UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549
                         ----------------------
                               FORM 10-K

[x] Annual Report under Section 13 or 15(d) of the Securities
    Exchange Act of 1934

For the fiscal year ended June 30, 2010

[ ] Transition report under Section 13 or 15(d) of the Securities
    Exchange Act of 1934

Commission File Number 0-6877

                         SANTA FE FINANCIAL CORPORATION
                         ------------------------------
                (Exact name of registrant as specified in its charter)

             Nevada                                   95-2452529
    ------------------------------                    ----------
   (State or other jurisdiction of                   (IRS Employer
    incorporation or organization)                 Identification No.)


10940 Wilshire Blvd., Suite 2150, Los Angeles, California       90024
---------------------------------------------------------     --------
      (Address of principal executive offices)               (Zip Code)

     Registrant's telephone number, including area code: (310) 889-2500

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

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

                       Common Stock, $.10 par value
                       ----------------------------
                            (Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.  [ ] Yes  [X] No

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [ ]

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 submitted electronically and
posted on its corporate Website, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section
232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
                                                             [ ] Yes  [ ] No

<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendments to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.

   Large accelerated filer  [ ]                 Accelerated filer [ ]

   Non-accelerated filer    [ ]                 Smaller reporting company [X]


Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act)  [ ] Yes   [X] No

The aggregate market value of the Common Stock, $.10 Par value, held by non-
affiliates computed by reference to the average bid and asked price on December
31, 2009 (the last business day of registrant's most recently completed second
fiscal quarter) was $1,984,248.

The number of shares outstanding of registrant's Common Stock, as of September
20, 2010, was 1,241,810.


                  DOCUMENTS INCORPORATED BY REFERENCE: None

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                           TABLE OF CONTENTS

                                PART I                                 PAGE
                                ------                                 ----

Item 1.     Business.                                                     5

Item 1A.    Risk Factors.                                                12

Item 1B.    Unresolved Staff Comments.                                   12

Item 2.     Properties.                                                  12

Item 3.     Legal Proceedings.                                           14

                                PART II
                                -------

Item 5.     Market for Registrant's Common Equity, Related Stockholder   15
             Matters and Issuer Purchases of Equity Securities.

Item 6.     Selected Financial Data.                                     16

Item 7.     Management's Discussion and Analysis of Financial            16
             Condition and Results of operations.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.  23

Item 8.     Financial Statements and Supplementary Data.                 23

Item 9.     Changes in and Disagreements With Accountants on             48
             Accounting and Financial Disclosure.

Item 9A.    Controls and Procedures.                                     48

Item 9B.    Other Information.                                           49

                                PART III
                                --------

Item 10.    Directors, Executive Officers and Corporate Governance.      49

Item 11.    Executive Compensation.                                      52

Item 12.    Security Ownership of Certain Beneficial Owners and          55
             Management and Related Stockholder Matters.

Item 13.    Certain Relationships and Related Transactions, and          57
             Director Independence.

Item 14.    Principal Accounting Fees and Services.                      58

                                PART IV
                                -------

Item 15.    Exhibits, Financial Statement Schedules.                     59

SIGNATURES                                                               61

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation reform Act of 1995.
Forward-looking statements give our current expectations or forecasts of future
events. You can identify these statements by the fact that they do not relate
strictly to historical or current facts. They contain words such as
"anticipate," "estimate," "expect," "project," "intend," "plan," "believe"
"may," "could," "might" and other words or phrases of similar meaning in
connection with any discussion of future operating or financial performance.
From time to time we also provide forward-looking statements in our Forms 10-Q
and 8-K, Annual Reports to Shareholders, press releases and other materials we
may release to the public. Forward looking statements reflect our current views
about future events and are subject to risks, uncertainties, assumptions and
changes in circumstances that may cause actual results or outcomes to differ
materially from those expressed in any forward looking statement. Consequently,
no forward looking statement can be guaranteed and our actual future results
may differ materially.

Factors that may cause actual results to differ materially from current
expectations include, but are not limited to:

    * risks associated with the lodging industry, including competition,
      increases in wages, labor relations, energy and fuel costs, actual and
      threatened pandemics, actual and threatened terrorist attacks, and
      downturns in domestic and international economic and market conditions,
      particularly in the San Francisco Bay area;

    * risks associated with the real estate industry, including changes in real
      estate and zoning laws or regulations, increases in real property taxes,
      rising insurance premiums, costs of compliance with environmental laws
      and other governmental regulations;

    * the availability and terms of financing and capital and the general
      volatility of securities markets;

    * changes in the competitive environment in the hotel industry;

    * risks related to natural disasters;

    * litigation; and

    * other risk factors discussed below in this Report.

We caution you not to place undue reliance on these forward-looking statements,
which speak only as to the date hereof. We undertake no obligation to publicly
update any forward looking statements, whether as a result of new information,
future events or otherwise. You are advised, however, to consult any further
disclosures we make on related subjects on our Forms 10-K, 10-Q, and 8-K
reports to the Securities and Exchange Commission.

                                  -4-
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                                PART I

Item 1.  Business.

GENERAL

Santa Fe Financial Corporation ("Santa Fe" or the "Company" and may also be
referred to as "we" "us" or "our" in this report) was incorporated under the
name of Tri Financial Corporation in the State of Nevada on July 25, 1967 as a
wholly owned subsidiary of Crateo, Inc, a public company.  On October 31, 1969,
Crateo issued a one-for-one stock dividend of all of its shares of Tri
Financial to its common shareholders.  On September 17, 1970, the name of the
Corporation was changed to Santa Fe Financial Corporation.

As of June 30, 2010, approximately 76% of the outstanding common stock of Santa
Fe was owned by The InterGroup Corporation ("InterGroup"), a public company
(NASDAQ: INTG). As of June 30, 2010, Santa Fe owned approximately 68.8% of the
common stock of Portsmouth Square, Inc. ("Portsmouth"), a public company
(OTCBB: PRSI). InterGroup also directly owns approximately 11.7% of the common
stock of Portsmouth.

The Company's principal source of operating revenue has been, and continues to
be, derived from the management of its 68.8% owned subsidiary, Portsmouth.
Portsmouth's principal business is conducted through its general and limited
partnership interest in the Justice Investors limited partnership ("Justice" or
the "Partnership"). The Company has a 50.0% limited partnership interest in
Justice and serves as one of the general partners. Justice owns a 544 room
hotel property located at 750 Kearny Street, San Francisco, California 94108,
known as the "Hilton San Francisco Financial District" (the "Hotel") and
related facilities, including a five level underground parking garage. The
financial statements of Justice are consolidated with those of the Company. See
Note 2 to the consolidated financial statements.

The other general partner, Evon Corporation ("Evon"), served as the managing
general partner of Justice until December 1, 2008. As discussed below, the
Limited Partnership Agreement was amended, effective December 1, 2008, to
provide for a change in the respective roles of the general partners. Pursuant
to that amendment, Portsmouth became the Managing General Partner of Justice
while Evon assumed the role of Co-General Partner of Justice.

Most significant partnership decisions require the active participation and
approval of both general partners. Pursuant to the terms of the partnership
agreement, voting rights of the partners are determined according to the
partners' entitlement to share in the net profit and loss of the partnership.
The Company is not entitled to any additional voting rights by virtue of its
position as a general partner. The partnership agreement also provides that no
portion of the partnership real property can be sold without the written
consent of the general and limited partners entitled to more than 72% of the
net profit. As of June 30, 2010, there were 113 limited partners in Justice,
including Portsmouth and Evon.

Historically, the Partnership's most significant source of income was a lease
between Justice and Holiday Inn for the Hotel portion of the property.  That
lease was amended in 1995, and ultimately assumed by Felcor Lodging Trust, Inc.
("Felcor") in 1998. The lease of the Hotel to Felcor was terminated effective
June 30, 2004. With the termination of the Hotel lease, Justice assumed the
role of an owner/operator with the assistance of a third party management

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company. Effective July 1, 2004, the Hotel was operated as a Holiday Inn Select
brand hotel pursuant to a short term franchise agreement until it was
temporarily closed for major renovations on May 31, 2005. The Hotel was
reopened on January 12, 2006 to operate as a full service Hilton hotel,
pursuant to a Franchise License Agreement with Hilton Hotels Corporation.
Justice also has a Management Agreement with Prism Hospitality L.P. ("Prism")
to perform the day-to-day management functions of the Hotel.

Until September 30, 2008, the Partnership also derived income from the lease of
the parking garage to Evon. As discussed below, effective October 1, 2008,
Justice entered into an installment sale agreement with Evon to purchase the
remaining term of the garage lease and related garage assets. Justice also
leases a portion of the lobby level of the Hotel to a day spa operator.
Portsmouth also receives management fees as a general partner of Justice for
its services in overseeing and managing the Partnership's assets.

The Company derives rental income from two multi-family, residential rental
properties located in the Los Angeles area. The Company may also look for new
real estate investment opportunities in hotels, apartments, office buildings
and shopping centers.  The acquisition of any new real estate investments will
depend on the Company's ability to find suitable investment opportunities and
the availability of sufficient financing to acquire such investments.  To help
fund any such acquisition, the Company may borrow funds to leverage its
investment capital.  The amount of any such debt will depend on a number of
factors including, but not limited to, the availability of financing and the
sufficiency of the acquisition property's projected cash flows to support the
operations and debt service.

The Company also derives income from the investment of its cash and investment
securities assets. The Company has invested in income-producing instruments,
equity and debt securities and will consider other investments if such
investments offer growth or profit potential. See Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations for a
discussion of the Company's marketable securities and other investments.


BUSINESS DEVELOPMENTS DURING THE LAST THREE FISCAL YEARS

Garage Installment Sale Agreement

Effective October 1, 2008, Justice and Evon entered into an Installment Sale
Agreement whereby the Partnership purchased all of Evon's right title and
interest in the remaining term of its lease of the parking garage, which was to
expire on November 30, 2010, and other related assets. The partnership also
agreed to assume Evon's contract with Ace Parking Management, Inc. ("Ace
Parking") for the management of the garage and any other liabilities related to
the operation of the garage commencing October 1, 2008. The purchase price for
the garage lease and related assets was approximately $755,000, payable in one
down payment of approximately $28,000 and 26 equal monthly installments of
approximately $29,000, which includes interest at the rate of 2.4% per annum.
See Note 11 to the Consolidated Financial Statements.

Amendment of Limited Partnership Agreement

On December 1, 2008, Portsmouth and Evon, as the two general partners of
Justice, entered into a 2008 Amendment to the Limited Partnership Agreement
(the "Amendment") that provides for a change in the respective roles of the
general partners. Pursuant to the Amendment, Portsmouth assumed the role of
Managing General Partner and Evon continued on as the Co-General Partner of

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Justice.  The Amendment was ratified by approximately 98% of the limited
partnership interests. The Amendment also provides that future amendments to
the Limited Partnership Agreement may be made only upon the consent of the
general partners and at least seventy five percent (75%) of the interests if
the limited partners. Consent of at least 75% of the interests of the limited
partners will also be required to remove a general partner pursuant to the
Amendment.

New General Partner Compensation Agreement

Concurrent with the Amendment to the Limited Partnership Agreement, a new
General Partner Compensation Agreement (the "Compensation Agreement") was
entered into on December 1, 2008, among Justice, Portsmouth and Evon to
terminate and supersede all prior compensation agreement for the general
partners. Pursuant to the Compensation Agreement, the general partners of
Justice will be entitled to receive an amount equal to 1.5% of the gross annual
revenues of the Partnership (as defined), less $75,000 to be used as a
contribution toward the cost of Justice engaging an asset manager. In no event
shall the annual compensation be less than a minimum base of approximately
$285,000, with eighty percent (80%) of that amount being allocated to
Portsmouth for its services as managing general partner and twenty percent
(20%) allocated to Evon as the co-general partner. Compensation earned by the
general partners in each calendar year in excess of the minimum base, will be
payable in equal fifty percent (50%) shares to Portsmouth and Evon.
During the years ended June 30, 2010 and 2009, the general partners were paid
approximately $417,000 and $435,000 respectively, under the applicable
compensation agreements. Of those amounts, approximately $264,000 and $222,000
was paid to Portsmouth for fiscal 2010 and 2009.


HILTON HOTELS FRANCHISE LICENSE AGREEMENT

On December 10, 2004, the Partnership entered into a Franchise License
Agreement with Hilton Hotels Corporation (the "Franchise Agreement") for the
right to operate the Hotel as a Hilton brand hotel.  The term of the Franchise
Agreement is for 15 years commencing on the opening date of the Hotel, January
12, 2006, with an option to extend that Agreement for another five years,
subject to certain conditions.

Pursuant to the Franchise Agreement, the Partnership paid monthly royalty fees
for the first two years of three percent (3%) of the Hotel's gross room
revenue, as defined, for the preceding calendar month; the third year was at
four percent (4%) of the Hotel's gross room revenue; and the fourth year until
the end of the term will be five percent (5%) of the Hotel's gross room
revenue.  Justice also pays a monthly program fee of four percent (4%) of the
Hotel's gross room revenue. The amount of the monthly program fee is subject to
change; however, the increase cannot exceed one percent (1%) of the Hotel gross
room revenue in any calendar year, and the cumulative increases in the monthly
fees will not exceed five percent (5%) of gross room revenue. The Partnership
also pays a monthly information technology recapture charge of 0.75% of the
Hotel's gross revenue. In this difficult economic environment, Hilton agreed to
reduce its information technology fees to 0.65% for the 2010 calendar year.

Prior to operating the Hotel as a Hilton hotel, the Partnership was required to
make substantial renovations to the Hotel to meet Hilton standards in
accordance with a product improvement plan ("PIP") agreed upon by Hilton and
the Partnership, as well as comply with other brand standards.  That project
included a complete renovation and upgrade of all of the Hotel's guestrooms,
meeting rooms, common areas and restaurant and bar.  As of January 12, 2006,

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the Hotel renovation work was substantially completed, at which time Justice
obtained approval from Hilton to open the Hotel as the "Hilton San Francisco
Financial District". The Hotel opened with a limited number of rooms available
to rent, which increased as the Hotel transitioned into full operations by the
end of February 2006.

The total cost of the construction-renovation project of the Hotel was
approximately $37,030,000, which includes approximately $630,000 in interest
costs incurred during the construction phase that were capitalized. To meet
those substantial financial commitments, and the costs of operations during the
renovation period and for the first five months when the Hotel ramped up its
operations, the Partnership has relied on additional borrowings to meet its
obligations.  As discussed in Item 2. Properties, the Partnership was able to
secure adequate financing, collateralized by the Hotel, to meet those
commitments.


HOTEL MANAGEMENT COMPANY AGREEMENT

In February 2007, the Partnership terminated its prior hotel management
agreement with Dow Hotel Company and entered into a management agreement with
Prism Hospitality ("Prism") to manage and operate the Hotel as its agent,
effective February 10, 2007. Prism is an experienced Hilton approved operator
of upscale and luxury hotels throughout the Americas. The agreement is
effective for a term of ten years, unless the agreement is extended as provided
in the agreement, and the Partnership has the right to terminate the agreement
upon ninety days written notice without further obligation. Under the
management agreement, the Partnership is to pay base management fees of 2.5% of
gross operating revenues for the fiscal year. However, 0.75% of the stated
management fee is due only if the partially adjusted net operating income for
the subject fiscal year exceeds the amount of a minimum Partnership's return
($7 million) for that fiscal year. Prism is also entitled to an incentive
management fee if certain milestones are accomplished. No incentive fees were
earned during the years ended June 30, 2010 and 2009.  In support of the
Partnership's efforts to reduce costs in this difficult economic environment,
Prism agreed to reduce its management fees by fifty percent from January 1,
2009 through December 31, 2010, after which the original fee arrangement will
remain in effect. Management fees paid to Prism during the years ended June 30,
2010 and 2009 were $246,000 and $398,000, respectively.


GARAGE LEASE AND OPERATIONS

Until September 30, 2008, the garage portion of the Hotel property was leased
by the Partnership to Evon. That lease provided for a monthly rental of sixty
percent (60%) of gross parking revenues with a minimum rent of $20,000 per
month.  That lease was to expire in November 2010.  The garage lessee, Evon,
was responsible for insurance, repairs and maintenance, utilities and all taxes
assessed against the improvements to the leased premises. The garage is
operated by Ace Parking pursuant to a parking facility management agreement. As
discussed above, effective October 1, 2008, the Partnership purchased all of
Evon's right title and interest in the remaining term of its lease and other
related assets and assumed Evon's contract with Ace Parking as well as other
liabilities associated with the operation of the garage. The Ace Parking
agreement runs until October 31, 2010, with an option to renew for another
five-year term. Pursuant to that agreement, the Partnership will pay to Ace
Parking a management of $2,000 per month, an accounting fee equal to $250 per
month, plus three percent (3%) of annual net profits in excess of $150,000.

                                  -8-
<PAGE>

TRU SPA LEASE

Approximately 5,400 square feet of space on the lobby level of the Hotel is
leased to Tru Spa for the operation of a health and beauty spa.  The lease
expires in May 2013, with a five year option to extend the term.  The spa lease
provides for minimum monthly rent of $14,000. Minimum rental amounts are
subject to adjustment every three years based on increases in the Consumer
Price Index.

CHINESE CULTURE FOUNDATION LEASE

On March 15, 2005, the Partnership entered into an amended lease with the
Chinese Culture Foundation of San Francisco (the "Foundation") for the third
floor space of the Hotel commonly known as the Chinese Cultural Center, which
the Foundation had right to occupy pursuant to a 50-year nominal rent lease.

The amended lease requires the Partnership to pay to the Foundation a monthly
event space fee in the amount of $5,000, adjusted annually based on the local
Consumer Price Index. The term of the amended lease expires on October 17,
2023, with an automatic extension for another 10 year term if the property
continues to be operated as a hotel. This amendment allowed Justice to
incorporate the third floor into the renovation of the Hotel resulting in a new
ballroom for the joint use of the Hotel and new offices and a gallery for the
Chinese Culture Center.

