Page 1 of 24


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549


                                    FORM 10-Q



                Quarterly Report Under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


For Quarter ended March 31, 1997                  Commission File Number 0-22109
                                 ----------------



                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
             (Exact name of registrant as specified in its charter)


         Delaware                                       86-0766007
(State or other jurisdiction                (I.R.S. employer identification no.)
of incorporation or organization)


         6991 East Camelback Road, Suite A200, Scottsdale, Arizona 85251
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (602) 840-1040



         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               NO  X
                        ---              ---




    As of April 25, 1997 there were 24,852,542 partnership units outstanding.
                                  Page 1 OF 24
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                       ----------------------------------


                                      INDEX
                                      -----
<TABLE>
<CAPTION>
Part I                     FINANCIAL INFORMATION                                                        Page
------                     ---------------------                                                        ----
<S>                                                                                                        <C>
                           Item 1   Financial Statements

                           Consolidated Balance Sheets as of March 31, 1997 ( Unaudited) and
                           December 31, 1996 ...........................................................   3

                           Consolidated Statements of Income for the three months
                           ended March 31, 1997 and 1996 (Unaudited) ...................................   4

                           Consolidated Statement of Partners' Capital as of March 31, 1997
                           (Unaudited) .................................................................   5

                           Consolidated Statements of Cash Flows for the three months
                           ended March 31, 1997 and 1996 (Unaudited) ...................................   6

                           Notes to Consolidated Financial Statements ..................................   7

                           Item 2   Management's Discussion
                                    and Analysis of Financial
                                    Condition and Results of
                                    Operations .........................................................  13

Part II                    OTHER INFORMATION
-------                    -----------------

                           Item 6   Exhibits and Reports on Form 8-K....................................  23


Signatures                 .............................................................................  24
</TABLE>
                                  Page 2 of 24
<PAGE>
                                EVANS WITHYCOMBE
                               RESIDENTIAL, L.P.
                          CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                         March 31, 1997           December 31, 1996
                                                                         --------------           -----------------
                                                                          (Unaudited)
<S>                                                                     <C>                         <C>            
ASSETS
Real Estate:
  Land..................................................                $       133,704             $       121,915
  Buildings and improvements............................                        584,866                     543,839
  Furniture and fixtures................................                         31,090                      29,567
  Construction-in-progress..............................                         57,431                      66,229
                                                                                807,091                     761,550
                                                                        ---------------             ---------------

  Less accumulated depreciation.........................                        (44,432)                    (38,331)
                                                                        ---------------             ---------------
                                                                                762,659                     723,219
Cash and cash equivalents...............................                          2,942                       2,568
Restricted cash.........................................                          1,710                       1,622
Accounts and notes receivable...........................                          2,055                       2,702
Deferred costs, net of accumulated amortization
  of $1,281 and $1,265 at March 31, 1997 and
  December 31, 1996, respectively ......................                          3,484                       3,838
Other assets ...........................................                          1,404                       1,518
                                                                        ---------------             ---------------

Total assets ...........................................                $       774,254             $       735,467
                                                                        ===============             ===============

LIABILITIES AND PARTNERS' CAPITAL

Mortgage and notes payable..............................                $       435,917             $       436,172
Accounts payable and other liabilities .................                          5,758                       7,782
Distributions payable ..................................                         10,065                           -
Accrued interest .......................................                          1,249                       1,417
Accrued property taxes .................................                          5,003                       2,912
Resident security deposits .............................                          2,161                       1,818
Prepaid rent ...........................................                            898                         585
                                                                        ---------------             ---------------
Total liabilities ......................................                        461,051                     450,686

Minority interest ......................................                            828                         827

Partners' capital ......................................                        312,375                     283,954
                                                                        ---------------             ---------------

Total liabilities and partners' capital.................                $       774,254             $       735,467
                                                                        ===============             ===============
</TABLE>
See Notes to Consolidated Financial Statements

                                  Page 3 of 24
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                        CONSOLIDATED STATEMENTS OF INCOME
     (Amounts in thousands, except for number of units and per unit amounts)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                    Three months Ended
                                                                     --------------------------------------------------
                                                                           March 31, 1997           March 31, 1996
                                                                           --------------           --------------
<S>                                                                  <C>                         <C>            
Revenues:
  Rental......................................................       $         27,152            $        22,136
  Third party management fees ................................                    110                        287
  Interest and other .........................................                  1,745                      1,738
                                                                     ----------------            ---------------
    Total revenues ...........................................                 29,007                     24,161

Expenses:
  Repairs and maintenance ....................................                  2,941                      2,556
  Property operating .........................................                  4,200                      2,683
  Advertising ................................................                    414                        433
  Real estate taxes ..........................................                  2,119                      1,649
  Property management ........................................                    907                        884
  General and administrative .................................                    419                        421
  Interest ...................................................                  7,389                      5,424
  Depreciation and amortization ..............................                  6,178                      4,770
                                                                     ----------------            ---------------
Total expenses ...............................................                 24,567                     18,820
                                                                     ----------------            ---------------

Income before minority interest and extraordinary item .......                  4,440                      5,341
Minority interest ............................................                    (17)                       (23)
                                                                     ----------------            ---------------

Income before extraordinary item..............................                  4,423                      5,318
Extraordinary item - loss from early extinguishment of debt...                 (1,500)                         -
                                                                     ----------------            ---------------

Net income ...................................................       $          2,923            $         5,318
                                                                     ================            ===============

Earnings per unit before extraordinary item...................       $           0.18            $          0.25
                                                                     ================            ===============

Earnings per unit ............................................       $           0.12            $          0.25
                                                                     ================            ===============




Weighted average units outstanding ...........................             23,968,328                 20,941,426
                                                                     ================            ===============
</TABLE>
See Notes to Consolidated Financial Statements
                                  Page 4 of 24
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
     (Amounts in thousands, except for number of units and per unit amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                Unamortized
                                                                     Evans          Other        Employee
                                                                  Withycombe       Limited       Restricted
                                                   Number of     Residential,     Partners'        Stock
                                                     Units           Inc.          Capital      Compensation    Total
                                                 --------------  ------------   -------------  -------------  ---------
<S>                                                <C>            <C>           <C>            <C>            <C>      
Partners' capital, December 31, 1996...........    23,044,712     $ 226,301     $    58,118    $     (465)    $ 283,954

    Net income.................................             -         2,387              536            -         2,923
    Distributions ($0.405 per unit) ...........             -        (8,199)          (1,866)           -       (10,065)
    Proceeds of third offering, net of
      underwriting discount and offering costs                       
      of $406..................................     1,800,000        35,415               -             -        35,415
    Conversion of units to common stock........        70,332         1,360          (1,360)            -             -
    Exercise of stock options..................         5,000           100               -             -           100
    Issuance of restricted stock...............         2,930            64               -           (64)            -
    Forfeiture of restricted stock.............          (100)            -               -             -             -
    Amortization of deferred compensation......             -             -               -            48            48
                                                   ----------     ---------     -----------    ----------     ---------

Partners' capital, March 31, 1997..............    24,922,874     $ 257,428     $    55,428    $     (481)    $ 312,375
                                                   ==========     =========     ===========    ==========     =========
</TABLE>
See Notes to Consolidated Financial Statements

                                  Page 5 of 24
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                               Three Months ended March 31,
                                                                     --------------------------------------------------
                                                                               1997                     1996
                                                                               ----                     ----
<S>                                                                    <C>                       <C>            
Cash flows from operating activities
Net income .....................................................       $         2,923           $         5,318
Adjustments to reconcile net income to net cash
  provided by operating  activities:
    Depreciation and amortization ..............................                 6,355                     4,889
    Amortization of executive deferred comp ....................                    48                       170
    Minority interest ..........................................                    17                        23
    Write-off of development and acquisition costs .............                    68                        36
    Write-off of deferred loan costs ...........................                   294                         -
Decrease (increase) in assets
    Restricted cash ............................................                   (88)                     (149)
    Accounts and notes receivable ..............................                   647                      (269)
    Other assets ...............................................                   114                         2
(Decrease) increase in liabilities
    Accounts payable and other liabilities .....................                (2,024)                    2,364
    Accrued interest ...........................................                  (168)                      207
    Accrued property taxes .....................................                 2,091                     1,472
    Resident security deposits .................................                   343                         3
    Prepaid rent ...............................................                   313                        (2)
                                                                       ---------------           ---------------
Net cash provided by operating activities ......................                10,933                    14,064

