SECURITIES AND EXCHANGE COMMISSION

                               Washington, D.C. 20549
                                      FORM 10-K

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

     For the fiscal year ended December 31, 1996 Commission file number  0-8952
                               -----------------                        -------

                                     SB Partners
     --------------------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
     New York                                                        13-6294787
     --------------------------------------------------------------------------
     (State of other jurisdiction of       (I.R.S. Employer Identification No.)
     Incorporation or organization)

     666 Fifth Avenue, N.Y., N.Y.                                         10103
     --------------------------------------------------------------------------
     (Address of Principal Executive Offices)                          Zip Code

                                   (212) 408-2900
     --------------------------------------------------------------------------
                 Registrant's telephone number, including area code

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

     TITLE OF EACH CLASS              NAME OF EACH EXCHANGE ON WHICH REGISTERED
     -------------------              -----------------------------------------
           NONE
     -------------------              -----------------------------------------

     -------------------              -----------------------------------------

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

                       Units of Limited Partnership Interests
     -------------------------------------------------------------------------
                                  (Title of Class)

       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

     STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NONAFFILIATES
        OF THE REGISTRANT.  (THE AGGREGATE MARKET VALUE SHALL BE COMPUTED BY
     REFERENCE TO THE PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE BID AND
     ASKED PRICES OF SUCH STOCK, AS OF A SPECIFIED DATE WITHIN 60 DAYS PRIOR TO
                                THE DATE OF FILING.)
                                   Not Applicable
                                   --------------


        INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
       CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE (APPLICABLE
                           ONLY TO CORPORATE REGISTRANTS).
                                   Not Applicable
                                   --------------

     INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
      405 OF REGULATION S-K 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
                          AMENDMENT TO THIS FORM 10-K (x).

        DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
       INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE
      DOCUMENT IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2)
      ANY PROXY OR INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT
         TO RULE 424(b) OR (c) UNDER THE SECURITIES ACT OF 1933. (THE LISTED
         DOCUMENTS SHOULD BE CLEARLY DESCRIBED FOR IDENTIFICATION PURPOSES.)

                                        None
                                        ----

                                    Page 1 of 39


     <PAGE>2
                                       PART I
                                       ------
     ITEM 1.  BUSINESS
              --------
     Description of SB Partners (the "Registrant")
     ---------------------------------------------

     The Registrant is an existing New York limited partnership, which has been
     engaged in acquiring, operating and holding for investment a varying
     portfolio of real properties since April, 1971.  The Registrant's initial
     public offering was in 1971.  In 1973, 1978, 1980, 1982 and 1985, the
     Registrant sold additional limited partnership interests.  As of December
     31, 1996, the Registrant owned a shopping center in Plantation, Florida;
     office buildings in Cherry Hill, New Jersey; and apartment projects in
     Holiday, Florida, and Reno, Nevada.  In addition, the Registrant owned an
     undivided 10% interest in an apartment project in Orlando, Florida, a 60%
     interest in an apartment project in Atlanta, Georgia, and 13.9 acres of
     land in Holiday, Florida.

     The principal objectives of the Registrant are, first, to obtain capital
     appreciation through equity investments in real estate, second, to
     generate cash available for distribution, a portion of which may not be
     currently taxable, and third, to the extent still permitted under the
     Internal Revenue Code of 1986, as amended, to generate tax losses which
     may offset the Limited Partners' income from the Registrant and certain
     other sources. In recent years, the ability of the Registrant to meet
     these objectives has been impacted negatively by factors discussed
     elsewhere in this annual report on Form 10-K, among other things.

     The Registrant incurred losses before gain or loss on sale of investments
     in real estate during each year of its existence, except for calendar
     years 1982, 1987, and 1988.  The accumulated tax losses and accumulated
     financial statement losses before gain on sale of investments in real
     estate as of December 31, 1996 were $159,602,698 and $111,016,796,
     respectively.  The accumulated tax gains and the accumulated financial
     statement gains on sale of investments in real estate as of December 31,
     1996, were $140,549,918 and $104,377,314 respectively.  Aggregate cash
     distributions made to partners as of December 31, 1996 were $97,752,882.
     Refer to the Registrant's 1996 Annual Audited Financial Statements, which
     are contained in this annual report on Form 10-K, Note 7 of Notes to
     Financial Statements, for a reconciliation of net income (loss) for
     financial reporting purposes to net income (loss) for Federal income tax
     reporting purposes for each of the three years in the period ended
     December 31, 1996.


     <PAGE>3
     Recent Developments and Real Estate Investment Factors
     ------------------------------------------------------

     During the last ten years, overbuilding in many markets, significant
     changes in federal income tax legislation, stricter government regulations
     with respect to lending practices of banking and savings and loan
     institutions, and the Resolution Trust Corporation's administration and
     disposition of billions of dollars of real estate, had a significant
     negative impact on the value and operation of real estate investments.
     The trend of corporate downsizing in recent years and businesses
     relocating have had negative impacts on some markets in particular.  Some
     markets and asset classes became unstable and some have now stabilized at
     a level where current rental rates less operating, financing and tenanting
     costs are insufficient to support debt and equity structures created in
     the 1980's and early 1990's.  Certain central business district office
     buildings are typical of these latter situations.  During such periods of
     declining values, the use of leverage caused equity values and property
     cash flow to decrease more rapidly and more substantially than instances
     where leverage was not used.  In many instances, the estimated value of
     these properties proved to be less than mortgage notes encumbering such
     properties.  Owners of such leveraged real estate investments, including
     the Registrant, may take actions with respect to these nonrecourse
     mortgage notes, including renegotiating terms of the loans with the
     lender, or turning the properties over to the lender in full satisfaction
     of the debt.

     Recently, certain markets and real estate asset classes have stabilized or
     exhibited improvement from improved tenant demand and reduced building
     activity, lower cost and greater availability of debt, lower equity
     capital costs, and more potential buyers of real estate including real
     estate investment trusts and opportunistic real estate funds, among other
     factors.  While not all asset classes have shown improvement, apartment
     properties are typical of an improving asset class.  When real estate
     values are stable or improving, the use of leverage, where the cost of
     debt is exceeded by the return on capital generated by property
     operations, enhances the value of the investment portfolio, yielding a
     return to the investor greater than that which would be possible without
     the use of such leverage.  In such instances, the owners of real estate
     investments, including the Registrant, may choose to place mortgage loans
     on such properties, to the benefit of the investor.

     Due to the tendency of real estate to be relatively non-liquid, the
     ability of the Registrant and other owners of real estate to vary their
     portfolios in response to changing general and local economic, financial
     and investment conditions has been limited in the past and may be limited
     in the future.  The Registrant has taken what it believes to have been the
     best available course of action with respect to its investments in various
     properties in different markets, in order to protect and preserve the
     interests of the partnership.  While this resulted in relinquishing
     ownership to certain properties where the value of the mortgage note
     encumbering the property exceeded the equity in the underlying property,
     the Registrant has also replaced the mortgage notes for certain properties
     so as to best preserve the value of the property and the equity interest
     of the investors.  (Refer also to Item 7. - Management's Discussion and
     Analysis of Financial Condition and Results of Operations.)


     <PAGE>4
     Competition
     -----------

     The Registrant competes for tenants with many other real estate owners.
     The success of the Registrant in attracting tenants for its properties
     will depend upon its ability to maintain its properties and their
     attractiveness to tenants, neighborhood conditions, and changing
     demographic trends, among other things.  Furthermore, the inability of
     existing tenants to meet their obligations under the terms of their
     leases, may in turn adversely affect the performance and financial
     condition of the Registrant.


     Tax Matters
     -----------

     In August 1993, Congress passed and President Clinton signed into law the
     Omnibus Budget Reconciliation Act of 1993 (the "Act").  The Act includes
     several provisions designed to help revive the real estate industry,
     including relaxed rules for pension fund investments in real estate,
     passive-loss relief for developers, extension of the low-income housing
     credit, and an easing of the rules on recognizing cancellation of certain
     real estate debt.  On the negative side, the Act extended the recovery
     period by 7.5 years (from 31.5 to 39) for nonresidential real estate
     purchased subsequent to the effective date of the Act.

     The Act relaxes the "per se" passive characterization of certain rental
     real estate operations.  For tax years beginning after 1993, eligible
     taxpayers, who materially participate in rental real estate activities,
     are able to deduct losses from rental activities against other income.
     For all other nonmaterial participating taxpayers, the provisions enacted
     as part of the Tax Reform Act of 1986 and the Technical and Miscellaneous
     Revenue Act of 1988 (as discussed below) continue to apply.  The Act also
     provides some relief by allowing taxpayers, other than corporations, to
     elect to exclude from income some cancellation of "qualified real property
     business indebtedness", effective for certain discharges after December
     31, 1992.  The amount of the exclusion is limited to the basis of the
     taxpayer's business real property or the excess of the principal amount of
     the debt over the fair market value of business real property that secures
     the debt, whichever is less.  The basis of the taxpayer's business real
     property must be reduced by the amount of excluded income. The provision
     does not apply to foreclosures or "deeds in lieu" with respect to
     nonrecourse debt.


     <PAGE>5
     Tax Reform Act of 1986 and the Technical
      and Miscellaneous Revenue Act of 1988
     ----------------------------------------

     On October 22, 1986, the Tax Reform Act of 1986 (the "1986 Act") was
     signed into law.  The Technical and Miscellaneous Revenue Act of 1988
     ("TAMRA 88") was enacted on November 10, 1988.  Generally the principal
     provisions of the 1986 Act and TAMRA 88 impacting the Registrant and its
     Limited Partners are:

         -Passive activity loss limitations have limited the ability of the
         partners to offset their allocated share of taxable passive losses
         (essentially losses from rental real estate operations) of the
         Registrant against other earned or portfolio income.

         -The limitation of losses to amounts that partners have "at risk" was
         extended to passive real estate investments.  The amount a partner has
         "at risk" generally includes their proportionate share of qualified
         non-recourse financing, and is also subject to other limitations.

         -The 1986 Act limits the deduction of investment interest expense, as
         defined, to the amount of net investment income generated for the
         year, as defined, with an unlimited carryover for excess expense.

