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      June 30, 1997

                                       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 ___

         Indicate by check mark whether the  registrant  has filed all documents
and reports  required to be filed by Sections 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes X No ___


                                                   Total number of pages:  8


                                       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                                                   7

                 PART II - Other Information
    6            Exhibits and Reports on Form 8-K                                            8

</TABLE>




                                       2
<PAGE>

                                     PART I

Item 1.  Financial Statements

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

                                                                                         June 30         December 31
                                                                                          1997              1996
                                                                                     ----------------------------------
                                                                                       (Unaudited)
<S>                                                                                   <C>               <C>
Assets
Investments in shopping centers:
   Land                                                                                $ 2,094,634       $ 2,094,634
   Buildings and improvements                                                            5,795,381         5,795,381
   Personal property                                                                        32,181            32,181
                                                                                     ----------------------------------
                                                                                         7,922,196         7,922,196
   Less accumulated depreciation                                                        (1,786,315)       (1,697,749)
                                                                                     ----------------------------------
                                                                                         6,135,881         6,224,447
Cash and cash equivalents                                                                  169,655           119,440
Restricted cash - tenant security deposits                                                  24,419            25,407
Accounts receivable, net                                                                    31,809            63,925
Prepaids and other assets                                                                   50,771            28,625
Deferred financing costs, net                                                               19,388            28,994
                                                                                     ==================================
           Total assets                                                                $ 6,431,923       $ 6,490,838
                                                                                     ==================================

Liabilities and Partners' Deficit
Mortgage notes payable                                                                 $ 6,844,271       $ 6,874,644
Trade accounts payable and accrued expenses                                                 78,472            52,992
Prepaid rents and tenant security deposits                                                  19,255            23,417
                                                                                     ----------------------------------
      Total liabilities                                                                  6,941,998         6,951,053

Partners' deficit:
   Limited partners                                                                       (442,230)         (392,869)
   General partner                                                                         (67,845)          (67,346)
                                                                                     ----------------------------------
      Total partners' deficit                                                             (510,075)         (460,215)
                                                                                     ==================================
         Total liabilities and partners' deficit                                       $ 6,431,923       $ 6,490,838
                                                                                     ==================================
</TABLE>

                                       3
<PAGE>



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

                                                             Three months                   Six months
                                                             ended June 30                 ended June 30
                                                           1997           1996           1997            1996
                                                       -------------------------------------------------------------
<S>                                                      <C>            <C>             <C>            <C>
Revenues
Rental revenue                                            $ 251,374      $ 253,358       $ 517,267      $ 570,652
Interest and other income                                     2,614          5,275           4,414          7,152
                                                       -------------------------------------------------------------
                                                            253,988        258,633         521,681        577,804

Expenses
Property operations                                          22,265         40,407          49,028         93,779
General and administrative expense                           19,286         18,007          41,352         35,153
Property taxes and insurance                                 24,106         24,277          49,192         56,328
Property management fees                                      8,331          7,523          16,425         19,941
Depreciation                                                 44,283         44,259          88,566         88,530
Amortization                                                  4,803          4,803           9,606         11,194
Interest                                                    158,511        159,863         317,372        377,868
Provision for loss on sale of New Market Square                   -              -               -        (11,457)
                                                       -------------------------------------------------------------
                                                            281,585        299,139         571,541        671,336
                                                       -------------------------------------------------------------

Loss before extraordinary item                              (27,597)       (40,506)        (49,860)       (93,532)
Extraordinary item - loss on extinguishment of debt
                                                                  -              -               -        (30,163)
                                                       -------------------------------------------------------------

Net loss                                                  $ (27,597)     $ (40,506)      $ (49,860)     $(123,695)
                                                       =============================================================

Net loss allocated to limited partners (99%)              $ (27,321)     $ (40,101)      $ (49,361)     $(122,458)
                                                       =============================================================
Net loss allocated to general partner (1%)                $    (276)     $    (405)      $    (499)     $  (1,237)
                                                       =============================================================

