SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)


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


For the quarterly period ended December 25, 1996


                                       OR


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


                         Commission File Number 0-13782


                              CAMBRIDGE ADVANTAGED
                         PROPERTIES LIMITED PARTNERSHIP
                         ------------------------------
             (Exact name of registrant as specified in its charter)



           Delaware                                              13-3228969
-------------------------------                              ------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)
                                      

625 Madison Avenue, New York, New York                                  10022
--------------------------------------                                ----------
(Address of principal executive offices)                              (Zip Code)


Registrant's telephone number, including area code (212)421-5333


       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 [_]

<PAGE>


                                     PART I

Item 1.  Financial Statements

                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                   (Unaudited)

                                                 ============      ============
                                                 December 25,        March 25,
                                                     1996              1996
                                                 ------------      ------------

ASSETS

Property and equipment at cost,
   net of accumulated depreciation
   of $98,449,329 and $94,655,094,
   respectively                                  $142,409,325      $149,262,982
Cash and cash equivalents                           3,016,255         2,651,994
Cash - restricted for tenants'
   security deposits                                1,538,346         1,510,971
Mortgage escrow deposits                           11,075,506        10,523,258
Prepaid expenses and other assets                   2,272,894         1,661,130
                                                 ------------      ------------
   Total assets                                  $160,312,326      $165,610,335
                                                 ============      ============
LIABILITIES AND PARTNERS' DEFICIT

Liabilities
   Mortgage notes payable                        $ 92,608,629      $ 94,374,639
   Purchase money notes payable
    (Note 2)                                       83,670,431        89,795,242
   Due to selling partners (Note 2)                98,073,855        97,169,422
   Accounts payable, accrued
    expenses and other liabilities                  4,077,735         3,620,602
   Tenants' security deposits payable               1,444,282         1,451,411
   Due to general partners of
    subsidiaries and their affiliates               1,593,573         2,380,398
   Due to general partners and
    affiliates                                      2,149,072         1,403,448
                                                 ------------      ------------
    Total liabilities                             283,617,577       290,195,162
                                                 ------------      ------------

Minority interest                                     133,653           150,518
                                                 ------------      ------------
Commitments and contingencies (Note 6)

Partners' deficit:
   Limited partners                              (121,666,990)     (122,950,467)
   General partners                                (1,771,914)       (1,784,878)
                                                 ------------      ------------
   Total partners' deficit                       (123,438,904)     (124,735,345)
                                                 ------------      ------------

   Total liabilities and partners'
    deficit                                      $160,312,326      $165,610,335
                                                 ============      ============


See Accompanying Notes to Consolidated Financial Statements

                                       2
<PAGE>

                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)


                      ===========================   =========================== 
                           Three Months Ended             Nine Months Ended
                              December 25,                   December 25,
                      ---------------------------   ---------------------------
                           1996          1995*           1996           1995*
                      ------------   ------------   ------------   ------------

Revenues
 Rentals, net         $  8,796,129   $  8,834,377   $ 26,711,306   $ 26,599,178
 Other                     414,947        376,644      1,111,512      1,043,127
 Gain on sale of
  property
  (Note 4)                       0              0        661,027              0
                      ------------   ------------   ------------   ------------
 Total revenues          9,211,076      9,211,021     28,483,845     27,642,305
                      ------------   ------------   ------------   ------------
Expenses
 Selling and
  renting                  102,022         80,673        315,215        309,734
 Administrative and
  management             1,205,197      1,263,452      3,790,218      3,855,905
 Administrative and
  management-
  related parties
  (Note 3)               1,344,182        568,481      2,494,563      1,711,174
 Operating               1,457,170      1,422,069      4,742,473      4,543,088
 Repairs and
  maintenance            2,556,751      2,484,997      7,026,950      6,793,522
 Taxes and
  insurance              1,198,401      1,158,996      3,617,768      3,515,712
 Interest                3,386,427      3,562,990     10,358,264     10,693,124
 Depreciation            2,113,050      2,160,614      6,352,792      6,472,907
                      ------------   ------------   ------------   ------------
 Total expenses         13,363,200     12,702,272     38,698,243     37,895,166
                      ------------   ------------   ------------   ------------

Net loss before
 minority
 interest               (4,152,124)    (3,491,251)   (10,214,398)   (10,252,861)
Minority interest
 in (income) loss
 of subsidiaries              (551)           681         (2,347)         2,157
                      ------------   ------------   ------------   ------------
Loss before
 extradordinary
 item                   (4,152,675)    (3,490,570)   (10,216,745)   (10,250,704)
Extraordinary
 item-forgiveness
 of indebtedness
 income (Note 5)                 0              0     11,513,186              0
                      ------------   ------------   ------------   ------------

Net income
 (loss)               $ (4,152,675)  $ (3,490,570)  $  1,296,441   $(10,250,704)
                      ============   ============   ============   ============

* Reclassified for comparative purposes
See Accompanying Notes to Consolidated Financial Statements

                                       3
<PAGE>

                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Consolidated Statement of Partners' Deficit
                                   (Unaudited)

                            ====================================================
                                                    Limited           General
                                 Total              Partners          Partners
                            ---------------------------------------------------

Balance -
 March 26, 1996             $(124,735,345)      $(122,950,467)      $(1,784,878)