     The effect of these and other changes in income tax laws will vary
     depending upon each partner's individual tax situation.  The Registrant
     believes that its characterization of and allocation of passive and
     portfolio income and losses from its operations are in compliance with
     existing regulations, but it can provide no assurances that the Internal
     Revenue Service ("IRS") will not challenge such treatment and allocations
     in the event of an audit.

     Other Tax Matters
     -----------------

     The Revenue Act of 1987 retroactively changed the treatment of income and
     loss of publicly-traded partnerships ("PTP") to characterize a partner's
     share of income as portfolio instead of passive, and limits the current
     deductibility of losses.

     The term PTP refers to any partnership whose interests are traded on an
     established securities market or are readily tradeable on a secondary
     market (or the substantial equivalent thereof).  The Registrant believes
     that it is not a PTP pursuant to such definition and therefore its holders
     will not be subject to the Revenue Act of 1987 provisions.  However, due
     to the complexities of the regulations, no assurance can be provided that
     the IRS may not challenge the treatment of income and losses in the event
     of an audit.


     <PAGE>6
     In 1989, the Registrant made an election under IRC Section 754 which
     provides for an adjustment of the adjusted tax basis of depreciable
     property which may result in additional depreciation deductions to
     purchasing partners and those partners who inherit their interests in the
     Registrant.  These adjustments, however, are subject to the passive loss
     rules discussed above and may or may not provide current benefit to a
     particular partner.  The Registrant will be bound by the Section 754
     election for all subsequent years.

     General
     -------

     Efforts required in complying with Federal, state and local environmental
     regulations may have and may continue to have an adverse effect on the
     Registrant's operations in the future, although such costs have not
     historically been significant in amount.

     There are approximately 36 full and part-time on site project personnel
     employed at the Registrant's properties.

     The Registrant's real estate investments are not generally subject to
     seasonal fluctuations, although net income (loss) may vary somewhat from
     quarter to quarter based upon changes in utility consumption and seasonal
     maintenance expenditures at each property.

     The Registrant considers itself to be engaged in only one industry
     segment, real estate investment, and therefore information regarding
     industry segments is not applicable and has not been provided.

     ITEM 2.PROPERTIES
            ----------

     The properties owned by the Registrant as of December 31, 1996 are set
     forth on the Summary of Properties Schedule on the page immediately
     following.

     ITEM 3.LEGAL PROCEEDINGS
            -----------------
     NONE.

     ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF UNITHOLDERS
            ----------------------------------------------
     NONE.


     <PAGE>7
     <TABLE>
                                                        SB PARTNERS
                                                   Summary of Properties
                                                  As of December 31, 1996
     <CAPTION>
                                                       Description                              Percent
                                                 -----------------------    Acquisition     -------------       Mortgage
              Property            Location         Sq. Ft.  Units  Acres        Date     Ownership  Occupancy   Payable
     <S>                        <C>              <C>        <C>    <C>       <S>          <C>       <C>       <C>
     Apartments:

     Holiday Park Apts.          Holiday, FL       220,000    244   21.5      Jan 1991     100%      91.8%    $ 3,556,683
     Summerwalk Apts. (1)        Orlando, FL       252,000    304   12.8      Mar 1978      10%     100.0%         -
     Riverbend Apts. (2)         Atlanta, GA       557,000    594   49.8      Jan 1989      60%      81.0%         -
     Meadowwood Apts.             Reno, NV         529,000    704   30.0      May 1983     100%      93.2%     21,500,000
                                                 ---------  -----  -----
                                                 1,558,000  1,846  114.1
     Office:                                     =========  =====  =====

     Cherry Hill Office Center  Cherry Hill, NJ    138,000   n/a     3.4      Sep 1993     100%      78.6%        345,695

     Retail:

     Plantation Center          Plantation, FL     238,000   n/a    18.6     July 1981     100%     77.6%      5,350,000

     Land:

     Unimproved land (3)         Holiday, FL         n/a     n/a    13.9     July 1978     100%      n/a          -

     <FN>
      (1) Registrant owns a 10% interest in property. This interest was sold in January, 1997.
      (2) Property contributed to 60% owned joint venture on January 6, 1992.  Refer also to the Registrant's 1996
     Annual Audited Financial Statements.  The property is included in "Investment in Joint Venture" in the 1996
     Annual Audited Financial Statements.
      (3) Land is adjacent to Holiday Park Apartments.
     </TABLE>


     <PAGE>8                           PART II
                                       -------

     ITEM 5.MARKET FOR REGISTRANT'S UNITS OF PARTNERSHIP
              INTEREST AND RELATED UNITHOLDER MATTERS
            --------------------------------------------

     The transfer of Units or Participations (equivalent to one-half Unit) is
     subject to certain limitations, including the consent of the General
     Partner.  There is no public market for the Units and it is not
     anticipated that any such public market will develop.
     The number of Unitholders as of December 31, 1996 was 3,908.

     Although at various times the Registrant has generated and distributed
     cash to the Unitholders, there is no requirement to make such
     distributions nor can there be any assurance that future operations will
     generate cash available for distribution.  The Registrant has not paid
     distributions since 1990 and has no current plans to recommence paying
     distributions.


     ITEM 6.SELECTED FINANCIAL DATA
            -----------------------

     Selected Financial Data is set forth on the table on the following page.
     This information should be read in conjunction with the Financial
     Statements and Notes thereto, and Management's Discussion and Analysis of
     Financial Condition and Results of Operations included elsewhere in this
     annual report on Form 10-K.


     <PAGE>9
     <TABLE>
     SELECTED FINANCIAL DATA

     The following table sets forth selected financial data regarding the Registrant's
     financial condition and results of operations determined in accordance with
     generally accepted accounting principles.  This data should be read in conjunction
     with the Audited Financial Statements and Notes thereto included elsewhere in this
     annual report on Form 10-K.
     <CAPTION>
                                                                                  For the Years Ended December 31,
                                                                         1996      1995        1994        1993        1992
                                                                         ----      ----        ----        ----        ----
                                                                              (In Thousands, Except Per Unit Data)
     <S>                                                               <C>      <C>         <C>         <C>         <C>
     Income Statement Data:
     Rental, Interest and Other Revenues                               $15,430  $ 23,324    $ 25,544    $ 27,019    $ 30,221
     Operating Expenses, including
       Depreciation and Amortization                                   (23,495)  (31,356)    (35,648)    (35,424)    (35,659)
     Provision for loan losses, net of recoveries                            0         0           0        (129)     (1,834)
     Writedown and Reserves of Investments in Real Estate                    0         0      (4,162)          0      (1,295)
     Interest Expense on Unsecured and Secured Loans                         0         0           0           0         (53)
                                                                       -------  --------   ---------   ---------   ---------
     Loss from Operations                                               (8,065)   (8,032)    (14,266)     (8,534)     (8,620)

     Gain (Loss) on Sale of Investments in Real Estate                       0     3,964       6,859         (72)        125
     Equity in Net Income (Loss) of Joint Venture                          426       725        (352)       (372)       (922)
                                                                       -------  --------   ---------   ---------   ---------
     Net Loss before Extraordinary Gain                                 (7,639)   (3,343)     (7,759)     (8,978)     (9,417)

     Gain on Dispositions of Investments in Real Estate
       through Discharge of Indebtedness                                11,951         0           0           0           0
                                                                       -------  --------   ---------   ---------   ---------
     Net Income (Loss)                                                 $ 4,312  ($ 3,343)  ($  7,759)  ($  8,978)  ($  9,417)
                                                                       =======  ========   =========   =========   =========

     Net Income (Loss) per Unit of Partnership Interest:
       Net Loss before Extraordinary Gain                             ($   985) ($   431)  ($  1,001)  ($  1,158)  ($  1,215)
       Extraordinary Gain                                              $ 1,541   $     0    $      0    $      0    $      0
       Net Income (Loss)                                               $   556  ($   431)  ($  1,001)  ($  1,158)  ($  1,215)

     Weighted Average Number of
       Partnership Units Outstanding                                     7,754     7,754       7,754       7,754       7,754

     Balance Sheet Data at Year End:

     Real Estate, net                                                  $32,357  $106,893    $116,253    $136,749    $136,069
     Investment in Joint Venture                                       $10,742  $ 10,697    $ 11,134    $ 11,635    $ 12,122
     Mortgage Notes Receivable, net                                    $     0  $      0    $      0    $  5,934    $ 10,006
     Total Assets                                                      $47,775  $127,259    $135,238    $163,370    $170,311
     Mortgage Notes Payable, net                                       $30,752  $103,408    $112,254    $136,004    $136,436
     </TABLE>


     <PAGE>10
     ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS
            -------------------------------------------------

     LIQUIDITY AND CAPITAL RESOURCES
     -------------------------------

     As of December 31, 1996, the Registrant had cash and cash equivalents of
     approximately $2,019,000 in addition to $592,000 of deposits held in
     escrow by certain lenders for the payment of insurance, real estate taxes
     and certain capital and maintenance costs.  These balances are
     approximately $1,839,000 less than cash, cash equivalents and deposits
     held in escrow on December 31, 1995.  Although the refinancing of an
     existing mortgage note secured by Meadowwood Apartments increased cash and
     cash equivalents by approximately $3,260,000, total cash and cash
     equivalents decreased, primarily due to the payment of approximately
     $3,005,000 of principal on the Registrant's mortgage notes.  Included in
     the total paid is a required principal reduction of $1,500,000 paid to the
     former lender of the mortgage note secured by Plantation Shopping Center,
     payment of $1,038,000 to reimburse the letters of credit which secured the
     financing for 1010 Market Street office building, and approximately
     $467,000 of mortgage principal paid through regularly scheduled payments.
     In addition, the Registrant made expenditures of approximately $2,078,000
     for capital additions to existing properties during the year.

     Outstanding debt at December 31, 1996 consisted of approximately
     $25,402,000 of nonrecourse first mortgage notes secured by real estate
     owned by the Registrant, and a recourse note of $5,350,000 secured by
     Plantation Shopping Center.  Scheduled maturities through regularly
     scheduled monthly payments will be $395,000 in 1997.  The terms of certain
     mortgage notes require monthly escrow of estimated annual real estate tax,
     insurance and reserves for repairs, maintenance and improvements to the
     secured property, in addition to the payment of principal and interest.
     The Registrant has no other debt except normal trade accounts payable and
     accrued interest on mortgage notes payable.