Cash flows from investing activities
Purchase of real estate assets .................................               (27,290)                  (30,756)
                                                                       ---------------           ---------------
Net cash used in investing activities ..........................               (27,290)                  (30,756)

Cash flows from financing activities
Proceeds from Third Public Offering, net of expenses ...........                35,415                         -
Proceeds from exercise of options...............................                   100                       145
Proceeds from mortgage notes and
  credit facility ..............................................                49,021                   133,217
Principal payments on mortgage notes ...........................               (67,595)                 (111,087)
Payment for loan costs .........................................                  (194)                     (312)
Distributions paid .............................................                     -                    (7,902)
Minority interest distributions ................................                   (16)                      (58)
Net cash provided by financing activities ......................                16,731                    14,003
                                                                       ---------------           ---------------

Net increase (decrease) in cash and cash
  equivalents ..................................................                   374                    (2,689)
Cash and cash equivalents, beginning of period .................                 2,568                     3,634
                                                                       ---------------           ---------------
Cash and cash equivalents, end of period .......................       $         2,942           $           945
                                                                       ===============           ===============

Supplemental information
Cash paid during the period for interest .......................       $         7,318           $         5,054
                                                                       ===============           ===============

Supplemental disclosure of non-cash activity
Assumption of debt related to the acquisition of
  apartment communities ........................................       $        18,318           $             -
                                                                       ===============           ===============

Issuance of stock under restricted stock incentive plan ........       $             -           $             9
                                                                       ===============           ===============
Conversion of units to common stock ............................       $         1,360           $           204
                                                                       ===============           ===============
</TABLE>

See Notes to Consolidated Financial Statements
                                  Page 6 of 24
<PAGE>
                                EVANS WITHYCOMBE
                                RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1997
      (Amounts in thousands, except for number of units or shares and per
                                 unit amounts)
                                   (Unaudited)

1.   Organization and Formation of the Operating Partnership

Evans Withycombe Residential,  L.P. (the "Operating  Partnership") is one of the
largest developers and managers of upscale apartment  communities in Arizona and
is expanding its operation into selected sub-markets in Southern California. The
Operating  Partnership  owns and  manages 52  stabilized  multifamily  apartment
communities   containing  14,799  units,  of  which  45  stabilized  multifamily
apartment communities are located in Phoenix and Tucson,  Arizona,  containing a
total of 12,401 units and seven stabilized multifamily apartment communities are
located in the Southern California market containing a total of 2,398 units. The
Operating  Partnership  is also in the process of developing  or expanding  five
multifamily apartment communities comprising 1,146 units in its Arizona markets.
The Operating  Partnership is fully  integrated  with expertise in  development,
acquisitions,   construction  and  management  of  apartment  communities.   The
Operating Partnership had approximately 600 employees at March 31, 1997.

The Operating  Partnership was formed in June 1994 to develop,  acquire, own and
manage  upscale   multifamily   apartment   communities  for  Evans   Withycombe
Residential,  Inc. On August 17, 1994, Evans Withycombe  Residential,  Inc. (the
"Company") completed an Initial Public Offering and engaged in various formation
transactions  designed to transfer ownership of the communities and other assets
of the  predecessor  company to the Operating  Partnership  or Evans  Withycombe
Finance  Partnership,   L.P.  (the  "Financing   Partnership").   The  Operating
Partnership owns 99.0 percent of Evans Withycombe  Finance,  L.P. and has a 99.0
percent economic interest in Evans Withycombe Management,  Inc. (the "Management
Company"). Evans Withycombe Residential, Inc. is the sole general partner of and
owned a 81.46 percent and 77.08 percent interest in the Operating Partnership at
March 31, 1997 and 1996, respectively.

In the second quarter of 1996, Evans Withycombe Residential,  Inc. completed the
Second  Public  Offering.  The net  proceeds  of  $40,891,000  from  the sale of
2,088,889  shares of common stock from the Second  Public  Offering were used to
purchase 2,088,889 units in the Operating Partnership. The Operating Partnership
used the  proceeds to repay a portion of the $225  million  unsecured  Revolving
Credit Facility (Revolving Credit Facility).

In the first quarter of 1997, Evans Withycombe  Residential,  Inc. completed the
Third  Public  Offering.  The net  proceeds  of  $35,415,000  from  the  sale of
1,800,000  shares of common  stock from the Third Public  Offering  were used to
purchase 1,800,000 units in the Operating Partnership. The Operating Partnership
used the proceeds to repay a portion of the Revolving Credit Facility.

2.   Basis of Presentation

The  accompanying   consolidated   financial   statements  of  Evans  Withycombe
Residential,   L.P.   include  the   consolidated   accounts  of  the  Operating
Partnership, the Financing Partnership and the Management Company.

The accompanying unaudited consolidated financial statements have been presented
by the Operating Partnership's  management in accordance with generally accepted
accounting  principles  for  interim  financial  information  and the  rules and
regulations of the Securities and Exchange Commission (SEC).  Accordingly,  they
do not include  all of the  information  and  footnotes  required  by  generally
accepted   accounting   principles  for  complete  financial   statements.   All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.  In the opinion of  management,  all  adjustments  (consisting of
normally recurring accruals)  considered  necessary for a fair presentation have
been included.  The results of operations for the three month period ended March
31, 1997 are not necessarily  indicative of the results that may be expected for
the year ended December 31, 1997.
                                  Page 7 of 24
<PAGE>
These consolidated  financial  statements should be read in conjunction with the
Operating   Partnership's  December  31,  1996  audited  consolidated  financial
statements and accompanying notes in the Evans Withycombe Residential, L.P. Form
10/A.

3.   Summary of Significant Accounting Policies

Real Estate Assets and Depreciation

The Operating  Partnership  records its real estate  assets in  accordance  with
Statement of Financial  Accounting  Standards ("SFAS") No. 121,  "Accounting for
the Impairment of Long-Lived  Assets and  Long-Lived  Assets to be Disposed of."
SFAS No. 121 requires  that  long-lived  assets such as real estate  assets,  be
reviewed  whenever  events or changes in  circumstances  indicate  that the book
value of the asset may not be  recoverable.  If the sum of the estimated  future
net cash flows  (undiscounted  and without interest charges) from an asset to be
held and used is less than the book value of the asset,  an impairment loss must
be recognized in the amount of the difference  between book value and fair value
as opposed to the difference  between book value and net realizable  value under
the  previous   accounting   standard.   For  long-term  assets  like  apartment
communities,  the  determination  of  whether  there  is an  impairment  loss is
dependent primarily on the Operating Partnership's estimates on occupancy,  rent
and expense increases,  which involves numerous  assumptions and judgments as to
future  events over a period of many years.  At March 31,  1997,  the  Operating
Partnership  did not hold any assets that meet the  impairment  criteria of SFAS
No. 121.

Costs related  directly to the  acquisition  and  improvement of real estate are
capitalized.  Interest costs incurred during  construction of a new property are
capitalized  until completion of construction on a  building-by-building  basis.
Interest  capitalized  was $478 and $720,  for the three  months ended March 31,
1997 and 1996, respectively.

Ordinary  repairs,  maintenance  and costs incurred in connection  with resident
turnover such as unit cleaning,  painting,  and carpet  cleaning are expensed as
incurred;  major  replacements  and  betterments are capitalized and depreciated
over their estimated  useful lives.  Depreciation is computed on a straight-line
basis over the expected useful lives of depreciable property,  which ranges from
10 to 40 years  for  buildings  and  improvements  and five to eight  years  for
furnishings and equipment.