Seasonality

Hotel's operations historically have been seasonal. Like most hotels in the San
Francisco area, the Hotel generally maintains higher occupancy and room rates
during the first and second quarters of its fiscal year (July 1 through
December 31) than it does in the third and fourth quarters (January 1 through
June 30). These seasonal patterns can be expected to cause fluctuations in the
quarterly revenues from the Hotel.

Competition

The hotel industry is highly competitive. Competition is based on a number of
factors, most notably convenience of location, brand affiliation, price, range
of services and guest amenities or accommodations offered and quality of
customer service. Competition is often specific to the individual market in
which properties are located.

The Hotel is located in an area of intense competition from other hotels in the
Financial District and San Francisco in general. After being closed for more
than seven months for a substantial renovation project in fiscal year 2006, it
has taken some time for the Hotel, now operating as a Hilton, to gain
recognition as a totally upgraded and higher level property after being under
the Holiday Inn brand for almost 35 years.  The Hotel is also somewhat limited
by having only 15,000 square feet of meeting room space. Other hotels, with
greater meeting room space, may have a competitive advantage by being able to
attract larger groups and small conventions. Increased competition from new
hotels, or hotels that have been recently undergone substantial renovation,
could have an adverse effect on occupancy, average daily rate ("ADR") and room
revenue per available room ("RevPar") and put pressure on the Partnership to
make additional capital improvements to the Hotel to keep pace with the
competition.

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The Hotel's target market is business travelers, leisure customers and
tourists, and small to medium size groups. Since the Hotel operates in an upper
scale segment of the market, we also face increased competition from providers
of less expensive accommodations, such as limited service hotels, during
periods of economic downturn when leisure and business travelers become more
sensitive to room rates. Like other hotels, we have experienced a significant
decrease in higher rated corporate and business travel during the last two
fiscal years as many companies have severely cut their travel and entertainment
budgets in response to economic conditions.  As a result, there is added
pressure on all hotels in the San Francisco market to lower room rates in an
effort to maintain occupancy levels during such periods.

In this highly competitive market, Management has continued to focus on ways to
enhance the guest experience as well as improve operating efficiencies. The
Hotel has recently upgraded its guest room with newer flat panel televisions
systems that provide guests with greater entertainment options. The Hotel has
also installed many energy saving controls and devices as part of its efforts
to become greener and reduce operating costs. Management will continue to
explore new and innovative ways to improve operations and to attract new guests
to the Hotel at higher room rates.

The Hotel is also subject to certain operating risks common to all of the hotel
industry, which could adversely impact performance. These risks include:

   *  Competition for guests and meetings from other hotels including
      competition and pricing pressure from internet wholesalers and
      distributors;

   *  increases in operating costs, including wages, benefits, insurance,
      property taxes and energy, due to inflation and other factors, which may
      not be offset in the future by increased room rates;

   *  labor strikes, disruptions or lock outs;

   *  dependence on demand from business and leisure travelers, which may
      fluctuate and is seasonal;

   *  increases in energy costs, cost of fuel, airline fares and other expenses
      related to travel, which may negatively affect traveling;

   *  terrorism, terrorism alerts and warnings, wars and other military
      actions, SARS, swine flu, pandemic or other medical events or warnings
      which may result in decreases in business and leisure travel; and

   *  adverse effects of down turns and recessionary conditions in
      international, national and/or local economies and market conditions.


Environmental Matters

In connection with the ownership of the Hotel, the Company is subject to
various federal, state and local laws, ordinances and regulations relating to
environmental protection. Under these laws, a current or previous owner or
operator of real estate may be liable for the costs of removal or remediation
of certain hazardous or toxic substances on, under or in such property. Such
laws often impose liability without regard to whether the owner or operator
knew of, or was responsible for, the presence of hazardous or toxic substances.

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<PAGE>

Environmental consultants retained by the Partnership or its lenders conducted
updated Phase I environmental site assessments in fiscal year ended June 30,
2008 on the Hotel property. These Phase I assessments relied, in part, on Phase
I environmental assessments prepared in connection with the Partnership's first
mortgage loan obtained in July 2005. Phase I assessments are designed to
evaluate the potential for environmental contamination on properties based
generally upon site inspections, facility personnel interviews, historical
information and certain publicly-available databases; however, Phase I
assessments will not necessarily reveal the existence or extent of all
environmental conditions, liabilities or compliance concerns at the properties.

Although the Phase I assessments and other environmental reports we have
reviewed disclose certain conditions on our properties and the use of hazardous
substances in operation and maintenance activities that could pose a risk of
environmental contamination or liability, we are not aware of any environmental
liability that we believe would have a material adverse effect on our business,
financial position, results of operations or cash flows.

The Company believes that the Hotel and its rental properties are in
compliance, in all material respects, with all federal, state and local
environmental ordinances and regulations regarding hazardous or toxic
substances and other environmental matters, the violation of which could have a
material adverse effect on the Company. The Company has not received written
notice from any governmental authority of any material noncompliance, liability
or claim relating to hazardous or toxic substances or other environmental
matters in connection with any of its present properties.


EMPLOYEES

As of June 30, 2010, Santa Fe had three full-time employees.  The employees of
the Company are not part of any collective bargaining agreement, and the
Company believes that its employee relations are satisfactory.

Employees of Justice and management of the Hotel are not unionized and the
Company believes that their employee relationships are satisfactory. Most of
the non-management employees of the Hotel are part of Local 2 of the Hotel
Employees and Restaurant Employees Union ("UNITE HERE"). The Hotel's contract
with Local 2 expired on August 14, 2009. While Local 2 has sent a statutory
letter to the Hotel to open negotiations, no talks between the Hotel and union
representatives have commenced to date. At this time, no disruptions to the
operations of the Hotel are expected resulting from this expired and unresolved
union contract.

The Hotel has two other labor agreements. A new contract with Stationary
Engineers, Local 39 was reached on July 31, 2009 with an effective date
retroactive to January 12, 2009 and an expiration date of January 11, 2011. A
contract with Teamsters Local 856 expiring on December 31, 2008 was extended to
December 31, 2010.


ADDITIONAL INFORMATION

The Company files annual and quarterly reports on Forms 10-K and 10-Q, current
reports on Form 8-K and other information with the Securities and Exchange
Commission ("SEC" or the "Commission"). The public may read and copy any
materials that we file with the Commission at the SEC's Public Reference Room
at 100 F Street, NE, Washington, DC 20549, on official business days during the

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hours of 10:00 a.m. to 3:00 p.m. You may obtain information on the operation of
the Public Reference Room by calling the Commission at 1-800-SEC-0330. The
Commission also maintains an Internet site at http://www.sec.gov that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission.

Other information about the Company can be found on our parent company's
website www.intergroupcorporation.com. Reference in this document to that
website address does not constitute incorporation by reference of the
information contained on the website.


Item 1A. Risk Factors.

Not required for smaller reporting companies.


Item 1B. Unresolved Staff Comments.

None.


Item 2.  Properties.

SAN FRANCISCO HOTEL PROPERTY

The Hotel is owned directly by the Partnership. The Hotel is centrally located
near the Financial District in San Francisco, one block from the Transamerica
Pyramid. The Embarcadero Center is within walking distance and North Beach is
two blocks away.  Chinatown is directly across the bridge that runs from the
Hotel to Portsmouth Square Park. The Hotel is a 31-story (including parking
garage), steel and concrete, A-frame building, built in 1970. The Hotel has 544
well appointed guest rooms and luxury suites situated on 22 floors as well as a
5,400 square foot Tru Spa health and beauty spa on the lobby level.  The third
floor houses the Chinese Culture Center and grand ballroom.  The Hotel has
approximately 15,000 square feet of meeting room space, including the grand
ballroom. Other features of the Hotel include a 5-level underground parking
garage and pedestrian bridge across Kearny Street connecting the Hotel and the
Chinese Culture Center with Portsmouth Square Park in Chinatown.  The bridge,
built and owned by the Partnership, is included in the lease to the Chinese
Culture Center.

Since the Hotel just completed renovations, there is no present program for any
further major renovations; however, the Partnership expects to reserve
approximately 4% of gross annual Hotel revenues each year for future capital
requirements.  In the opinion of management, the Hotel is adequately covered by
insurance.


HOTEL FINANCINGS

On July 27, 2005, Justice entered into a first mortgage loan with The
Prudential Insurance Company of America in a principal amount of $30,000,000
(the "Prudential Loan").  The term of the Prudential Loan is for 120 months at
a fixed interest rate of 5.22% per annum. The Prudential Loan calls for monthly
installments of principal and interest in the amount of approximately $165,000,
calculated on a 30-year amortization schedule. The Loan is collateralized by a
first deed of trust on the Partnership's Hotel property, including all

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<PAGE>

improvements and personal property thereon and an assignment of all present and
future leases and rents. The Prudential Loan is without recourse to the limited
and general partners of Justice. The principal balance of the Prudential Loan
was $27,723,000 as of June 30, 2010.

On March 27, 2007, Justice entered into a second mortgage loan with Prudential
(the "Second Prudential Loan") in a principal amount of $19,000,000. The term
of the Second Prudential Loan is for approximately 100 months and matures on
August 5, 2015, the same date as the first Prudential Loan. The Second
Prudential Loan is at a fixed interest rate of 6.42% per annum and calls for
monthly installments of principal and interest in the amount of approximately
$119,000, calculated on a 30-year amortization schedule. The Second Prudential
Loan is collateralized by a second deed of trust on the Partnership's Hotel
property, including all improvements and personal property thereon and an
assignment of all present and future leases and rents. The Second Prudential
Loan is also without recourse to the limited and general partners of Justice.
The principal balance of the Second Prudential Loan was $18,267,000 as of June
30, 2010.

The Partnership had a $2,500,000 unsecured revolving line of credit facility
with a bank that was to mature on April 30, 2010. Borrowings under that line of
credit bore interest at Prime plus 3.0% per annum or based on the Wall Street
Journal Prime Rate (3.25%) plus 3.0% per annum, floating, (but subject to a
minimum floor rate at 5.0% per annum). Borrowings under the line of credit were
subject to certain financial covenants, which are measured annually at June
30th and December 31st based on the credit arrangement.  Effective April 29,
2010, the Partnership obtained a modification from the bank which converted its
revolving line of credit facility to a term loan. The Partnership also obtained
a waiver of any prior noncompliance with financial covenants.

The modification provides that Justice will pay the $2,500,000 balance on its
line of credit facility over a period of four years, to mature on April 30,
2014. This term loan calls for monthly principal and interest payments of
$41,000, calculated on a six-year amortization schedule, with interest only
from May 1, 2010 to August 31, 2010. Pursuant to the modification, the annual
floating interest rate was reduced by 0.5% to the WSJ Prime Rate plus 2.5%
(with a minimum floor rate of 5.0% per annum). The modification includes
financial covenants written to reflect financial conditions that all hotels are
facing. The covenants include specific financial ratios and a return to minimum
profitability by June 2011. Management believes that the Partnership has the
ability to meet the specific covenants and the Partnership was in compliance
with the covenants as of June 30, 2010. The Partnership paid a loan
modification fee of $10,000. The loan continues as unsecured. As of June 30,
2010, the interest rate was 5.75% and the outstanding balance was $2,500,000.
As of June 30, 2009, the interest rate was 6.25% and the outstanding balance on
the line of credit was $1,811,000.


LOS ANGELES, CALIFORNIA APARTMENT BUILDINGS

The property owned and consolidated by the Company's 55.4% subsidiary, Woodland
Village, is a 27-unit apartment complex located Los Angeles, California. The
Company's equity interest in Woodland Village was acquired on September 29,
1999 at a cost of $4,075,000.  For the year ended June 30, 2010, real estate
property taxes were approximately $57,000.  Depreciation is recorded on the
straight-line method based upon an estimated useful life of 40 years. As of
June 30, 2010, the outstanding mortgage balance was $1,660,000.  The mortgage
carries a fixed interest rate of 7.73% and matures in October 2029.

                                  -13-
<PAGE>

The second Los Angeles property, Acanto, which is wholly owned by the Company,
is a two-story apartment building with 2 units.  The property was acquired on
February 1, 2002 at an initial cost of $785,000.  For the year ended June 30,
2010, real estate property taxes were approximately $11,000.  Depreciation
is recorded on the straight-line method, based upon an estimated useful life of
40 years.  The outstanding mortgage balance was approximately $407,000 at June
30, 2010 and the maturity date of the mortgage is January 2032 and is
collateralized by the property.  The interest rate is variable and was 6.45% at
June 30, 2010.

Effective August 1, 2005, the Company entered into a Management Agreement with
Century West Properties, Inc. ("Century West") to act as an agent of the
Company to rent and manage both of the Company's residential rental properties
in the Los Angeles, California area. The Management Agreement with Century
West was for a term of twelve months ending on July 31, 2006 and continues
thereafter on a month-to-month basis, unless terminated upon 30 days prior
written notice. The Management Agreements provide for a monthly fee equal to 4%
of the monthly gross receipts from the properties with resident managers and a
fee of 4 1/2% of monthly gross receipts for properties without resident
managers.  For the years ended June 30, 2010 and 2009, management fees were
$23,000 for each respective period.

Woodland Village and Acanto lease units in the apartment buildings on a short-
term basis, with no lease extending beyond one year.  For the year ended June
30, 2010, the economic occupancy (gross potential less rent below market,
vacancy loss, bad debt, discounts and concessions divided by gross potential
rent) for Woodland Village and Acanto was 70% and 95%, respectively.  The
physical occupancy(gross potential rent less vacancy loss divided by gross
potential rent) for the year ended June 30, 2010 for Woodland Village and
Acanto was 99% and 92%, respectively.

In the opinion of management, both rental properties are adequately covered by
insurance.


LAND HELD FOR DEVELOPMENT

On August 29, 2007, the Board of Directors of Portsmouth authorized an
investment of $973,000 for Portsmouth to acquire a 50% equity interest in
Intergroup Uluniu, Inc., a Hawaii corporation ("Uluniu") in a related party
transaction. Uluniu was a 100% owned subsidiary of The InterGroup Corporation
("InterGroup"). Uluniu owns an approximately two-acre parcel of unimproved land
located in Kihei, Maui, Hawaii which is held for development. The Company's
investment in Uluniu represents an amount equal to the costs paid by InterGroup
for the acquisition and carrying costs of the property through August 2007.
Uluniu intends to obtain the entitlements and permits necessary for the joint
development of the parcel with an adjoining landowner into residential units.
After the completion of this predevelopment phase, the Uluniu will determine
whether it more advantageous to sell the entitled property or to commence with
construction.


Item 3.  LEGAL PROCEEDINGS

The Company is not subject to any legal proceedings requiring disclosure.

                                  -14-
<PAGE>

                               Part II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
         and Issuer Purchases of Equity Securities.

MARKET INFORMATION

Santa Fe's common stock is traded on the OTC Bulletin Board ("OTCBB") under the
symbol: SFEF.OB The following table sets forth the range of the high and low
bid quotations as reported by the OTCBB for Santa Fe's common stock for each
full quarterly period for the years ended June 30, 2010 and 2009. The
quotations reflect inter-dealer prices, without retail mark-up, markdown or
commissions and may not represent actual transactions.


Fiscal 2010                             High            Low
-----------                             -----          -----
First Quarter (7/1 to 9/30)            $10.05         $ 7.00
Second Quarter (10/1 to 12/31)         $10.50         $ 7.25
Third Quarter (1/1 to 3/31)            $ 8.00         $ 7.50
Fourth Quarter (4/1 to 6/30)           $12.00         $ 7.50


Fiscal 2009                             High            Low
-----------                             -----          -----
First Quarter (7/1 to 9/30)            $13.71         $13.50
Second Quarter (10/1 to 12/31)         $24.00         $ 8.00
Third Quarter (1/1 to 3/31)            $12.35         $ 6.60
Fourth Quarter (4/1 to 6/30)           $10.05         $ 7.60


As of September 10, 2010, the number of holders of record of the Company's
Common Stock was approximately 246.  Such number of owners was determined from
the Company's shareholders records and does not include beneficial owners of
the Company's Common Stock whose shares are held in the names of various
brokers, clearing agencies or other nominees.  Including beneficial holders,
there are approximately 414 shareholders of the Company's Common Stock.


Dividends

On February 1, 2000, the Board of Directors of the Company determined that it
did not foresee the Company paying any cash dividends on its Common Stock in
the immediate future.  Instead, it is the intent of the Company to deploy its
capital in a manner to increase its operating and investment activities.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Santa Fe has no securities authorized for issuance under equity compensation
plans.


PURCHASES OF EQUITY SECURITIES

Santa Fe did not repurchase any of its own securities during the last quarter
of its fiscal year ending June 30, 2010 and does not have any publicly
announced repurchase program.

                                  -15-
<PAGE>

Item 6. Selected financial Data.

Not required for smaller reporting companies.


Item 7. Management's Discussion and Analysis of Financial
        Condition and Results of Operations

RESULTS OF OPERATIONS

The Company's principal sources of revenue continue to be derived from the
investment of its 68.8% owned subsidiary, Portsmouth, in the Justice Investors
limited partnership ("Justice" or the "Partnership"), rental income from its
investments in multi-family real estate properties and income received from
investment of its cash and securities assets.  Portsmouth has a 50.0% limited
partnership interest in Justice and serves as the managing general partner of
Justice. Evon Corporation ("Evon") serves as the other general partner. Justice
owns the land, improvements and leaseholds at 750 Kearny Street, San Francisco,
California, known as the Hilton San Francisco Financial District (the "Hotel").
The financial statements of Justice have been consolidated with those of the
Company. See Note 2 to the Consolidated Financial Statements.

The Hotel is operated by the Partnership as a full service Hilton brand hotel
pursuant to a Franchise License Agreement with Hilton Hotels Corporation. The
term of the Agreement is for a period of 15 years commencing on January 12,
2006, with an option to extend the license term for another five years, subject
to certain conditions. Justice also has a Management Agreement with Prism
Hospitality L.P. ("Prism") to perform the day-to-day management functions of
the Hotel.