Net income                      1,296,441           1,283,477            12,964
                            -------------       -------------       -----------

Balance -
 December 25, 1996          $(123,438,904)      $(121,666,990)      $(1,771,914)
                            =============       =============       ===========

See Accompanying Notes to Consolidated Financial Statements

                                       4
<PAGE>

                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                      Consolidated Statement of Cash Flows
                     Increase in Cash and Cash Equivalents
                                   (Unaudited)

                                                   ============================
                                                        Nine Months Ended
                                                           December 25,
                                                   ----------------------------
                                                      1996             1995*
                                                   ------------    ------------




Cash flows from operating activities:

Net income (loss)                                  $  1,296,441    $(10,250,704)
                                                   ------------    ------------
Adjustments to reconcile net income
   (loss) to net cash provided
   by operating activities:
   Gain on sale of property (Note 4)                   (661,027)              0
   Extraordinary item-forgiveness of
    indebtedness income (Note 5)                    (11,513,186)              0
   Depreciation                                       6,352,792       6,472,907
   Minority interest in income (loss)
    of subsidiaries                                       2,347          (2,157)
   Increase in cash-restricted for tenants'
    security deposits                                   (31,300)        (22,628)
   Increase in mortgage escrow deposits                (552,248)     (1,515,598)
   Increase in prepaid expenses and
    other assets                                       (651,610)        (65,320)
   Increase in due to selling partners                7,995,535       8,255,404
   Payments of interest to selling
    partners                                         (1,410,091)     (1,082,312)
   Increase in accounts payable,
    accrued expenses
    and other liabilities                               816,643       1,054,141
   Increase in tenants' security
    deposits payable                                     18,257           8,554
   Increase in due to general partners
    of subsidiaries and their affiliates                  6,998          32,623
   Decrease in due to general partners
    of subsidiaries and their affiliates                (96,043)       (194,765)
   Increase in due to general
    partners and affiliates                             750,624         237,721
                                                   ------------    ------------
   Total adjustments                                  1,027,691      13,178,570
                                                   ------------    ------------
   Net cash provided by operating
    activities                                        2,324,132       2,927,866
                                                   ------------    ------------

* Reclassified for comparative purposes
See Accompanying Notes to Consolidated Financial Statements

                                       5
<PAGE>
                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                      Consolidated Statement of Cash Flows
                      Increase in Cash and Cash Equivalents
                                   (continued)
                                   (Unaudited)

                                                   ============================
                                                        Nine Months Ended
                                                           December 25,
                                                   ----------------------------
                                                      1996             1995*
                                                   ------------    ------------

Cash flows from investing activities:

   Proceeds from sale of property                     1,650,000               0
   Acquisition of property and
    equipment                                          (562,865)       (754,164)
   Disposition of property and
    equipment                                            32,436             276
                                                     ----------      ----------
   Net cash provided by (used in)
    investing activities                              1,119,571        (753,888)
                                                     ----------      ----------
Cash flows from financing activities:

   Increase in purchase money notes
    payable                                             355,780               0
   Decrease in purchase money notes
    payable                                          (1,650,000)              0
   Principal payment of mortgage
    notes payable                                    (1,766,010)     (1,639,290)
   Decrease in minority interest                        (19,212)        (14,553)
                                                     ----------      ----------
   Net cash used in financing
    activities                                       (3,079,442)     (1,653,843)
                                                     ----------      ----------
Net increase in cash and cash
   equivalents                                          364,261         520,135
Cash and cash equivalents -
   beginning of period                                2,651,994       3,190,963
                                                     ----------      ----------
Cash and cash equivalents -
   end of period                                     $3,016,255      $3,711,098
                                                     ==========      ==========

* Reclassified for comparative purposes
See Accompanying Notes to Consolidated Financial Statements

                                       6
<PAGE>
                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                      Consolidated Statement of Cash Flows
                      Increase in Cash and Cash Equivalents
                                   (continued)
                                   (Unaudited)

                                                   ============================
                                                        Nine Months Ended
                                                           December 25,
                                                   ----------------------------
                                                      1996             1995*
                                                   ------------    ------------


Supplemental disclosures of noncash activities:

   Forgiveness of indebtedness (Note 5):
    Decrease in purchase money
      note payable                                   (4,830,591)              0
    Decrease in due to selling partners              (5,681,011)              0
    Decrease in due to general partners
      of subsidiaries and their affiliates             (697,780)              0
    Decrease in due to general partners
      and affiliates                                     (5,000)              0
    Decrease in accounts payable,
      accrued expenses and other
      liabilities                                      (298,804)              0

Summarized below are the components
   of the gain on sale of property:

   Decrease in property and equipment,
    net of accumulated depreciation                   1,031,294               0
   Decrease in cash-restricted for
    tenants' security deposits                            3,925               0
   Decrease in prepaid expenses and
    other assets                                         39,846               0
   Decrease in accounts payable,
    accrued expenses and other liabilities              (60,706)              0
   Decrease in tenants' security deposits
    payable                                             (25,386)              0

* Reclassified for comparative purposes
See Accompanying Notes to Consolidated Financial Statements

                                       7
<PAGE>
                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)


Note 1 - General

The consolidated financial statements include the accounts of Cambridge
Advantaged Properties Limited Partnership (the "Partnership") and sixty-one
subsidiary partnerships ("subsidiaries," "subsidiary partnerships" or "Local
Partnerships"), one of which only has activity through the date of sale of its
property and the related assets and liabilities on May 2, 1996 (see Note 4). The
Partnership is the sole limited partner, with an ownership interest of 98.99% in
each of the subsidiary partnerships. Through the rights of the Partnership
and/or an affiliate of the General Partner, which affiliate has a contractual
obligation to act on behalf of the Partnership, to remove the general partner of
the subsidiary partnerships and to approve certain major operating and financial
decisions, the Partnership has a controlling financial interest in the
subsidiary partnerships.