The  Operating  Partnership  reports  developments  and lease-up  properties  as
construction-in-progress  until construction on the apartment community has been
completed and the apartment community has reached stabilized occupancy.

The Operating Partnership also reports land relating to construction-in-progress
as land on its balance sheet. Land associated with  construction-in-progress was
$15,142 and $16,542 at March 31, 1997 and December 31,1996, respectively.

Revenue Recognition

Rental  income  attributable  to  residential  leases is recorded  when due from
residents.  Leases are for periods of up to one year,  with rental  payments due
monthly.

Cash and Cash Equivalents

Cash and cash equivalents include all cash and cash equivalent  investments with
original  maturities  of three months or less,  primarily  consisting  of demand
deposits in banks.

Restricted Cash

Restricted cash includes  restricted  deposits for sinking fund accounts related
to tax exempt bonds, property taxes and escrow accounts.
                                  Page 8 of 24
<PAGE>
Deferred Costs

Costs incurred in obtaining  long-term  financing are deferred.  These costs are
amortized on the  effective  interest  method over the terms of the related debt
agreements.

Income Taxes

The Operating  Partnership has made an election to be taxed as a Partnership and
accordingly,  no  federal  or state  income  taxes  have  been  provided  in the
accompanying consolidated financial statements.

Use of Estimates

The  preparation of the  consolidated  financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts  reported in the consolidated  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

Earnings Per Unit

Earnings per unit has been  computed by dividing net income for the three months
ended March 31, 1997 and 1996,  respectively,  by the weighted average number of
units outstanding.

In February 1997, the Financial  Accounting Standards Board issued SFAS No. 128,
"Earnings  per Share" which is required to be adopted on December  31, 1997.  At
that time,  the  Operating  Partnership  will be  required  to change the method
currently  used to compute  earnings  per unit and to restate all prior  periods
presented.  Under the new requirements for calculating  basic earnings per unit,
the dilutive  effect of stock  options will be excluded.  The impact of SFAS No.
128 is not expected to be material.

4.   Mortgage and Notes Payable

The Operating  Partnership's  mortgage  notes and notes payable  consists of the
following:

<TABLE>
<CAPTION>
                                                                                     March 31,    December 31,
                                                                                       1997          1996
                                                                                       ----          ----

<S>                                                                                <C>           <C>       
Mortgage note payable at fixed interest rate of 8.0 percent, monthly principal     $        -    $    5,380
and interest payments.  The unpaid principal balance was repaid on January 9,
1997.

Mortgage note payable at fixed interest rate of 8.0 percent, monthly principal              -         4,340
and interest payments. The unpaid principal balance was repaid on January 9, 1997.

Mortgage note payable at fixed interest rate of 8.0 percent,  monthly principal             -         8,951
and interest payments. The unpaid principal balance was repaid on January 9, 1997.

Mortgage note payable at fixed interest rate of 8.28 percent, monthly principal             -         6,225
and interest payments.  The unpaid principal balance was repaid on January 31,
1997.

Mortgage note payable at fixed interest rate of 9.95 percent, monthly principal        12,033        12,065
and interest payments through September 15, 1997, remaining balance due September
15, 1997.

Mortgage note payable at fixed interest rate of 9.3 percent, monthly principal          3,174         3,182
and interest payments through September 15, 1997, remaining balance due September
15, 1997

Mortgage note payable at fixed interest rates ranging from 6.25 percent to 9.0         18,318             -
percent,  monthly principal and interest payments through August 17, 2004,                               
remaining balance due August 17, 2004.  Interest rate increases 0.25 percent
annually each September.  The mortgage note can be repaid at any time at the
Operating Partnership's option without prepayment penalty.
</TABLE>
                                  Page 9 of 24
<PAGE>
4.   Mortgage and Notes Payable (continued)
<TABLE>
<CAPTION>
                                                                                     March 31,    December 31,
                                                                                       1997          1996
                                                                                       ----          ----
<C>                                                                                  <C>           <C>     
$50 million securitized debt at a fixed interest rate of 7.17 percent, monthly       $ 49,381      $ 49,509
principal and interest payments through January 1, 2006, remaining balance due
January 1, 2006.  Secured by first mortgage liens on 5 communities.

Securitized debt at a fixed stated interest rate of 7.98 percent, with an             130,542       130,520
effective interest rate of 8.05 percent, monthly interest payments only through
August 1, 2001. Secured by first mortgage liens on 21 communities.  The face
amount of $131 million is  due August 1, 2001.  The balance is net of unamortized
discount of $458 and $480 at March 31, 1997 and December 31, 1996, respectively.

$17.3 million tax exempt bonds with a floating interest rate based on the tax          17,300        17,300
exempt note rate set by the remarketing agent, or at the option of the Operating
Partnership can convert to a fixed rate as determined by the remarketing agent.
Secured by a $17.5 million direct pay letter of credit, interest payments only,
matures December 1, 2007 (Effective interest rate of 4.95 percent at March  31,
1997).

$22.6 million tax exempt bonds with a floating interest rate based on the tax          22,650        22,650
exempt note rate set by the remarketing agent, interest payments only.  Secured
by a $22.8  million  direct  pay  letter of credit,  matures  February  1, 2016.
(Effective interest rate of 5.05 percent at March 31, 1997).

$24.05 million tax exempt bonds with a floating interest rate based on the tax         24,050        24,050
exempt note rate set by the remarketing agent, interest payments only.  Secured
by a $24.4  million  direct  pay  letter of  credit,  matures  August  1,  2005.
(Effective interest rate of 6.06 percent at March 31, 1997).

$225 million unsecured Revolving Credit Facility with floating interest rate          158,469        152,000
based on LIBOR plus 1.50 percent or at the option of the Operating Partnership at
prime rate, interest payments only.  Matures September 24, 1999 (Effective
interest rate of 7.25 percent at March 31, 1997).

                                                                                   ------------- ------------
                                                                                     $435,917       $436,172
                                                                                   ============= ============
</TABLE>




Each  of  the  mortgage  loans  is  secured  by a  first  mortgage  on  separate
communities.

Principal maturities as of March 31, 1997 are as follows:


               1997                                $    15,724   
               1998                                        784   
               1999                                    159,300   
               2000                                        882   
               2001                                    131,479   
               Thereafter                              127,748   
                                                   ------------- 
                                                                 
                                                   $   435,917   
                                                   ============= 
               
The $225 million Revolving Credit Facility provides funding for working capital,
construction activities and acquisitions.

The  Operating  Partnership  has three  direct pay letters of credit of $17,500,
$22,800  and  $24,400  which  serve as a credit  enhancement  for the tax exempt
bonds.  The letters of credit are secured by a first  mortgage on four apartment
communities.
                                 Page 10 of 24
<PAGE>
In  January  1997,  the  Operating  Partnership  extinguished  the  debt on four
mortgages with unpaid principal balances of approximately  $25,000 with proceeds
from the Revolving  Credit  Facility.  As a result,  the  Operating  Partnership
incurred a loss from the early extinguishment of debt of approximately $1,500.

5.   Distributions

On April 15, 1997, the Operating  Partnership  paid a distribution of $0.405 per
unit ($10,065) to unitholders of record as of March 31, 1997.

6.    Management Fees

The Operating  Partnership  through the Management  Company performs  management
services for certain  unaffiliated  communities.  Management  fees received from
managed communities were $110 and $287 for the three months ended March 31, 1997
and 1996, respectively.

7.   Stock Incentive Plan

Stock Option Plan

Evans  Withycombe  Residential,  Inc.  (the  "Company")  has  elected  to follow
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees" (APB 25) and related  interpretations  in accounting for its employee
stock options because the alternative fair value  accounting  provided for under
SFAS No. 123, "Accounting for Stock-Based  Compensation," requires use of option
valuation  models  that were not  developed  for use in valuing  employee  stock
options.  Under APB 25,  because the exercise  price of the  Company's  employee
stock  options  equals the market price of the  underlying  stock on the date of
grant, no compensation expense is recognized. Proforma information regarding net
income and earnings per share is required by SFAS No. 123 and is provided by the
Company in its annual report.