Until September 30, 2008, the Partnership also derived income from the lease of
the parking garage to Evon.  Effective October 1, 2008, Justice entered into an
installment sale agreement with Evon to purchase the remaining term of the
garage lease and related garage assets, and assumed the contract with Ace
Parking for the operations of the garage. Justice also leases a portion of the
lobby level of the Hotel to a day spa operator.  Portsmouth also receives
management fees as a general partner of Justice for its services in overseeing
and managing the Partnership's assets. Those fees are eliminated in
consolidation.

In addition to the operations of the Hotel, the Company also generates income
from the ownership and management of real estate.  On December 31, 1997, the
Company acquired a controlling 55.4% interest in Intergroup Woodland Village,
Inc. ("Woodland Village") from InterGroup.  Woodland Village's major asset is a
27-unit apartment complex located in Los Angeles, California. The Company also
owns a two-unit apartment building in Los Angeles, California.


Fiscal Year Ended June 30, 2010 Compared to Fiscal Year Ended June 30, 2009

The Company had a net loss of $3,603,000 for the year ended June 30, 2010
compared to a net loss of $1,769,000 for the year ended June 30, 2009. The
increase in the net loss is primarily attributable to the current year net loss
on marketable securities of $429,000 compared to a net gain on marketable
securities of 2,695,000 in the prior year and an increase in depreciation and
amortization expense of approximately $281,000 resulting from improvements to
the Hotel during fiscal 2010.  This change was partially offset by a higher
income tax benefit and improved hotel operations.

                                  -16-
<PAGE>

The Company had a loss on hotel operations of $2,289,000 for the year ended
June 30, 2010, compared to a loss of $2,621,000 for the year ended March 31,
2009. The reduction in the loss was primarily attributable to a one-time loss
related to the termination of the hotel garage lease in the amount of $684,000
which was incurred during fiscal 2009, partially offset by an increase in
depreciation and amortization expense due to improvements to the Hotel during
the current year, including upgrades to the guest rooms and installation of
energy saving controls and devices.

The following table sets forth a more detailed presentation of Hotel operations
for the years ended June 30, 2010 and 2009.

<TABLE>

For the years ended June 30,                                    2010            2009
---------------------------                                 -----------     ----------
<S>                                                        <C>             <C>
Hotel revenues:
 Hotel rooms                                               $ 24,848,000    $ 25,237,000
 Food and beverage                                            4,703,000       4,911,000
 Garage                                                       2,507,000       2,104,000
 Other operating departments                                    622,000         569,000
                                                             ----------      ----------
  Total hotel revenues                                       32,680,000      32,821,000

Operating expenses excluding interest, depreciation
  and amortization                                          (27,223,000)    (28,015,000)
                                                             ----------      ----------
Operating income before interest, depreciation and
 amortization                                                 5,457,000       4,806,000

Interest expense                                             (2,902,000)     (2,873,000)
Depreciation and amortization expense                        (4,844,000)     (4,554,000)
                                                             ----------      ----------
Loss from hotel operations                                  $(2,289,000)    $(2,621,000)
                                                             ==========      ==========
</TABLE>

For the fiscal year ended June 30, 2010, the Hotel generated operating income
of approximately $5,457,000 before interest, depreciation and amortization, on
operating revenues of approximately $32,680,000 compared to operating income of
approximately $4,806,000 before interest, depreciation and amortization, on
operating revenues of approximately $32,821,000 for the fiscal year ended June
30, 2009. The increase in Hotel operating income from fiscal 2009 to 2010 is
primarily attributable to a one-time loss on the termination of the garage
lease in the amount of $684,000 which was included in operating expenses in
fiscal 2009, partially offset by a $141,000 decline in total hotel revenues in
fiscal 2010.

Room revenues decreased by approximately $389,000 for the fiscal year ended
June 30, 2010 when compared to fiscal year ended June 30, 2009 and food and
beverage revenues decreased by approximately $208,000 for the same period. The
decrease in room revenues was primarily attributable to a significant decline
in average daily room rates during fiscal 2010 as hotels in the San Francisco
market continued to reduce room rates in an effort to maintain occupancy levels
in a very competitive market. Many hotels have been forced to adopt this
strategy due to a severe reduction in higher rated corporate and group business
travel, which has been replaced by discounted business from Internet channels.
The decrease in food and beverage revenues is primarily attributable to decline
in banquet and catering business as companies continue with cuts in business
travel, corporate meetings and events. The declines in room and food and
beverage revenue were partially offset by a $403,000 increase in garage
revenues due to the termination of the garage lease effective October 1, 2008
and the integration of those operations into those of the Hotel.

                                  -17-
<PAGE>

The following table sets forth the average daily room rate, average occupancy
percentage and room revenue per available room ("RevPar") of the Hotel for the
fiscal years ended June 30, 2010 and 2009.

Fiscal Year Ended          Average           Average
     June 30,             Daily Rate        Occupancy%         RevPar
-----------------         ----------        ---------         --------
      2010                   $143              87%              $125
      2009                   $157              81%              $127

The operations of the Hotel continued to be impacted by the significant
downturn in the domestic and international economies and markets.  Room rates
continue to be the toughest challenge as the Hotel's average daily room rate
was approximately $14 lower for the fiscal year ended June 30, 2010 compared to
the fiscal year ended June 30, 2009. However, due to increased sales and
marketing efforts in the face of difficult economic conditions and greater
competition, the Hotel was able to boost occupancy rates by approximately 6%
over the comparable period.  As a result, the Hotel was able to achieve a
RevPar number that compared very favorably to its competitive set.

In this highly competitive market, management has also continued to focus on
ways to enhance the guest experience as well as improve operating efficiencies.
The Hotel has recently upgraded its guest room with newer flat panel television
systems that provide guests with greater entertainment options. The Hotel has
also installed many energy saving controls and devices as part of its efforts
to become greener and reduce operating costs. Management will continue to
explore new and innovative ways to improve operations and attract new guests to
the Hotel at higher room rates.

Operating income from the Company's real estate operations remained consistent.
Although the Company was operating in a tougher economic environment, the
Company's real estate operations remained relatively stable. Management
continues to review and analyze the Company's real estate operations to improve
occupancy and rental rates, reduce expenses and improve efficiencies.

The Company had a net loss on marketable securities of $429,000 for the year
ended June 30, 2010 as compared to a net gain on marketable securities of
$2,695,000 for the year ended June 30, 2009.  For the year ended June 30, 2010,
the Company had a net realized gain of $2,650,000 and a net unrealized loss of
$3,079,000.  For the year ended June 30, 2009, the Company had a net realized
loss of $280,000 and a net unrealized gain of $2,975,000.  Gains and losses
on marketable securities and other investments may fluctuate significantly from
period to period in the future and could have a significant impact on the
Company's net income. However, the amount of gain or loss on marketable
securities and other investments for any given period may have no predictive
value and variations in amount from period to period may have no analytical
value.  For a more detailed description of the composition of the Company's
marketable securities please see the Marketable Securities section below.

Dividend and interest income increased to $266,000 from the year ended June 30,
2010 from $150,000 for the year ended June 30, 2009 due to the increased
investment in income yielding securities.

Margin interest and trading expenses increased to $554,000 for the year ended
June 30, 2010 from $417,000 for the year ended June 30, 2009.  The increase is
primarily due to the increase in margin interest expense to $205,000 for the
year ended June 30, 2010 from $54,000 for the year ended June 30, 2009.  The
increase is the result of the maintenance of higher margin balances.

                                  -18-
<PAGE>

The Company may also invest, with the approval of the Securities Investment
Committee and other company guidelines, in private investment equity funds and
other unlisted securities, such as convertible notes through private
placements. Those investments in non-marketable securities are carried at cost
on the Company's balance sheet as part of other investments, net of other than
temporary impairment losses. As of June 30, 2010, the Company had net other
investments of $4,124,000. Included in other investments are investments in
corporate debt and equity instruments which had attached warrants that were
considered derivative instruments.  The Company recorded an unrealized gain of
$128,000 related to these warrants during the year ended June 30, 2010. During
the years ended June 30, 2010 and 2009, the Company performed an impairment
analysis of its other investments and determined that its investments had other
than temporary impairments and recorded impairment losses of $1,121,000 and
$965,000, respectively.

During the year ended June 30, 2010, the provision for income tax benefit
increased to $1,169,000 from $189,000 for the year ended June 30, 2009.
The effective tax rate is significantly higher for the year ended June 30, 2010
as compared to the year ended June 30, 2009 primarily due to a lower net loss
from Justice which resulted in a lower amount of noncontrolling interest that
was reconciled against the net loss of the Company for income tax calculation
purposes.


MARKETABLE SECURITIES AND OTHER INVESTMENTS

As of June 30, 2010 and 2009, the Company had investments in marketable equity
securities of $4,332,000 and $8,706,000, respectively.  The following table
shows the composition of the Company's marketable securities portfolio by
selected industry groups as:

   June 30, 2010                                              % of Total
                                                              Investment
   Industry Group                      Market Value           Securities
   --------------                      ------------           ----------
   Investment funds                    $  1,876,000               43.3%
   REITs                                    880,000               20.3%
   Healthcare                               668,000               15.4%
   Services                                 296,000                6.8%
   Financial services                       214,000                4.9%
   Other                                    398,000                9.3%
                                         ----------              ------
                                       $  4,332,000              100.0%
                                         ==========              ======

June 30, 2009                                                % of Total
                                                              Investment
   Industry Group                      Market Value           Securities
   --------------                      ------------           ----------
   Dairy products                      $  3,728,000               42.8%
   REITs and financial                    2,371,000               27.2%
   Basic materials and energy               830,000                9.5%
   Electronic traded funds(ETFs)            779,000                8.9%
   Services                                 318,000                3.7%
   Other                                    680,000                7.9%
                                         ----------              ------
                                       $  8,706,000              100.0%
                                         ==========              ======

                                  -19-
<PAGE>

The Company's investment portfolio is diversified with 34 different equity
positions.  The portfolio contains five individual equity security positions
that are more than 5% of the total equity value of the portfolio, with the
largest representing approximately 23.4% of the total equity value of the
entire portfolio.  The amount of the Company's investment in any particular
issuer may increase or decrease, and additions or deletions to its securities
portfolio may occur, at any time.  While it is the internal policy of the
Company to limit its initial investment in any single equity to less than 5% of
its total portfolio value, that investment could eventually exceed 5% as a
result of equity appreciation or reduction of other positions.  Marketable
securities are stated at market value as determined by the most recently
traded price of each security at the balance sheet date.

The following table shows the net gain or loss on the Company's marketable
securities and the associated margin interest and trading expenses for the
respective years.

For the years ended June 30,                     2010              2009
                                            -------------     -------------

Net (loss)gain on marketable securities      $  (429,000)     $  2,695,000
Net unrealized gain on other investments         128,000                 -
Impairment loss on other investments          (1,121,000)         (965,000)
Dividend and interest income                     266,000           150,000
Margin interest expense                         (205,000)          (54,000)
Trading and management expenses                 (349,000)         (363,000)
                                              ----------        ----------
                                             $(1,710,000)     $  1,463,000
                                              ==========        ==========

The Company may also invest, with the approval of the Securities Investment
Committee and other Company guidelines, in private investment equity funds and
other unlisted securities, such as convertible notes through private
placements. Those investments in non-marketable securities are carried at cost
on the Company's balance sheet as part of other investments, net of other than
temporary impairment losses.

As of June 30, 2010 and 2009, the Company had net other investments of
$4,124,000 and $4,077,000, respectively.  Included in the net other investments
are notes and convertible notes in Comstock Mining, Inc., a public company,
that had a carrying value of $1,125,000 (net of impairment adjustments) as of
June 30, 2010.  The face value of these notes and convertible notes as of June
30, 2010 totaled approximately $6,535,000, which includes $4,512,000 of
principal and $2,023,000 of accrued interest. Comstock Mining is currently
working with its debt holders, including the Company, to restructure its debt
and capital structure.


FINANCIAL CONDITION AND LIQUIDITY

The Company's cash flows are primarily generated from its Hotel operations and
general partner fees from Justice. The Company also receives revenues generated
from the investment of its cash and marketable securities and other
investments. Since the operations of the Hotel were temporarily suspended on
May 31, 2005, and significant amounts of money were expended to renovate and
reposition the Hotel as a Hilton, Justice did not pay any partnership
distributions until the end of March 2007. As a result, the Company had to
depend more on the revenues generated from the investment of its cash and
marketable securities during that transition period.

                                  -20-
<PAGE>

The Hotel started to generate cash flows from its operations in June 2006. For
the fiscal year ended June 30, 2009, Justice paid a total of $850,000 in
limited partnership distributions, of which the Company received $425,000. The
fiscal 2009 distributions were paid in September 2008, after which the San
Francisco hotel market began to feel the full impact of the significant
downturn in domestic and international economies that continued throughout
fiscal 2009 and 2010. As a result, no Partnership distributions were paid in
fiscal 2010. Since no significant improvement in economic conditions is
expected in the lodging industry until sometime during 2011, no limited
partnership distributions are anticipated in the foreseeable future. The
general partners will continue to monitor and review the operations and
financial results of the Hotel and to set the amount of any future
distributions that may be appropriate based on operating results, cash flows
and other factors, including establishment of reasonable reserves for debt
payments and operating contingencies.

The new Justice Compensation Agreement that became effective on December 1,
2008, when Portsmouth assumed the role of managing general partner of Justice,
has provided additional cash flows to the Company. Under the new Compensation
Agreement, Portsmouth is now entitled to 80% of the minimum base fee to be paid
to the general partners of $285,000, while under the prior agreement,
Portsmouth was entitled to receive only 20% of the minimum base fee. As a
result, total general partner fees paid to Portsmouth for the year ended June
30, 2010 increased to $264,000, compared to $222,000 for the year ended June
30, 2009.

To meet its substantial financial commitments for the renovation and transition
of the Hotel to a Hilton, Justice had to rely on borrowings to meet its
obligations. On July 27, 2005, Justice entered into a first mortgage loan with
The Prudential Insurance Company of America in a principal amount of
$30,000,000 (the "Prudential Loan").  The term of the Prudential Loan is for
120 months at a fixed interest rate of 5.22% per annum. The Prudential Loan
calls for monthly installments of principal and interest in the amount of
approximately $165,000, calculated on a 30-year amortization schedule. The Loan
is collateralized by a first deed of trust on the Partnership's Hotel property,
including all improvements and personal property thereon and an assignment of
all present and future leases and rents. The Prudential Loan is without
recourse to the limited and general partners of Justice. The principal balance
of the Prudential Loan was $27,723,000 as of June 30, 2010.

On March 27, 2007, Justice entered into a second mortgage loan with Prudential
(the "Second Prudential Loan") in a principal amount of $19,000,000. The term
of the Second Prudential Loan is for approximately 100 months and matures on
August 5, 2015, the same date as the first Prudential Loan. The Second
Prudential Loan is at a fixed interest rate of 6.42% per annum and calls for
monthly installments of principal and interest in the amount of approximately
$119,000, calculated on a 30-year amortization schedule. The Second Prudential
Loan is collateralized by a second deed of trust on the Partnership's Hotel
property, including all improvements and personal property thereon and an
assignment of all present and future leases and rents. The Second Prudential
Loan is also without recourse to the limited and general partners of Justice.
The principal balance of the Second Prudential Loan was $18,267,000 as of June
30, 2010.

Justice had a $2,500,000 unsecured revolving line of credit facility with East
West Bank (formerly United Commercial Bank) that was to mature on April 30,
2010. Borrowings under that line of credit bore interest at Prime plus 3.0% per
annum or based on the Wall Street Journal Prime Rate (3.25%) plus 3.0% per
annum, floating, (but subject to a minimum floor rate at 5.0% per annum).
Borrowings under the line of credit were subject to certain financial

                                  -21-
<PAGE>

covenants, which are measured annually at June 30th and December 31st based on
the credit arrangement.  Effective April 29, 2010, the Partnership obtained a
modification from the bank which converted its revolving line of credit
facility to a term loan. The Partnership also obtained a waiver of any prior
noncompliance with financial covenants.

The modification provides that Justice will pay the $2,500,000 balance on its
line of credit facility over a period of four years, to mature on April 30,
2014. This term loan calls for monthly principal and interest payments of
$41,000, calculated on a six-year amortization schedule, with interest only
from May 1, 2010 to August 31, 2010. Pursuant to the modification, the annual
floating interest rate was reduced by 0.5% to the WSJ Prime Rate plus 2.5%
(with a minimum floor rate of 5.0% per annum). The modification includes
financial covenants written to reflect financial conditions that all hotels are
facing. The covenants include specific financial ratios and a return to minimum
profitability by June 2011. Management believes that the Partnership has the
ability to meet the specific covenants and the Partnership was in compliance
with the covenants as of June 30, 2010. The Partnership paid a loan
modification fee of $10,000. The loan continues as unsecured. As of June 30,
2010, the interest rate was 5.75% and the outstanding balance was $2,500,000.
As of June 30, 2009, the interest rate was 6.25% and the outstanding balance on
the line of credit was $1,811,000.

Despite the downturns in the economy, the Hotel has continued to generate
positive cash flows. While the debt service requirements related to the two
Prudential loans, as well as the new term loan to pay off the line of credit,
may create some additional risk for the Company and its ability to generate
cash flows in the future since the Partnership's assets had been virtually debt
free for a number of years, management believes that cash flows from the
operations of the Hotel and the garage will continue to be sufficient to meet
all of the Partnership's current and future obligations and financial
requirements. Management also believes that there is sufficient equity in the
Hotel assets to support future borrowings, if necessary, to fund any new
capital improvements and other requirements.

The Company has invested in short-term, income-producing instruments and in
equity and debt securities when deemed appropriate.  The Company's marketable
securities are classified as trading with unrealized gains and losses recorded
through the consolidated statement of operations.

Management believes that its cash, securities assets, and the cash flows
generated from those assets and from partnership distributions and management
fees, will be adequate to meet the Company's current and future obligations.