     During 1996, the prior existing mortgage note secured by Plantation
     Shopping Center, with a balance of $5,173,000, was retired and a short-
     term secured note of $5,350,000 obtained from a bank was placed on the
     property.  Payment terms of the new note include interest only, based upon
     a fixed spread over a LIBOR index, until the maturity of the note at the
     end of 1997.  The Registrant expects to evaluate the potential for a sale
     of the shopping center or to refinance the new short-term loan with more
     conventional long-term financing prior to the maturity of the note.  If it
     fails to do so, the Registrant may be required to secure funds from other
     sources to retire the mortgage loan.


     <PAGE>11
     In December, 1996, the Registrant successfully completed negotiations with
     the lender for the mortgage loan secured by Meadowwood Apartments to
     refinance the loan.  The maturity of the loan was extended through January
     2004, the loan amount was increased to $21,500,000, and the interest rate
     was reduced from 9.5% to 7.55% per annum.

     As previously reported, cash flow generated by International Jewelry
     Center, located in Los Angeles, California, had not been sufficient to
     carry debt service on the mortgage encumbering the property.  The
     Registrant ceased paying scheduled debt service in May 1993, and since
     then had been paying debt service based on available cash flow from the
     building.  A reserve for real estate losses of $4,162,000 was recorded for
     the year ended December 31, 1994 in connection with this property.  The
     loan was declared in default by the lender in November 1993, and the
     lender filed a Notice of Default and Election to Sell on March 3, 1995 and
     a Notice of Trustee's Sale on April 24, 1996.  Negotiations with the
     lender were concluded on May 22, 1996, when the title to the property was
     transferred to a designee of the lender.  Consideration for this
     conveyance was $238,000, subject to the first leasehold note and deed of
     trust, the balance of which was $33,898,520, and the assumption by the
     designee of the ground lease.  The Registrant recognized a gain of
     approximately $7,536,000 associated with the disposition.  The disposition
     will have negative tax consequences for the partners.

     Also as previously reported, in 1994 and 1995, Southwestern Bell, formerly
     the largest non-governmental tenant in the St. Louis Central Business
     District, relocated its headquarters and other operations to San Antonio,
     Texas and other cities.  The St. Louis CBD continues to suffer from
     significant decreases in rental rates charged for new and renewal leases
     and high vacancy rates caused by other tenants downsizing, ceasing
     operations, or relocating to suburban locations or other cities.  This
     adversely affected the operation of 1010 Market Street in St. Louis.  The
     Registrant stopped making regularly scheduled payments on the mortgage
     note secured by 1010 Market Street office building in May, 1996.  The
     lender filed a Notice of Default on May 9, a notice of Acceleration of
     Debt on May 22, and a Notice of Foreclosure Sale on August 1, 1996.  The
     property was sold on August 28, 1996 in a foreclosure sale, effectively
     extinguishing the mortgage note outstanding.  The balance of the mortgage
     note at the date of foreclosure was $39,563,617, resulting in a net gain
     of approximately $4,415,000.  The foreclosure will have negative tax
     consequences for the partners.


     <PAGE>12
     Cash flow from the Registrant's remaining apartment properties has been
     increasing moderately, reflecting improving markets.  Based upon the
     refinancing of the loan with a significantly lower interest rate and debt
     service requirement, Plantation Center is expected to generate positive
     cash flow from operations during 1997.  The dispositions of International
     Jewelry Center and 1010 Market Street from the Registrant's portfolio of
     investments will not have a significant impact on cash flows since, during
     recent years, the Registrant paid debt service to the lender equal to the
     cash flow from the operations of the properties.  The Registrant's
     remaining properties are expected to generate sufficient cash flow to
     cover operating, financing and capital improvement costs of the Registrant
     for the foreseeable future.


     MANAGEMENT'S DISCUSSION OF RESULTS OF OPERATIONS
     ------------------------------------------------
     1996 VS. 1995
     -------------

     Total revenues decreased $7,894,000 to $15,430,000 in 1996 from
     $23,324,000 in 1995.  Loss from operations increased $33,000 to $8,065,000
     in 1996 from $8,032,000 in 1995.  Net income increased $7,655,000 to net
     income of $4,312,000 in 1996 from a net loss of $3,343,000 in 1995.

     Net income for 1996 includes an extraordinary gain on dispositions of
     investments in real estate through discharge of indebtedness of
     $11,951,000.  The net loss for 1995 is net of a gain on sale of investment
     in real estate of $3,964,000.

     Meadowwood Apartments (Reno, Nevada)
     ---------------------
     Total revenues increased $191,000 to $4,673,000 in 1996 from $4,482,000 in
     1995.  Net loss after depreciation and mortgage interest expense increased
     $1,000 to $41,000 in 1996 from $40,000 in 1995.

     The increase in total revenues was primarily due to the strong apartment
     market, evidenced by increases in rental rates implemented at the property
     which increased revenues $269,000, and increases in miscellaneous income
     which increased revenues $28,000.  However, the rental increases were
     partially offset by decreases in occupancy in the early part of the year
     which decreased revenues $106,000.  Net loss after depreciation and
     amortization remained approximately unchanged from 1995 since the
     increased revenues were offset by increased expenses, primarily the
     acceleration of the amortization of $135,000 of costs associated with the
     loan which was replaced, (see also the Liquidity and Capital Resources
     Section.)  Other increases in operating expenses in 1996 included an
     increase in repair and maintenance costs of $79,000.  The increases in
     costs were partially offset by decreases in other expenses, including a
     decrease in depreciation expense of $21,000.


     <PAGE>13
     Holiday Park Apartments (Holiday, Florida)
     -----------------------

     Total revenues increased $26,000 to $1,097,000 in 1996 from $1,071,000 in
     1995.  Net loss after depreciation and mortgage interest expense decreased
     $19,000 to $101,000 in 1996 from $120,000 in 1995.

     The increase in total revenues was primarily due to the strength of the
     Tampa Bay area apartment market, as evidenced by increases in rental rates
     charged at the property which increased revenues $18,000, while occupancy
     at the property increased moderately increasing revenues $4,000.  The
     decrease in net loss was primarily due to the increased revenues, and
     decreased mortgage interest expense of $3,000, partially offset by
     increased depreciation expense of $10,000.

     Plantation Shopping Center (Plantation, Florida)
     --------------------------

     Total revenues decreased $96,000 to $1,425,000 in 1996 from $1,521,000 in
     1995.  Net loss after depreciation and mortgage interest expense decreased
     $267,000 to $168,000 in 1996 from $435,000 in 1995.

     The decrease in total revenues was primarily due to decreases in rental
     rates charged at the property which decreased income $76,000, decreases in
     average occupancy which decreased income $10,000, and decreases in
     escalation income which decreased income $27,000, partially offset by
     increased percentage rents of $20,000.  The decrease in net loss was
     primarily due to decreased interest expense of $510,000 as a result of the
     refinancing of the mortgage note securing the property at a substantially
     reduced balance and lower interest rate.  (See also the Liquidity and
     Capital Resources Section.)  The decreased interest expense was partially
     offset by the decreased revenues and increases of $74,000 in depreciation
     expense and $73,000 in real estate tax expense.

     Due to increased leasing activity in the latter half of 1996, new leases
     have been entered into with tenants, and occupancy for 1997 is expected to
     exceed 1996 levels.


     <PAGE>14
     1010 Market Street (St. Louis, Missouri)
     ------------------

     The office building at 1010 Market Street was sold in a foreclosure sale
     on August 28, 1996 effectively extinguishing the mortgage note
     outstanding, which resulted in a net gain of approximately $4,415,000.
     (Refer also to the Liquidity and Capital Resources Section and Footnote 4
     of the Financial Statements.)

     Total revenues decreased $2,156,000 to $3,816,000 in 1996 from $5,972,000
     in 1995.  Net loss before gain on disposition and after depreciation and
     mortgage interest expense increased $1,169,000 to $1,687,000 in 1996 from
     $518,000 in 1995.

     Due to the disposition of the property by the Registrant, the reporting
     period for 1010 Market Street office building ended on August 28, 1996.
     The changes in revenues and net loss are substantially due to the
     shortened reporting periods.  Also included in the activity for the
     reporting period is a write-off to bad debt expense of approximately
     $600,000 of uncollectible accounts receivable, originally recorded
     pursuant to the straight-lining of rents in accordance with FAS 13, which
     increased the net loss reported for the year.


     Cherry Hill Office Center (Cherry Hill, New Jersey)
     -------------------------

     Total revenues increased $123,000 to $1,506,000 in 1996 from $1,383,000 in
     1995.  Net income after depreciation and mortgage interest expense
     decreased $95,000 to $28,000 in 1996 from $123,000 in 1995.

     The increase in total revenue was primarily due to increases in base rent
     charged to tenants which increased income $68,000, and increased average
     occupancy which increased income $38,000, and an increase in escalation
     income of $16,000.  The decrease in net income was primarily due to
     increased property operating costs, including increased utility costs of
     $125,000 due both to the excessively harsh winter of 1996, and a general
     rate increase imposed by the utility company in 1996.  Other increases in
     expenses included an increase in repairs and maintenance costs of $54,000,
     and increased depreciation and amortization expense of $39,000.


     <PAGE>15
     International Jewelry Center (Los Angeles, California)
     ----------------------------

     Through negotiations with the former lender, the Registrant transferred
     title to the International Jewelry Center on May 22, 1996, in full
     satisfaction of the mortgage note outstanding, which resulted in a net
     gain on disposition of approximately $7,536,000.  (Please refer also to
     the Liquidity and Capital Resources Section and Footnote 4 of the
     Financial Statements.)

     Total revenues decreased $3,930,000 to $2,849,000 in 1996 from $6,779,000
     in 1995.  Net loss before gain on disposition and after depreciation and
     mortgage interest expense increased $100,000 to $3,487,000 in 1996 from
     $3,387,000 in 1995.