The Partnership's fiscal quarter ends December 25. All subsidiaries have fiscal
quarters ending September 30. Accounts of the subsidiary partnerships have been
adjusted for intercompany transactions from October 1 through December 25.

All intercompany accounts and transactions have been eliminated in
consolidation.

Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.

Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $14,000 and $15,000 and $0 and $41,000 for the three
and nine months ended December 25, 1996 and 1995, respectively. The
Partnership's investment in each subsidiary is equal to the respective
subsidiary's partners' equity less minority interest capital, if any. In
consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.

In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." Under SFAS No. 121, the Partnership is required to review long-lived assets
and certain identifiable intangibles for impairment whenever events or changes

                                       8
<PAGE>
                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 1 - General (continued)

in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.
Effective March 26, 1996, the Partnership adopted SFAS No. 121, consistent with
the required adoption period.

Property and equipment are carried at the lower of depreciated cost or estimated
amounts recoverable through future operations and ultimate disposition of the
property. Cost includes the purchase price, acquisition fees and expenses, and
any other costs incurred in acquiring the properties. As required by SFAS No.
121, a provision for loss on impairment of assets is recorded when estimated
amounts recoverable through future operations and sale of the property on an
undiscounted basis or a property appraisal when deemed necessary are below
depreciated cost. However, depreciated cost, adjusted for such reductions in
value, if any, may be greater than the fair value. Property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value. Through March 25, 1996, the Partnership had
recorded approximately $4,343,000 as an allowance for loss on impairment of
assets relating to the property owned by Bicentennial Associates, Ltd.
("Bicentennial"), which was sold on May 2, 1996. Through December 25, 1996, the
Partnership has not recorded any provisions for loss on impairment of assets or
reduction to estimated fair value relating to any other properties.

The unaudited financial statements have been prepared on the same basis as the
audited financial statements included in the Partnership's Form 10-K for the
year ended March 25, 1996. In the opinion of the General Partners, the
accompanying unaudited financial statements contain all adjustments (consisting
only of normal recurring adjustments) necessary to present fairly the financial
position of the Partnership as of December 25, 1996, the results of operations
for the three and nine months ended December 25, 1996 and cash flows for the
nine months ended December 25, 1996 and 1995. However, the operating results for
the nine months ended December 25, 1996 may not be indicative of the results for
the year.

Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested 



                                       9
<PAGE>
                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 1 - General (continued)

that these consolidated financial statements should be read in conjunction with
the financial statements and notes thereto included in the Partnership's March
25, 1996 Annual Report on Form 10-K.

Note 2 - Purchase Money Notes Payable

Purchase Money Notes in the original amount of $85,458,825 were issued to the
selling partners of the subsidiary partnerships as part of the purchase price
and are secured only by the interest in the subsidiary partnership to which the
note relates. A portion of these notes, in the original amount of $31,932,568
are obligations at the subsidiary partnership level, whereas the remaining
$53,526,257 is recorded at the Partnership level. On May 2, 1996 the property
and the related assets and liabilities owned by Bicentennial were sold to a
third party and the associated purchase money note and accrued interest thereon,
which were obligations at the subsidiary partnership level, were canceled (see
Note 4). The Purchase Money Notes provided for compound interest at rates which,
in general, ranged from 9% to 12% per annum through August 31, 1989. Thereafter,
simple interest has accrued, without further interest thereon, through maturity,
August through December 1996 (unless extended by the Partnership for up to three
years in general). As of December 25, 1996, the maturity dates of each of the
Purchase Money Notes associated with the remaining properties owned by the
subsidiary partnerships were extended for one year (see below). Purchase Money
Notes at December 25, 1996 and March 25, 1996 include $4,336,417 of interest
accrued through August 31, 1989.

The Purchase Money Notes, which provide for simple interest through maturity
during the period August through December 1996 (unless extended by the
Partnership), will not be in default during the basic term (generally twelve
years) if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the due date of the note.

The Partnership may elect, upon the payment of an extension fee of 1/2% per
annum of the outstanding principal amount, to extend the term of the Purchase
Money Notes for up to three additional years (four years with respect to three
subsidiary partnerships). As of December 25, 1996, the maturity dates of each of
the 


                                       10
<PAGE>

                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 2 - Purchase Money Notes Payable (continued)

Purchase Money Notes associated with the remaining properties owned by the
subsidiary partnerships (ranging from August to December 1996) were extended for
one year and extension fees in the amount of $409,335 were incurred by the
Partnership. Of such fees incurred, $355,780 was accrued and added to the
Purchase Money Notes balance in accordance with the respective note agreements.
The extension fees are being amortized over the term of the extension.
Management is working with the selling partners to restructure and/or refinance
the notes and is negotiating the sale of certain properties. No assurance can be
given that management's efforts will be successful. The selling partners'
recourse, in the event of non-payment, would be to foreclose on the
Partnership's interests in the respective subsidiary partnerships.