MATERIAL CONTRACTUAL OBLIGATIONS

The following table provides a summary of the Company's material financial
obligations which also includes interest.

<TABLE>

                                   Total        Year 1       Year 2       Year 3       Year 4       Year 5      Thereafter
                                 -----------   ----------   ----------   ----------   ----------   ----------   -----------
<S>                              <C>           <C>          <C>          <C>          <C>          <C>          <C>
Mortgage notes payable           $62,928,000   $3,613,000   $3,613,000   $3,613,000   $3,613,000   $3,613,000   $44,863,000
Other notes payable                4,274,000    1,234,000      708,000      694,000    1,629,000        9,000             -
                                  ----------    ---------    ---------    ---------    ---------    ---------    ----------
Total                            $67,202,000   $4,847,000   $4,321,000   $4,307,000   $5,242,000   $3,622,000   $44,863,000
                                  ----------    ---------    ---------    ---------    ---------    ---------    ----------
</TABLE>


OFF-BALANCE SHEET ARRANGEMENTS

The Company has no material off balance sheet arrangements.

                                  -22-
<PAGE>

IMPACT OF INFLATION

Hotel room rates are typically impacted by supply and demand factors, not
inflation, since rental of a hotel room is usually for a limited number of
nights.  Room rates can be, and usually are, adjusted to account for
inflationary cost increases.  Since Prism has the power and ability under the
terms of its management agreement to adjust hotel room rates on an ongoing
basis, there should be minimal impact on partnership revenues due to inflation.
Partnership revenues are also subject to interest rate risks, which may be
influenced by inflation.  For the two most recent fiscal years, the impact of
inflation on the Company's income is not viewed by management as material.

The Company's residential rental properties provide income from short-term
operating leases and no lease extends beyond one year.  Rental increases are
expected to offset anticipated increased property operating expenses.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that are most significant to the
portrayal of our financial position and results of operations and require
judgments by management in order to make estimates about the effect of matters
that are inherently uncertain. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts in
our consolidated financial statements. We evaluate our estimates on an on-going
basis, including those related to the consolidation of our subsidiaries, to our
revenues, allowances for bad debts, accruals, asset impairments, other
investments, income taxes and commitments and contingencies. We base our
estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities.
The actual results may differ from these estimates or our estimates may be
affected by different assumptions or conditions.


Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not required for smaller reporting companies.


Item 8.  Financial Statements and Supplementary Data


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                         PAGE

Report of Independent Registered Public Accounting Firm             24

Consolidated Balance Sheets - June 30, 2010 and 2009                25

Consolidated Statements of Operations - For
  Years Ended June 30, 2010 and 2009                                26

Consolidated Statements of Shareholders' Equity(Deficit) - For
  Years Ended June 30, 2010 and 2009                                27

Consolidated Statements of Cash Flows - For
  Years Ended June 30, 2010 and 2009                                28

Notes to the Consolidated Financial Statements                      29 - 47

                                  -23-
<PAGE>


        REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and
   Shareholders of Santa Fe Financial Corporation:

We have audited the accompanying consolidated balance sheets of Santa Fe
Financial Corporation and its subsidiaries (the Company) as of June 30, 2010
and 2009, and the related consolidated statements of operations, shareholders'
equity (deficit) and cash flows for the years then ended.  The Company's
management is responsible for these financial statements.  Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting.  Accordingly, we express no such opinion.  An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Santa Fe Financial
Corporation and its subsidiaries as of June 30, 2010 and 2009, and the results
of their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the Company
changed the manner in which it accounts for noncontrolling interests effective
July 1, 2009.



/s/Burr Pilger Mayer, Inc.
San Francisco, California
September 24, 2010

                                  -24-
<PAGE>


<TABLE>
                                SANTA FE FINANCIAL CORPORATION
                                 CONSOLIDATED BALANCE SHEETS

                                                         June 30, 2010         June 30, 2009
                                                          ------------          ------------
ASSETS
<S>                                                       <C>                   <C>
  Investment in hotel, net                                $ 37,561,000          $ 40,290,000
  Investment in real estate, net                             5,228,000             5,294,000
  Investment in marketable securities                        4,332,000             8,706,000
  Other investments, net                                     4,124,000             4,077,000
  Cash and cash equivalents                                    632,000               291,000
  Accounts receivable, net                                   1,573,000             1,271,000
  Other assets, net                                          1,680,000             1,817,000
  Deferred tax asset                                         4,891,000             3,709,000
                                                           -----------           -----------
Total assets                                              $ 60,021,000          $ 65,455,000
                                                           ===========           ===========

LIABILITIES AND SHAREHOLDERS' EQUITY(DEFICIT)

Liabilities
  Accounts payable and other liabilities                  $  8,019,000          $  7,487,000
  Due to securities broker                                     889,000             2,560,000
  Obligations for securities sold                              708,000             1,165,000
  Line of credit                                                     -             1,811,000
  Other notes payable                                        3,688,000             1,280,000
  Mortgage notes payable - real estate                       2,067,000             2,132,000
  Mortgage notes payable - hotel                            45,990,000            46,757,000
                                                           -----------           -----------
Total liabilities                                           61,361,000            63,192,000
                                                           -----------           -----------

Commitments and contingencies

Shareholders' equity(deficit)
  Common stock - par value $.10 per share
   Authorized - 2,000,000
   Issued 1,339,638 and outstanding 1,241,810                  134,000               134,000
  Additional paid-in capital                                 8,808,000             8,808,000
  Accumulated deficit                                       (2,588,000)             (674,000)
  Treasury stock, at cost, 97,828 shares                      (951,000)             (951,000)
                                                           -----------           -----------
Total Santa Fe shareholders' equity                          5,403,000             7,317,000
Noncontrolling interest                                     (6,743,000)           (5,054,000)
                                                           -----------           -----------

Total shareholders' (deficit)equity                         (1,340,000)            2,263,000
                                                           -----------           -----------

Total liabilities & shareholders' equity                  $ 60,021,000          $ 65,455,000
                                                           ===========           ===========
</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements.

                                  -25-
<PAGE>


<TABLE>

                       SANTA FE FINANCIAL CORPORATION
                    CONSOLIDATED STATEMENTS OF OPERATIONS


For the years ended June 30,                              2010            2009
                                                       ----------     -----------
<S>                                                   <C>             <C>
Revenues
 Hotel                                                $32,680,000     $32,821,000
 Real estate                                              554,000         560,000
                                                       ----------     -----------
Total revenues                                         33,234,000      33,381,000
                                                       ----------     -----------
Costs and operating expenses
 Hotel operating expenses                             (27,223,000)    (27,331,000)
 Real estate operating expenses                          (216,000)       (217,000)
 Loss on termination of garage lease                            -        (684,000)
 Depreciation and amortization expense                 (4,910,000)     (4,629,000)
 General and administrative expense                      (948,000)       (903,000)
                                                       ----------     -----------
Total costs and operating expenses                    (33,297,000)    (33,764,000)
                                                       ----------     -----------
Loss from operations                                      (63,000)       (383,000)
                                                       ----------     -----------

Other income (expense)
 Interest expense                                      (2,999,000)     (3,038,000)
 Net (loss)gain on marketable securities                 (429,000)      2,695,000
 Net unrealized gain on other investments                 128,000               -
 Impairment loss on other investments                  (1,121,000)       (965,000)
 Dividend and interest income                             266,000         150,000
 Trading and margin interest expense                     (554,000)       (417,000)
                                                       ----------     -----------
Net other expense                                      (4,709,000)     (1,575,000)
                                                       ----------     -----------
Loss before income tax                                 (4,772,000)     (1,958,000)
Income tax benefit                                      1,169,000         189,000
                                                       ----------       ---------
Net loss                                               (3,603,000)     (1,769,000)
Less: Net loss attributable to
      noncontrolling interest                           1,689,000         466,000
                                                       ----------      ----------
Net loss attributable to Santa Fe                      (1,914,000)     (1,303,000)
                                                       ==========      ==========

Basic and diluted loss per share                      $     (1.54)    $     (1.05)
                                                       ==========      ==========
Weighted average number of shares outstanding           1,241,810       1,241,810
                                                       ==========      ==========
</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements.

                                  -26-
<PAGE>


<TABLE>

                    SANTA FE FINANCIAL CORPORATION
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


                      Common Stock                      Retained
                   -------------------    Additional    Earnings              Total Santa Fe                       Total
                                           Paid-In     (Accumulated  Treasury  Shareholders'   Noncontrolling    Shareholders'
                     Shares     Amount     Capital       Deficit)     Stock   Equity(Deficit)    Interest        Equity(Deficit)
                   ---------  ---------   ----------   ----------   --------- --------------   --------------    ---------------
<S>                <C>        <C>         <C>         <C>           <C>         <S>            <C>               <C>
Balance at
June 30, 2008      1,339,638  $134,000    $8,808,000  $ 1,054,000   $(951,000)  $  9,045,000   $   (4,588,000)   $     4,457,000


Net loss                                               (1,303,000)                (1,303,000)        (466,000)        (1,769,000)

Distributions to
Noncontrolling
Interest                                                 (425,000)                  (425,000)                           (425,000)

                   ---------  ---------   ----------   ----------   ---------   ------------   --------------    ----------------
Balance at
June 30, 2009      1,339,638   134,000     8,808,000     (674,000)   (951,000)     7,317,000       (5,054,000)         2,263,000


Net loss                                               (1,914,000)                (1,914,000)      (1,689,000)        (3,603,000)

                   ---------  ---------   ----------    ----------   ---------  ------------   --------------    ---------------
Balance at
June 30, 2010      1,339,638  $134,000    $8,808,000  $(2,588,000)  $(951,000)  $  5,403,000   $   (6,743,000)   $    (1,340,000)
                   =========  =========   ==========    ==========   =========  ============   ==============    ===============

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                  -27-
<PAGE>
<TABLE>

                           SANTA FE FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF CASH FLOWS


For the years ended June 30,                           2010          2009
                                                    ----------    ----------
<S>                                                <C>           <C>
Cash flows from operating activities:
  Net loss                                         $(3,603,000)  $(1,769,000)
  Adjustments to reconcile net loss
   to net cash provided by operating activities:
    Net unrealized loss(gain) on marketable
     securities                                      3,079,000    (2,975,000)
    Net unrealized gain on other investments          (128,000)            -
    Impairment loss on other investments             1,121,000       965,000
    Depreciation and amortization                    4,910,000     4,629,000
    Loss on termination of garage lease                      -       684,000
    Changes in operating assets and liabilities:
      Investment in marketable securities            1,295,000    (1,403,000)
      Accounts receivable                             (302,000)     (131,000)
      Other assets                                     134,000        75,000
      Accounts payable and other liabilities           583,000       896,000
      Due to securities broker                      (1,671,000)    1,120,000
      Obligations for securities sold                 (457,000)    1,165,000
      Deferred tax asset                            (1,182,000)     (192,000)
                                                    ----------    ----------
  Net cash provided by operating activities          3,779,000     3,064,000
                                                    ----------    ----------
Cash flows from investing activities:
  Capital expenditures for furniture, equipment
   And building improvements                        (1,409,000)   (1,303,000)
  Investment in other investments                   (1,040,000)     (803,000)
                                                    ----------    ----------
  Net cash used in investing activities             (2,449,000)   (2,106,000)
                                                    ----------    ----------
Cash flows from financing activities:
  Borrowings from note payable/line of credit          689,000       298,000
  Principal payments on mortgage notes payable        (832,000)     (768,000)
  Payment on other notes payable                      (846,000)     (535,000)
  Cash distributions to noncontrolling interest              -      (425,000)
                                                    ----------    ----------
  Net cash used in financing activities               (989,000)   (1,430,000)
                                                    ----------    ----------
Net increase(decrease) in cash and cash equivalents    341,000      (472,000)

Cash and cash equivalents at beginning of year         291,000       763,000
                                                    ----------    ----------
Cash and cash equivalents at end of year           $   632,000   $   291,000
                                                    ==========    ==========
Supplemental information:

  Net income tax paid                              $     3,000   $     3,000
                                                    ==========    ==========
  Interest paid                                    $ 3,205,000   $ 3,092,000
                                                    ==========    ==========
Conversion of line of credit into other notes
  Payable                                          $ 2,500,000   $         -
                                                    ==========    ==========
 Fixed assets acquired through capital lease       $   754,800   $         -
                                                    ==========    ==========
Note payable issued under the installment
   sale agreement                                  $         -       727,000
                                                    ==========    ==========
  Fixed assets acquired and note payable assumed
   under the installment sale agreement            $         -       (43,000)
                                                    ==========    ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                  -28-
<PAGE>

                       SANTA FE FINANCIAL CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Santa Fe Financial Corporation, a Nevada corporation, ("Santa Fe" or the
"Company") owns approximately 68.8% of the outstanding common shares of
Portsmouth Square, Inc. ("Portsmouth"), a public company. Santa Fe is a 76%-
owned subsidiary of The InterGroup Corporation ("InterGroup"), a public
company. InterGroup also directly owns approximately 11.7% of the common stock
of Portsmouth.

The Company's primary business is conducted through Portsmouth's general and
limited partnership interest in Justice Investors, a California limited
partnership ("Justice" or the "Partnership"). Portsmouth has a 50.0% limited
partnership interest in Justice and serves as one of the two general partners.
The other general partner, Evon Corporation ("Evon"), served as the managing
general partner until December 1, 2008 at which time Portsmouth assumed the
role of managing general partner. As discussed in Note 2, the financial
statements of Justice are consolidated with those of the Company.

Justice owns a 544-room hotel property located at 750 Kearny Street, San
Francisco California, known as the Hilton San Francisco Financial District (the
Hotel) and related facilities including a five level underground parking
garage. The Hotel is operated by the partnership as a full service Hilton brand
hotel pursuant to a Franchise License Agreement with Hilton Hotels Corporation.
Justice also has a Management Agreement with Prism Hospitality L.P. (Prism) to
perform the day-to-day management functions of the Hotel.

Justice leased the parking garage to Evon through September 30, 2008.
Effective October 1, 2008, Justice and Evon entered into an Installment Sale
Agreement whereby Justice purchased all of Evon's right, title, and interest in
the remaining term of its lease of the parking garage, which was to expire on
November 30, 2010, and other related assets.  Justice also agreed to assume
Evon's contract with Ace Parking Management, Inc. ("Ace Parking") for the
management of the garage and any other liabilities related to the operation of
the garage commencing October 1, 2008.  The Partnership also leases a day spa
on the lobby level to Tru Spa.

Due to the temporary closing of the Hotel to undergo major renovations from May
2005 until January 2006 to transition and reposition the Hotel from a Holiday
Inn to a Hilton, and the substantial depreciation and amortization expenses
resulting from the renovations and operating losses incurred as the Hotel
ramped up operations after reopening, Justice has recorded net losses. These
losses were anticipated and planned for as part of the Partnership's renovation
and repositioning plan for Hotel and management considers those net losses to
be temporary. The Hotel has been generating positive cash flows from operations
since June 2006 and net income is expected to improve in the future, especially
since depreciation and amortization expenses attributable to the renovation
will decrease substantially. Despite the significant downturn in the economy,
management believes that the revenues expected to be generated from the Hotel,
garage and the Partnership's leases will be sufficient to meet all of the
Partnership's current and future obligations and financial requirements.
Management also believes that there is significant equity in the Hotel to
support additional borrowings, if necessary.

                                  -29-
<PAGE>

In addition to the operations of the Hotel, the Company also generates income
from the ownership and management of real estate.  On December 31, 1997, the
Company acquired a controlling 55.4% interest in Intergroup Woodland Village,
Inc. ("Woodland Village") from InterGroup.  Woodland Village's major asset is a
27-unit apartment complex located in Los Angeles, California. The Company also
owns a two-unit apartment building in Los Angeles, California.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
all controlled subsidiaries. All significant inter-company transactions and
balances have been eliminated.

Investment in Hotel, Net

The Hotel property and equipment are stated at cost less accumulated
depreciation.  Building and improvements are being depreciated on a straight-
line basis over their estimated useful lives ranging from 5 to 39 years.
Furniture, fixtures and equipment are being depreciated on a straight-line
basis over their estimated useful lives ranging from 5 to 7 years.

Repairs and maintenance are charged to expense as incurred, and costs of
significant renewals and improvements are capitalized.  Costs of significant
renewals and improvements are capitalized and depreciated over the shorter of
its remaining estimated useful life or life of the asset.

The Company reviews property and equipment for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable in accordance with generally accepted accounting principles
(GAAP). If the carrying amount of the asset, including any intangible assets
associated with that asset, exceeds its estimated undiscounted net cash flow,
before interest, the Company will recognize an impairment loss equal to the
difference between its carrying amount and its estimated fair value. If
impairment is recognized, the reduced carrying amount of the asset will be
accounted for as its new cost. For a depreciable asset, the new cost will be
depreciated over the asset's remaining useful life. Generally, fair values are
estimated using discounted cash flow, replacement cost or market comparison
analyses. The process of evaluating for impairment requires estimates as to
future events and conditions, which are subject to varying market and economic
factors. Therefore, it is reasonably possible that a change in estimate
resulting from judgments as to future events could occur which would affect the
recorded amounts of the property. No impairment losses were recorded for the
years ended June 30, 2010 and 2009.

Investment in Real Estate, Net

Rental properties are stated at cost less accumulated depreciation.
Depreciation of rental property is provided on the straight-line method based
upon estimated useful lives of 5 to 40 years for buildings and improvements and
5 to 10 years for equipment.  Expenditures for repairs and maintenance are
charged to expense as incurred and major improvements are capitalized.

The Company also reviews its rental property assets for impairment.  No
impairment losses on the investment in real estate have been recorded for the
years ended June 30, 2010 and 2009.

                                  -30-
<PAGE>

Investment in Marketable Securities

Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date.  Marketable
securities are classified as trading securities with all unrealized gains and
losses on the Company's investment portfolio recorded through the consolidated
statements of operations.