     Due to the disposition of the property by the Registrant, the reporting
     period for the International Jewelry Center ended on May 22, 1996.  The
     changes in revenues and net loss are substantially due to the shortened
     reporting period.  Also included in the reporting period is a write-off to
     bad debt expense of approximately $1,931,000 of uncollectible accounts
     receivable, originally recorded pursuant to the straight-lining of rents
     in accordance with FAS 13, which increased the net loss for the year.


     Investment in Joint Venture
     ---------------------------

     Equity in net income of joint venture decreased $299,000 to $426,000 in
     1996 from $725,000 in 1995.  The decrease in net income was primarily due
     to a decrease in average occupancy of 9% during the latter half of the
     year ended December 31, 1996 to approximately 84% from approximately 93%
     during the year ended December 31, 1995.  This lower occupancy,
     attributable to decreased demand for housing in the Atlanta area due to
     the conclusion of the Olympic Games, reduced income $167,000 as compared
     to the prior year.  In addition, net income was lower due to increases in
     operating expenses, primarily increases in utilities expense of $156,000,
     professional fees of $64,000, and real estate tax expense of $54,000.


     <PAGE>16
     MANAGEMENT'S DISCUSSION OF RESULTS OF OPERATIONS
     ------------------------------------------------
     1995 VS. 1994
     -------------

     Total revenues decreased $2,220,000 to $23,324,000 in 1995 from
     $25,544,000 in 1994.  Loss from operations decreased $6,234,000 to
     $8,032,000 in 1995 from $14,266,000 in 1994.  Net loss decreased
     $4,415,000 to $3,343,000 in 1995 from $7,758,000 in 1994.

     The net loss for 1995 includes a gain on sale of real estate of
     $3,964,000.  The net loss for 1994 includes a net gain on sales of real
     estate of $6,859,000 and a reserve for real estate losses of $4,162,000.

     Meadowwood Apartments (Reno, Nevada)
     ---------------------

     Total revenues increased $161,000 to $4,482,000 in 1995 from $4,321,000 in
     1994.  Net loss after depreciation and mortgage interest expense decreased
     $60,000 to $40,000 in 1995 from $100,000 in 1994.

     The increase in total revenues was primarily due to the strong apartment
     market, evidenced by increases in rental rates implemented at the property
     which increased revenues $132,000, and increased occupancy which increased
     revenues $27,000.  The decrease in net loss was primarily attributable to
     the increases in income, partially offset by increases in repairs and
     maintenance costs of $43,000, real estate taxes of $41,000, payroll and
     related costs of $8,000, and insurance expense of $7,000.

     Sahara Palms Apartments (Las Vegas, Nevada)
     -----------------------

     Sahara Palms Apartments was sold on December 28, 1995, for $12,000,000,
     resulting in a gain on sale of $3,964,000.  Revenues before gain on sale
     increased $18,000 to $2,001,000 in 1995 from $1,983,000 in 1994.  Net loss
     before gain on sale and after depreciation and mortgage interest expense
     increased $95,000 to $285,000 in 1995 from $190,000 in 1994.

     The increase in total revenues was primarily due to increases in rental
     rates implemented at the property during the year which increased income
     $8,000 and increases in incidental income of $10,000.  The increase in net
     loss was primarily due the write-off of deferred financing costs of
     $94,000, as well as increases in advertising costs of $11,000 and other
     costs which were partially offset by the increases in income.


     <PAGE>17
     Holiday Park Apartments (Holiday, Florida)
     -----------------------

     Total revenues increased $6,000 to $1,071,000 in 1995 from $1,065,000 in
     1994.  Net loss after depreciation and mortgage interest expense increased
     $21,000 to $120,000 in 1995 from $99,000 in 1994.

     The increase in total revenues was primarily due to increases in
     incidental income during the year.  The increase in net loss was primarily
     due to increases in repairs and maintenance of $11,000, insurance of
     $4,000, utilities of $3,000, depreciation of $2,000 and professional fees
     of $2,000.

     Plantation Shopping Center (Plantation, Florida)
     --------------------------

     Total revenues increased $281,000 to $1,521,000 in 1995 from $1,240,000 in
     1994.  Net loss after depreciation and mortgage interest expense decreased
     $489,000 to $435,000 in 1995 from $924,000 in 1994.

     The increase in total revenues was primarily due to increases in rental
     rates charged at the property which increased income $223,000, increases
     in average occupancy which increased income $25,000, and increases in
     escalation income which increased income $27,000.  The decrease in net
     loss was primarily due to the increased revenues, and decreases in
     professional fees expense of $213,000.  Legal fees incurred in the prior
     year pertained to a tenant collection matter which has since been
     resolved.

     1010 Market Street (St. Louis, Missouri)
     ------------------

     Total revenues increased $396,000 to $5,972,000 in 1995 from $5,576,000 in
     1994.  Net loss after depreciation and mortgage interest expense decreased
     $499,000 to $518,000 in 1995 from $1,017,000 in 1994.

     The increase in total revenues was primarily due to increases in
     escalations and other income of $352,000, and increases in miscellaneous
     income of $38,000.  The decrease in net loss was primarily due to the
     increase in revenues, and decreases in repairs and maintenance expense of
     $89,000 and utilities of $26,000.


     <PAGE>18
     Cherry Hill Office Center (Cherry Hill, New Jersey)
     -------------------------

     Total revenues decreased $125,000 to $1,383,000 in 1995 from $1,508,000 in
     1994.  Net income after depreciation and mortgage interest expense
     decreased $125,000 to $123,000 in 1995 from $248,000 in 1994.

     The decrease in total revenues was primarily due to decreases in base rent
     charged to tenants which decreased income $34,000, and decreased average
     occupancy which decreased income $78,000, and a decrease in escalation
     income of $14,000.  The decrease in net income was primarily due to the
     decrease in revenues, as total expenses remained relatively constant.

     International Jewelry Center (Los Angeles, California)
     ----------------------------

     Total revenues decreased $222,000 to $6,779,000 in 1995 from $7,001,000 in
     1994.  Net loss after depreciation and mortgage interest expense decreased
     $4,348,000 to $3,387,000 in 1995 from $7,735,000 in 1994.  As previously
     discussed in Liquidity and Capital Resources, a reserve for real estate
     losses of $4,162,000 was recorded in 1994.  The net loss excluding the
     reserve for real estate losses decreased $186,000 to $3,387,000 in 1995
     from $3,573,000 in 1994.

     The decrease in total revenues was primarily due to a decrease in average
     base rents charged to tenants which decreased income $251,000, and
     decreases in escalation income of $109,000 and in other income of $70,000.
     These decreases were partially offset by an increase in income of $207,000
     which resulted from an increase in average occupancy of 4% to 71% in 1995
     from 67% in 1994.  The decrease in net loss was primarily due to decreases
     in bad debt expense of $417,000, real estate taxes of $203,000, and
     repairs and maintenance of $138,000, partially offset by the decrease in
     revenues and increases in depreciation expense of $289,000, payroll and
     related costs of $37,000, and utilities expense of $22,000.

     The International Jewelry Center was severely adversely affected by the
     softening of the jewelry business in general, and the migration of tenants
     and potential tenants to suburban areas perceived to be safer than
     downtown Los Angeles.  As a result, cash flow generated by the
     International Jewelry Center was not sufficient to carry ground rent and
     debt service on the mortgage encumbering the property.  The positive
     effects of improvements in property occupancy were minimized by continuing
     reductions in rental rates paid by new and renewal tenants, tenant
     failures and costs of improving such space for the tenants at the
     Registrant's cost.  Additionally, given the nature of the tenancy at the
     building, many of whom manufacture and clean jewelry in the building, the
     City of Los Angeles has imposed additional requirements in respect of the
     waste water treatment plant and indoor air monitoring system.


     <PAGE>19
     Mortgage Notes Receivable Portfolio
     -----------------------------------

     Interest income from the mortgages receivable portfolio decreased to $-0-
     from $497,000 in 1994.  The decrease was caused by the reacquisition of
     Nob Hill Apartments in July, 1994.  The Registrant has not owned interests
     in mortgage notes receivable since that time.

     Investment in Joint Venture
     ---------------------------

     Equity in net income (loss) of joint venture increased $1,076,000 to
     income of $725,000 in 1995 from a net loss of $351,000 in 1994.  The
     increase in net income was primarily due to increases in average occupancy
     of approximately 7% to approximately 93% during the year ended December
     31, 1995 from approximately 86% for the year ended December 31, 1994.  In
     addition to increased occupancy, increases in base rentals charged to
     tenants accounted for $166,000 of the total increase in net income for the
     year.



     ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
            -------------------------------------------

     The Financial Statements required by this item, together with the Report
     of Independent Public Accountants, thereon, are contained herein on pages
     25 through 37 of this annual report on Form 10-K.  Supplementary financial
     information required by this item is contained herein on pages 38 and 39
     of this report.


     ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ------------------------------------------------
            ACCOUNTING AND FINANCIAL DISCLOSURE
            -----------------------------------

     NONE.


     <PAGE>20
                                      PART III
                                      --------


     ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
             --------------------------------------------------

     The Registrant has no executive officers or directors.  All of its
     business affairs are handled by its General Partner, SB Partners Real
     Estate Corporation ("General Partner").

     The directors and executive officers of the General Partner are elected by
     Sentinel Holdings Corporation ("SHC") as its sole shareholder to serve
     until their successors are duly elected and qualified.  The Limited
     Partners of the Registrant are not entitled to vote in their election.

     The directors and executive officers of the General Partner who are active
     in the Registrant's operations are:


             Name                    Age       Position

             John H. Streicker        54       President & Director

             Michael J. Weinberger    61       Director

             Millie C. Cassidy        51       Director

             David Weiner             61       Director

             Christine Kurtz          42       Director


     Mr. Streicker joined the General Partner in May, 1976.  He has been
     President since April, 1984.  He is President of SHC and its parent
     company, J.H. Streicker & Co., Inc.

     Mr. Weinberger, a Certified Property Manager, joined the  General Partner
     in February, 1973.  He is the residential portfolio manager for the
     Western region.

     Ms. Cassidy joined the General Partner in August, 1982.  She has been a
     Director of the General Partner since March, 1988.

     Mr. Weiner joined the General Partner in April, 1984.  He is a portfolio
     manager and manager of investor relations.  He has been a Director of the
     General Partner since March, 1988.