Initially  1,830,000  shares of the  Company's  common  stock were  reserved for
issuance  under the plan.  Information  with  respect to stock  options  granted
during the three months ended March 31, 1997 is as follows:

                                                                  Weighted
                                                                  Average
                                                               Exercise Price
                                                  Shares          Per Share
                                                  ------          ---------

Options outstanding at December 31, 1996           908,850          $20.63
         Exercised                                  (5,000)          20.00
         Granted                                    12,000           20.77
         Forfeited                                 (23,775)          21.26
Options outstanding at March 31, 1997           -------------   --------------
                                                   892,075          $20.68
                                                =============   ==============

Options exercisable:
         December 31, 1996                         357,700          $19.98
         March 31, 1997                            502,775          $20.45


Options to purchase  913,425 and 901,650  shares of common stock were  available
for grant under the plan at March 31, 1997 and December 31, 1996, respectively.

Executive Stock Incentive Plan

Prior to the Offering,  the Company's predecessor Evans Withycombe,  Inc. had in
place an Executive Incentive Deferred  Compensation Plan (the "Executive Plan").
Pursuant to the Executive Plan,  certain  executives of Evans  Withycombe,  Inc.
(the  "Participants")  were granted an aggregate of 98,500  shares of restricted
stock from the Company one year  following the Initial  Public  Offering if they
remain employees of the Company during such 
                                  Page 11 of 24
<PAGE>
period.  One-third  of the shares vest on each of the  second,  third and fourth
anniversaries  of the Initial  Public  Offering  based on an offering  price per
share of $20. The expense is being  amortized  ratably over the periods in which
the shares vest and an expense of $30 and $170 for the three  months ended March
31, 1997 and 1996,  respectively,  is  included  in general  and  administrative
expense.  Information  with respect to the executive  restricted stock incentive
plan is as follows:

                                                                        Shares
                                                                      ----------

        Restricted stock, net of forfeitures, at March 31, 1997         74,348
        Number of shares vested at March 31, 1997                       27,600

Restricted Stock Program

The Company has awarded 12,850 shares of restricted  stock to certain  employees
of the Company under its 1994 Stock Incentive  Plan. The restricted  stock vests
ratably over  periods  ranging from one to four years from the date of the award
and are  based on the price of the stock at the award  date  which  ranges  from
$19.13 to $22.25. The related expense will be amortized ratably over the periods
in which the shares vest and an expense of $18 and $9 for the three months ended
March 31, 1997 and 1996, respectively, is included in general and administrative
expense.

The  Company  uses the  proceeds  from the  exercise  of stock  options  and the
issuance  of  restricted  stock to  acquire  a  similar  number  of units in the
Operating Partnership.

8.   Minority Interest

Evans  Withycombe  Finance,  Inc., a wholly owned subsidiary of Evans Withycombe
Residential,  Inc., owns a one percent interest in the Financing  Partnership at
March 31, 1997 as follows:


                                                             Dollars
                                                        ------------------

                                                              $  827
            Balance at December 31, 1996
            Allocation of net income                              17
            Distributions                                        (16)
            Balance at March 31, 1997                   ------------------
                                                              $  828
                                                        ==================


9.   Subsequent Event

On April 2, 1997,  the Operating  Partnership  completed the sale of $75 million
senior unsecured notes priced at 99.44 percent of par with a coupon rate of 7.50
percent due April 15,  2004 and $50 million  senior  unsecured  notes  priced at
99.21  percent of par with a coupon rate of 7.625  percent  due April 15,  2007.
Proceeds  to the  Operating  Partnership  from  the  sale of the  notes,  net of
underwriter's   discount  and  out-of-pocket  costs,  was  approximately  $122.8
million. In anticipation of the offering, the Operating Partnership entered into
two forward  treasury lock  agreements  on February 25, 1997.  The treasury lock
agreements  were settled  concurrently  with the  completion  of the sale of the
senior unsecured notes on April 2, 1997, and the Operating  Partnership received
proceeds from the settlement of the treasury lock agreements of approximately $3
million.  The Operating  Partnership is amortizing the gain on the settlement of
the treasury lock  transaction  as a reduction in interest  expense on the notes
using the effective  interest rate method.  The effective  interest rates on the
senior  unsecured  notes  inclusive  of the benefit from the  settlement  of the
treasury lock  transaction is 7.18 percent and 7.36 percent,  respectively.  The
Operating  Partnership  used  the  proceeds  from  the  sale  of the  notes  and
settlement of the treasury  lock  transaction  to pay down its Revolving  Credit
Facility.
                                 Page 12 of 24
<PAGE>
ITEM 2.   MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
          RESULTS OF OPERATIONS (Amounts in thousands, except apartment data and
          number of units)


The following discussion, which is based primarily on the consolidated financial
statements of Evans Withycombe  Residential,  L.P. should be read in conjunction
with the consolidated  financial  statements appearing elsewhere in this report.
The consolidated  financial  statements of the Operating  Partnership consist of
the  Operating  Partnership,  the  Financing  Partnership,  and  the  Management
Company.

Overview

When used in the  following  discussion,  the words  "believes,"  "anticipates,"
"expects,"  and similar  expressions  are  intended to identify  forward-looking
statements. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those projected, including,
but not limited to, the actual  timing of the  Operating  Partnership's  planned
acquisitions  and  developments,  the  strength  of the local  economies  in the
sub-markets  in which the  Operating  Partnership  operates,  and the  Operating
Partnership's ability to successfully manage its planned expansion into Southern
California.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking  statements,  which  speak  only  as of  the  date  hereof.  The
Operating Partnership undertakes no obligation to publicly release any revisions
to these  forward-looking  statements  which  may be made to  reflect  events or
circumstances   after  the  date  hereof  or  to  reflect  the   occurrence   of
unanticipated events.

Results of Operations - Consolidated Financial Statements

The results of  operations  for the three  months ended March 31, 1997 and 1996,
respectively,  were  significantly  affected by  acquisitions,  developments and
expansions.

Comparison of Results of Operations for the Three Months Ended March 31, 1997 to
the Three Months Ended March 31, 1996
<TABLE>
<CAPTION>
                                                              March 31,             
                                                     ----------------------------   Percentage
                                                         1997          1996           Change
                                                     ------------  -------------  ---------------
<S>                                                  <C>           <C>                   <C>  
               Rental income                         $   27,152    $   22,136            22.7%
               Third party management fees                  110           287           (61.6)
               Interest and other                         1,745         1,738             0.4
                                                     ------------  -------------  ---------------
                    Total revenues                       29,007        24,161            20.0

               Property operating and 
                 maintenance (1)                          7,555         5,672            33.2
               Real estate taxes                          2,119         1,649            28.5
               Property management                          907           884             2.6
               General and administrative                   419           421             -
               Interest                                   7,389         5,424            36.2
               Depreciation and amortization              6,178         4,770            29.5
                                                     ------------  -------------  ---------------
               Total expenses                            24,567        18,820            30.5
                                                     ------------  -------------  ---------------
               Income before minority interest and
                   extraordinary item                $    4,440    $    5,341           (16.9)%
                                                     ============  =============  ===============
               Weighted average monthly rental
                   revenue per unit, net of         
                   concessions                       $      688    $      672
                                                     ============  ============= 
               Weighted average number of                
                   apartments                            14,766        11,929 
                                                     ============  ============= 
               Economic occupancy (2)                      89.2%         92.3%
                                                     ============  ============= 
</TABLE>

             (1)  The  Operating  Partnership  defines  property  operating  and
                  maintenance expense as repairs and maintenance, other property
                  operating and advertising expense.
             (2)  Stabilized properties only.
                                 Page 13 of 24
<PAGE>
Rental  revenues  increased by $5,016 or 22.7 percent for the three months ended
March  31,  1997 as  compared  to the  similar  period  in 1996 as a  result  of
increases in the weighted  average  number of  apartments  and weighted  average
monthly revenue per occupied apartment.  The Operating Partnership believes that
the increase in rental income was largely  attributable to the  acquisitions and
stabilization of properties developed by the Operating Partnership in its rental
markets.

