to) general partner                                            (80,846)          42,000
Principal payments on notes payable                                                   (5,907,797)        (208,687)
Distribution to limited partners                                                        (297,985)               -
                                                                                 ---------------- ----------------
Net cash used in financing activities                                                 (6,286,628)        (166,687)
                                                                                 ---------------- ----------------

Increase (decrease) in cash and cash equivalents                                         101,208         (105,586)
 Cash and cash equivalents at beginning of period                                         16,467          149,639
                                                                                 ---------------- ----------------

Cash and cash equivalents at end of period                                         $     117,675    $      44,053
                                                                                 ================ ================
</TABLE>

                                       5
<PAGE>


RETAIL EQUITY PARTNERS LIMITED PARTNERSHIP
------------------------------------------------------------------------------
Notes to Financial Statements - September 30, 1996
(Unaudited)

Note 1.  Interim financial statements

The  accompanying   financial  statements  of  Retail  Equity  Partners  Limited
Partnership   (the   "Partnership")   have  not  been  audited  by   independent
accountants,  except for the  balance  sheet at  December  31,  1995,  which was
derived from the financial  statements included in the Partnership's 1995 Annual
Report  on Form  10-K.  In the  opinion  of the  Partnership's  management,  all
adjustments  (consisting  of normal  recurring  accruals)  necessary  for a fair
presentation of the financial position and results of operations for the periods
presented have been included.

Certain  notes and other  information  have been  condensed  or omitted from the
interim  financial  statements  presented in this Quarterly Report on Form 10-Q.
Therefore,  these financial  statements  should be read in conjunction  with the
Partnership's  1995 Annual  Report on Form 10-K and  Current  Report on Form 8-K
dated February 8, 1996.

The results for the first three quarters of 1996 are not necessarily  indicative
of future financial results.

Note 2.  New Market Square Shopping Center

The New Market Square  Shopping  Center  property was sold to an unrelated third
party on February 8, 1996, for a contract price of $6,558,000.  Estimated direct
costs of the sale total approximately  $214,000.  Carrying value of these assets
at December 31, 1995, was as follows:
<TABLE>
<S>                                                               <C>
Land                                                               $1,459,445
Buildings and improvements                                          7,018,876
Personal property                                                      33,134
                                                                -------------
                                                                    8,511,455
Less -   Accumulated depreciation                                  (1,637,925)
         Reserve for writedown to net realizable value               (510,000)
                                                                 ------------
                                                                   $6,363,530
</TABLE>

New Market Square Limited Partnership was dissolved effective July 31, 1996. The
consolidated  statements  of  operations  for the  three and nine  months  ended
September 30, 1996 and 1995, include the operations of New Market Square Limited
Partnership and its shopping center, New Market Square Shopping Center.

Results of operations of New Market Square Limited Partnership for these periods
were as follows:

                                       6
<PAGE>

<TABLE>
<CAPTION>

                                                     Three months ended                  Nine months ended
                                                       September 30,                       September 30,
                                                   1996             1995              1996              1995
                                                ------------- ------------------  ---------------- -----------------
<S>                                             <C>             <C>               <C>               <C> 
Rental Revenue                                   $    2,250      $    149,869      $     63,430      $    461,005
Interest and other income                                85               830             4,407            85,590
                                                ------------- ------------------  ---------------- -----------------
     Total revenue                                    2,335           150,699            67,837           546,595
                                                ------------- ------------------  ---------------- -----------------

Property operations, taxes, and insurance                 -            37,853            25,726           118,754
General and administrative expense                       40               569             1,665            22,722
Property management fees                                  -             4,495             3,831            17,143
Depreciation                                              -            53,529                 -           160,949
Amortization                                              -             3,175             1,588             9,525
Interest                                                  -           133,919            57,822           373,053
Provision for loss on sale of shopping center             -                 -            18,707                 -
                                                ------------- ------------------  ---------------- -----------------
      Total expenses                                     40           233,540           109,339           702,146
                                                ------------- ------------------  ---------------- -----------------

      Net income (loss)                         $     2,295     $     (82,841)     $    (41,502)     $   (155,551)
                                                ============= ==================  ================ =================

</TABLE>

                                       7
<PAGE>

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

This  discussion  contains   forward-looking   statements   including,   without
limitation,  statements  relating to development  activities of the  Partnership
within the meaning of federal securities laws. Although management believes that
the  expectations  reflected  in such  forward-looking  statements  are based on
reasonable  assumptions,  there are  certain  factors  such as general  economic
conditions, local real estate conditions, or weather conditions that might cause
a difference between actual results and those forward-looking statements.

Overview

Retail  Equity  Partners  Limited  Partnership  (the  "Partnership")  is a North
Carolina limited  partnership formed to acquire,  hold, operate and manage three
neighborhood  shopping  centers.  In October,  1991 the  ownership of one of the
shopping  centers was  transferred  to a newly  formed  partnership,  New Market
Square Limited Partnership ("NMSLP").  The Partnership has been the sole general
partner and held a 99.99 percent  interest in NMSLP. In February 1996 New Market
Square Shopping Center was sold to an unaffiliated party.