Distributions aggregating $711,652 and $167,225 were made to the Partnership for
the nine months ended December 25, 1996 and 1995, respectively, of which
$393,760 and $100,335, respectively, was used to pay interest on the purchase
money notes. Unpaid interest of $96,898,887 and $95,994,453 at December 25, 1996
and March 25, 1996, respectively, has been accrued and is included in the
caption due to selling partners.

The Partnership expects that upon maturity of the Purchase Money Notes, it will
be required to refinance or sell its investments in the Local Partnerships in
order to pay the Purchase Money Notes. The Partnership cannot sell or otherwise
liquidate its investments in those Local Partnerships which have subsidy
agreements with HUD during the period that such agreements are in existence
without HUD's approval. Based on the historical operating results of the Local
Partnerships and the current economic conditions, including changes in tax laws,
it is uncertain as to whether the proceeds from such sales will be sufficient to
meet the outstanding balances.



                                       11
<PAGE>

                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 3 - Related Party Transactions

The costs incurred to related parties for the three and nine months ended
December 25, 1996 and 1995 were as follows:

                            ====================================================
                               Three Months Ended           Nine Months Ended
                                   December 25,                December 25,
                            ------------------------    ------------------------
                               1996          1995*         1996          1995*
                            ------------------------    ------------------------
Partnership
 management
 fees (a)                   $  794,000    $   31,250    $  856,500    $   93,750
Expense
 reimburse-
 ment (b)                       51,705        32,615       142,959       109,510
Property manage-
 ment fees (c)                 478,477       476,616     1,433,104     1,424,914
Local adminis-
 trative fee (d)                20,000        28,000        62,000        83,000
                            ----------    ----------    ----------    ----------

                            $1,344,182    $  568,481    $2,494,563    $1,711,174
                            ==========    ==========    ==========    ==========

*Reclassified for comparative purposes

(a) After all other expenses of the Partnership are paid, an annual partnership
management fee of up to .5% of invested assets is payable to the Partnership's
General Partners and affiliates. Partnership management fees owed to the General
Partners amounting to $1,337,737 and $481,237 were accrued and unpaid as of
December 25, 1996 and March 25, 1996, respectively.

(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the Related General Partner performs asset monitoring for the
Partnership. These services include site visits and evaluations of the
subsidiary partnerships' performance. Expense reimbursements and asset
monitoring fees owed to the Related General Partner amounting to $94,442 and
$153,750 were accrued and unpaid as of December 25, 1996 and March 25, 1996,
respectively.

(c) Property management fees incurred to affiliates of the subsidiary
partnerships' general partners amounted to $478,477 and $465,217 and $1,418,025
and $1,391,620 for the three and nine 

                                       12
<PAGE>

                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 3 - Related Party Transactions (continued)

months ended December 25, 1996 and 1995, respectively. Property management fees
incurred to affiliates of the Partnership amounted to $0 and $11,399 and $15,079
and $33,294 for the three and nine months ended December 25, 1996 and 1995,
respectively.

(d) H/R Special Partnership, the special limited partner, owning a .01%
interest, is entitled to receive a local administrative fee of up to $2,500 per
year from each subsidiary partnership.

Note 4 - Sale of Property

On May 2, 1996, the property and the related assets and liabilities of
Bicentennial were sold to a third party for $1,700,000, resulting in no net
proceeds to the Partnership after repayment of the first mortgage owed to Beal
Bank and expenses of the sale. For financial reporting purposes a gain on the
sale of property in the amount of $661,027 was realized and forgiveness of
indebtedness income of $11,513,186 was also realized as a result of forgiveness
of a portion of the purchase money note payable and accrued interest thereon
(which were obligations at the subsidiary partnership level), amounts due to
HUD, and amounts due to general partners and affiliates. For tax purposes, the
entire gain to be realized by the Partnership is anticipated to be approximately
$10,200,000.

Note 5 - Extraordinary Item

On May 2, 1996, the property and the related assets and liabilities of
Bicentennial were sold to a third party for $1,700,000. For financial reporting
purposes, forgiveness of indebtedness income of $11,513,186 was realized (see
Note 4).

Note 6 - Commitments and Contingencies

The following disclosures include changes and/or additions to disclosures
regarding the subsidiary partnerships which were included in the Partnership's
Annual Report on Form 10-K for the period ended March 25, 1996 (see Note 4 for a
discussion of the sale of the property and the related assets and liabilities of
Bicentennial).

Bellfort Associates, Ltd.
-------------------------
Bellfort Associates, Ltd. ("Bellfort") has been in default on the required
interest payments due on the wraparound purchase note payable to Finger
Companies since 1992. Delinquent interest payments at September 30, 1996
aggregated $3,336,453 on the wrap-


                                       13
<PAGE>
                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 6 - Commitments and Contingencies (continued)

around purchase note payable of $7,000,000 due
on November 1, 1996. The note, which was extended for one year, is secured by a
first lien on and security interest in the Partnership's and Bellfort's special
limited partner's rights, titles and interest in Bellfort.