Net loss per limited partnership unit                     $   (0.08)     $   (0.12)      $   (0.15)     $   (0.37)
                                                       =============================================================

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>

                                                                                                Six months
                                                                                              ended June 30,
                                                                                          1997              1996
                                                                                     ----------------------------------
<S>                                                                                    <C>              <C>
Operating activities
Net loss                                                                                $  (49,860)      $  (123,695)
Adjustments to reconcile net loss to
   net cash provided by operations:
   Depreciation and amortization                                                            98,172            99,724
   Extraordinary item - loss on early extinguishment
      of debt                                                                                    -            30,163
   Provision for loss on sale of New Market Square                                               -           (11,457)
   Changes in operating assets and liabilities:
      Rent and other receivables                                                            32,116            78,352
      Prepaid expenses and other assets                                                    (22,146)           12,809
      Accounts payable and accrued expenses                                                 25,480             3,769
      Accrued interest payable                                                                   -           (43,993)
      Prepaid rents and tenant security deposits                                            (3,174)             (759)
                                                                                     ----------------------------------
Net cash provided by operating activities                                                   80,588            44,913

Investing activities
Proceeds of sale of New Market Square Shopping Center                                            -         6,363,400

Financing activities
Repayment of advances from general partner                                                       -           (80,846)
Principal payments on notes payable                                                        (30,373)       (5,893,462)
Distribution to limited partners                                                                 -          (297,985)
                                                                                     ----------------------------------
Cash used in financing activities                                                          (30,373)       (6,272,293)
                                                                                     ----------------------------------

Net increase in cash and cash equivalents                                                   50,215           136,020
Cash and cash equivalents at beginning of period                                           119,440            16,467
                                                                                     ----------------------------------

Cash and cash equivalents at end of period                                              $  169,655       $   152,487
                                                                                     ==================================
</TABLE>

                                       5
<PAGE>



RETAIL EQUITY PARTNERS LIMITED PARTNERSHIP
-------------------------------------------------------------------------------
Notes to Financial Statements - June 30, 1997
(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, 1996. 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 1996 Annual Report on Form 10-K.

Certain amounts in the Consolidated  Statements of Operations and Cash Flows for
the six months ended June 30,  1996,  have been  reclassified  to conform to the
presentation  in the  Partnership's  1996  Annual  Report  on Form  10-K.  These
reclassifications had no effect on net income or partners' deficit as previously
reported.

The results for the second  quarter of 1997 are not  necessarily  indicative  of
future financial results.

Note 2.  New Market Square Shopping Center
The consolidated statements of operations for the six months ended June 30, 1996
include the operations of New Market Square through  February 7, 1996, which was
sold to an unrelated party effective February 8, 1996. New Market Square Limited
Partnership,  which was 99.99 percent owned by the Partnership, was subsequently
dissolved  effective  July 31, 1996.  Results of operations of New Market Square
for the six months ended June 30, 1996, were as follows:

  Rental revenue                                                      $61,180
  Interest and other income                                             4,322
                                                                    ---------
                                                                       65,502

  Property operations                                                  18,572
  General and administrative expense                                    1,625
  Property taxes and insurance                                          7,155
  Property management fees                                              3,831
  Depreciation                                                              -
  Amortization                                                          1,588
  Interest                                                             57,822
  Provision for loss on sale of shopping center                       (11,457)
                                                                    ----------
                                                                       79,136
                                                                    ----------
  Loss before extraordinary item                                      (13,634)
  Extraordinary item - loss on extinguishment of debt                 (30,163)
                                                                    ----------
  Net loss                                                           $(43,797)
                                                                    ==========

The  Partnership  had  previously  recorded a $510,000  reserve for writedown to
estimated net  realizable  value and provision for estimated loss on the sale of
New Market  Square based on  estimated  proceeds  pursuant to the sale  contract
received in December 1995.