Interest  and  other  income  for the three  months  ended  March  31,  1997 was
comparable  to the similar  period in 1996.  Interest  and other income for 1996
included  a $235  gain on the sale of  telephone  servicing  rights  on  certain
properties.

Third party  management  fees  decreased $177 or 61.6 percent due to the sale of
several properties in the management portfolio.

Property  operating and maintenance  expense and real estate taxes increased due
to the  increase in the  weighted  average  number of  apartments  for the three
months   ended  March  31,  1997  as  compared  to  the  same  period  in  1996,
respectively.

Interest   expense   increased  due  to  an  increase  in  debt  resulting  from
acquisitions  and the  increase  in  weighted  average  number  of  units in the
portfolio.  The Operating Partnership capitalized $478 of interest for the three
months ended March 31, 1997  compared to $720 for the same period in 1996 due to
a decrease in construction activity. Interest costs incurred during construction
of a  new  property  are  capitalized  until  completion  of  construction  on a
building-by-building basis.

"Same Store" Portfolio

The Operating Partnership defines same store portfolio as those communities that
reached  stabilized  occupancy  prior to January 1, 1996.  Same store  portfolio
consists of 41 stabilized properties containing 11,053 apartment units that were
owned by the Operating Partnership for the three months ended March 31, 1997 and
1996.
<TABLE>
<CAPTION>
                                                              March 31,             
                                                     ----------------------------   Percentage
                                                         1997          1996           Change
                                                     ------------  -------------    -------------
<S>                                                  <C>           <C>                  <C>   
                Rental income                        $    19,802   $   20,240           (2.2)%
                Other income                               1,113        1,173           (5.1)
                                                     ------------  -------------    -------------
                                                          20,915       21,413           (2.3)
                Property operating and maintenance         5,448        5,174            5.3
                Real estate taxes                          1,498        1,478            1.4
                                                     ------------  -------------    -------------
                                                           6,946        6,652            4.4
                                                     ------------  -------------    -------------
                Property net operating income        $    13,969   $   14,761           (5.4)%
                                                     ============  =============    =============
                Weighted average monthly rental
                revenue per unit, net of             
                concessions                          $       671   $      661
                                                     ============  =============
                Economic occupancy                          89.2%        92.3%
                                                     ============  =============
</TABLE>

Rental  income for the three  months  ended  March 31,  1997  decreased  $438 as
compared to the same period in 1996 as a result of the  increase in the weighted
average monthly rental revenue per unit being offset by a decline in the average
economic  occupancy.  Other  income for the three  months  ended  March 31, 1997
decreased  as a result of the 1996 amount  including  $235 gain from the sale of
telephone servicing rights at various communities.

Property  operating and maintenance  expense  increased $274 or 5.3 percent over
1996 due to higher  apartment  turnover  and utility  costs  associated  with an
increased number of vacant apartments in its "same store" portfolio.
                                 Page 14 of 24
<PAGE>
Communities Stabilized Less Than Two Years

Communities  stabilized  less than two years consist of the  development of four
new  apartment   communities  and  the  expansion  of  four  existing  apartment
communities by the Operating  Partnership,  containing an aggregate of 1,444 new
apartment units that reached stabilized occupancy during the year ended December
31,  1996.  Increases in the three month period ended March 31, 1997 as compared
to the three month period ended March 31, 1996 are the result of the increase in
the weighted average number of apartments.

                                                              March 31,
                                                     ---------------------------
                                                         1997          1996
                                                     ------------  -------------
                Rental income                        $    3,062     $   1,894
                Other income                                159           135
                                                     ------------  -------------
                                                          3,221         2,029
                Property operating and maintenance          717           482
                Real estate taxes                           245           171
                                                     ------------  -------------
                                                            962           653
                                                     ------------  -------------
                Property net operating income        $    2,259    $    1,376
                                                     ============  =============
                Weighted average number of
                    apartments                            1,444           874
                                                     ============  =============

Development and Lease Up Communities

Development  and lease up  communities  consist of the  development of seven new
apartment  communities  or  the  expansion  of  existing  apartment  communities
containing   an   aggregate   of  1,542   apartment   units  that  were  in  the
"construction,"  "development,"  or "lease up" stage during 1997 and  therefore,
not  considered  to have  achieved  stabilized  occupancy for all of the periods
presented.  Increases in the three month period ended March 31, 1997 as compared
to the three month  period ended March 31, 1996 are the result of an increase in
the weighted average number of apartments.

                                                              March 31,
                                                     ---------------------------
                                                         1997          1996
                                                     ------------  -------------
                Rental income                        $    1,349    $        2
                Other income                                121             1
                                                     ------------  -------------
                                                          1,470             3

                Property operating and maintenance          484            16
                Real estate taxes                           128             -
                                                     ------------  -------------
                                                            612            16
                                                     ------------  -------------
                Property net operating income        $      858    $      (13)
                                                     ============  =============
                    (loss)
                Weighted average number of
                    apartments in leaseup                   695             2
                                                     ============  =============
                                 Page 15 of 24
<PAGE>
Acquisitions

Acquisitions  consist of 6 properties  containing 1,906 apartment  units,  which
have been acquired by the  Operating  Partnership  since January 1, 1996.  There
were no acquisitions of apartment communities in the First Quarter of 1996.

                                                              March 31,
                                                     ---------------------------
                                                         1997          1996
                                                     ------------  -------------
                Rental income                        $    2,939     $       -
                Other income                                 73             -
                                                     ------------  -------------
                                                          3,012             -
                Property operating and maintenance          906             -
                Real estate taxes                           248             -
                                                     ------------  -------------
                                                          1,154             -
                                                     ------------  -------------
                Property net operating income        $    1,858    $        -
                                                     ============  =============
                Weighted average number of
                    apartments                       
                                                          1,574             -
                                                     ============  =============

Liquidity and Capital Resources

Liquidity

The Operating  Partnership's net cash provided by operating activities decreased
from $14.1  million for the three months  ended March 31, 1996 to $10.9  million
for the three  months  ended March 31, 1997  principally  due to a reduction  in
accounts payable and other  liabilities  related to the decrease in construction
activity  and the  decrease  in net  income  related  to the loss from the early
extinguishment  of debt.  Net cash used in investing  activities  decreased from
$30.8 million for the three months ended March 31, 1996 to $27.3 million for the
three months ended March 31, 1997.  The decrease is the result of a reduction in
construction  activity for the first quarter 1997 of $9.8 million as compared to
$30.2 million in the first quarter 1996 being offset by $16.5 million related to
the  acquisitions  of two apartment  communities,  net of assumed debt. Net cash
provided by  financing  activities  increased  from $14.0  million for the three
months  ended March 31, 1996 to $16.7  million for the three  months ended March
31, 1997 due to the proceeds  from the sale of 1,800,000  shares of common stock
from the  Third  Public  Offering  and  borrowings  under the  Revolving  Credit
Facility which were used to fund the  development  and  acquisition of apartment
communities.

The Operating Partnership expects to meet its short-term liquidity requirements,
including capital expenditures relating to maintaining  Stabilized  Communities,
generally  through its net cash provided by operations and borrowings  under its
credit arrangements and anticipates  meeting long-term  liquidity  requirements,
such as scheduled debt  maturities,  financing of  construction  and development
activities and possible  acquisitions  through long-term  unsecured  borrowings,
issuance of additional  equity  securities of the Company or debt  securities of
the Operating Partnership,  or, possibly in connection with acquisitions of land
or  existing  properties,  Units of the  Operating  Partnership.  The  Operating
Partnership  believes that its net cash provided by operations  will be adequate
and  anticipates  that it will  continue to be  adequate to meet both  operating
requirements and payment of dividends by the Operating Partnership in accordance
with REIT requirements in both the short and the long term.