Other Investments, Net

Other investments include non-marketable securities that are carried at cost
net of any impairment loss and non-marketable warrants carried at fair value.
The Company has no significant influence or control over the entities that
issue these investments.  These investments are reviewed on a periodic basis
for other-than-temporary impairment. The Company reviews several factors to
determine whether a loss is other-than-temporary. These factors include but are
not limited to: (i) the length of time an investment is in an unrealized loss
position, (ii) the extent to which fair value is less than cost, (iii) the
financial condition and near term prospects of the issuer and (iv) our ability
to hold the investment for a period of time sufficient to allow for any
anticipated recovery in fair value.  For the years ended June 30, 2010 and
2009, the Company recorded impairment losses related to other investments of
$1,121,000 and $965,000, respectively.

Derivative Financial Instruments

The Company has investments in stock warrants that are considered derivative
instruments.

Derivative financial instruments, as defined in ASC 815-10-15-83, "Derivatives
and Hedging"(pre-Codification SFAS No. 133  Accounting for Derivative Financial
Instruments and Hedging Activities ), consist of financial instruments or other
contracts that contain a notional amount and one or more underlying (e.g.
interest rate, security price or other variable), require no initial net
investment and permit net settlement. Derivative financial instruments may be
free-standing or embedded in other financial instruments. Further, derivative
financial instruments are initially, and subsequently, measured at fair value
on the Company's consolidated balance sheet with the related unrealized gain or
loss recorded in the Company's consolidated statement of operations.  The
Company used the Black-Scholes option valuation model to estimate the fair
value these instruments which requires management to make significant
assumptions including trading volatility, estimated terms, and risk free rates.
Estimating fair values of derivative financial instruments requires the
development of significant and subjective estimates that may, and are likely
to, change over the duration of the instrument with related changes in internal
and external market factors. In addition, option-based models are highly
volatile and sensitive to changes in the trading market price of the underlying
common stock, which has a high-historical volatility. Since derivative
financial instruments are initially and subsequently carried at fair values,
the Company's consolidated statement of operations will reflect the volatility
in these estimate and assumption changes.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with an original maturity
of three months or less when purchased and are carried at cost, which
approximates fair value.

                                  -31-
<PAGE>

Accounts Receivable, Net

Accounts receivable from Hotel customers are carried at cost less an allowance
for doubtful accounts that is based on management's assessment of the
collectability of accounts receivable.  The Company extends unsecured credit to
its customers but mitigates the associated credit risk by performing ongoing
credit evaluations of its customers.

Other Assets, Net

Other asset includes loan fees, franchise fees and license fees. Loan fees are
stated at cost and amortized over the term of the loan using the effective
interest method. Franchise fees are stated at cost and amortized over the life
of the agreement (15 years). License fees are stated at cost and amortized over
10 years.

Income Taxes

Deferred income taxes are calculated under the liability method. Deferred
income tax assets and liabilities are based on differences between the
financial statement and tax basis of assets and liabilities at the current
enacted tax rates. Changes in deferred income tax assets and liabilities are
included as a component of income tax expense. Changes in deferred income tax
assets and liabilities attributable to changes in enacted tax rates are charged
or credited to income tax expense in the period of enactment. Valuation
allowances are established for certain deferred tax assets where realization is
not likely.

Assets and liabilities are established for uncertain tax positions taken or
positions expected to be taken in income tax returns when such positions are
judged to not meet the "more-likely-than-not" threshold based on the technical
merits of the positions.

Due to Securities Broker

Various securities brokers have advanced funds to the Company for the purchase
of marketable securities under standard margin agreements. These advanced funds
are recorded as a liability.

Obligations for Securities Sold

Obligation for securities sold represents the fair market value of shares sold
with the promise to deliver that security at some future date and the fair
market value of shares underlying the written call options with the obligation
to deliver that security when and if the option is exercised.  The obligation
may be satisfied with current holdings of the same security or by subsequent
purchases of that security.  Unrealized gains and losses from changes in the
obligation are included in the statement of operations.

Accounts Payable and Other Liabilities

Accounts payable and other liabilities include trade payables, advance deposits
and other liabilities.

                                  -32-
<PAGE>

Fair Value of Financial Instruments

The Company accounts for its assets and liabilities under accounting standards
of fair value measurement. Under these standards, fair value is defined as the
price that would be received to sell an asset or paid to transfer a liability
(i.e., the "exit price") in an orderly transaction between market participants
at the measurement date. Accounting standards for fair value measurement
establishes a hierarchy for inputs used in measuring fair value that maximizes
the use of observable inputs and minimizes the use of unobservable inputs by
requiring that the most observable inputs be used when available. Observable
inputs are inputs that market participants would use in pricing the asset or
liability developed based on market data obtained from sources independent of
the Company. Unobservable inputs are inputs that reflect the Company's
assumptions about the assumptions market participants would use in pricing the
asset or liability developed based on the best information available in the
circumstances. The hierarchy is broken down into three levels based on the
observability of inputs as follows:

Level 1-inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active markets.

Level 2-inputs to the valuation methodology include quoted prices for similar
assets and liabilities in active markets, and inputs that are observable for
the assets or liability, either directly or indirectly, for substantially the
full term of the financial instruments.

Level 3-inputs to the valuation methodology are unobservable and significant to
the fair value.

Treasury Stock

The Company records the acquisition of treasury stock under the cost method.

Environmental Remediation Costs

Liabilities for environmental remediation costs are recorded and charged to
expense when it is probable that obligations have been incurred and the amounts
can be reasonably estimated.  Recoveries of such costs are recognized when
received.  As of June 30, 2010 and 2009, there were no liabilities for
environmental remediation.

Revenue Recognition

Room revenue is recognized on the date upon which a guest occupies a room
and/or utilizes the Hotel's services. Food and beverage revenues are recognized
upon delivery. Garage revenue is recognized when a guest uses the garage space.

Rental revenue is recognized on the straight-line method of accounting whereby
contractual rent payment increases are recognized evenly over the lease term,
regardless of when the rent payments are received by Justice. The leases
contain provisions for base rent plus a percentage of the lessees' revenues,
which are recognized when earned.

Revenue recognition from apartment rentals commences when an apartment unit is
placed in service and occupied by a rent-paying tenant.  Apartment units are
leased on a short-term basis, with no lease extending beyond one year.

                                  -33-
<PAGE>

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs were $278,000 and
$273,000 for the years ended June 30, 2010 and 2009, respectively.

Basic and Diluted Loss per Share

Basic loss per share is calculated based upon the weighted average number of
common shares outstanding during each fiscal year.  As of June 30, 2010 and
2009, the Company did not have any potentially dilutive securities outstanding.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (GAAP) requires the use of
estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses.  Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated amounts.

Reclassifications

Certain prior year balances have been reclassified to conform with the current
year presentation.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles,
which was primarily codified into Accounting Standards Codification (ASC) Topic
105. This standard became the single source of authoritative nongovernmental
U.S. generally accepted accounting principles (GAAP). The Codification was
effective for interim or annual financial periods ended after September 15,
2009. The Company adopted ASC 105 beginning the quarter ended September 30,
2009. The adoption of ASC 105 did not have a material impact on our
consolidated financial position, results of operations and cash flows.
Additionally, the FASB now uses Accounting Standards Updates (ASU) to amend
ASC.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation
No. 46(R) (SFAS 167), which has been codified into ASC Topic 810-10,
"Consolidation". It clarifies that related parties should be considered when
evaluating the criteria for determining whether a decision maker's or service
provider's fee represents a variable interest. In addition, the amendments
clarify that a quantitative calculation should not be the sole basis for
evaluating whether a decision maker's or service provider's fee represents a
variable interest. This guidance will be effective at the start of a reporting
entity's first fiscal year beginning after November 15, 2009. Early application
is not permitted. Management does not anticipate that the adoption of this
guidance will have a material effect on the Company's consolidated financial
statements.

                                  -34-
<PAGE>

In May 2009, the FASB issued SFAS No. 165, Subsequent Events, which was
primarily codified into ASC Topic 855 and updated by ASU 2010-09. The Company
adopted ASC Topic 855 which requires an entity to recognize in the financial
statements the effects of all subsequent events that provide additional
evidence about conditions that existed at the date of the balance sheet. For
non-recognized subsequent events that must be disclosed to keep the financial
statements from being misleading, an entity will be required to disclose the
nature of the event as well as an estimate of its financial effect, or a
statement that such an estimate cannot be made. ASC Topic 855 is consistent
with current practice and did not have any impact on the Company's consolidated
financial statements. Subsequent events were evaluated through the date the
consolidated financial statements were issued.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interest in
Consolidated Financial Statements-an amendment of ARB No. 51" which was
primarily codified into ASC Topic 810, "Consolidation."  ASC Topic 810 states
that accounting and reporting for minority interests will be recharacterized as
noncontrolling interests and classified as a component of equity. This standard
also establishes reporting requirements that provide disclosures that identify
and distinguish between the interests of the parent and the interests of the
noncontrolling owners. ASC Topic 810 required retrospective adoption of the
presentation and disclosure requirements for previously existing minority
interests.  All other requirements are to be applied prospectively.   This
standard is effective for fiscal years beginning after December 15, 2008.  The
Company adopted the provisions beginning July 1, 2009.  Prior to adopting this
standard, the Company absorbed 100% of the net loss and accumulated deficit of
Justice Investors as of June 30, 2009.  Effective July 1, 2009 under ASC Topic
810, losses attributable to the parent and the noncontrolling interest in a
subsidiary shall be attributed to those respective interests.  That is, the
noncontrolling interest shall continue to be attributed its share of losses
even if that attribution results in a deficit noncontrolling interest balance.
As a result, upon adoption, the Company recalculated the accumulated deficit
pertaining to noncontrolling interest totaling $5,054,000 and $4,588,000 as of
June 30, 2009 and June 30, 2008, respectively, and reclassified such amount as
a separate component of the shareholders' equity (deficit).  However, the
losses attributed to the noncontrolling interest were not adjusted in the
consolidated statement of operations for the year ended June 30, 2009.

In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities"
which was primarily codified into ASC Topic 825, "Financial Instruments." ASC
Topic 825 provides entities with an irrevocable option to report selected
financial assets and financial liabilities at fair value. It also establishes
presentation and disclosure requirements that are designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities.  The Company adopted ASC Topic 825 on
July 1, 2008 and chose not to elect the fair value option for its financial
assets and liabilities that had not been previously carried at fair value.
Therefore, material financial assets and liabilities not carried at fair value,
such as other assets, accounts payable, line of credit, other notes payable and
mortgage payables are reported at their carrying values.

In January 2010, the FASB issued ASU 2010-06, "Improving Disclosures About Fair
Value Measurements." Effective January 1, 2010, ASU 2010-06 requires the
separate disclosure of significant transfers into and out of the Level 1 and
Level 2 categories and the reasons for such transfers, and also requires fair
value measurement disclosures for each class of assets and liabilities as well
as disclosures about valuation techniques and inputs used for recurring and
nonrecurring Level 2 and Level 3 fair value measurements.  Effective in fiscal
years beginning after December 31, 2010, ASU 2010-06 also requires Level 3

                                  -35-
<PAGE>

disclosure of purchases, sales, issuances and settlements activity on a gross
rather than a net basis. These amendments resulted in additional disclosures in
the Company's consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations",
which was primarily codified into ASC Topic 805, "Business Combinations".  It
establishes principles and requirements for how an acquirer in a business
combination recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any controlling
interest; recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and determines what information
to disclose to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. This standard is to be
applied prospectively to business combinations for which the acquisition date
is on or after an entity's fiscal year that begins after December 15, 2008. The
Company adopted this standard beginning July 1, 2009 and adoption of this
standard had no material impact on the Company's consolidated financial
statements.


NOTE 2 - JUSTICE INVESTORS

On July 14, 2005, the FASB issued Staff Position (FSP) SOP 78-9-1, "Interaction
of AICPA Statement of Position 78-9 and EITF Issue No. 04-5" which was codified
into ASC Topic 910-810, "Real Estate - General - Consolidation", to amend the
guidance in AICPA Statement of Position 78-9, "Accounting for Investments in
Real Estate Ventures" (SOP 78-9) to be consistent with the consensus in
Emerging Issues Task Force Issue No. 04-5 "Determining Whether a
General Partner, or General Partners as a Group, Controls a Limited Partnership
or Similar Entity When the Limited Partners Have Certain Rights" which was
codified into ASC 810-20, "Consolidation", eliminated the concept of "important
rights"(ASC Topic 970-810) and replaces it with the concepts of "kick out
rights" and "substantive participating rights".  In accordance with guidance
set forth in ASC Topic 970-20, Portsmouth has applied the principles of
accounting applicable for investments in subsidiaries due to its substantial
limited partnership interest and general partnership rights and has
consolidated the financial statements of Justice with those of the Company
effective as of July 1, 2006.  For the years ended June 30, 2010 and 2009, the
results of operations for Justice were consolidated with those of the Company.

On December 1, 2008, Portsmouth and Evon, as the two general partners of
Justice, entered into a 2008 Amendment to the Limited Partnership Agreement
(the "Amendment") that provides for a change in the respective roles of the
general partners. Pursuant to the Amendment, Portsmouth assumed the role of
Managing General Partner and Evon continued on as the Co-General Partner of
Justice.  The Amendment was ratified by approximately 98% of the limited
partnership interests. The Amendment also provides that future amendments to
the Limited Partnership Agreement may be made only upon the consent of the
general partners and at least seventy five percent (75%) of the interests of
the limited partners. Consent of at least 75% of the interests of the limited
partners will also be required to remove a general partner pursuant to the
Amendment.

Concurrent with the Amendment to the Limited Partnership Agreement, a new
General Partner Compensation Agreement (the "Compensation Agreement") was
entered into on December 1, 2008, among Justice, Portsmouth and Evon to
terminate and supersede all prior compensation agreement for the general
partners. Pursuant to the Compensation Agreement, the general partners of
Justice will be entitled to receive an amount equal to 1.5% of the gross annual
revenues of the Partnership (as defined), less $75,000 to be used as a

                                   -36-
<PAGE>

contribution toward the cost of Justice engaging an asset manager. In no event
shall the annual compensation be less than a minimum base of approximately
$285,000, with eighty percent (80%) of that amount being allocated to
Portsmouth for its services as managing general partner and twenty percent
(20%) allocated to Evon as the co-general partner. Compensation earned by the
general partners in each calendar year in excess of the minimum base, will be
payable in equal fifty percent (50%) shares to Portsmouth and Evon.


NOTE 3 - INVESTMENT IN HOTEL, NET

Investment in hotel consisted of the following as of:

June 30, 2010                                Accumulated       Net Book
                               Cost          Depreciation        Value
                          ------------       ------------     ------------
Land                      $  1,896,000       $          -     $  1,896,000
Furniture and equipment     18,392,000        (14,711,000)       3,681,000
Building and improvements   50,253,000        (18,269,000)      31,984,000
                          ------------       ------------     ------------
                          $ 70,541,000       $(32,980,000)    $ 37,561,000
                          ------------       ------------     ------------

June 30, 2009                                Accumulated       Net Book
                               Cost          Depreciation        Value
                          ------------       ------------     ------------
Land                      $  1,896,000       $          -     $  1,896,000
Furniture and equipment     16,939,000        (11,262,000)       5,677,000
Building and improvements   49,545,000        (16,828,000)      32,717,000
                          ------------       ------------     ------------
                          $ 68,380,000       $(28,090,000)    $ 40,290,000
                          ------------       ------------     ------------

Depreciation expense for the years ended June 30, 2010 and 2009 was $4,789,000
and $4,499,000 respectively.

The Partnership leases certain equipment under agreements that are classified
as capital leases. The cost of equipment under capital leases was $2,108,000
and $959,000 as of June 30, 2010 and 2009, respectively. The accumulated
amortization on capital leases was $1,046,000 and $670,000 as of June 30, 2010
and 2009, respectively.


NOTE 4 - INVESTMENT IN REAL ESTATE, NET

The Company owns and operates a 27-unit and 2-unit multi-family apartment
complex located in Los Angeles, California and owns land held for development
located in Maui, Hawaii.  As of June 30, 2010 and 2009, investment in real
estate included the following:

                                                 2010        2009
                                              ---------    ---------
  Land                                      $ 2,430,000  $ 2,430,000
  Buildings, improvements and equipment       2,575,000    2,575,000
  Accumulated depreciation                     (750,000)    (684,000)
                                              ---------    ---------
                                              4,255,000    4,321,000
  Land held for development                     973,000      973,000
                                              ---------    ---------
  Investment in real estate, net            $ 5,228,000    5,294,000
                                              =========    =========

                                  -37-
<PAGE>

Depreciation expense for the years ended June 30, 2010 and 2009 was $66,000 and
$75,000 respectively.

In August 2007, Portsmouth agreed to acquire 50% interest in Intergroup Uluniu,
Inc., a Hawaiian corporation and a 100% owned subsidiary of InterGroup, for
$973,000, which represents an amount equal to the costs paid by InterGroup for
the acquisition and carrying costs of approximately 2 acres of unimproved land
held for development located in Maui, Hawaii.  As a related party transaction,
the fairness of the financial terms of the transaction were reviewed and
approved by the independent director of Portsmouth.


NOTE 5 - INVESTMENT IN MARKETABLE SECURITIES

The Company's investment in marketable securities consists primarily of
corporate equities.  The Company has also invested in corporate bonds and in
income producing securities, which may include interests in real estate based
companies and REITs, where financial benefit could insure to its shareholders
through income and/or capital gain.

At June 30, 2010 and June 30, 2009, all of the Company's marketable securities
are classified as trading securities.  The change in the unrealized gains and
losses on these investments are included in earnings.