     Ms. Kurtz joined the General Partner in 1980.  Ms. Kurtz is a Director and
     portfolio manager responsible for commercial property transactions and
     management.


     <PAGE>21
     ITEM 11.EXECUTIVE COMPENSATION
             ----------------------

     The Registrant has no executive officers or directors.


     ITEM 12.SECURITY OWNERSHIP OF CERTAIN
             -----------------------------
             BENEFICIAL OWNERS AND MANAGEMENT
             --------------------------------

     (a) At December 31, 1996, an institutional investor of record owned 7.13%
         of the outstanding Units of Limited Partnership Interests.  On January
         13, 1993, a group of unitholders of record, including the
         institutional investor referred to above, entered into a collective
         agreement with respect to their ownership interest in the Registrant.
         The aggregate number of Units beneficially owned by the group is 676
         Units, representing 8.7% of the total number of outstanding Units of
         Limited Partnership Interest on that date.  Each unitholder has
         disclaimed beneficial ownership of all Units owned by the other
         unitholders in this group.  The foregoing information is based upon a
         13-D filing made by the respective unitholders.

     (b) As of December 31, 1996, none of the Directors of the General Partner
         owned any outstanding Units of Limited Partnership Interest.  However,
         an Assistant Secretary of the General Partner owned four Units of
         Limited Partnership Interest.  No officers or Directors of SHC owned
         any outstanding Units of Limited Partnership Interest.  SRE Clearing
         Services, Inc. (formerly known as SRE Investor Services, Inc.), an
         affiliate of the General Partner, owned 343.5 Units of Limited
         Partnership Interest representing 4.4% of the outstanding number of
         Units on December 31, 1996.

     (c) During the year ended December 31, 1996, there have been no changes in
         control of the Registrant or the General Partner.


     ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
             ----------------------------------------------

     The General Partner, among other things, furnishes services and advice to
     the Registrant and is paid a variable annual fee for such services based
     on calculations prescribed in the Registrant's Partnership Agreement.
     Certain affiliates of the General Partner oversee the management and
     operations of various real estate properties, including those owned by the
     Registrant.  Services performed by these affiliates applicable to the
     Registrant's properties are billed at actual or allocated cost, percentage
     of revenues or net equity.  The costs of such services are believed to be
     competitive with charges for similar services provided by unrelated
     management companies.  Fees charged by these affiliates totalled
     $1,196,395, $1,839,832, and $2,073,339 in 1996, 1995, and 1994,
     respectively.


     <PAGE>22
     In connection with the mortgage financing of certain properties, the
     respective lenders required the Registrant to place the assets and
     liabilities of these properties into single asset limited partnerships and
     limited liability companies which hold, or held, title to these
     properties.  A trust company affiliated with the General Partner holds, or
     held, the general partner interest in each single asset limited
     partnership as trustee for the Registrant.  For its services, the
     affiliate is paid an annual fee, which aggregated $54,227, $129,580, and
     $134,086 in 1996, 1995, and 1994, respectively, and is based upon the
     trust company's standard rate schedule.

     Reference is made to Items 10 and 11, and Notes 2 and 8 in the  financial
     statements.

                                       PART IV
                                       -------

     ITEM 14.EXHIBITS, FINANCIAL STATEMENT
             -----------------------------
             SCHEDULES AND REPORTS ON FORM 8-K
             ---------------------------------

     (a) (1) Financial statements - The Registrant's 1996 Annual Audited
             Financial Statements are included in this annual report on Form
             10-K.

         (2) Financial statement schedules - See Index to Financial Statement
             Schedules on page 24.  All other financial statement schedules are
             inapplicable or the required subject matter is contained in the
             financial statements or notes thereto.

     (b) There were no current reports on Form 8-K filed with the SEC during
         the quarter ended December 31, 1996.

     (c) Financial data schedule

     (d) Exhibits Incorporated by Reference -

                                            Incorporated by
     Description                            Reference to
     -----------                            ---------------
     Agreement of                           Exhibit A to Registration Statement
     Limited Partnership                    on  Form  S-11  as filed with  the
                                            Securities and Exchange  Commission
                                            on May 16, 1985.


     <PAGE>23

     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.


                                            SB PARTNERS
                                            -----------

                                       By:  SB PARTNERS REAL ESTATE CORPORATION
                                            -----------------------------------
                                            GENERAL PARTNER


     March 31, 1997                         /s/ John H. Streicker
                                            ----------------------------------
                                       By:  John H. Streicker
                                            President, Chief Executive 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.


     Signature                         Position             Date
     ---------                         --------             ----

     /s/ John H. Streicker       Chief Executive Officer
     ---------------------           and Director           March 31, 1997
     John H. Streicker


     /s/ Elizabeth B. Longo      Chief Financial Officer    March 31, 1997
     ----------------------
     Elizabeth B. Longo


     /s/ George N. Tietjen III      Vice President          March 31, 1997
     -------------------------
     George N. Tietjen III


     <PAGE>24

                                     SB PARTNERS

                           ITEMS 8 and 14 (a) (1) and (2)

                     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                     -------------------------------------------

                          INDEX TO FINANCIAL STATEMENTS AND
                          ---------------------------------
                      SUPPLEMENTAL FINANCIAL STATEMENT SCHEDULE
                      -----------------------------------------

     Report of Independent Public Accountants  . . . . . . . . . . .   25

     Balance Sheets as of December 31, 1996 and 1995 . . . . . . . .   26

     Statements of Operations for the years ended
           December 31, 1996, 1995 and 1994  . . . . . . . . . . . .   27

     Statements of Changes in Partners' Capital for the
           years ended December 31, 1996, 1995 and 1994  . . . . . .   28

     Statements of Cash Flows for the years ended
           December 31, 1996, 1995 and 1994  . . . . . . . . . . . .   29

     Notes to Financial Statements . . . . . . . . . . . . . . . . .   30

     Supplemental Financial Statement Schedule:

     Schedule III -- Real Estate and Accumulated
           Depreciation -- December 31, 1996   . . . . . . . . . . .   38


     <PAGE>25

                                 ARTHUR ANDERSEN LLP

                      REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


     To the Partners of SB Partners:


           We have audited the accompanying balance sheets of SB Partners (a
     New York limited partnership) as of December 31, 1996 and 1995, and the
     related statements of operations, changes in partners' capital and cash
     flows for each of the three years in the period ended December 31, 1996.
     These financial statements and the schedule referred to below are the
     responsibility of the general partner.  Our responsibility is to express
     an opinion on these financial statements and schedule based on our audits.

           We conducted our audits in accordance with generally accepted
     auditing standards.  Those standards require that we plan and perform the
     audit to obtain reasonable assurance about whether the financial
     statements are free of material misstatement.  An audit includes
     examining, on a test basis, evidence supporting the amounts and
     disclosures in the financial statements.  An audit also includes assessing
     the accounting principles used and significant estimates made by the
     general partner, 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 financial statements referred to above present
     fairly, in all material respects, the financial position of SB Partners as
     of December 31, 1996 and 1995, and the results of its operations and its
     cash flows for each of the three years in the period ended December 31,
     1996 in conformity with generally accepted accounting principles.

           Our audits were made for the purpose of forming an opinion on the
     basic financial statements taken as a whole.  The schedule listed in the
     index to financial statements is presented for purposes of complying with
     the Securities and Exchange Commission rules and is not part of the basic
     financial statements.  This schedule has been subjected to the auditing
     procedures applied in the audit of the basic financial statements and, in
     our opinion, fairly states in all material respects the financial data
     required to be set forth therein in relation to the basic financial
     statements taken as a whole.

     /s/ Arthur Andersen LLP

     New York, New York
     January 29, 1997


     <PAGE>26
     <TABLE>
      SB PARTNERS
      BALANCE SHEETS
     <CAPTION>
                                                                                          As of December 31,
                                                                                        1996             1995
                                                                                    -----------------------------
     <S>                                                                           <C>             <C>
      ASSETS:
        Investments -
           Real Estate, at cost
                Land                                                                $ 5,113,690      $ 12,092,365
                Buildings, furnishings and improvements                              45,521,700       140,331,546
                Less - accumulated depreciation and valuation allowance             (18,278,229)      (45,560,951)
                                                                                    -----------      ------------
                                                                                     32,357,161       106,862,960

           Investment in joint venture                                               10,742,193        10,697,225
                                                                                    -----------      ------------
                                                                                     43,099,354       117,560,185
        Other Assets -
           Cash and cash equivalents                                                  2,019,321         3,304,968
           Other                                                                      2,656,255         6,394,068
                                                                                    -----------      ------------
                         Total assets                                               $47,774,930      $127,259,221
                                                                                    ===========      ============
      LIABILITIES:
           Mortgage notes payable                                                   $30,752,378      $103,407,513
           Accounts payable and accrued expenses                                      1,113,122        11,271,026
           Tenants' security deposits                                                   322,821         1,306,052
                                                                                    -----------      ------------
                         Total liabilities                                           32,188,321       115,984,591
                                                                                    -----------      ------------
      PARTNERS' CAPITAL:
           Units of partnership interest without par value;
           Limited partners - 7,753 units                                            15,603,034        11,291,611
           General partner - 1 unit                                                     (16,425)          (16,981)
                                                                                    -----------      ------------
                         Total partners' capital                                     15,586,609        11,274,630
                                                                                    -----------      ------------
                         Total liabilities and partners' capital                    $47,774,930      $127,259,221
                                                                                    ===========      ============
       <FN>
                                     The accompanying notes are an integral part of these statements.
     </TABLE>