The  information in the immediately  preceding  paragraph is forward looking and
involves risks and uncertainties that could  significantly  impact the Operating
Partnership's  expected liquidity requirements in the short and long term. While
it is  impossible  to itemize the many  factors and  specific  events that could
affect the Operating Partnership's outlook for its liquidity requirements,  such
factors would include the actual timing of the Operating  Partnership's  planned
development  of new, and  expansion of existing,  communities;  acquisitions  of
existing   apartment   communities;   the  actual  costs  associated  with  such
developments  and  acquisitions;  and the strength of the local economies in the
sub-markets  in  which  the  Operating  Partnership   operates.   The  Operating
Partnership is further subject to risks relating to the limited  geographic area
in  which it  operates  and its  ability  to  successfully  manage  its  
                                 Page 16 of 24
<PAGE>
planned  expansion into Southern  California,  a market in which it did not have
any operating  history  prior to 1995.  Higher than  expected  costs,  delays in
development of communities, a downturn in the local economies and/or the lack of
growth of such economies could reduce the Operating  Partnership's  revenues and
increase  its  expenses,   resulting  in  a  greater  burden  on  the  Operating
Partnership's  liquidity than that which the Operating Partnership has described
above.

Capital Resources

At March 31, 1997,  the  Operating  Partnership's  total debt was  approximately
$435.9   million  and  the   Operating   Partnership's   debt  to  total  market
capitalization  (Market Equity plus Debt) was  approximately  46.0 percent.  The
Operating  Partnership  received an investment  grade security  rating of "BBB-"
from Standards and Poors Corporation, "Baa3" from Moody's Investor Services, Inc
and " BBB-" from Fitch Investors Service,  Inc. in December 1996 with respect to
prospective issuances of senior unsecured debt.

A security  rating is not a  recommendation  to buy, sell or hold securities and
may be subject to revision or  withdrawal  at any time by the  assigning  rating
organization,  and each rating  should be evaluated  independently  of any other
rating.  A rating of (a) BBB- from Standard & Poors  Corporation  indicates that
the  obligations  of the Operating  Partnership  are in the lower range of those
obligations that exhibit adequate protection  parameters,  (b) Baa3 from Moody's
Investor   Service  Inc.   indicates  that  the  obligations  of  the  Operating
Partnership are considered to be in the lower range of medium-grade obligations,
which are not  considered to be highly  protected or poorly secured and (c) BBB-
from  Fitch  Investors  Service,  Inc.  indicates  that the  obligations  of the
Operating  Partnership  are  considered to be in the lower range of  obligations
considered to be of investment grade and of satisfactory credit quality and that
its ability to pay interest and to repay principal is considered to be adequate.

Conventional Mortgage Loans

Conventional mortgage loans are comprised of three fixed rate loans at March 31,
1997, each of which is  collateralized  by a first mortgage lien on an apartment
community  included in real estate assets.  The mortgages are payable in monthly
installments  of  principal  and interest  and mature at various  dates  through
August 17, 2004. The  conventional  mortgage loans  aggregated  $33.5 million at
March 31, 1997 with interest rates ranging from 6.25 percent to 9.95 percent. In
January 1997, the Operating Partnership  extinguished the debt on four mortgages
with unpaid principal balances of approximately $25.0 million with proceeds from
the Revolving Credit Facility. As a result, the Operating Partnership incurred a
loss from the early extinguishment of debt of approximately $1.5 million.

In December 1995, the Operating  Partnership entered into a ten year $50 million
fixed rate loan from an insurance  company that bears  interest at 7.17 percent,
with principal and interest due monthly based on a 25-year amortization schedule
beginning  January 1, 1996 through  January 1, 2006,  and the  remaining  unpaid
principal  balance due  January 1, 2006.  The loan is secured by a first deed of
trust on five  apartment  communities.  Proceeds  from the loan were used to pay
down outstanding balances on the Revolving Credit Facility. The outstanding debt
was $49.4 million at March 31, 1997.  The loan is  convertible to unsecured upon
the Operating Partnership achieving an investment grade rating of BBB or better.

Mortgage Loan Certificates

The Operating Partnership,  through the Financing  Partnership,  borrowed $102.0
million  under a  securitized  loan in August 1994.  During  January  1995,  the
Operating  Partnership  borrowed the balance of $29.0  million  (increasing  the
total to $131.0  million).  The loan is  secured by first  mortgage  liens on 21
Communities.  The $102.0  million was issued at 99.97 percent of its face amount
and the $29.0 million was issued at 97.9375  percent of its face amount and will
mature on August 1, 2001.  Although  both amounts bear interest at 7.98 percent,
the $29.0  million has an  effective  interest  rate of 8.40  percent due to the
discount. The weighted average effective interest rate of the total $131 million
loan is 8.05 percent. The bonds have been rated "AA" by Standard and Poors.

In March 1997, the Operating Partnership  substituted two apartment communities,
Sonoran and The Heritage, as collateral for the securitized loan in exchange for
releasing the liens on three apartment  communities,  The Pines, La Valencia and
Deer Creek Village, which are held for sale.
                                 Page 17 of 24
<PAGE>
Tax Exempt Bonds

Tax exempt bonds were  comprised of three  floating  rate bonds based on the tax
exempt note rate set by the respective  remarketing agents (or, at the option of
the Operating Partnership at a fixed rate determined by the remarketing agents).
The bonds are secured by letters of credit  which are secured by first  mortgage
liens on four apartment communities.  The tax exempt bonds have monthly interest
only payments and mature at various  dates  through  2016.  The tax exempt bonds
aggregated  $64 million at March 31, 1997 with interest  rates ranging from 4.95
percent to 6.06 percent.

Revolving Credit Facility

On September  25, 1996,  the  Operating  Partnership  expanded its existing $125
million  unsecured  Revolving Credit Facility to $225 million with a bank group.
The Revolving  Credit Facility bears interest at a floating rate of London Inter
Bank Offered  Rate (LIBOR ) plus 150 basis  points (100 basis points  equals one
percent)  (or,  at the option of the  Operating  Partnership,  at the prime rate
announced  by the banks).  The  Revolving  Credit  Facility  has a term of three
years,  with an option to extend for one year and provides for monthly  payments
of interest only. It will be used to finance acquisitions,  to fund construction
and development and renovation costs, and for working capital purposes. At March
31, 1997, there was $158.5 million outstanding on the Revolving Credit Facility,
with an effective  interest rate of 7.25 percent.  The Revolving Credit Facility
contains customary representations, covenants and events of default, including a
limitation which restricts dividends to 95 percent of Funds From Operations,  as
defined.  The  Operating  Partnership  does not expect that the  covenants  will
affect its ability to pay  dividends  in  accordance  with its current  dividend
policy or its ability to maintain a REIT status.

<TABLE>
<CAPTION>
The table below outlines the Operating Partnership's debt structure as of March 31, 1997
                                                                              Outstanding        Weighted Average
                                                                                Balance            Interest Rate
                                                                          --------------------   --------------------
<S>                                                                       <C>                           <C>  
Fixed Rate Debt:
   Mortgage Debt
     Conventional....................................................     $         82,906              7.40%
     Mortgage Loan Certificates......................................              130,542              8.05
                                                                          --------------------   --------------------
         Total Fixed Rate Debt.......................................              213,448              7.80

Variable Rate Debt:
   Tax Exempt Bonds..................................................               64,000              5.40
   Revolving Credit Facility.........................................              158,469              7.25
                                                                          --------------------   --------------------
         Total Variable Rate Debt....................................              222,469              6.72
                                                                          --------------------   --------------------
         Total Debt..................................................     $        435,917              7.25%
                                                                          ====================   ====================
</TABLE>

The Operating Partnership had 5,714 unencumbered  apartment units related to the
Stabilized  Communities  and 1,146  unencumbered  apartment units related to the
Communities Under Construction and in Lease-Up at March 31, 1997.