In December 1994 Bellfort signed a work-out agreement with HUD (which replaced a
similar agreement of December 1993) that required monthly payments of $40,917
through November 30, 1995 to cover service charges, tax escrows and 90% of
accruing interest. The agreement, which acceded to HUD a 15% equity position due
upon sale or refinancing of the project, expired November 30, 1995. Bellfort
submitted a proposal for a new work-out agreement which had not been approved by
HUD. On December 15, 1995, HUD announced its intention to sell Bellfort's
mortgage during the second quarter of 1996, and on June 27, 1996, the underlying
mortgage note was sold to Multifamily Mortgage Trust 1996-1. The wraparound
purchase note holder has lent to Bellfort the funds necessary to pay all costs
and interest in arrears and has restated the note into a current status.

The Partnership's investment is Bellfort has been reduced to zero by prior
years' losses. The minority balance was zero at December 25, 1996 and March 25,
1996. Bellfort's net loss after minority interest amounted to approximately
$169,000 and $168,000 and $501,000 and $601,000 for the three and nine months
ended December 25, 1996 and 1995.

Westminster Manor Apartments
----------------------------
In February, 1995, Westminster Manor Apartments ("Westminster") received an
unsatisfactory physical inspection report from HUD. In response to the
inspection report, Westminster submitted, for HUD approval, a Management
Improvement Objective Plan (the "MIO Plan") with an accompanying estimate of
restorations and improvements and a request for funding. Westminster does not
have the working capital necessary to cover the costs contained in the MIO Plan
to cure the deficiencies.

The determination of whether the identified instances of noncompliance and
Westminster's lack of capital to fund the repair costs will ultimately effect
future cash flow cannot presently be determined.

The inability of Westminster to satisfy the deficiencies sited in the inspection
report without approval of the funding request accompanying the MIO Plan raises
substantial doubt about the entity's 


                                       14
<PAGE>

                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 6 - Commitments and Contingencies (continued)

ability to continue as a going concern. Management of Westminster is now working
on securing a commercial loan to cover the cost of physical improvements. The
Partnership's investment in Westminster at December 25, 1996 and March 25, 1996
was approximately $1,843,000 and $1,956,000, respectively, and the minority
interest balance was zero at each date. Westminster's net loss after minority
interest amounted to approximately $42,000 and $104,000 and $112,000 and
$219,000 for the three and nine months ended December 25, 1996 and 1995,
respectively.

Northgate Townhouse Apartments
------------------------------
During November 1995, the Colorado Department of Public Health identified a
contamination problem on the Northgate Townhouse Apartments ("Northgate")
property. The complex hired environmental specialists and other contractors to
remedy the problem. Costs in the amount of $262,153 were incurred for the
cleanup and installation of preventive measures and, as of December 25, 1996
work has been completed, all contractors have been paid and the property has
been inspected, but no report has been sent. The funds to pay for the work were
advanced by the management company. The Partnership's investment in Northgate at
December 25, 1996 and March 25, 1996 was approximately $1,448,000 and
$1,670,000, respectively, and the minority interest balance was zero at each
date. Northgate's net loss after minority interest amounted to approximately
$23,000 and $62,000 and $222,000 and $237,000 for the three and nine months
ended December 25, 1996 and 1995, respectively.

Saraland Apartments, Ltd.
-------------------------
Saraland Apartments, Ltd. ("Saraland") has been designated as a "Superfund" site
on the National Priorities List under the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"). On March 18, 1992, Redwing Carriers,
Inc., a trucking company which utilized the Saraland site prior to development
of the property as a low-income apartment complex, served an Amended Complaint
on the Partnership and C/R Special, among others, adding them to the lawsuit
previously commenced against Saraland and the general partners in the United
States District Court for the Southern District of Alabama. That lawsuit seeks
reimbursement for costs previously incurred by Redwing Carriers with respect to
the site, which at the time of the Amended Complaint totaled approximately
$2,000,000, as well as a declaration that each of the defendants is jointly and
severally liable for costs of response or damages resulting from the release of
hazardous substances, among other items of relief. In


                                       15
<PAGE>
                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 6 - Commitments and Contingencies (continued)

September 1996, the 11th Circuit Court of Appeals affirmed a lower court's
decision dismissing the Partnership and C/R Special from the case, and,
accordingly, the Partnership and C/R Special are no longer subject to liability
in the lawsuit brought by Redwing Carriers, Inc.

During March 1993, the Partnership was named by the United States Environmental
Protection Agency ("EPA") as a "Potentially Responsible Party" under Superfund
in connection with the Saraland Apartment Complex Site.

On July 16, 1993, Saraland, the local general partners (Roar Corporation and the
Estate of Robert Coit), the limited partners (the Partnership and C/R Special),
and five other parties were named as Respondents in a unilateral administrative
order (the "Order") issued under CERCLA by EPA, directing the Respondents to
implement the EPA-selected remedy for addressing contamination by hazardous
substances at the site. In December 1993, Saraland and its general partners, the
Partnership and C/R Special informed EPA that they have "sufficient cause" to
not comply with the Order. Redwing Carriers, Inc. initially advised EPA that it
would commence implementation of the Order. It has recently, however, refused to
do so and EPA has now begun implementation of the remedy.