The  Partnership  adopted  Statement of Financial  Accounting  Standard No. 121,
Accounting for the Impairment of Long-Lived  Assets and for Long-Lived Assets to
Be Disposed  Of,  effective  January 1, 1996.  Adoption of this  standard had no
significant effect on the financial  position,  operating results, or cash flows
of the Partnership.

                                       6
<PAGE>


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

The following discussion contains forward-looking  statements within the meaning
of  the  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  is  a  North  Carolina  limited
partnership  formed  in  1987  to  acquire,   hold,  operate  and  manage  three
neighborhood  shopping  centers.  In  February  1996 one of the  three  shopping
centers was sold to an unrelated party.

The Partnership received aggregate  subscription funds of $6,671,543 for 333,577
beneficial  assignment  certificates  ("BACs") from approximately 480 investors.
There is  currently  no  established  public  trading  market for the BACs.  The
Partnership  is unaware of any  secondary  market for its  securities.  There is
currently no established fair market value for the BACs.

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

Results of Operations

Effective  February 8, 1996,  the  Partnership  sold New Market Square  Shopping
Center ("NMS") to an unrelated party. The consolidated  statements of operations
for the six months ended June 30,  1996,  include the  operations  of New Market
Square through February 7, 1996.  Decreases in property  operations and interest
expenses in 1997 compared to 1996 generally reflect the effect of sale of NMS in
early February 1996. Summary operating results of properties held throughout the
entire first six months of 1997 and 1996 are as follows:

                                                   Six months ended June 30,
                                                  1997                  1996
                                                  ----                  ----

    Revenues                                     $521,681            $512,302
    Expenses:
       Property expenses                          114,645             140,490
       General and administrative                  41,352              33,528
       Depreciation and amortization               98,172              98,136
       Interest                                   317,372             320,046
                                                 --------           ---------
                                                  571,541             592,200
                                                ---------           ---------
          Net loss                              $ (49,860)          $ (79,898)
                                                =========           =========


Plaza West was 100 percent  occupied  throughout  second  quarter 1997 and 1996.
Occupancy  at Cape Henry Plaza was 100% in April and May, and 97% in June 1997 ,
as compared to 100%  occupancy  throughout  the second  quarter of 1996.  Rental
revenues  at the two  properties  were  consistent  in  second  quarter  of 1997
compared to 1996.  The  increase in revenues  for the six months  ended June 30,
1997,  compared  to the same  period in 1996 is  primarily  attributable  to the
timing of recovery of common  area costs in first  quarter of 1997.  For the two
properties,  the decrease in property expenses in second quarter and through six
months of 1997 compared to 1996 is primarily attributable to non-routine repairs
and maintenance costs incurred in second quarter of 1996.

Liquidity and Capital Resources.  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  


                                       7
<PAGE>

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,  virtually any adverse development,  such
as the loss of a major  tenant,  the loss of multiple  smaller  tenants,  or 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 does not
generate  sufficient  cash flow to make  significant  repairs,  improvements  or
modifications to the centers should such needs arise.

The general partner continues to evaluate the possible sale of the Partnership's
properties and termination of the Partnership.  In the event the properties were
sold,  the  general  partner  does not  believe  that the sale  would  result in
sufficient funds, after repayment of the first mortgage loans, to allow for more
than nominal distributions to investors.

The  Partnership's  two  mortgage  loans  mature  in  1998.  In  the  event  the
Partnership's  properties have not been sold prior to that date, the Partnership
will be required to  refinance  these  loans.  The general  partner can offer no
assurance that, at that time, replacement financing will be obtainable.

The Partnership made no capital  expenditures or distributions  during the first
six months of 1997. At June 30, 1997, the Partnership  has made  commitments for
capital repairs to Plaza West totaling approximately $110,000.
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)

     Reports on Form 8-K:

     None


                                   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



August 12, 1997                                      /s/ Philip S. Payne
                                                ------------------------
                                                Philip S. Payne
                                                (Duly authorized agent)


                                       8
<PAGE>