     <PAGE>27
     <TABLE>
      SB PARTNERS
      STATEMENTS OF OPERATIONS
     <CAPTION>
                                                                               For the Years Ended December 31,
                                                                            1996             1995            1994
                                                                         --------------------------------------------
     <S>                                                               <C>              <C>             <C>
     REVENUES
           Rental income                                                 $14,940,374      $22,618,843     $24,244,843
           Interest on mortgage notes receivable                                   0                0         496,834
           Interest on short-term investments                                 50,615           73,984         114,946
           Other                                                             439,063          631,381         687,484
                                                                         -----------      -----------     -----------
               Total revenues                                             15,430,052       23,324,208      25,544,107
                                                                         -----------      -----------     -----------
     EXPENSES
           Interest on mortgage notes payable                              7,215,718       11,462,066      13,338,723
           Real estate operating expenses                                  9,524,911       10,307,816      11,369,234
           Depreciation and amortization                                   3,465,840        5,176,543       5,243,818
           Real estate taxes                                               1,086,477        1,936,253       2,376,046
           Management fees                                                 1,634,397        1,929,127       2,141,519
           Reserve of investment in real estate                                    0                0       4,161,531
           Other                                                             567,553          544,592       1,179,557
                                                                         -----------      -----------     -----------
               Total expenses                                             23,494,896       31,356,397      39,810,428
                                                                         -----------      -----------     -----------
               Loss from operations                                       (8,064,844)      (8,032,189)    (14,266,321)

     Equity in net income (loss) of joint venture                            425,725          725,118        (351,586)
     Gain on sale of investments in real estate                                    0        3,963,791       6,859,221
                                                                         -----------      -----------     -----------
     NET LOSS BEFORE EXTRAORDINARY GAIN                                   (7,639,119)      (3,343,280)     (7,758,686)

     Gain on dispositions of investments in real estate
           through discharge of indebtedness                              11,951,098                0               0
                                                                         -----------      -----------     -----------
     NET INCOME (LOSS)                                                     4,311,979       (3,343,280)     (7,758,686)
           Income (loss) allocated to general partner                            556             (431)         (1,001)
                                                                         -----------      -----------     -----------
           Income (loss) allocated to limited partners                   $ 4,311,423     ($ 3,342,849)   ($ 7,757,685)
                                                                         ===========      ===========     ===========

     NET INCOME (LOSS) PER UNIT OF LIMITED PARTNERSHIP INTEREST:
           Net loss before extraordinary gain                           ($       985)    ($       431)   ($     1,001)
                                                                         ===========      ===========     ===========
           Extraordinary gain                                            $     1,541      $         0     $         0
                                                                         ===========      ===========     ===========
           Net income (loss)                                             $       556     ($       431)   ($     1,001)
                                                                         ===========      ===========     ===========
     WEIGHTED AVERAGE NUMBER OF UNITS OF LIMITED
         PARTNERSHIP INTEREST OUTSTANDING                                      7,753            7,753           7,753
                                                                         ===========      ===========     ===========
     <FN>
                                 The accompanying notes are an integral part of these statements.
     </TABLE>


     <PAGE>28
     <TABLE>
      SB PARTNERS
      STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
      FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

      Limited Partners:
     <CAPTION>
                                           Units of
                                         Partnership
                                           Interest              Cumulative       Accumulated
                                     --------------------           Cash           Earnings
                                    Number      Amount         Distributions       (Losses)         Total
                                    -------------------------------------------------------------------------
     <S>                            <C>      <C>               <C>               <C>             <C>
      Balance, December 31, 1993    7,753    $119,968,973      ($97,728,323)     $   151,495     $22,392,145
       Net loss for the year          -            -                 -            (7,757,685)     (7,757,685)
                                    -----    ------------      ------------      -----------     -----------
      Balance, December 31, 1994    7,753     119,968,973       (97,728,323)      (7,606,190)     14,634,460
       Net loss for the year          -            -                 -            (3,342,849)     (3,342,849)
                                    -----    ------------      ------------      -----------     -----------
      Balance, December 31, 1995    7,753     119,968,973       (97,728,323)     (10,949,039)     11,291,611
       Net income for the year        -            -                 -             4,311,423       4,311,423
                                    -----    ------------      ------------      -----------     -----------
      Balance, December 31, 1996    7,753    $119,968,973      ($97,728,323)    ($ 6,637,616)    $15,603,034
                                    =====    ============      ============      ===========     ===========




      General Partner:
     <CAPTION>                             Units of
                                         Partnership
                                           Interest              Cumulative         Accumulated
                                     --------------------           Cash             Earnings
                                    Number        Amount       Distributions         (Losses)         Total
                                    -------------------------------------------------------------------------
     <S>                             <C>         <C>              <C>                <C>             <C>
      Balance, December 31, 1993      1           $10,000          ($24,559)         ($  990)       ($15,549)
       Net loss for the year          -             -                 -               (1,001)         (1,001)
                                     ---          -------          --------          -------        --------
      Balance, December 31, 1994      1            10,000           (24,559)          (1,991)        (16,550)
       Net loss for the year          -             -                 -                 (431)           (431)
                                     ---          -------          --------          -------        --------
      Balance, December 31, 1995      1            10,000           (24,559)          (2,422)        (16,981)
       Net income for the year        -             -                 -                  556             556
                                     ---          -------          --------          -------        --------
      Balance, December 31, 1996      1           $10,000          ($24,559)         ($1,866)       ($16,425)
                                     ===          =======          ========          =======        ========
     <FN>
                         The accompanying notes are an integral part of these statements.
     </TABLE>

     <PAGE>29
     <TABLE>
      SB PARTNERS
      STATEMENTS OF CASH FLOWS
     <CAPTION>
                                                                                  For the years ended December 31,
                                                                                 1996           1995           1994
                                                                             -------------------------------------------
     <S>                                                                    <C>             <C>            <C>
      Cash Flows From Operating Activities:
      Net Income (Loss)                                                      $ 4,311,979    ($3,343,280)    ($7,758,686)
       Adjustments to reconcile net income (loss) to
        net cash provided by (used in) operating activities:
         Extraordinary gain on dispositions of investments
               in real estate through discharge of indebtedness              (11,951,098)             0               0
         Gain on sale of investments in real estate                                    0     (3,963,791)     (6,859,221)
         Reserve of investment in real estate                                          0              0       4,161,531
         Equity in net (income) loss of joint venture                           (425,725)      (725,118)        351,586
         Depreciation and amortization                                         3,465,840      5,176,543       5,243,818
         Amortization of discount on mortgage notes payable                            0        310,904         343,860
         Decrease in other assets                                              2,932,392        187,050         969,920
         Increase in other liabilities                                           985,378      3,886,240       3,376,486
                                                                             -----------     ----------      ----------
           Net cash provided by (used in) operating activities                  (681,234)     1,528,548        (170,706)
                                                                             -----------     ----------      ----------
      Cash Flows From Investing Activities:
         Net proceeds from sales/dispositions of investments in real estate       92,327      3,569,190       4,877,352
         Cash paid on real estate acquisitions                                         0              0        (710,384)
         Capital additions to real estate                                     (2,077,599)    (3,024,145)     (2,636,254)
         Additional advances under guarantees                                          0              0        (113,651)
         Distributions received from joint venture                               573,857        882,749         150,000
                                                                             -----------     ----------      ----------
           Net cash provided by (used in) investing activities                (1,411,415)     1,427,794       1,567,063
                                                                             -----------     ----------      ----------
      Cash Flows From Financing Activities:
         Proceeds from mortgage notes payable                                 26,850,000              0               0
         Proceeds from short-term loan                                         1,038,370              0               0
         Retirement of mortgage notes payable                                (23,037,409)             0               0
         Principal payments on mortgage notes payable                         (3,005,589)      (726,359)       (744,634)
         Repayment of short-term loan                                         (1,038,370)             0               0
                                                                             -----------     ----------      ----------
           Net cash provided by (used in) financing activities                   807,002       (726,359)       (744,634)
                                                                             -----------     ----------      ----------

      Net increase (decrease) in cash and cash equivalents                    (1,285,647)     2,229,983         651,723
        Cash and cash equivalents at beginning of year                         3,304,968      1,074,985         423,262
                                                                             -----------     ----------      ----------
        Cash and cash equivalents at end of year                             $ 2,019,321     $3,304,968      $1,074,985
                                                                             ===========     ==========      ==========
      Supplemental disclosures of cash flow information:
         Cash paid during the year for interest                              $ 5,434,319     $8,043,301      $9,410,407
                                                                             ===========     ==========      ==========
     <FN>
      Supplemental disclosures of non-cash investing and financing activities:
          The dispositions of International Jewelry Center and 1010 Market Street in 1996, to the extent of the release from
     liability from the underlying mortgage notes which had been secured by the properties, represent non-cash investing and
     financing activities and have been excluded from the statements of cash flows.  The proceeds from the sale of Sahara Palms
     Apartments in 1995 and Nob Hill Apartments in 1994 are shown net of the retirement of the underlying mortgage notes which had
     been secured by the properties.  The sale of Woodlake Apartments, to the extent of the assumption of a mortgage note payable by
     the purchaser, and the portion of the reacquisition of Nob Hill Apartments in exchange for mortgage notes receivable in 1994,
     represent non-cash investing and financing activities and have been excluded from the statements of cash flows.
          See also Note 4 to Financial Statements.
                               The accompanying notes are an integral part of these statements.
     </TABLE>


     <PAGE>30
     SB PARTNERS
     Notes to Financial Statements

     (1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
           SB Partners (the "Partnership") is a New York limited partnership
           which has been engaged since April 1971 in acquiring, operating and
           holding for investment a varying portfolio of real properties.  SB
           Partners Real Estate Corporation (the "General Partner") serves as
           the general partner of the Partnership.  The significant accounting
           and financial reporting policies of the Partnership are as follows:
             (a)    The accompanying financial statements are prepared using
                    the accrual basis of accounting under generally accepted
                    accounting principles.  Revenues are recognized as earned
                    and expenses are recognized as incurred.  The preparation
                    of financial statements in conformity with generally
                    accepted accounting principles requires management to make
                    estimates and assumptions that affect the reported amounts
                    of assets and liabilities and disclosure of contingent
                    assets and liabilities at the date of the financial
                    statements and the reported amounts of revenues and
                    expenses during the reporting period.  Actual results could
                    differ from those estimates.  Certain prior year amounts
                    have been reclassified to make them comparable to the
                    current year presentation.
             (b)    Each partner is individually responsible for reporting his
                    share of the Partnership's taxable income or loss.
                    Accordingly, no provision has been made in the accompanying
                    financial statements for Federal, state or local income
                    taxes.
             (c)    Depreciation of buildings, furnishings and improvements is
                    computed using the straight-line method of depreciation,
                    based upon the estimated useful lives of the related
                    properties, as follows:
                            Buildings and improvements     5 to 40 years
                            Furnishings                    5 to 7 years
                    Investments in real estate are carried at historical cost
                    and reviewed periodically for impairment.  Expenditures for
                    maintenance and repairs are expensed as incurred.
                    Expenditures for improvements, renewals and betterments,
                    which increase the useful life of the real estate, are
                    capitalized.  Upon retirement or sale of property, the
                    related cost and accumulated depreciation are removed from
                    the accounts.  Amortization of deferred financing and
                    refinancing costs is computed by amortizing the cost over
                    the term of the related mortgage notes.  Amortization of
                    leasing commissions and tenant improvements is computed by
                    amortizing the cost over the term of the related lease.