Since September 1993, EPA has not notified the Partnership whether it intends to
take further legal action. During the 1994 Fiscal Year, EPA determined that
cleanup for the project site could cost between six and ten million dollars.
Given the fact that EPA has not informed the Partnership whether or not it
intends to pursue the Partnership through further legal action, neither
management nor management's counsel are in a position, at this point, to
evaluate the likelihood of an unfavorable outcome or range of any potential
loss. However, the dismissal of the Partnership and C/R Special from the Redwing
litigation (discussed above) should provide strong grounds upon which to contest
any attempt by EPA to visit liability for undertaking and funding the remedy
upon the Partnership. The Partnership intends to present a vigorous defense and
strongly contests any further legal action brought by or on behalf of EPA to
obtain from the Partnership remedial funding and/or any other costs associated
with this matter. Litigation costs incurred to date by the Partnership total
approximately $275,000. The Partnership's investment in Saraland at December 25,
1996 and March 25, 1996 was approximately $521,000 and $504,000, respectively.
The minority interest balance 


                                       16
<PAGE>
                         CAMBRIDGE ADVANTAGED PROPERTIES
                      LIMITED PARTNERSHIP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 25, 1996
                                   (Unaudited)

Note 6 - Commitments and Contingencies (continued)

was approximately $32,000 at both December 25, 1996 and March 25, 1996.
Saraland's net income (loss) after minority interest amounted to approximately
$5,000 and $8,000 and $16,000 and ($5,000) for the three and nine months ended
December 25, 1996 and 1995, respectively.


                                       17
<PAGE>

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

Liquidity and Capital Resources

The Partnership's capital has been invested primarily in 61 Local Partnerships,
in which the Partnership made an initial investment of $50,293,934 (including
acquisition expenses) in the Local Partnerships. These investments are highly
illiquid. On May 2, 1996, the property and the related assets and liabilities
owned by one of the Local Partnerships was sold to a third party (see below)
and, as a result, approximately $461,000 of Partnership funds which had been
advanced to the Local Partnership were forgiven.

During the nine months ended December 25, 1996, cash and cash equivalents of the
Partnership increased approximately $364,000. This increase was primarily due to
cash provided by operating activities ($2,324,000) and proceeds from sale of
property ($1,650,000) which exceeded net acquisitions of property and equipment
($530,000), net repayments of purchase money notes ($1,294,000) and repayments
of mortgage notes payable ($1,766,000). Included in the adjustments to reconcile
the net income to cash flow from operations is gain on sale of property
($661,000), forgiveness of indebtedness ($11,513,000) and depreciation
($6,353,000).

The Partnership's primary sources of funds are the cash distributions from
operations of the Local Partnerships in which the Partnership has invested.
These sources are available to meet the obligations of the Partnership. However,
the cash distributions received from the Local Partnerships to date have not
been sufficient to meet all such obligations of the Partnership. During the nine
months ended December 25, 1996 and 1995, the Partnership received approximately
$712,000 and $167,000, respectively, of cash flow distributions, of which
approximately $394,000 and $100,000, respectively, was used to pay interest on
the related Local Partnership Purchase Money Notes. Accordingly, the General
Partners advanced funds totaling approximately $205,000 at both December 25,
1996 and March 25, 1996 to meet the Partnership's third party obligations. In
addition, certain fees and expense reimbursements owed to the General Partners
amounting to approximately $1,432,000 and $635,000 were accrued and unpaid as of
December 25, 1996 and March 25, 1996, respectively. Without the General
Partners' advances and continued accrual without payment of certain fees and
expense reimbursements, the Partnership will not be in a position to meet its
obligations. The General Partners have continued advancing and allowing the
accrual without payment of these amounts but are under no obligation to do so.

As part of the purchase price of its investment in the Local Partnerships, the
Partnership issued approximately $85,459,000 of 


                                       18
<PAGE>

Purchase Money Notes. The typical Purchase Money Note has a basic term of twelve
years (maturities range from August 1996 to December 1996), subject to certain
possible extensions as described below. On May 2, 1996 the property and the
related assets and liabilities owned by Bicentennial were sold to a third party
and the associated purchase money note and accrued interest thereon were
canceled. In addition, as of December 25, 1996, the maturity dates of each of
the Purchase Money Notes associated with the remaining properties owned by the
Local Partnerships were extended for one year (see below).

The Purchase Money Notes typically bear interest at a rate of between 9% and 10%
per annum (except that the Purchase Money Note with respect to Cabarrus Arms
Associates bears interest at 12% per annum) during their entire term. A Purchase
Money Note will not be in default during the basic twelve-year term if not less
than 60% of the cash flow actually distributed to the Partnership by the
corresponding Local Partnership (generated by the operations of its Apartment
Complex) is applied first to accrued interest and then to current interest
thereon.

The obligation to pay the Purchase Money Note is on a non-recourse basis to any
General or Limited Partner but payment thereof is secured by a pledge under the
purchase, sale and security agreement of the related Local Partnership Interest.
The payee has the right to foreclose on the related Local Partnership Interest
in the event that any payment on the Purchase Money Note is not paid when due or
if the Partnership is otherwise in default thereunder.