Subsequent Offerings

On May 28, 1996, the Company  completed the Second Public  Offering of 4,500,000
shares of its Common  Stock of which  2,000,000  shares were sold by the Company
and an aggregate of 2,500,000 were sold by two  institutional  stockholders.  On
June 25,  1996,  the  underwriters  exercised  their  over-allotment  option for
200,000 shares and the Company issued an additional  88,889 shares of its Common
Stock and the  institutional  stockholders  sold an  additional  111,111  shares
pursuant  to a partial  exercise  of the  over-allotment  option  granted to the
underwriters.  Net proceeds to the Company from the Second  Public  Offering was
approximately $40,891,000. The Company used the proceeds from the sale of Common
Stock to purchase  2,088,889 units in the Operating  Partnership.  The Operating
Partnership  used the  proceeds  to pay down a portion of its  Revolving  Credit
Facility.
                                 Page 18 of 24
<PAGE>
In January 1997, the Company filed a shelf  registration  statement with the SEC
for up to $125 million of common stock, preferred stock and warrants issuable by
the  Company  and $200  million of debt  securities  issuable  by the  Operating
Partnership.  The registration  statement,  which has been declared effective by
the SEC,  includes  $125  million  of  available  equity  securities  under  the
September 1995 registration statement. These registration statements provide the
Company  with the  ability to issue and sell a portion of such  securities  from
time to time.

On  February  14,  1997,  the Company  completed  the Third  Public  Offering of
1,800,000  shares of its Common  Stock.  Net  proceeds to the  Company  from the
February  1997  Offering  was  approximately  $35,415,000.  The Company used the
proceeds  from  the sale of  Common  Stock to  purchase  1,800,000  units in the
Operating Partnership. The Operating Partnership used the proceeds to pay down a
portion of its Revolving Credit Facility.

On April 2, 1997,  the Operating  Partnership  completed the sale of $75 million
senior unsecured notes priced at 99.44 percent of par with a coupon rate of 7.50
percent due April 15,  2004 and $50 million  senior  unsecured  notes  priced at
99.21  percent of par with a coupon rate of 7.625  percent  due April 15,  2007.
Proceeds  to the  Operating  Partnership  from  the  sale of the  notes,  net of
underwriter's   discount  and  out-of-pocket  costs,  was  approximately  $122.8
million. In anticipation of the offering, the Operating Partnership entered into
two forward  treasury lock  agreements  on February 25, 1997.  The treasury lock
agreements  were settled  concurrently  with the  completion  of the sale of the
senior unsecured notes on April 2, 1997, and the Operating  Partnership received
proceeds from the settlement of the treasury lock agreements of approximately $3
million.  The Operating  Partnership is amortizing the gain on the settlement of
the treasury lock  transaction  as a reduction in interest  expense on the notes
using the effective  interest rate method.  The effective  interest rates on the
senior  unsecured  notes  inclusive  of the benefit from the  settlement  of the
treasury lock  transaction is 7.18 percent and 7.36 percent,  respectively.  The
Operating  Partnership  used the  proceeds  from the sale of the  notes  and the
settlement of the treasury  lock  transaction  to pay down its Revolving  Credit
Facility.

Inflation

Most of the leases at the communities are for a term of one year or less,  which
may enable the Operating  Partnership  to seek  increased  rents upon renewal of
existing  leases or  commencement  of new leases.  The short-term  nature of the
leases generally  serves to reduce the risk to the Operating  Partnership of the
adverse effects of inflation.

Funds From Operations

The Operating  Partnership and industry  analysts consider Funds from Operations
("FFO")  to be an  appropriate  measure  of the  performance  of an equity  REIT
because  it is  predicated  on cash flow  analyses.  The  Operating  Partnership
computes  FFO  in  accordance   with  standards   established  by  the  National
Association of Real Estate Investment Trusts  ("NAREIT").  FFO is defined as net
income (loss)  determined in accordance  with GAAP,  excluding gains (or losses)
from  debt   restructuring   and  sales  of  property  plus   depreciation   and
amortization,  excluding depreciation on non-real estate assets and amortization
of deferred  financing costs.  Funds from Operations should not be considered as
an  alternative  to net  income  (determined  in  accordance  with  GAAP)  as an
indicator of the Operating  Partnership's  financial performance or to cash flow
from operating  activities  (determined in accordance with GAAP) as a measure of
the Operating  Partnership's  needs. The Operating  Partnership believes that in
order  to  facilitate  a  clear  understanding  of the  consolidated  historical
operating  results  of the  Operating  Partnership,  FFO should be  examined  in
conjunction  with  net  income,  as  presented  in  the  consolidated  financial
statements and elsewhere in this document.

                                                       Three Months Ended    
                                                             March 31,       
                                                      ---------------------- 
                                                         1997       1996     
                                                      ---------------------- 
     Income before extraordinary                                             
       items and minority interest                     $  4,440  $   5,341   
     Depreciation and amortization, net of corporate                         
       depreciation of $66 and $39, respectively          6,112      4,731   
     Amortization of executive deferred                                      
       compensation expense                                  30        170   
                                                      ---------------------- 
     Funds from Operations                            $  10,582  $  10,242   
                                                      ====================== 
                                                      
                                 Page 19 of 24
<PAGE>
Number of Units

The Operating  Partnership had 23,968,328 and 20,941,426 weighted average number
of units at March 31, 1997 and 1996, respectively.

Capitalization of Fixed Assets and Community Improvements.

The  Operating  Partnership  has  established  a policy  of  capitalizing  those
expenditures relating to acquiring new assets, materially enhancing the value of
an existing  asset,  or  substantially  extending the useful life of an existing
asset. All expenditures  necessary to maintain a community in ordinary operating
condition are expensed as incurred.

Acquisition  of assets and  community  expenditures  for the three  months ended
March 31, are as follows:

                                                            1997         1996
                                                        ---------    ----------

          New community development                     $   9,793    $   30,276
          Acquisitions                                     34,800             -
          Nonrecurring capital expenditures:
            Vehicle access control gates                      313             -
            Computer upgrade                                   71            28
          Recurring capital expenditures:
            Community additions and
                improvements                                  552           416
            Corporate additions and improvements               12             -
                                                        ---------    ----------
                                                        $  45,541    $   30,720
                                                        =========    ==========


Development and Construction Activity

The apartment communities under construction and in lease-up are listed below:
<TABLE>
<CAPTION>
                                                                             Actual         Actual or
                                                   Average   Estimated       Date of      Estimated     Estimated
                                                    Unit    Construction  Construction     Commence-      Date of
                                           Total    Size       Cost       Commence-        ment of      Stabilized
             Name                  City    Units  (Sq. Ft.) (Millions)         ment        Lease-Up    Occupancy
--------------------------------------------------------------------------------------------------------------------
                                                                                            Quarter
                                                                          ------------------------------------------
<S>                             <C>           <C>       <C>      <C>          <C>            <C>            <C> 
Phoenix
The Isle at Arrowhead Ranch     Glendale      256       940      $  17        2:96           4:96           4:97
The Retreat Phase I             Phoenix       240       973         14        1:97           3:97           2:98
Vista Grove                     Mesa          224       911         14        1:97           3:97           2:98
                                           -------          -----------
                                              720                   45
Tucson
Bear Canyon                     Tucson        238       973         15        3:95           2:96           2:97
Harrison Park II Expansion      Tucson        188       974         10        3:95           2:96           2:97
                                           -------          -----------
                                              426                   25
                                           -------          -----------
     Total                                  1,146                 $ 70
                                           =======          ===========
</TABLE>
                                 Page 20 of 24
<PAGE>
The  Operating  Partnership  owns  sites  intended  for the  development  of two
additional multifamily apartment communities and Phase II of the Retreat, which,
if completed,  are expected to contain  approximately 651 apartment units. There
can be no assurance that the Operating Partnership will succeed in obtaining any
necessary  governmental  approvals or any  financing  required to develop  these
projects,  or  that  the  Operating  Partnership  will  decide  to  develop  any
particular project.

The information set forth in the table above is based upon a number of estimates
and  assumptions  that  are  inherently   subject  to  business,   economic  and
competitive  uncertainties  and  contingencies,  many of which  are  beyond  the
Operating  Partnership's  control. The actual development cost,  completion date
and  stabilization  date of any  project  will be  dependent  upon a variety  of
factors beyond the control of the Operating Partnership including,  for example,
labor and other personnel costs, material costs, weather conditions,  government
fees and leasing rates.