<TABLE>

As of June 30, 2010
                         Gross         Gross            Net            Market
Investment   Cost        Unrealized Gain Unrealized Loss  Unrealized Gain     Value
---------- -----------   --------------- ---------------  ---------------  ------------
<S>        <C>            <C>              <C>             <C>             <C>
Corporate
Equities   $ 3,791,000    $ 1,108,000      ($567,000)      $541,000        $4,332,000

</TABLE>
<TABLE>

As of June 30, 2009
                         Gross         Gross            Net            Market
Investment   Cost        Unrealized Gain Unrealized Loss  Unrealized Gain     Value
---------- -----------   --------------- ---------------  ---------------  ------------
<S>        <C>            <C>              <C>             <C>               <C>
Corporate
Equities   $ 5,181,000    $ 4,488,000      ($963,000)      $3,525,000        $8,706,000

</TABLE>

As of June 30, 2010 and 2009, the Company had $436,000 and $687,000,
respectively, of unrealized losses related to securities held for over one
year.

The net gain(loss) on marketable securities on the statements of operations are
comprised of realized and unrealized gains.  Below is the composition of the
two components for the years ended June 30, 2010 and 2009, respectively.

For the years ended June 30,                          2010             2009
                                                  -----------      -----------
Realized gain(loss) on marketable securities      $ 2,650,000      $  (280,000)
Unrealized (loss)gain on marketable securities     (3,079,000)       2,975,000
                                                  -----------      -----------
Net (loss)gain on marketable securities           $  (429,000)     $ 2,695,000
                                                  ===========      ===========

                                  -38-
<PAGE>

NOTE 6 - OTHER INVESTMENTS, NET

The Company may also invest, with the approval of the Securities Investment
Committee and other Company guidelines, in private investment equity funds and
other unlisted securities, such as convertible notes through private
placements. Those investments in non-marketable securities are carried at cost
on the Company's balance sheet as part of other investments, net of other than
temporary impairment losses.

As of June 30, 2010 and 2009, the Company had net other investments of
$4,124,000 and $4,077,000, respectively, which consist of the following:

   Type                                  June 30, 2010     June 30, 2009
   ---------------------------         -----------------  ----------------
   Private equity hedge fund           $       2,306,000  $      3,427,000
   Corporate debt instruments                  1,433,000           650,000
   Warrants - at fair value                      385,000                 -
                                       -----------------  ----------------
                                       $       4,124,000  $      4,077,000
                                       =================  ================

During the years ended June 30, 2010 and 2009, the Company recorded impairment
losses of $1,121,000 and $965,000, respectively.

As of June 30, 2010, the Company had investments in corporate debt and equity
instruments which had attached warrants that were considered derivative
instruments.  These warrants have an allocated cost basis of $257,000 and a
fair market value of $385,000 as of June 30, 2010.  During the year ended June
30, 2010, the Company had an unrealized gain of $128,000 related to these
warrants.


NOTE 7 - FAIR VALUE MEASUREMENTS

The carrying values of the Company's non-financial instruments approximate fair
value due to their short maturities(i.e., accounts receivable, other assets,
accounts payable and other liabilities, due to securities broker, obligations
for securities sold, line of credit) or the nature and terms of the
obligation(i.e., other notes payable and mortgage note payable).

The assets measured at fair value on a recurring basis as of June 30, 2010 are
as follows:

<TABLE>

Assets:                                 Level 1      Level 2        Level 3        June 30, 2010
-----------                            ---------    ---------      ---------       --------------
<S>                                   <C>           <C>            <C>               <C>
Cash                                  $  632,000    $      -       $      -          $  632,000
                                       ---------                                      ---------
Other investments - warrants                   -     385,000              -             385,000
                                                     -------                          ---------
Investment in marketable securities
  Investment funds                     1,876,000                                      1,876,000
  REITs                                  880,000                                        880,000
  Healthcare                             668,000                                        668,000
  Services                               296,000                                        296,000
  Financial services                     214,000                                        214,000
  Other                                  398,000                                        398,000
                                       ---------                                      ---------
                                       4,332,000                                      4,332,000
                                       ---------     --------       --------          ---------
                                      $4,964,000    $ 385,000      $       -         $5,349,000
                                       =========     ========       ========          =========
</TABLE>

                                  -39-
<PAGE>
<TABLE>

Assets:                                 Level 1      Level 2        Level 3        June 30, 2009
-----------                            ---------    ---------      ---------       -------------
<S>                                   <C>           <C>            <C>               <C>
Cash                                  $  291,000    $       -      $       -         $  291,000
                                       ---------                                      ---------
Investment in marketable securities
  Dairy products                       3,728,000                                      3,728,000
  REITs and financial                  2,371,000                                      2,371,000
  Basic materials and energy             830,000                                        830,000
  Electronic traded funds                779,000                                        779,000
  Services                               318,000                                        318,000
  Other                                  680,000                                        680,000
                                       ---------                                      ---------
                                       8,706,000                                      8,706,000
                                       ---------     ---------      ---------         ---------
                                      $8,997,000    $        -     $        -        $8,997,000
                                       =========     =========      =========         =========
</TABLE>

The fair values of investments in marketable securities are determined by the
most recently traded price of each security at the balance sheet date. The fair
value of the warrants was determined based upon a Black-Scholes option
valuation model.

Financial assets that are measured at fair value on a non-recurring basis and
are not included in the tables above include "Other investments in non-
marketable securities," that were initially measured at cost and have been
written down to fair value as a result of impairment. The following table shows
the fair value hierarchy for these assets measured at fair value on a non-
recurring basis are as follows:

<TABLE>

                                                                                            Loss for the
                                                                                          For the year ended
Assets:                           Level 1    Level 2      Level 3      June 30, 2010       June 30, 2010
-----------                      ---------  ---------    ---------   ------------------   ------------------
<S>                                     <C>        <C>   <C>            <C>                    <C>
Other non-marketable investments        -          -     $3,739,000     $3,739,000             $(1,121,000)

</TABLE>
<TABLE>

                                                                                            Loss for the
                                                                                          For the year ended
Assets:                           Level 1    Level 2      Level 3      June 30, 2009        June 30, 2009
-----------                      ---------  ---------    ---------   ------------------   ------------------
<S>                                     <C>        <C>   <C>            <C>                    <C>
Other non-marketable investments        -          -     $4,077,000     $4,077,000             $(965,000)

</TABLE>

Other investments in non-marketable securities are carried at cost net of any
impairment loss.  The Company has no significant influence or control over the
entities that issue these investments.  These investments are reviewed on a
periodic basis for other-than-temporary impairment. The Company reviews several
factors to determine whether a loss is other-than-temporary. These factors
include but are not limited to: (i) the length of time an investment is in an
unrealized loss position, (ii) the extent to which fair value is less than
cost, (iii) the financial condition and near term prospects of the issuer and
(iv) our ability to hold the investment for a period of time sufficient to
allow for any anticipated recovery in fair value.

                                  -40-
<PAGE>

NOTE 8 - OTHER ASSETS, NET

Other assets consist of the following as of June 30,:

                                   2010         2009
                                ----------   ----------
  Inventory                     $  534,000   $  483,000
  Prepaid expenses                 557,000      679,000
  Miscellaneous assets, net        589,000      655,000
                                ----------   ----------
  Total other assets            $1,680,000   $1,817,000
                                ==========   ==========

Amortization expense of loan fees and franchise costs for the years ended June
30, 2010 and 2009 was $55,000 for each year.


NOTE 9 - OTHER NOTES PAYABLE AND LINE OF CREDIT

The Partnership had a $2,500,000 unsecured revolving line of credit facility
with a bank that was to mature on April 30, 2010. Borrowings under that line of
credit bore interest at Prime plus 3.0% per annum or based on the Wall Street
Journal Prime Rate (3.25%) plus 3.0% per annum, floating, (but subject to a
minimum floor rate at 5.0% per annum). Borrowings under the line of credit were
subject to certain financial covenants, which are measured annually at June
30th and December 31st based on the credit arrangement.  Effective April 29,
2010, the Partnership obtained a modification from the bank which converted its
revolving line of credit facility to a term loan. The Partnership also obtained
a waiver of any prior noncompliance with financial covenants.

The modification provides that Justice will pay the $2,500,000 balance on its
line of credit facility over a period of four years, to mature on April 30,
2014. This term loan calls for monthly principal and interest payments of
$41,000, calculated on a six-year amortization schedule, with interest only
from May 1, 2010 to August 31, 2010. Pursuant to the modification, the annual
floating interest rate was reduced by 0.5% to the WSJ Prime Rate plus 2.5%
(with a minimum floor rate of 5.0% per annum). The modification includes
financial covenants written to reflect financial conditions that all hotels are
facing. The covenants include specific financial ratios and a return to minimum
profitability by June 2011. Management believes that the Partnership has the
ability to meet the specific covenants and the Partnership was in compliance
with the covenants as of June 30, 2010. The Partnership paid a loan
modification fee of $10,000. The loan continues as unsecured. As of June 30,
2010, the interest rate was 5.75% and the outstanding balance was $2,500,000.
As of June 30, 2009, the interest rate was 6.25% and the outstanding balance on
the line of credit was $1,811,000.

The Partnership has short-term financing agreements with a financial
institution for the payment of its general, property, and workers' compensation
insurance. The notes payable under these financing agreements bear interest at
3.8% per annum and payable in equal monthly installments (principal and
interest) through December 2010. The notes payable at June 30, 2010 and 2009,
were $176,000 and $246,000, respectively.

As of June 30, 2010 and 2009, the Partnership also has a note payable due to
Evon Corporation in the amount of $143,000 and $480,000, respectively.  This
note has an annual fixed interest rate of 2.5% and matures on November 15,
2010.  As of June 30, 2010 and 2009, the Partnership also has a note payable to
Ace Parking Management, Inc., in the amount of $36,000 and $104,000,
respectively.  This note has an annual fixed interest rate of 8.5% and matures
on October 31, 2010.

                                  -41-
<PAGE>

Justice leases certain equipment under capital leases expiring in various years
through 2012. The capital lease obligations at June 30, 2010 and 2009, were
$833,000 and $450,000, respectively. These notes were included as part of
accounts payable and other liabilities on the consolidated balance sheets

Minimum future lease payments for assets under capital leases as of June 30,
2010 for each of the next five years and in aggregate are:

    Year ending June 30
          2011                                         $ 441,000
          2012                                           213,000
          2013                                           199,000
          2014                                           140,000
          2015                                             9,000
                                                        --------
            Total minimum lease payments:              1,002,000
            Less interest on capital leases             (169,000)
                                                        --------
            Present value of minimum lease payments      833,000
                                                        ========

NOTE 10 - MORTGAGE NOTES PAYABLE

Each mortgage note payable is secured by its respective land and building. As
of June 30, 2010 and 2009, the Company had the following mortgages:

<TABLE>


  June 30, 2010   June 30, 2009     Interest Rate   Origination Date     Maturity Date
  -------------   -------------     -------------   ----------------     --------------
  <S>             <C>               <C>             <C>                  <C>
  $  27,723,000   $  28,242,000     Fixed 5.22%     July 27, 2005        August 5, 2015
     18,267,000      18,515,000     Fixed 6.42%     March 27, 2007       August 5, 2015
  -------------   -------------
  $  45,990,000   $  46,757,000     Total mortgage notes payable - hotel
  =============   =============

  $   1,660,000   $   1,717,000     Fixed 7.73%     November 1, 1999     October 1,2029
        407,000         415,000     Variable 6.45%  January 1, 2002      January 18, 2032
  -------------   -------------
  $   2,067,000   $   2,132,000     Total mortgage notes payable - real estate
  =============   =============

</TABLE>

On July 27, 2005, Justice entered into a first mortgage loan with The
Prudential Insurance Company of America in a principal amount of $30,000,000
(the "Prudential Loan").  The term of the Prudential Loan is for 120 months at
a fixed interest rate of 5.22% per annum. The Prudential Loan calls for monthly
installments of principal and interest in the amount of approximately $165,000,
calculated on a 30-year amortization schedule. The Loan is collateralized by a
first deed of trust on the Partnership's Hotel property, including all
improvements and personal property thereon and an assignment of all present and
future leases and rents. The Prudential Loan is without recourse to the limited
and general partners of Justice.

In March 2007, Justice entered into a second mortgage loan with The Prudential
Insurance Company of America (the "Second Prudential Loan") in a principal
amount of $19,000,000. The term of the Second Prudential Loan is for
approximately 100 months and matures on August 5, 2015, the same date as the
Partnership's first mortgage loan with Prudential. The Second Prudential Loan
is at a fixed interest rate of 6.42% per annum and calls for monthly
installments of principal and interest in the amount of approximately $119,000,

                                  -42-
<PAGE>

calculated on a 30-year amortization schedule. The Loan is collateralized by a
second deed of trust on the Partnership's Hotel property, including all
improvements and personal property thereon and an assignment of all present and
future leases and rents. The Loan is without recourse to the limited and
general partners of Justice.

Future minimum payments for all notes payable (including the $3,688,000 other
notes payable less the $833,000 capital lease obligations) are as follows:

        For the year ending June 30,

          2010                       $  1,513,000
          2011                          1,461,000
          2012                          1,449,000
          2013                          2,535,000
          2014                          1,167,000
          Thereafter                   42,787,000
                                      -----------
                                     $ 50,912,000
                                      ===========


NOTE 11 - HOTEL RENTAL INCOME AND TERMINATION OF GARAGE LEASE

The Partnership had a lease agreement with Evon for the use of the parking
garage, which was to expire in November 2010. Effective October 1, 2008,
Justice and Evon entered into an installment sale agreement whereby Justice
purchased all of Evon's right, title, and interest in the remaining term of the
garage lease and other related assets. Justice also agreed to assume Evon's
contract with Ace Parking Management, Inc. (Ace) for the management of the
garage and note payable to Ace related to the operation of the garage
commencing October 1, 2008. The purchase price for the garage lease and related
assets was $755,000, payable in one down payment of $28,000 and 26 equal
monthly installments of $29,000, which includes interest at the rate of 2.4%
per annum. For the year ended June 30, 2009, the Partnership recorded a loss on
termination of the garage lease of $684,000.

Prior to the installment sale agreement, the garage lease had provided for a
monthly rental equal to the greater of the sum of $20,000, or an amount equal
to 60% of gross parking revenues as defined by the lease. For the three months
ended September 30, 2008, the Partnership recorded rental income from Evon of
$402,000.

The Partnership has a lease agreement with Tru Spa, LLC (Tru Spa) for the use
of the spa facilities expiring in May 2013. The lease provides the Partnership
with minimum monthly payments of $14,000, subject to increases based on the
Consumer Price Index. Minimum future rentals to be received under this non-
cancellable lease as of June 30, 2010 are as follows:

   For the year ending June 30,
       2011                       $      165,000
       2012                              165,000
       2013                              151,000
                                  --------------
                                  $      481,000
                                  ==============

                                  -43-
<PAGE>

NOTE 12 - MANAGEMENT AGREEMENT

On February 2, 2007, the Partnership entered into an agreement with Prism to
manage and operate the Hotel as its agent. The agreement is effective for a
term of ten years, unless the agreement is extended or earlier terminated as
provided in the agreement. Under the management agreement, the Partnership is
required to pay the base management fees of 2.5% of gross operating revenues of
the Hotel (i.e., room, food and beverage, and other operating departments) for
the fiscal year. However, 0.75% of the stated management fee is due only if the
partially adjusted net operating income of the hotel for the fiscal year
exceeds the amount of the Hotel return for the fiscal year. Prism is also
entitled to an incentive management fee if certain milestones are accomplished.
No incentive fees were paid during the years ended June 30, 2010 and 2009. In
support of the Partnership's efforts to reduce costs in this difficult economic
environment, Prism agreed to reduce its management fees by fifty percent from
January 1, 2009, through December 31, 2010, after which the original fee
arrangement will remain in effect. Management fees paid to Prism during the
years ended June 30, 2010 and 2009 were $246,000 and $398,000, respectively.


NOTE 13 - INCOME TAXES

The Company and Portsmouth file separate tax returns for both federal and state
purposes.  The provision for income tax benefit (expense) consists of the
following:

For the years ended June 30,            2010          2009
                                     ----------    ----------
 Federal
   Current                          $         -   $         -
   Deferred                             926,000       153,000
                                     ----------    ----------
                                        926,000       153,000
                                     ----------    ----------
State
   Current                              (13,000)       (3,000)
   Deferred                             256,000        39,000
                                     ----------    ----------
                                        243,000        36,000
                                     ----------    ----------
                                    $ 1,169,000   $   189,000
                                     ==========    ==========


A reconciliation of the statutory federal income tax rate to the effective tax
rate is as follows:

For the years ended June 30,               2010          2009
                                         ------        ------
  Statutory federal tax rate              34.0%         34.0%
  State income taxes, net of
   federal tax benefit                     4.1%          1.4%
  Noncontrolling interest                 (9.0%)       (23.9%)
  Valuation allowance                     (5.1%)        (1.4%)
  Other                                    0.5%         (0.4%)
                                         ------        ------
                                          24.5%          9.7%
                                         ======        ======

                                  -44-
<PAGE>

The components of the Company's deferred tax assets and (liabilities) as of
June 30, 2010 and 2009 are as follows:

                                                        2010         2009
  Deferred tax assets                                ----------   ----------
    Net operating loss carryforwards                $ 7,044,000  $ 6,962,000
    Other investment impairment reserve               1,543,000    1,062,000
    Constructive sales                                   91,000            -
    Depreciation amortization                           188,000      183,000
    Accrued vacation                                     15,000       20,000
    Valuation allowance                              (1,484,000)  (1,197,000)
                                                     ----------   ----------
                                                      7,397,000    7,030,000
  Deferred tax liabilities
    Unrealized gains on marketable securities          (265,000)  (1,529,000)
    Deferred gains on real estate sale                 (913,000)    (913,000)
    Book/tax basis difference in the investment
     in Justice Investors                              (944,000)    (596,000)
    State taxes                                        (384,000)    (283,000)
                                                     ----------   ----------
                                                     (2,506,000)  (3,321,000)
                                                     ----------   ----------
  Net deferred tax asset                            $ 4,891,000  $ 3,709,000
                                                     ==========   ==========

As of June 30, 2010, the Company had federal and state operating loss
carryforwards of $17,174,000 and $13,632,000, respectively.  These
carryforwards expire in varying amounts through 2030.