At December 25, 1996, unpaid accrued interest on the Purchase Money Notes
amounted to approximately $96,899,000. The Partnership may elect, upon the
payment of an extension fee of 1/2% per annum of the outstanding principal
amount, to extend the term of the Purchase Money Notes for up to three
additional years (four years with respect to three Local Partnerships). The
Partnership expects that upon maturity it will be required to extend, refinance
or sell its investments in the Local Partnerships in order to pay the Purchase
Money Notes and accrued interest thereon. Based on the historical operating
results of the Local Partnerships and the current economic conditions including
changes in tax laws, it is uncertain as to whether the proceeds from such sales
will be sufficient to meet the outstanding balances. As of December 25, 1996,
the maturity dates of each of the Purchase Money Notes associated with the
remaining properties owned by the Local Partnerships (ranging from August to
December 1996) were extended for one year and extension fees in the amount of
approximately $409,000 were incurred by the Partnership. Of such fees incurred,
approximately $356,000 was ac-


                                       19
<PAGE>

crued and added to the Purchase Money Notes balance in accordance with the
respective note agreements. Management is working with the selling partners to
restructure and/or refinance the notes and is negotiating the sale of certain
properties. No assurance can be given that management's efforts will be
successful. The selling partners' recourse, in the event of non-payment, would
be to foreclose on the Partnership's interests in the respective Local
Partnerships.

The Local Partnerships which receive government assistance are subject to
low-income use restrictions which limited the owners ability to sell or
refinance the properties. In order to maintain the existing inventory of
affordable housing, Congress passed a series of related acts including the
Emergency Low Income Preservation Act of 1987, the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 and the Housing Opportunity
Program Extension Act of 1996 (the "1996 Act") (together the "Preservation
Acts"). In exchange for maintaining the aforementioned use restrictions, the
Preservation Acts provided financial incentives for owners of government
assisted properties. The 1996 Act provides financial assistance by funding the
sale of such properties to not-for-profit owners and also restores the owners'
ability to prepay their HUD mortgage and convert the property to condominiums or
market-rate rental housing.

The following eight Local Partnerships filed for incentives under the
Preservation Acts: Lansing, MI - Cranbrook Manor Apts., Romulus, MI - Oakbrook
Villa Apts., New Bedford, MA - Buttonwood Acres, Wyandotte, MI - Villa Apollo
Associates Limited Partnership and Villa Apollo # 2 Limited Partnership, South
Dartmouth, MA - Solemar, Sterling Heights, MI - Carlton Terrace Apartments, and
San Diego, CA - Lancaster Manor Apartments. Villa Apollo Associates, Villa
Apollo #2, Carlton Terrace, Cranbrook Manor, Oakbrook Villa and Lancaster Manor
are under contract of sale.

Funding for the 1996 Act is subject to appropriations by Congress. Congress
funded $624 million in fiscal year 1996 for the preservation of housing.
Congress has funded approximately $325 million for preservation for the 1997
fiscal year. Moreover, only $175 million of the 1997 allocation is available to
fund preservation, the balance is set aside for rental assistance payments and
for special projects. There is a backlog of properties having a preservation
value of in excess of $1.3 billion. Accordingly, no assurance can be given that
any of the Local Partnerships will obtain such incentives.

HUD previously released the American Community Partnerships Act (the "ACPA").
The ACPA is HUD's blueprint for providing 


                                       20
<PAGE>

for the nation's housing needs in an era of static or decreasing budget
authority.

Two key proposals in the ACPA that could affect the Local Partnerships are: a
discontinuation of project based Section 8 subsidy payments and an attendant
reduction in debt on properties that were supported by the Section 8 payments.

The ACPA calls for a transition during which the project-based Section 8 would
be converted to a tenant-based voucher system. Any FHA insured debt would then
be "marked-to-market", that is revalued in light of the reduced income stream,
if any.

Several industry sources have already commented to HUD and Congress that in the
event the ACPA was fully enacted in its present form the reduction in mortgage
indebtedness would be considered taxable income to limited partners in the
Partnership. Legislative relief has been proposed to exempt "marked-to-market"
debt from cancellation of indebtedness income treatment. Though HUD initially
backed away from the "marked-to-market" proposal, it has now been reintroduced
as "Portfolio Restructuring". Additionally, in the interim, HUD has agreed to
annual extensions of any expiring project based Section 8 contracts, but there
is no guarantee that such extension will be available in the future.

Six of the Local Partnerships have entered into contracts of sale (Villa Apollo
and Villa Apollo #2, Carlton Terrace, Cranbrook Manor, Oakbrook Villa and
Lancaster Manor) for an aggregate selling price of approximately $48,400,000.
The net proceeds will be used to satisfy the existing mortgage debt of
approximately $17,946,000. The balance of the proceeds will be used to settle
the purchase money notes and accrued interest with the balance, if any,
available for Partnership purposes. HUD has not yet approved the sale of these
properties. No assurance can be given that the transactions contemplated will
close.

On May 2, 1996, the property and the related assets and liabilities of
Bicentennial were sold to a third party for $1,700,000, resulting in no net
proceeds to the Partnership after repayment of the first mortgage owed to Beal
Bank and expenses of the sale. For financial reporting purposes a gain on the
sale of property in the amount of $661,027 was realized and forgiveness of
indebtedness income of $11,513,186 was also realized as a result of forgiveness
of a portion of the purchase money note payable and accrued interest thereon
(which were obligations at the Local Partnership level), amounts due to HUD, and
amounts due to general partners and affiliates. For tax purposes, the entire
gain to be realized by the Partnership is anticipated to be approximately
$10,200,000.