     <PAGE>31
             (d)    Gains on sales of investments in real estate are recognized
                    in accordance with generally accepted accounting principles
                    applicable to sales of real estate, which require minimum
                    levels of initial and continuing investment by the
                    purchaser, and that certain other tests be met prior to the
                    full recognition of profit at the time of the sale.  When
                    the tests are not met, gains on sales are recognized on
                    either the installment or cost recovery methods.
             (e)    Net loss per unit of partnership interest has been computed
                    based on the weighted average number of units of
                    partnership interest outstanding during each year.  There
                    were no potentially dilutive securities outstanding during
                    each year.
             (f)    For financial reporting purposes, the Partnership considers
                    all highly liquid short-term investments purchased with an
                    original maturity of three months or less to be cash
                    equivalents.
             (g)    The Partnership accounts for its investment in a joint
                    venture using the equity method.  Pursuant to the special
                    allocations of cash flow which are contained in the joint
                    venture agreement, it recognizes income or loss to the
                    extent of its allocable share of the change in the net
                    assets of the joint venture, taking into account preference
                    distributions, as defined, for the period.
             (h)    In connection with the mortgage financing on certain of its
                    properties, the Partnership placed the assets and
                    liabilities of these properties into single asset limited
                    partnerships and limited liability companies which hold, or
                    held, title to the properties.  In these limited
                    partnerships, the Partnership holds a 99% limited partner
                    interest, and an affiliate of the General Partner holds a
                    1% general partner interest as trustee for the Partnership.
                    The financial statements of these subsidiaries are
                    consolidated with those of the Partnership.
             (i)    In 1996, the Partnership adopted Statement of Financial
                    Accounting Standards No.121, "Accounting for the Impairment
                    of Long-Lived Assets and for Long-Lived Assets to be
                    Disposed of".  This statement establishes the recognition
                    and measurement standards related to the impairment of
                    long-lived assets.  The adoption of this standard did not
                    have a material effect on the Partnership's financial
                    position or results of operations.



     <PAGE>32
     (2) INVESTMENT MANAGEMENT AGREEMENT
             The Partnership has entered into a management agreement with the
             General Partner.  Under the terms of this agreement, the General
             Partner is responsible for the acquisition, management and
             disposition of all investments, as well as performance of the day-
             to-day administrative operations and provision of office space for
             the Partnership.

             For these services, the General Partner receives a management fee
             equal to 2% of the average amount of capital invested in real
             estate plus cumulative mortgage payments and 0.5% of capital not
             invested in real estate, as defined in the partnership agreement.
             The management fee amounted to $1,634,397, $1,929,127, and
             $2,141,519, for the years ended December 31, 1996, 1995 and 1994,
             respectively.  In addition, the General Partner is entitled to 25%
             of cash distributions in excess of the annual distribution
             preferences, as defined in the partnership agreement.  No such
             amounts were due for the years ended December 31, 1996, 1995, and
             1994.

     (3) INVESTMENTS IN REAL ESTATE
             As of December 31, 1996, the Partnership owned a shopping center
             in Plantation, Florida; office buildings in Cherry Hill, New
             Jersey; apartment projects in Holiday, Florida, and Reno, Nevada,
             and 13.9 acres of land in Holiday, Florida.  The following is the
             cost basis, and accumulated depreciation and valuation allowance
             of the real estate investments owned by the Partnership at
             December 31, 1996 and 1995:
     <TABLE>
     <CAPTION>
                                                                                 Carrying Amount
                               No.of    Year of                                  ---------------
     Type                      Prop.  Acquisition    Description             1996             1995
     ----                      -----  -----------    -----------             ----             ----
     <S>                        <C>    <C>         <C>                    <C>             <C>
     Residential properties     2      1983-91     948 Apt. units         $31,741,606     $ 30,811,051
     Shopping center            1      1981        238,410 Sq. Ft.         14,294,724       13,983,133
     Office buildings           3      1984-93     851,588 Sq. Ft.          4,554,673      107,585,340
     Undeveloped land           1      1978        13.9 Acres                  44,387           44,387
                                                                          -----------     ------------
                                                                           50,635,390      152,423,911
     Less: Accumulated depreciation and valuation allowance                18,278,229       45,560,951
                                                                          -----------     ------------
                                                                          $32,357,161     $106,862,960
                                                                          ===========     ============
     <FN>
     Note: Information is provided for all properties owned during the periods presented.
     </TABLE>



     <PAGE>33
     (4) REAL ESTATE TRANSACTIONS
             The Partnership ceased paying scheduled debt service on the
             mortgage note secured by International Jewelry Center, located in
             Los Angeles, California, in May, 1993, and since then had been
             paying debt service based on available cash flow from the
             building.  The loan was declared in default by the lender in
             November 1993, and the lender filed a Notice of Default and
             Election to Sell on March 3, 1995 and a Notice of Trustee's Sale
             on April 24, 1996.  Negotiations with the lender were concluded on
             May 22, 1996, when the title to the property was transferred to a
             designee of the lender.  Consideration for this conveyance was
             $238,000, subject to the first leasehold note and deed of trust,
             the balance of which was $33,899,000, and the assumption by the
             designee of the ground lease.  The Partnership recognized an
             extraordinary gain of $7,536,000 associated with the disposition.
             The disposition will have negative tax consequences for the
             partners.

             The Partnership stopped making regularly scheduled payments on the
             mortgage note secured by 1010 Market Street office building in
             May, 1996.  The lender filed a Notice of Default on May 9, a
             notice of Acceleration of Debt on May 22, and a Notice of
             Foreclosure Sale on August 1, 1996.  The property was sold on
             August 28, 1996 in a foreclosure sale.  The balance of the
             mortgage note at the date of foreclosure was $39,564,000, which
             resulted in a net gain through discharge of indebtedness of
             $4,415,000.  The foreclosure will have negative tax consequences
             for the partners.

             In December 1995, the Partnership sold Sahara Palms Apartments for
             $12,000,000 in an all cash transaction.  The underlying mortgage
             note payable of $8,431,000 was retired and the Partnership
             recognized a net gain on sale of real estate investments of
             $3,964,000 for the year ended December 31, 1995.

             In June 1994, the Partnership sold Woodlake Apartments for
             $22,055,000.  In connection with the sale, the buyer assumed the
             existing first mortgage note in the amount of $17,476,000 and paid
             the balance in cash.  In July 1994, the Partnership reacquired Nob
             Hill Apartments for $700,000 cash, subject to existing liens
             secured by the property.  The property was recorded at $6,803,000
             which in addition to cash paid was the aggregate carrying amount
             of the liens, including those owned by the Partnership on the date
             of acquisition, net of a deferred gain of $5,179,000 and allowance
             for possible loan losses of $5,212,000.  The junior liens owned by
             the Partnership were effectively extinguished.  In December 1994,
             Nob Hill was sold for $7,400,000, all cash.  The Partnership
             recognized net gains on sale of real estate investments of
             $6,859,000 for the year ended December 31, 1994.


     <PAGE>34
     (5) INVESTMENT IN JOINT VENTURE
             During 1992, the Partnership and an institutional investor (the
             "Investor") entered into a joint venture agreement where the
             Partnership contributed Riverbend Apartments for an agreed equity
             value of $14,250,000 and the Investor contributed $9,500,000 in
             cash.  The Partnership and the Investor hold interests in the
             venture of 60% and 40%, respectively, and the Investor is entitled
             to a guaranteed return of 9.5% of its average investment, as
             defined in the joint venture agreement.  For financial reporting
             purposes, the Partnership recorded its investment in the joint
             venture at its net carrying amount of the property contributed,
             and no gain or loss was recognized.  All significant matters
             affecting the joint venture require the unanimous consent of the
             venturers.

             The following are the condensed financial statements (000's
             omitted) of the joint venture as of and for the years ended
             December 31, 1996, 1995, and 1994 (See Note 1):

                                   BALANCE SHEETS

                                             1996          1995        1994
                                             ----          ----        ----

     Investment in real estate, net         $19,414     $19,935      $20,532
     Current assets                             127         138          262
     Current liabilities                       (313)       (461)        (407)
                                            -------     -------      -------
     Venturers' capital                     $19,228     $19,612      $20,387
                                            =======     =======      =======

                              STATEMENTS OF OPERATIONS

     Rent and other income                  $ 4,580     $ 4,395      $ 3,815
     Real estate operating expenses          (3,680)     (3,353)      (3,264)
                                            -------     -------      -------
     Net income                             $   900     $ 1,042      $   551
                                            =======     =======      =======


     <PAGE>35
     (6) MORTGAGE NOTES PAYABLE
             Mortgage notes payable consist of the following first liens:
<TABLE>
<CAPTION>
                                                                                                           Net Carrying Amount
                                      Interest rate                         Annual                            December 31,
                     Original         -------------                      Installment     Amount Due           ------------
Property             Principal(e)   Coupon  Effective   Maturity date     Payments(f)    at Maturity       1996          1995
--------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>           <C>       <C>        <S>              <C>             <C>            <C>          <C>
Holiday Park         $ 3,700,000     9.00%     9.00%        March 1999     $  357,252   $ 3,494,467    $ 3,556,683  $  3,592,065

Meadowwood (a)        21,500,000     7.55      7.55       January 2004      1,914,996    18,979,461     21,500,000    17,975,016

Plantation Center
Shopping Plaza (b)     5,350,000   Variable  Variable    December 1997  Interest Only     5,350,000      5,350,000     6,773,388

Cherry Hill            2,900,000     9.50      9.50     September 2000        109,941         ---          345,695       418,970

International
Jewelry Center (c)    35,000,000    12.40     12.40                                                         ---       33,898,519

1010 Market St. (d)   42,000,000     8.00      8.00                                                         ---       40,749,555
                                                                                                       -----------  ------------
                                                                                                       $30,752,378  $103,407,513
                                                                                                       ===========  ============
<FN>
(a) Mortgage was refinanced in December, 1996.
(b) Mortgage was refinanced in June, 1996.  The new short-term note carries interest at 2% over the LIBOR rate.
    The interest rate charged at December 31, 1996 was 7.625%
(c) Property was transferred to a designee of the former lender in May, 1996.
(d) Property was sold in a foreclosure sale in August, 1996.
(e) All mortgages are nonrecourse to the Partnership with the exception of the short-term note secured by Plantation Center.
(f) Annual installment payments include principal and interest.
</TABLE>


         Scheduled principal payments on mortgage notes payable are $5,745,273
         for 1997; $454,522 for 1998; $3,921,929 for 1999; $455,429 for 2000;
         $405,612 for 2001; and $19,769,613 thereafter.