The  following  discussion  should  be read in  conjunction  with the  financial
statements and notes thereto included in this Quarterly Report on Form 10-Q, the
Partnership's  Current  Report  on Form 8-K  dated  February  8,  1996,  and the
Partnership's  audited  financial  statements and notes thereto  included in the
Partnership's 1995 Annual Report on Form 10-K.

Results of Operations

Effective  February 8, 1996,  the  Partnership  sold New Market Square  Shopping
Center ("NMS") to an unaffiliated  party for a contract price of $6,558,000.  At
December  31,  1995,  the  Partnership  had  recorded a reserve of $510,000  for
writedown of NMS to estimated net realizable value. During first quarter of 1996
the  Partnership  recorded  an  additional  provision  for  loss on the  sale of
approximately $19,000. NMSLP was dissolved effective July 31, 1996.

The  consolidated  statements of operations  for the three and nine months ended
September 30, 1996 include the  operations  of NMSLP.  Decreases in revenues and
expenses in 1996 compared to 1995 generally reflect the effect of sale of NMS in
early  February.  Summary  operating  results of Cape Henry Plaza and Plaza West
shopping centers are as follows:
<TABLE>
<CAPTION>

                                                 Three months ended                Nine months ended
                                                   September 30,                     September 30,
                                                1996            1995             1996             1995
                                            ------------- ------------------ ---------------- ----------------
<S>                                         <C>             <C>              <C>              <C>
Revenues                                     $   255,502     $   239,128      $   767,804      $   727,199
                                            ------------- ------------------ ---------------- ----------------
Expenses:
Property Operations                               59,650          69,078          200,140          183,651
General and administrative expense                10,934           4,024           44,462           28,904
Depreciation and amortization                     49,062          49,078          147,198          147,544
Interest                                         159,537         160,799          479,583          483,284
                                            ------------- ------------------ ---------------- ----------------
                                                 279,183         282,979          871,383          843,383
                                            ============= ================== ================ ================
      Net loss                               $   (23,681)    $   (43,851)     $  (103,579)     $  (116,184)
                                            ============= ================== ================ ================
</TABLE>

Both Plaza West and Cape Henry Plaza shopping  centers were 100 percent occupied
throughout  third quarter  1996,  compared to 100 percent and  approximately  94
percent,   respectively,   in  third  quarter  1995.  Fluctuations  in  property
operations  expense are  primarily  attributable  to timing of planned  exterior
repairs and  maintenance.  The increase in general and  administrative  costs is
primarily  attributable  to partnership  administration  fees ($1,500 per month)
charged and recorded in 1996.

                                       8
<PAGE>

The Partnership experienced a net loss of $21,000 in third quarter 1996 compared
to net loss of $127,000  for the same period in 1995.  The decrease is primarily
attributable to the sale of NMS, which generated significant operating losses in
1995 (see notes to  financial  statements  included in this  report)  along with
improved occupancy and related rental revenue at Cape Henry Plaza.

Liquidity and Capital Resources. The Partnership has long-term financing on both
remaining  shopping  centers.  These  first  mortgage  loans  mature in 1998 and
require monthly principal reduction.

The two remaining  shopping  centers  continue to generate nominal positive cash
flow  from  operations.  The  leases  held  by  the  Partnership  are  generally
long-term,  with  substantially all increases in operating  expenses,  taxes and
insurance  passed through to, and paid by,  tenants.  Additionally,  most leases
include  built-in rent increases based on changes in the consumer price index or
percentage  rents  based on total  sales.  Although  the  Partnership  currently
generates  sufficient  cash flow to meet its  immediate  operating  and  capital
needs, certain adverse developments, such as the failure of a significant tenant
to pay rent, could create a material deficiency in the Partnership's  short-term
liquidity.  In addition,  the Partnership currently does not generate sufficient
cash flow to make  significant  improvements  or  modifications  to the  centers
should such needs arise.

During third quarter 1996 the  Partnership  expended  approximately  $26,000 for
capitalized roof replacement at Cape Henry Plaza.

During second quarter 1996, the Partnership made a distribution in the amount of
$297,985 to the limited partners from net proceeds of the sale of NMS.  However,
other distributions have been suspended until property operations allow.


                                     PART II

Item 6.  Exhibits and Reports on Form 8-K

a)   Exhibits:

     Exhibit 27          Financial data schedule (electronic filing)

b)   Reports on Form 8-K:

     The Partnership  filed a Current Report on Form 8-K dated October 15, 1996,
     relating to the change in its certifying accountant as of that date.


                                       9
<PAGE>


                                   SIGNATURES

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



                                        RETAIL EQUITY PARTNERS
                                        LIMITED PARTNERSHIP
                                        (Registrant)

                                        By:   Boddie Investment Company
                                              General Partner




November 12, 1996                            /s/ Philip S. Payne
                                        ------------------------
Philip S. Payne
                                        (Duly authorized agent)


                                       10
<PAGE>