                                       21
<PAGE>

For a discussion of contingencies affecting certain Local Partnerships, see Note
6 to the financial statements. Since the maximum loss the Partnership would be
liable for is its net investment in the respective Local Partnerships, the
resolution of the existing contingencies is not anticipated to impact future
results of operations, liquidity or financial condition in a material way.

Management is not aware of any trends of trends or events, commitments or
uncertainties, which have not been otherwise disclosed, that will or are likely
to impact liquidity in a material way. Management believes the only impact would
be from laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversification of the portfolio may not protect against a general downtown in
the national economy.

Results of Operations

In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of". Under SFAS No. 121, the Partnership is required to review long-lived assets
and certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.
Effective March 26, 1996, the Partnership adopted SFAS No. 121, consistent with
the required adoption period.

Property and equipment are carried at the lower of depreciated cost or estimated
amounts recoverable through future operations and ultimate disposition of the
property. Cost includes the purchase price, acquisition fees and expenses, and
any other costs incurred in acquiring the properties. As required by SFAS No.
121 a provision for loss on impairment of assets is recorded when estimated
amounts recoverable through future operations and sale of the property on an
undiscounted basis or a property appraisal when deemed necessary are below
depreciated cost. However, depreciated cost, adjusted for such reductions in
value, if any, may be greater than the fair value. Property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value. 


                                       22
<PAGE>

Through March 25, 1996, the Partnership had recorded approximately $4,343,000 as
an allowance for loss on impairment of assets relating to the property owned by
Bicentennial, which was sold on May 2, 1996. Through December 25, 1996, the
Partnership has not recorded any provisions for loss on impairment of assets or
reduction to estimated fair value relating to any other properties.

The results of operations of the Partnership, as well as the Local Partnerships,
excluding gain on sale of property, forgiveness of indebtedness income and
administrative and management related parties, remained fairly consistent for
the three and nine months ended December 25, 1996 as compared to the same
periods in 1995. The majority of Local Partnership income continues to be in the
form of rental income with the corresponding expenses being divided among
operations, depreciation and mortgage interest. In addition, the Partnership
incurred interest expense relating to the Purchase Money Notes which were issued
when the Local Partnerships were acquired.

Rental income decreased and increased less than 1% during the three and nine
months ended December 25, 1996, respectively, as compared to 1995. Excluding
Bicentennial, which sold its property on May 2, 1996, rental income increased
approximately 2% during both the three and nine months ended December 25, 1996
as compared to 1995 primarily due to rental rate increases.

Other income increased approximately $38,000 for the three months ended December
25, 1996 as compared to the same period in 1995 primarily due to the receipt of
insurance proceeds by one Local Partnership relating to damages caused by a hail
storm.

Total expenses excluding Bicentennial, selling and renting expenses and
administrative and management related parties remained fairly consistent with a
decreases of approximately 1% and an increase of less than 1% for the three and
nine months ended December 25, 1996, respectively, as compared to the same
periods in 1995.

Selling and renting expenses increased approximately $21,000 and $5,000 for the
three and nine months ended December 25, 1996, respectively, as compared to
1995. Excluding Bicentennial, such expenses increased approximately $50,000 and
$53,000, respectively. The increase for the three months was primarily due to an
increase in advertising at one Local Partnership as well as an overstatement of
rental expenses in the second quarter of 1995, which was corrected in the third
quarter, at two other Local Partnerships. The increase for the nine months was
primarily due to an increase in advertising at two Local Partnerships.

                                       23
<PAGE>

Administrative and management-related parties increased approximately $776,000
and $783,000 for the three and nine months ending December 25, 1996,
respectively, as compared to the same periods in 1995 primarily due to an
increase in partnership management fees payable to the General Partners.





                                       24
<PAGE>



                           PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

           The litigation described in Note 6 to the financial statements
contained in Part I, Item I is incorporated herein by reference.

Item 2.    Changes in Securities - None

Item 3.    Defaults Upon Senior Securities - None

Item 4.    Submission of Matters to a Vote of Security Holders - None

Item 5.    Other information - None

Item 6.    Exhibits and Reports on Form 8-K

       (a) Exhibits:

           27 Financial Data Schedule (filed herewith).

       (b) Reports on Form 8-K - No reports on Form 8-K were filed during 
the quarter



                                       25

<PAGE>
                                   SIGNATURES

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


                              CAMBRIDGE ADVANTAGED
                         PROPERTIES LIMITED PARTNERSHIP
                                  (Registrant)


                                           By: RELATED BETA CORPORATION,
                                                  a General Partner

Date:  February 7, 1997

                                               By:/s/ Alan P. Hirmes
                                                  -----------------------------
                                                  Alan P. Hirmes,
                                                  Vice President
                                                  (principal financial officer)
                 
Date:  February 7, 1997

                                               By:/s/ Richard A. Palermo
                                                  -----------------------------
                                                  Richard A. Palermo,
                                                  Treasurer
                                                  (principal accounting officer)
                

                                           By: ASSISTED HOUSING ASSOCIATES,
                                               INC., a General Partner

Date:  February 7, 1997

                                               By:/s/ Paul L. Abbott
                                                  -----------------------------
                                                  Paul L. Abbott,
                                                  President




                                       26