Acquisition Activity

On February 27, 1997,  the Operating  Partnership  acquired  Canyon Ridge, a 162
unit apartment  community located in San Diego,  California for a total purchase
price of  approximately  $11.1 million  cash.  On March 14, 1997,  the Operating
Partnership  acquired  Marquessa  Apartments,  a 336  unit  apartment  community
located in Corona Hills,  California for $5.1 million cash and the assumption of
a note for $18.3 million.

The Operating  Partnership is actively pursuing and in preliminary  negotiations
regarding  additional  properties  in  Riverside/San  Bernardino  and San Diego,
California,  but no  assurance  can be given that it will  continue to pursue or
consummate any acquisitions as a result of these negotiations.

Disposition Activity

The Operating  Partnership has entered into agreements to sell three properties,
Deer Creek Village,  The Pines, and La Valencia  containing 863 apartment units.
The aggregate sales price is approximately $42.2 million.  The sales are subject
to due diligence procedures and no assurance can be given that the sales will be
consummated.
                                 Page 21 of 24
<PAGE>
Apartment Communities

The following  sets forth certain  information  regarding the current  apartment
communities at March 31, 1997. All of the  communities  are owned 100 percent in
fee by the Operating Partnership or the Financing Partnership.
<TABLE>
<CAPTION>
                                                                                                  Year
                                                                                                Developed
                                                                  Number of      Developed/        or
             Apartment Communities                   City        Apartments       Acquired      Acquired
             ---------------------                   ----        ----------       --------      --------
<S>                                            <C>                  <C>       <C>            <C>   
Same Store
Arizona
-------
    Phoenix:
Acacia Creek                                      Scottsdale           508        Acquired        1995
Bayside at the Islands                             Gilbert             272       Developed        1988
Country Brook                                      Chandler            276        Acq/Dev       1991/1993
Deer Creek Village                                 Phoenix             308        Acquired        1991
Gateway Villas                                     Phoenix             180       Developed        1995
Greenwood Village                                   Tempe              270        Acquired        1993
Heritage Point                                       Mesa              148        Acquired        1994
La Mariposa                                          Mesa              222        Acquired        1990
La Valencia                                          Mesa              361        Acquired        1990
Little Cottonwoods                                  Tempe              379      Acq/Acq/Dev    1989/89/90
Los Arboles                                        Chandler            232       Developed        1985
Miramonte                                         Scottsdale           151       Developed        1983
Morningside                                       Scottsdale           160        Acquired        1992
Mountain Park Ranch                                Phoenix             240       Developed        1995
Park Meadow                                        Gilbert             156        Acquired        1992
Preserve at Squaw Peak                             Phoenix             108        Acquired        1991
Promontory Pointe                                  Phoenix             304        Acquired        1988
Rancho Murietta                                     Tempe              292        Acquired        1995
Scottsdale Courtyards                             Scottsdale           274       Developed        1993
Scottsdale Meadows                                Scottsdale           168       Developed        1984
Shadow Brook                                       Phoenix             224        Acquired        1993
Shores at Andersen Springs                         Chandler            299       Developed      1989/1993
Silver Creek                                       Phoenix             174        Acquired        1991
Sonoran                                            Phoenix             429       Developed        1995
Sun Creek                                          Glendale            175        Acquired        1993
Superstition Vista                                   Mesa              316        Acquired        1995
The Enclave                                         Tempe              204       Developed        1995
The Heritage                                       Phoenix             204       Developed        1995
The Meadows                                          Mesa              306        Acquired        1987
The Palms                                          Phoenix             132       Developed        1990
The Pines                                            Mesa              194        Acquired        1992
Towne Square                                       Chandler            468        Acq/Dev       1992/1995
Villa Encanto                                      Phoenix             382       Developed        1983
Village at Lakewood                                Phoenix             240       Developed        1988
                                                                   ----------
                                                                     8,756
   Tucson:
Harrison Park                                       Tucson             172        Acquired        1991
La Reserve                                        Oro Valley           240       Developed        1988
Orange Grove Village                                Tucson             256        Acquired        1991
Suntree Village                                   Oro Valley           424        Acquired        1992
The Arboretum                                       Tucson             496        Acq/Dev       1992/1995
Village at Tanque Verde                             Tucson             217        Acq/Dev       1990/1994
                                                                   ----------
                                                                     1,805
   California:
The Ashton                                       Corona Hills          492        Acquired        1995
                                                                   ----------
                                                                       492
                                                                   ----------
     Total Same Store                                               11,053
                                                                   ==========
</TABLE>
                                 Page 22 of 24
<PAGE>
<TABLE>
<CAPTION>
                                                                                                  Year
                                                                                                Developed
                                                                  Number of      Developed/        or
             Apartment Communities                   City        Apartments       Acquired      Acquired
             ---------------------                   ----        ----------       --------      --------
<S>                                            <C>                  <C>       <C>            <C>   
Communities Stabilized Less than Two Years
Arizona
-------
    Phoenix:
Country Brook Expansion Phase III                  Chandler            120       Developed       1995/96
Ingleside                                          Phoenix             120       Developed       1995/96
Ladera                                             Phoenix             248       Developed       1995/96
Mirador                                            Phoenix             316       Developed       1995/96
Park Meadow Expansion Phase II                     Gilbert              68       Developed       1995/96
Towne Square Expansion Phase III                   Chandler            116       Developed       1995/96
                                                                   ----------
                                                                       988
Tucson:
The Legends                                         Tucson             312       Developed       1995/96
Orange Grove Expansion Phase II                     Tucson             144       Developed       1995/96
                                                                   ----------
                                                                       456
                                                                   ----------
     Total Communities Stabilized Less than Two Years                1,444
                                                                   ==========

Developments and Lease-Up Properties
Arizona
-------
   Phoenix:
The Hawthorne (1)                                  Phoenix             276       Developed       1995/96
The Retreat Phase I                                Glendale            240       Developed       1996/97
Vista Grove                                          Mesa              224       Developed       1996/97
The Isle at Arrowhead Ranch (2)                    Glendale            256       Developed        1996
Promontory Pointe Expansion Phase II (1)           Phoenix             120       Developed       1995/96
                                                                   ----------
                                                                     1,116
  Tucson:
Bear Canyon (2)                                     Tucson             238       Developed       1995/96
Harrison Park Expansion Phase II (2)                Tucson             188       Developed       1995/96
                                                                   ----------
                                                                       426
                                                                   ----------
    Total Developments and Lease-Up Properties                       1,542
                                                                   ==========

Acquisitions
  California
  ----------
Canyon Crest Views                                Riverside            178        Acquired        1996
Canyon Ridge                                      San Diego            162        Acquired        1997
Marquessa                                        Corona Hills          336        Acquired        1997
Portofino                                        Chino Hills           176        Acquired        1996
Parkview Terrace Club                              Redlands            558        Acquired        1996
Redlands Lawn & Tennis Club                        Redlands            496        Acquired        1996
                                                                   ----------
                                                                     1,906
                                                                   ==========

Total                                                               15,945
                                                                   ==========
</TABLE>

(1) Community reached stabilized occupancy in the first quarter 1997
(2) Community is in lease-up



PART II     OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K.

(b) No current reports on Form 8-K were filed during the quarter ended March 31,
1997
                                 Page 23 of 24
<PAGE>
                                   SIGNATURES

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




                                     EVANS WITHYCOMBE RESIDENTIAL, L.P.

                                     By: Evans Withycombe Residential, Inc., as
                                     General Partner


May 13, 1997                         /s/ Stephen O. Evans
-------------------                  ------------------------------
 (Date)                              Stephen O. Evans,
                                     Chairman of the Board and
                                     Chief Executive Officer




May 13, 1997                         /s/ Paul R. Fannin
-------------------                  ------------------------------
 (Date)                              Paul R. Fannin,
                                     Senior Vice President and
                                     Chief Financial Officer
                                 Page 24 of 24