For the years ended June 30, 2010 and 2009, the Company recorded an increase to
the valuation allowance of $287,000 and $26,000, respectively, against the
total deferred tax assets.  Management believes that it is more likely than not
that the Company will not realize the entire benefit of the deferred asset as
of June 30, 2010 and 2009.


NOTE 14 - SEGMENT INFORMATION

The Company operates in three reportable segments, the operation of the hotel
("Hotel Operations"), its multi-family residential properties ("Real Estate
Operations) and the investment of its cash in marketable securities and other
investments ("Investment Transactions"). These three operating segments, as
presented in the financial statements, reflect how management internally
reviews each segment's performance.  Management also makes operational and
strategic decisions based on this same information.

Information below represents reporting segments for the years ended June 30,
2010 and 2009, respectively. Operating income from hotel operations consists of
the operation of the hotel and operation of the garage. Operating income (loss)
for rental properties consist of rental income.  Operating income from
investment transactions consist of net investment gain (loss) and dividend and
interest income.

                                  -45-
<PAGE>


<TABLE>

AS OF AND FOR THE
YEAR ENDED                     HOTEL      REAL ESTATE    INVESTMENT
JUNE 30, 2010                OPERATIONS   OPERATIONS    TRANSACTIONS      OTHER         TOTAL
                            -----------   -----------  ------------   -----------   ------------
<S>                         <C>           <C>           <C>           <C>          <C>
Revenues                    $32,680,000   $   554,000   $         -   $         -  $  33,234,000
Expenses                    (32,067,000)     (282,000)            -      (948,000)   (33,297,000)
                            -----------   -----------   -----------   -----------   ------------
Income (loss)from
 operations                     613,000       272,000             -      (948,000)       (63,000)
Interest expense             (2,902,000)      (97,000)                                (2,999,000)
Net loss from
 investments                          -             -    (1,710,000)            -     (1,710,000)
Income tax benefit                    -             -             -     1,169,000      1,169,000
                            -----------   -----------   -----------   -----------   ------------
Net income (loss)           $(2,289,000)  $   175,000   $(1,710,000)  $   221,000   $ (3,603,000)
                            ===========   ===========   ===========   ===========   ============
Total Assets                $37,561,000   $ 5,228,000   $ 8,456,000   $ 8,776,000   $ 60,021,000
                            ===========   ===========   ===========   ===========   ============


AS OF AND FOR THE
YEAR ENDED                     HOTEL      REAL ESTATE    INVESTMENT
JUNE 30, 2009                OPERATIONS   OPERATIONS    TRANSACTIONS      OTHER         TOTAL
                            -----------   -----------  ------------   -----------   ------------

Revenues                    $32,821,000   $   560,000   $         -   $         -  $  33,381,000
Expenses                    (32,569,000)     (292,000)            -      (903,000)   (33,764,000)
                            -----------   -----------   -----------   -----------   ------------
Income (loss)from
 operations                     252,000       268,000             -      (903,000)      (383,000)
Interest expense             (2,873,000)     (165,000)                                (3,038,000)
Net income from
 investments                          -             -     1,463,000             -      1,463,000
Income tax benefit                    -             -             -       189,000        189,000
                            -----------   -----------   -----------   -----------   ------------
Net income (loss)           $(2,621,000)  $   103,000   $ 1,463,000   $  (714,000)  $ (1,769,000)
                            ===========   ===========   ===========   ===========   ============
Total Assets                $40,290,000   $ 5,294,000   $12,783,000   $ 7,088,000   $ 65,455,000
                            ===========   ===========   ===========   ===========   ============
</TABLE>


NOTE 15 - RELATED PARTY TRANSACTIONS

The contractor that was selected to oversee the garage and the first four
floors' renovation (excluding room upgrades) of the Hotel is the contractor who
originally constructed the Hotel. He is also a limited partner in the
Partnership and is a director of Evon Corporation, the co-general partner of
the Partnership. There were no payables to the contractor at June 30, 2010 and
2009. Services performed by the contractor were capitalized as fixed assets
which totaled $0 and $103,000 for the years ended June 30, 2010 and 2009,
respectively. Management believes these renovations were competitively priced.

Through September 30, 2008, Evon, was the lessee of the parking garage. Evon
paid the Partnership $402,000 for the three months ended September 30, 2008,
under the terms of the lease agreement. The lease agreement with Evon was
terminated effective October 1, 2008. Concurrently, an installment sale
agreement was entered between Justice and Evon. Justice had a note payable to
Evon totaling $143,000 and $480,000 as of June 30, 2010 and 2009, respectively.

Certain shared costs and expenses, primarily administrative expenses, rent and
insurance are allocated among the Company and InterGroup based on management's
estimate of the pro rata utilization of resources.  For the years ended June
30, 2010 and 2009, these expenses were approximately $144,000 for each
respective year.

                                  -46-
<PAGE>

Four of the Portsmouth directors serve as directors of Intergroup. Three of
those directors also serve as directors of Santa Fe.  The three Santa Fe
directors also serve as directors of Intergroup.

As Chairman of the Securities Investment Committee, the Company's President and
Chief Executive Officer(CEO), John V. Winfield, directs the investment activity
of the Company in public and private markets pursuant to authority granted by
the Board of Directors.  Mr. Winfield also serves as Chief Executive Officer
and Chairman of Santa Fe and InterGroup and oversees the investment activity
of those companies.  Depending on certain market conditions and various risk
factors, the Chief Executive Officer, his family, Santa Fe and InterGroup may,
at times, invest in the same companies in which the Company invests.  The
Company encourages such investments because it places personal resources of the
Chief Executive Officer and his family members, and the resources of Santa Fe
and InterGroup, at risk in connection with investment decisions made on behalf
of the Company.


NOTE 16 - COMMITMENTS AND CONTINGENCIES

Operating leases

The Partnership leases equipment under operating leases with expiration dates
through 2012. The future minimum payments under these operating leases as of
June 30, 2010 are as follows:


For the year ending June 30,
       2011                       $      180,000
       2012                               10,000
                                  --------------
                                  $      190,000
                                  ==============

Administrative fees - General Partners

During the each of the years ended June 30, 2010 and 2009, the general partners
of Justice were paid a total of $417,000 and $425,000, respectively. The total
amounts paid represents the minimum base compensation of $285,000 each year
plus $131,000 and $140,000, respectively, based upon the agreement.  The
amounts paid to the Company were eliminated in the consolidation.

Franchise Agreements

The Partnership entered into a Franchise License agreement (the License
agreement) with the Hilton Hotels Corporation (Hilton) on December 10, 2004.
The term of the License agreement is for a period of 15 years commencing on the
opening date, with an option to extend the license agreement for another five
years, subject to certain conditions.

Beginning on the opening date in January 2006, the Partnership paid monthly
royalty fees for the first two years of three percent (3%) of the Hotel's gross
room revenue for the preceding calendar month; the third year was at four
percent (4%) of the Hotel's gross room revenue; and the fourth year until the
end of the term will be five percent (5%) of the Hotel's gross room revenue.
The Partnership also pays a monthly program fee of four percent (4%) of the
Hotel's gross revenue. The amount of the monthly program fee is subject to
change; however, the increase cannot exceed one percent (1%) of the Hotel gross

                                  -47-
<PAGE>

room revenue in any calendar year, and the cumulative increases in the monthly
fees will not exceed five percent (5%) of gross room revenue. Franchise fees
for the years ended June 30, 2010 and 2009 were $2,239,000 and $2,128,000,
respectively.

The Partnership also pays Hilton a monthly information technology recapture
charge of 0.75% of the Hotel's gross revenues. In this difficult economic
environment, Hilton agreed to reduce its information technology fees to 0.65%
for the 2010 calendar year. For the years ended June 30, 2010 and 2009, those
charges were $139,000 and $166,000, respectively.

The Company is involved from time to time in various claims in the ordinary
course of business. Management does not believe that the impact of such matters
will have a material effect on the financial conditions or result of operations
when resolved.


NOTE 17 - EMPLOYEE BENEFIT PLAN

Justice has a 401(k) Profit Sharing Plan (the Plan) for employees who have
completed six months of service. Justice provides a matching contribution up to
4% of the contribution to the Plan based upon a certain percentage on the
employees' elective deferrals. Justice may also make discretionary
contributions to the Plan each year. Contributions made to the Plan amounted to
$64,000 and $73,000 during the years ended June 30, 2010 and 2009,
respectively.


Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.


Item 9A. Controls and Procedures.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company's management, with the participation of the Company's Chief
Executive Officer and Principal Financial Officer, has evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined
in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) as of the end of the
fiscal period covered by this Annual Report on Form 10-K.  Based upon such
evaluation, the Chief Executive Officer and Principal Financial Officer have
concluded that, as of the end of such period, the Company's disclosure controls
and procedures are effective in ensuring that information required to be
disclosed in this filing is accumulated and communicated to management and is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission rules and forms.


MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rule 13a-15(f)
under the Securities Exchange Act of 1934, for the Company. In establishing
adequate internal control over financial reporting, management has developed
and maintained a system of internal control, policies and procedures designed
to provide reasonable assurance that information contained in the accompanying
consolidated financial statements and other information presented in this

                                  -48-
<PAGE>

annual report is reliable, does not contain any untrue statement of a material
fact or omit to state a material fact, and fairly presents in all material
respects the financial condition, results of operations and cash flows of the
Company as of and for the periods presented in this annual report.

Management conducted an evaluation of the effectiveness of Company's internal
control over financial reporting using the framework in Internal Control-
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on its evaluation under that framework, management
believes that the Company's internal control over financial reporting was
effective as of June 30, 2010.


CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in the Company's internal control over financial
reporting during the last quarterly period covered by this Annual Report on
Form 10-K that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.


Item 9B. Other Information.

None to report.


                              PART III

Item 10.  Directors, Executive Officers and Corporate Governance


The following table sets forth certain information with respect to the
Directors and Executive Officers of the Company as of June 30, 2010:

<TABLE>

                                  Present
                                  Position           Director
     Name             Age      with the Company        Since       Term to Expire
--------------------------------------------------------------------------------------
<S>                   <C>      <C>                     <C>         <C>
John V. Winfield      63       Chairman, President     1995        2010 Annual Meeting
                               and Chief Executive
                               Officer (1)

William J. Nance      66       Director (1)(2)         1996        2010 Annual Meeting

John C. Love          70       Director (1)(2)         1998        2010 Annual Meeting

Michael G. Zybala     58       Vice President,
                               Secretary, and
                               General Counsel         N/A         N/A

David T. Nguyen       36       Treasurer and           N/A         N/A
                               Controller
---------------------------
</TABLE>

(1)  Member of Securities Investment Committee
(2)  Member of Audit Committee

                                  -49-
<PAGE>

BUSINESS EXPERIENCE:

The principal occupation and business experience during the last five years
for each of the Directors and Executive Officers of the Company are as
follows:

John V. Winfield - Mr. Winfield was first elected to the Board in May of 1995
and currently serves as the Company's Chairman of the Board, President and
Chief Executive Officer, having been appointed as such in April 1996.  Mr.
Winfield is also the Chairman of the Board, President and Chief Executive
Officer of the Company's subsidiary Portsmouth, having held those positions
since May of 1996.  Mr. Winfield is Chairman of the Board, President and Chief
Executive Officer of The InterGroup Corporation ("InterGroup"), a public
company, and has held those positions since 1987. Mr. Winfield's extensive
experience as an entrepreneur and investor, as well as his managerial and
leadership experience from serving as a chief executive officer and director of
public companies, led to the Board's conclusion that he should serve as a
director of the Company.

William J. Nance - Mr. Nance was first elected to the Board in May of 1996.
Mr. Nance is also a director of Portsmouth.  Mr. Nance is the President and CEO
of Century Plaza Printers, Inc., a company he founded in 1979.  He has also
served as a consultant in the acquisition and disposition of multi-family and
commercial real estate.  Mr. Nance is a Certified Public Accountant and, from
1970 to 1976, was employed by Kenneth Leventhal & Company where he was a Senior
Accountant specializing in the area of REITS and restructuring of real estate
companies, mergers and acquisitions, and all phases of real estate development
and financing.  Mr. Nance is also Director of InterGroup, a public company, and
has held such position since 1984. Mr. Nance also serves as a director of
Goldspring, Inc., a public company. Mr. Nance also serves as a director and
Chairman of the Board of Comstock Mining, Inc. (formerly Goldspring, Inc.), a
public company. Mr. Nance's extensive experience as a CPA and in numerous
phases of the real estate industry, his business and management experience
gained in running his own businesses, his service as a director and audit
committee member for other public companies and his knowledge and understanding
of finance and financial reporting, led to the Board's conclusion that he
should serve as a director of the Company.

John C. Love - Mr. Love was appointed a Director of the Company on March 5,
1998. Mr. Love is an international hospitality and tourism consultant. He is a
retired partner in the national CPA and consulting firm of Pannell Kerr Forster
and, for the last 30 years, a lecturer in hospitality industry management
control systems and competition & strategy at Golden Gate University and San
Francisco State University. He is Chairman Emeritus of the Board of Trustees of
Golden Gate University and the Executive Secretary of the Hotel and Restaurant
Foundation. Mr. Love is also a Director of Portsmouth, having first been
appointed in March 1998 and a Director of InterGroup, having first been
appointed in January 1998. Mr. Love's extensive experience as a CPA and in the
hospitality industry, including teaching at the university level for the last
30 years in management control systems, and his knowledge and understanding of
finance and financial reporting, led to the Board's conclusion that he should
serve as a director of the Company.

Michael G. Zybala - Mr. Zybala was appointed as Vice President and Secretary of
the Company on February 20, 1998.  He is also Vice President, Secretary and
General Counsel of Portsmouth.  Mr. Zybala is an attorney at law and has served
as the Company's General Counsel since 1995 and has represented the Company as
its corporate counsel since 1978.  Mr. Zybala also serves as Assistant
Secretary and counsel to InterGroup and has held those positions since January
1999.

                                  -50-
<PAGE>

David T. Nguyen - Mr. Nguyen was appointed as Treasurer of the Company on
February 27, 2003.  Mr. Nguyen also serves as Treasurer of InterGroup and
Portsmouth, having been appointed to those positions on February 26, 2003 and
February 27, 2003, respectively.  Mr. Nguyen is a Certified Public Accountant
and, from 1995 to 1999, was employed by PricewaterhouseCoopers LLP where he was
a Senior Accountant specializing in real estate.  Mr. Nguyen has also served as
the Company's Controller from 1999 to December 2001 and from December 2002 to
present.

Family Relationships:  There are no family relationships among directors,
executive officers, or persons nominated or chosen by the Company to become
directors or executive officers.

Involvement in Certain Legal Proceedings:  No director or executive officer, or
person nominated or chosen to become a director or executive officer, was
involved in any legal proceeding requiring disclosure.


BOARD AND COMMITTEE INFORMATION

Santa Fe is an unlisted company and a Smaller reporting Company under the rules
and regulations of the Securities and Exchange Commission ("SEC").  The
majority of its Board of Directors consists of "independent" directors as
independence is defined by the applicable rules and regulations of the SEC and
NASDAQ.


AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT

Santa Fe is an unlisted company and Smaller Reporting Company under SEC rules
and regulations.  The Company's Audit Committee is currently comprised of
Messrs. Nance (Chairperson) and Love, each of whom are independent directors as
independence is defined by the applicable rules of the SEC and NASDAQ, and as
may be modified or supplemented.  Each of these directors also meets the audit
committee financial expert test.

Procedures for Recommendations of Nominees to Board of Directors

There have been no changes to the procedures previously disclosed by which
security holders may recommend nominees to the Company's Board of Directors.


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and each beneficial owner of more than ten percent of
the Common Stock of the Company, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission.  Officers, directors and
greater than ten-percent shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by the Company,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during fiscal 2010 all
filing requirements applicable to its officers, directors, and greater than
ten-percent beneficial owners were complied with.

                                  -51-
<PAGE>

Code of Ethics.

The Company has adopted a Code of Ethics that applies to its principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions.  A copy of the Code of
Ethics is filed as Exhibit 14 to this Report.  The Company will provide to any
person without charge, upon request, a copy of its code of ethics by sending
such request to: Santa Fe Financial Corporation, Attn: Treasurer, 10940
Wilshire Blvd., Suite 2150, Los Angeles, CA 90024. A copy of the Company's Code
of Ethics can also be found on its parent company's website
www.intergroupcorporation.com. The Company will promptly disclose any
amendments or waivers to its Code of Ethics on Form 8-K.


Item 11.   Executive Compensation

The following table provides certain summary information concerning
compensation awarded to, earned by, or paid to the Company's principal
executive officer and other named executive officers of the Company whose total
compensation exceeded $100,000 for all services rendered to the Company and its
subsidiary for each of the Company's last two competed fiscal years ended June
30, 2010 and June 30, 2009.  No stock awards, long-term compensation, options
or stock appreciation rights were granted to any of the named executive
officers during the last two fiscal years.

<TABLE>

                        SUMMARY COMPENSATION TABLE

                              Fiscal                                All Other
Name and Principal Position    Year     Salary        Bonus       Compensation     Total
---------------------------    ----   ----------    ----------   ------------   ------------
<S>                            <C>    <C>            <C>           <C>           <C>
John V. Winfield               2010   $267,000(1)    $      -      $42,500(2)    $ 309,500
Chairman, President and        2009   $267,000(1)    $      -      $42,500(2)    $ 309,500
Chief Executive Officer

Michael G. Zybala              2010   $123,750(3)    $      -      $     -       $ 123,750
Vice President, Secretary      2009   $111,000(3)    $      -      $     -       $ 111,000
and General Counsel

David T. Nguyen                2010   $ 90,000(4)    $      -      $     -       $  90,000
Treasurer and Controller       2009   $ 90,000(4)    $      -      $     -       $  90,000
---------------------------
</TABLE>

(1) Includes salary and director's fees received from the Company's subsidiary,
Portsmouth, in the amounts of $133,000 for each of the fiscal years ended June
30, 2010 and 2008 and directors fees in the amount of $6,000 per year paid by
Santa Fe.  Does not include compensation received from Santa Fe's parent
corporation, InterGroup, of $255,000 for each of the fiscal years ended June
30, 2010 and June 30, 2009.