     <PAGE>36
     (7) FEDERAL INCOME TAX INFORMATION
         A reconciliation of net income (loss) for financial reporting purposes
         to net income (loss) for Federal income tax reporting purposes is as
         follows:
     <TABLE>
     <CAPTION>
                                                                                               For the Years Ended December 31,
                                                                                          1996             1995             1994
                                                                                      -----------      -----------      -----------
     <S>                                                                             <C>              <C>              <C>
     Net income (loss) for financial reporting purposes                               $ 4,311,979      ($3,343,280)     ($7,758,686)
     Adjustment to net gain on sales/dispositions of investments in real estate
       to reflect differences between tax and financial reporting bases
       of assets and liabilities disposed                                              23,749,150        3,772,180          360,131
     Adjustment for provision for loan and reserves for real estate losses                 -               103,122        4,161,531
     Difference between tax and financial statement equity in net income
       or loss of joint venture                                                           200,293         (275,132)         140,227
     Adjustment to interest expense to reflect non-deductibility of interest and
       amortization of discount on mortgage notes payable recognized for
       financial reporting purposes                                                     1,793,018        3,496,154        3,635,561
     Difference between tax and financial statement depreciation                       (2,356,788)      (4,196,258)      (5,135,849)
     Net change in accrual entries not recorded on tax basis and
       prior tax adjustments                                                                -                -              754,969
                                                                                      -----------      -----------      -----------
     Net income (loss) for Federal income tax reporting purposes                      $27,697,652      ($  443,214)     ($3,842,116)
                                                                                      ===========      ===========      ===========

     Net income (loss) per weighted average limited partnership unit
       for Federal income tax reporting purposes:
         Net ordinary loss per unit of Partnership interest                               ($1,032)     ($    1,055)     ($    1,333)
         Average Capital (Sec.1231) gain per unit of
           Partnership interest                                                             4,605              998              838
                                                                                      -----------      -----------     ------------
                                                                                           $3,573      ($       57)     ($      495)
                                                                                      ===========      ===========     ============
     Weighted average number of units of limited partnership
       interest outstanding                                                                 7,753            7,753            7,753
                                                                                      ===========      ===========     ============
     </TABLE>

         As of December 31, 1996 and 1995, the tax bases of the Partnership's
         assets and liabilities amounted to $38,681,000 and $88,303,000 of
         assets, and $32,188,000 and $109,508,000 of liabilities, respectively.

     (8) PROPERTY MANAGEMENT SERVICES
         Certain affiliates of the General Partner oversee the management and
         operations of various real estate properties, including those owned by
         the Partnership.  Services performed by affiliates are billed at
         actual or allocated cost, percentage of revenues or net equity.  For
         the years ended December 31, 1996, 1995 and 1994, such billings to the
         Partnership amounted to $1,250,622, $1,969,412, and $2,207,425,
         respectively, and are included in real estate operating expenses.



     <PAGE>37
     (9) COMMITMENTS AND CONTINGENCIES
         The Partnership is a party to certain actions directly related to its
         normal business operations.  While the ultimate outcome is not
         presently determinable with certainty, the Partnership believes that
         the resolution of these matters will not have a material effect on its
         financial position or results of operations.

         The Partnership had secured irrevocable letters of credit in the
         amount of approximately $1,038,000 which primarily served as
         additional collateral securing certain financing.  These letters of
         credit were called upon in connection with the foreclosure of the 1010
         Market Street office building, and were repaid and retired in 1996.


     (10) COMMERCIAL OPERATING LEASES
         Minimum future rentals on noncancelable commercial operating leases
         for each of the five succeeding fiscal years and thereafter are as
         follows: 1997 - $2,660,783; 1998 - $2,452,422; 1999 - $2,207,025; 2000
         - $1,681,011; 2001 - $1,115,602; and $2,715,755 thereafter.  The
         minimum rentals received on noncancelable commercial operating leases
         for the year ended December 31, 1996 was $8,601,781.





     <PAGE>38
     <TABLE>
      SB PARTNERS
      SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
      DECEMBER 31, 1996
     <CAPTION>
                      Column A                    Column B                  Column C                     Column D
                                                                 Initial Cost to the Registrant            Costs
                                                             --------------------------------------     Capitalized
                                                                         Buildings and                 Subsequent to
                    Description                 Encumbrances     Land     Improvements     Total        Acquisition
     <S>                                        <C>          <C>          <C>          <C>                <C>
     MULTI FAMILY RESIDENTIAL
       Nevada -
        Reno (Meadowwood)                        $21,500,000  $2,466,311   $19,057,859  $21,524,170        $4,641,419
       Florida -
        Holiday (Holiday Park -
           including undeveloped land)             3,556,683     458,342     4,043,354    4,501,696           695,553
        Orlando (Summerwalk)                            -         30,456       370,284      400,740            22,415
                                                 -----------  ----------   -----------  -----------        ----------
                                                  25,056,683   2,955,109    23,471,497   26,426,606         5,359,387

     SHOPPING CENTER
       Florida -
        Plantation (Plantation
           Shopping Center)                        5,350,000   1,510,714     9,668,665   11,179,379         3,115,345

     OFFICE BUILDINGS
       New Jersey -
        Cherry Hill (Cherry Hill Office Park)        345,695     647,867     3,163,115    3,810,982           743,691
                                                 -----------  ----------   -----------  -----------        ----------
                                                 $30,752,378  $5,113,690   $36,303,277  $41,416,967        $9,218,423
                                                 ===========  ==========   ===========  ===========        ==========
     </TABLE>





     <TABLE>
      SB PARTNERS
      SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
      DECEMBER 31, 1996
     <CAPTION>

                      Column A                                   Column E                        Column F

                                                Gross amount at which Carried at End of Year
                                                               (Notes a & c)
                                                                                                Accumulated
                                                               Buildings and                   Depreciation
                    Description                     Land       Improvements       Total        (Notes b & d)
     <S>                                          <C>          <C>              <C>              <C>
     MULTI FAMILY RESIDENTIAL
       Nevada -
        Reno (Meadowwood)                          $2,466,311    $23,699,278     $26,165,589      $11,109,810
       Florida -
        Holiday (Holiday Park -
           including undeveloped land)                458,342      4,738,907       5,197,249        1,098,326
        Orlando (Summerwalk)                           30,456        392,699         423,155          312,438
                                                   ----------    -----------     -----------      -----------
                                                    2,955,109     28,830,884      31,785,993       12,520,574

     SHOPPING CENTER
       Florida -
        Plantation (Plantation
           Shopping Center)                         1,510,714     12,784,010      14,294,724        5,328,847

     OFFICE BUILDINGS
       New Jersey -
        Cherry Hill (Cherry Hill Office Park)         647,867      3,906,806       4,554,673          428,808
                                                   ----------    -----------     -----------      -----------
                                                   $5,113,690    $45,521,700     $50,635,390      $18,278,229
                                                   ==========    ===========     ===========      ===========
     </TABLE>





     <TABLE>
      SB PARTNERS
      SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
      DECEMBER 31, 1996
     <CAPTION>

                      Column A                    Column G      Column H         Column I

                                                                              Life on which
                                                                             Depreciation in
                                                                             Latest Statement
                                                  Date of         Date        of Operations
                     Description                Construction    Acquired       is Computed
     <S>                                       <S>            <S>           <S>
     MULTI FAMILY RESIDENTIAL
       Nevada -
        Reno (Meadowwood)                       1974 - 1977     May 1983      5 to 30 years
       Florida -
        Holiday (Holiday Park -
           including undeveloped land)                          Jan 1991     7 to 27.5 years
        Orlando (Summerwalk)                        1974       March 1978     7 to 31 years


     SHOPPING CENTER
       Florida -
        Plantation (Plantation
           Shopping Center)                         1980        July 1981     5 to 40 years

     OFFICE BUILDINGS
       New Jersey -
        Cherry Hill (Cherry Hill Office Park)       1970        Sept 1993        40 years



     </TABLE>





     <PAGE>39
     <TABLE>

         NOTES TO SCHEDULE III:

     <CAPTION>
                                                                 1996
                                                                 ----
     <S>                                                   <C>
      (a)Reconciliation of amounts shown in Column E:

           Balance at beginning of year                      $152,423,911

           Additions -
             Cost of improvements and adjustments               2,077,599

           Deductions -
             Dispositions of property                         103,866,120
                                                             ------------
           Balance at end of year                            $ 50,635,390
                                                             ============

      (b)Reconciliation of amounts shown in Column F:

           Balance at beginning of year                      $ 45,560,951

           Additions -
             Depreciation expense for year                      3,014,931

           Deductions -
             Accumulated depreciation on property disposed     30,297,653
                                                             ------------
           Balance at end of year                            $ 18,278,229
                                                             ============
      (c)Aggregate cost basis for Federal
           income tax reporting purposes                     $ 58,977,612
                                                             ============
      (d)Accumulated depreciation for Federal
           income tax reporting purposes                     $ 36,899,911
                                                             ============
     </TABLE>