(2) During fiscal 2010 and 2009, the Company and Portsmouth also paid combined
annual premiums of $42,500, for each respective year, for split dollar whole
life insurance policies, owned by, and the beneficiary of which is, a trust for
the benefit of Mr. Winfield's family.  Portsmouth's share of those premiums was
$17,000 per year. These policies were obtained in December 1998 and provide for
an aggregate death benefit of $2,500,000. The Company has a secured right to
receive, from any proceeds of the policy, reimbursement of all premiums paid
prior to any payments to the beneficiary.

                                  -52-
<PAGE>

(3) Includes salary paid by Portsmouth in the aggregate amount of $105,000 for
fiscal year ended June 30, 2010 and $94,800 for fiscal year ended June 30,
2009. Does not include $31,250 and $27,000 paid by Santa Fe's parent company,
InterGroup, for fiscal years 2010 and 2009, respectively.

(4) Includes salary paid by Portsmouth in the amount of $45,000 for each of the
fiscal years ended June 30, 2010 and June 30, 2009. Does not include $90,000
paid by Santa Fe's parent company, InterGroup, for each of fiscal years 2010
and 2009.


As a Smaller Reporting Company, Santa Fe has no compensation committee.
Executive Officer compensation is set by disinterested members of the Board of
Directors. Santa Fe has no stock option plan or stock appreciation rights for
its executive officers.  The Company has no pension or long-term incentive
plans.  There are no employment contracts between Santa Fe and any executive
officer, nor is there any termination-of-employment or change-in-control
arrangements.

On July 18, 2003, the disinterested members of the Board of Directors
established a performance based compensation program for the Company's CEO,
John V. Winfield, to keep and retain his services as a direct and active
manager of the Company's securities portfolio.  The Company's previous
experience and results with outside money managers was not acceptable.
Pursuant to the criteria established by the Board, Mr. Winfield was be entitled
to performance compensation for his management of the Company's securities
portfolio equal to 20% of all net investment gains generated in excess of the
performance of the S&P 500 Index.  Compensation amounts will be calculated and
paid quarterly based on the results of the Company's investment portfolio for
that quarter.  Should the Company have a net investment loss during any
quarter, Mr. Winfield would not be entitled to any further performance-based
compensation until any such investment losses are recouped by the Company.  On
February 26, 2004, the Board of Directors amended the performance threshold to
require an annualized return equal to the Prime Rate of Interest (as published
in the Wall Street Journal) plus 2% instead of the S&P 500 Index, effective
with the quarterly period commencing January 1, 2004. This change was made to
make the Company's plan be consistent with that established by its parent
company, InterGroup.  This performance based compensation program may be
further modified or terminated at the discretion of the Board. No performance
based compensation was paid for fiscal years ended June 30, 2010 or 2009.


Internal Revenue Code Limitations

Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that, in the case of a publicly held corporation, the corporation is
not generally allowed to deduct remuneration paid to its chief executive
officer and certain other highly compensated officers to the extent that such
remuneration exceeds $1,000,000 for the taxable year. Certain remuneration,
however, is not subject to disallowance, including compensation paid on a
commission basis and, if certain requirements prescribed by the Code are
satisfied, other performance based compensation.  No compensation paid by the
Company to its CEO or other executive officers was subject the deduction
disallowance prescribed by Section 162(m) of the Code.


Outstanding Equity Awards at Fiscal Year End.

The Company did not have any outstanding equity awards at the end of its fiscal
year ended June 30, 2010 and has no equity compensation plans in effect.

                                  -53-
<PAGE>

                       DIRECTOR COMPENSATION
                      Year Ended June 30, 2010


                          Fees Earned
                            or Paid            All Other
     Name                   in Cash           Compensation        Total
-----------------         -----------         ------------       -------

John C. Love              $ 46,000(1)                  -         $46,000

William J. Nance          $ 46,000(1)                  -         $46,000

John V. Winfield(2)
------------------

(1) Mr. Love and Mr. Nance also serve as directors of the Company's subsidiary,
    Portsmouth. Amounts shown include $8,000 in regular board and audit
    committee fees paid by Santa Fe and $8,000 in regular board and audit
    committee fees paid by Portsmouth. These amounts also include $30,000 in
    special hotel committee fees paid to Mr. Love and Mr. Nance by Portsmouth
    related to the oversight of its Hotel asset.

(2) As an executive officer Mr. Winfield director's fees are reported in the
    Summary Compensation Table.


The bylaws of Santa Fe permit directors to be paid a fixed sum for attendance
at each meeting of the Board or a stated retainer fee as director.  Each
director is paid a fee of $1,500 per quarter for a total annual compensation of
$6,000.  This policy has been in effect since July 1, 1985. Members of the
Company's Audit Committee also receive a fee of $500 per quarter.


Change in Control or Other Arrangements

Except for the foregoing, there are no other arrangements for compensation of
directors and there are no employment contracts between the Company and its
directors or any change in control arrangements.

                                  -54-
<PAGE>

Item 12.    Security Ownership of Certain Beneficial Owners and Management and
            Related Stockholder Matters

(a) Security ownership of Certain Beneficial Owners

The following table sets forth, as of September 10, 2010, certain information
with respect to the beneficial ownership of the Company's voting securities
owned by those persons or groups known by the Company to own more than five
percent of any class of the Company's voting securities.


Name and Address of                 Amount and Nature            Percent of
Beneficial Owner                   of Beneficial Owner (1)        Class (2)
-------------------                ----------------------        ----------
Guinness Peat Group plc ("GPG")          89,858(3)                   7.2%
Allied Mutual Insurance
  Services ("AMI")
First Floor, Times Place,
45 Pall Mall
London SW1Y 5GP, UK

The InterGroup Corporation              944,379                     76.0%
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

John V. Winfield                         49,400                      4.0%
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

The InterGroup Corporation and          993,779(4)                  80.0%
  John V. Winfield as a group
------------------------------

(1) Unless otherwise indicated, and subject to applicable community property
    laws, each person has sole voting and investment power with respect to the
    shares beneficially owned.

(2) Percentages are calculated on the basis of 1,241,810 shares of Common
    Stock issued and outstanding as of September 10, 2010, plus any securities
    that person has the right to acquire within 60 days pursuant to options,
    warrants, conversion privileges or other rights.

(3) Based on their Statement on Schedule 13D (Amendment No. 6) dated June 13,
    2001, GPG and its wholly-owned subsidiary AMI claim shared power to vote,
    or to direct the vote, and to dispose of, or to direct the disposition of,
    the shares of Santa Fe's Common Stock owned of record by AMI.

(4) Pursuant to Voting Trust Agreement dated June 30, 1998, InterGroup has the
    power to vote the 49,400 shares of Common Stock owned by Mr. Winfield.  As
    President, Chairman of the Board and a 60.2% shareholder of InterGroup,
    Mr. Winfield has voting and dispositive power over the shares owned
    of record and beneficially by InterGroup.

                                  -55-
<PAGE>

(b) Security Ownership of Management

The following table sets forth, as of September 10, 2010, certain
information with respect to the beneficial ownership as to each class of the
Company's equity securities beneficially owned by all directors, each of the
named executive officers and directors and executive officers as a group.


Name and Address of                 Amount and Nature            Percent of
Beneficial Owner                   of Beneficial Owner(1)         Class (2)
-------------------                -------------------           ----------

John V. Winfield                        993,779(3)                  80.0%
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

John C. Love                                  0(4)                      *
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

William J. Nance                              0(4)                      *
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

Michael G. Zybala                             0                         *
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

David T. Nguyen                               0                         *
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

All of the above as a group             993,779                     80.0%
---------------------------
* Ownership does not exceed 1%

(1) Unless otherwise indicated, and subject to applicable community property
    laws, each person has sole voting and investment power with respect to the
    shares beneficially owned.

(2) Percentages are calculated on the basis of 1,241,810 shares of Common
    Stock issued and outstanding as of September 10, 2010, plus any securities
    that person has the right to acquire within 60 days pursuant to options,
    warrants, conversion privileges or other rights.

(3) John V. Winfield is the sole beneficial owner of 49,400 shares of Common
    Stock.  InterGroup is the beneficial owner of 944,379 shares of Common
    Stock.  As the President, Chairman of the Board and a 60.2% shareholder of
    InterGroup, Mr. Winfield has voting and dispositive power with respect to
    the shares of Santa Fe owned of record and beneficially by InterGroup.

(4) William J. Nance is a 2.4% shareholder of InterGroup as well as a
    Director thereof.  John C. Love is also a Director of InterGroup and a
    0.9% shareholder.

                                  -56-
<PAGE>

Security Ownership of Management in Subsidiary

As of September 10, 2010, Santa Fe was the record and beneficial owner of
505,437 shares of its subsidiary, Portsmouth, and 86,000 shares are owned by
Santa Fe's parent company InterGroup. The President and Chairman of the Board
of Santa Fe and InterGroup has voting power with respect to common shares of
Portsmouth owned by Santa Fe and InterGroup which represent 80.5% of the voting
power of Portsmouth.  No other director or executive officer of Santa Fe has a
beneficial interest in Portsmouth's shares.


(c) Changes in Control

There are no arrangements that may result in a change in control of the
Company.

Securities Authorized for Issuance Under Equity Compensation Plans.

Santa Fe has no securities authorized for issuance under any equity
compensation plans.


Item 13. Certain Relationships and Related Transactions, and
         Director Independence

As of September 10, 2009, Santa Fe and InterGroup owned 80.5% of the common
stock of Portsmouth, and InterGroup and John V. Winfield, in the aggregate,
owned approximately 80.0% of the voting stock of Santa Fe.  All of the
Company's Directors serve as directors of InterGroup and all three of the
Company's Directors serve on the Board of Portsmouth.

Certain costs and expenses, primarily administrative salaries, rent and
insurance, are allocated among the Company, its subsidiary, Portsmouth, and
parent InterGroup based on management's estimate of the pro rata utilization of
resources.  During each of the fiscal years ended June 30, 2010 and 2009, the
Company and Portsmouth made payments to InterGroup of approximately $144,000
for administrative costs and reimbursement of direct and indirect costs
associated with the management of the Companies and their investments,
including the partnership asset.

As Chairman of the Securities Investment Committee, the Company's President and
Chief Executive officer, John V. Winfield, directs the investment activity of
the Company in public and private markets pursuant to authority granted by the
Board of Directors.  Mr. Winfield also serves as Chief Executive Officer and
Chairman of Portsmouth and InterGroup and oversees the investment activity
of those companies.  Depending on certain market conditions and various risk
factors, the Chief Executive Officer, his family, Portsmouth and InterGroup
may, at times, invest in the same companies in which the Company invests.  The
Company encourages such investments because it places personal resources of the
Chief Executive Officer and his family members, and the resources of Portsmouth
and InterGroup, at risk in connection with investment decisions made on behalf
of the Company.

In December 1998, Board of Directors authorized the Company to obtain whole
life insurance and split dollar insurance policies covering the Company's
President and Chief Executive Officer, Mr. Winfield.  During fiscal years 2010
and 2009, the Company paid annual premiums of $25,500 for the split dollar
whole life insurance policy, owned by, and the beneficiary of which is, a trust
for the benefit of Mr. Winfield's family.  The Company has a secured right to

                                  -57-
<PAGE>

receive, from any proceeds of the policy, reimbursement of all premiums paid
prior to any payments to the beneficiary.  During fiscal 2010 and 2009,
Portsmouth also paid annual premiums of $17,000 for a split dollar policy also
covering Mr. Winfield. The premiums associated with that spilt dollar policy
are considered additional compensation to Mr. Winfield.

There are no other relationships or related transactions between the Company
and any of its officers, directors, five-percent security holders or their
families which require disclosure.


Director Independence

Santa Fe is an unlisted company and a Smaller Reporting Company under the rules
and regulations of the SEC.  With the exception of the Company's President and
CEO, John V. Winfield, all of Portsmouth's Board of Directors consists of
"independent" directors as independence is defined by the applicable rules of
the SEC and NASDAQ.


Item 14.  Principal Accountants Fees and Services.


Audit Fees - The aggregate fees billed for each of the last two fiscal years
ended June 30, 2010 and 2008 for professional services rendered by Burr Pilger
Mayer, Inc., the independent registered public accounting firm for the audit of
the Company's annual financial statements and review of financial statements
included in the Company's Form 10-Q reports or services normally provided by
the independent registered public accounting firm in connection with statutory
and regulatory filings or engagements for those fiscal years, were as follows:

                                              Fiscal Year
                                       -------------------------
                                         2010             2009
                                       --------         --------
               Audit Fees              $156,000         $156,000
               Audit Related Fees             -                -
               Tax Fees                       -                -
               All Other Fees                 -                -
                                       --------         --------
                   TOTAL:              $156,000         $136,000
                                       ========         ========

Audit Committee Pre-Approval Policies

The Audit Committee shall pre-approve all auditing services and permitted non-
audit services (including the fees and terms thereof) to be performed for the
Company by its independent registered public accounting firm, subject to any de
minimus exceptions that may be set for non-audit services described in Section
10A(i)(1)(B) of the Exchange Act which are approved by the Committee prior to
the completion of the audit.  The Committee may form and delegate authority to
subcommittees consisting of one or more members when appropriate, including the
authority to grant pre-approvals of audit and permitted non-audit services,
provided that decisions of such subcommittee to grant pre-approvals shall be
presented to the full Committee at its next scheduled meeting. All of the
services described herein were approved by the Audit Committee pursuant to its
pre-approval policies.

                                  -58-
<PAGE>

None of the hours expended on the independent registered public accounting
firms' engagement to audit the Company's financial statements for the most
recent fiscal year were attributed to work performed by persons other than the
independent registered public accounting firm's full-time permanent employees.


                               PART IV

Item 15.  Exhibits, Financial Statement Schedules.

  (a)(1) Financial Statements

   The following financial statements of the Company are included in Part II,
   Item 8 of this report at pages 23 through 48:

         Report of Independent Registered Public Accounting Firm

         Consolidated Balance Sheets - June 30, 2010 and 2009

         Consolidated Statements of Operations for Years Ended
          June 30, 2010 and 2009

         Consolidated Statements of Shareholders' Equity(Deficit) for
          Years Ended June 30, 2010 and 2009

         Consolidated Statements of Cash Flows for Years Ended June 30,
          2010 and 2009

         Notes to the Consolidated Financial Statements


  (a)(2) Financial Statement Schedules

         All other schedules for which provision is made in Regulation S-X
         have been omitted because they are not required or are not applicable
         or the required information is shown in the consolidated financial
         statements or notes to the consolidated financial statements.


  (a)(3) Exhibits

Set forth below is an index of applicable exhibits filed with this report
according to exhibit table number.

Exhibit No.                           Description
-----------   -------------------------------------------------------------

  3.(i)       Articles of Incorporation (Restated Articles of Incorporation,
              dated August 12, 1997, are incorporated by reference to the
              Company's Form 10-KSB for the year ended December 31, 1997 as
              ailed with the Commission on March 31, 1998).

    (ii)      Bylaws (as amended February 15, 2000, are incorporated by
              reference to the Company's Form 10-KSB for the year ended
              December 31, 1999, as filed with the Commission of March 29,
              2000).

  4.          Instruments defining he rights of Security Holders, including
              indentures (see Articles of Incorporation and Bylaws)

                                  -59-
<PAGE>

  10.         Material Contracts:

  10.1        Securities Purchase Agreement dated December 20, 1994 between
              Santa Fe Financial Corporation and The InterGroup Corporation
              (incorporated by reference to the Company's Form 10-K for the
              year ended December 31, 1994, as filed with the Commission on
              March 31, 1995).

  10.2        2008 Amendment to the Limited Partnership Agreement, dated
              December 1, 2008 (incorporated by reference to Exhibit 10.1
              to the Company's Form 10-Q Report for the quarterly period
              ended December 31, 2008 as filed with the Commission on
              February 12, 2009).

  10.3        General Partner Compensation Agreement, dated December 1,
              2008 (incorporated by reference to Exhibit 10.2 to Company's
              Form 10-Q Report for the quarterly period ended December 31,
              2008, as filed with the Commission on February 12, 2009).

  14.         Code of Ethics (filed herewith)

  21.         Subsidiaries (filed herewith)

  31.1        Certification of Chief Executive Officer of Periodic Report
              Pursuant to Rule 13a-14(a) and Rule 15d-14(a). (filed herewith)

  31.2        Certification of Principal Financial Officer of Periodic Report
              Pursuant to Rule 13a-14(a) and Rule 15d-14(a). (filed herewith)

  32.1        Certification of Chief Executive Officer Pursuant to 18
              U.S.C. Section 1350. (filed herewith)

  32.2        Certification of Principal Financial Officer Pursuant to 18
              U.S.C. Section 1350. (filed herewith)

                                  -60-
<PAGE>

                                SIGNATURES
                                ----------

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


                                               SANTA FE FINANCIAL CORPORATION
                                                        (Registrant)

Date: September 24, 2010                      by /s/ John V. Winfield
      ------------------                         ---------------------------
                                                 John V. Winfield, President,
                                                 Chairman of the Board and
                                                 Chief Executive Officer

Date: September 24, 2010                      by /s/ Michael G. Zybala
      ------------------                         ---------------------------
                                                 Michael G. Zybala,
                                                 Vice President and Secretary

Date: September 24, 2010                      by /s/ David T. Nguyen
      ------------------                         ---------------------------
                                                 David T. Nguyen, Treasurer
                                                 and Controller
                                                 (Principal Financial Officer)


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


Date: September 24, 2010              /s/ John V. Winfield
      ------------------              ---------------------------------------
                                      John V. Winfield, Chairman of the Board


Date: September 24, 2010              /s/ John C. Love
      ------------------              ---------------------------------------
                                      John C. Love
                                      Director


Date: September 24, 2010              /s/ William J. Nance
      ------------------              ---------------------------------------
                                      William J. Nance,
                                      Director

                                  -61-