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 June 30, 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 August 1, 1997 there were 24,894,186 partnership units outstanding.

                                   Page 1 of 25
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                       ----------------------------------
<TABLE>
<CAPTION>
                                      INDEX
                                      -----

<S>           <C>                                                                          <C>
Part I        FINANCIAL INFORMATION                                                        Page
------        ---------------------                                                        ----

              Item 1   Financial Statements

              Consolidated Balance Sheets as of June 30, 1997 (Unaudited) and
              December 31, 1996 ...........................................................   3

              Consolidated Statements of Income for the three and six months
              ended June 30, 1997 and 1996 (Unaudited) ....................................   4

              Consolidated Statement of Partners' Capital as of June 30, 1997
              (Unaudited) .................................................................   5

              Consolidated Statements of Cash Flows for the six months
              ended June 30, 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 .........................................................  14

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

              Item 6   Exhibits and Reports on Form 8-K....................................  25


Signatures    .............................................................................  25
</TABLE>
                                  Page 2 of 25
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                           CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                             June 30, 1997  December 31, 1996
                                                             -------------  -----------------
                                                              (Unaudited)
<S>                                                             <C>             <C>        
ASSETS                                                        
Real Estate:
  Land ......................................................   $ 130,490       $ 121,915  
  Buildings and improvements ................................     598,421         543,839  
  Furniture and fixtures ....................................      31,728          29,567  
  Construction-in-progress ..................................      43,265          66,229  
                                                                ---------       ---------  
                                                                  803,904         761,550  
                                                                                           
  Less accumulated depreciation .............................     (48,925)        (38,331) 
                                                                ---------       ---------  
                                                                  754,979         723,219  
Cash and cash equivalents ...................................       1,051           2,568  
Restricted cash .............................................       8,518           1,622  
Accounts and notes receivable ...............................       2,174           2,702  
Mortgage notes receivable ...................................      15,120            --    
Deferred costs, net of accumulated amortization                                            
 of $1,555 and $1,265 at June 30, 1997 and                                                
 December 31, 1996, respectively ............................       4,489           3,838  
Other assets ................................................       1,891           1,518  
                                                                ---------       ---------  
                                                                                           
Total assets ................................................   $ 788,222       $ 735,467  
                                                                =========       =========  
                                                                                           
                                                                                           
LIABILITIES AND PARTNERS' CAPITAL                                                          
                                                                                           
Mortgage and notes payable ..................................   $ 445,441       $ 436,172  
Accounts payable and other liabilities ......................      10,081           7,782  
Distributions payable .......................................      10,078            --    
Accrued interest ............................................       2,860           1,417  
Accrued property taxes ......................................       3,241           2,912  
Resident security deposits ..................................       2,408           1,818  
Prepaid rent ................................................         870             585  
                                                                ---------       ---------  
Total liabilities ...........................................     474,979         450,686  
                                                                                           
Minority interest ...........................................         801             827  
                                                                                           
Partners' capital ...........................................     312,442         283,954  
                                                                ---------       ---------  
                                                                                           
Total liabilities and partners' capital .....................   $ 788,222       $ 735,467  
                                                                =========       =========  
</TABLE>
See Notes to Consolidated Financial Statements                                  
                                  Page 3 of 25
<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             Six Months Ended
                                                         June 30, 1997   June 30, 1996  June 30, 1997   June 30, 1996
                                                         -------------   -------------  -------------   -------------
<S>                                                      <C>             <C>             <C>             <C>         
Revenues:
  Rental .............................................   $     27,713    $     22,078    $     54,865    $     44,214
  Third party management fees ........................            120             664             230             951
  Interest and other .................................          1,760           1,343           3,505           3,081
                                                         ------------    ------------    ------------    ------------
    Total revenues ...................................         29,593          24,085          58,600          48,246

Expenses:
  Repairs and maintenance ............................          2,637           2,719           5,578           5,275
  Property operating .................................          4,237           2,865           8,437           5,548
  Advertising ........................................            542             599             956           1,032
  Real estate taxes ..................................          2,079           1,615           4,198           3,264
  Property management ................................            633             824           1,540           1,708
  General and administrative .........................            253             376             673             797
  Interest ...........................................          8,013           5,469          15,402          10,893
  Depreciation and amortization ......................          6,459           4,870          12,637           9,640
                                                         ------------    ------------    ------------    ------------
Total expenses .......................................         24,853          19,337          49,421          38,157
                                                         ------------    ------------    ------------    ------------

Income before minority interest, gain on sale of
  real estate assets and extraordinary item ..........          4,740           4,748           9,179          10,089 
Gain on sale of real estate assets ...................          5,253             --            5,253             --
Minority interest ....................................            (13)            (16)            (30)            (39)
                                                         ------------    ------------    ------------    ------------

Income before extraordinary item .....................          9,980           4,732          14,402          10,050

Extraordinary item-
    loss on early extinguishment of debt .............            --              --           (1,500)            --
                                                         ------------    ------------    ------------    ------------

Net income ...........................................   $      9,980    $      4,732    $     12,902    $     10,050
                                                         ============    ============    ============    ============


Earnings per unit before extraordinary item ..........   $       0.40    $       0.22    $       0.59    $       0.47
                                                         ============    ============    ============    ============

Earnings per unit ....................................   $       0.40    $       0.22    $       0.53    $       0.47
                                                         ============    ============    ============    ============





Weighted average units outstanding ...................     24,857,210      21,700,019      24,415,225      21,320,722
                                                         ============    ============    ============    ============
</TABLE>
See Notes to Consolidated Financial Statements
                                  Page 4 of 25
<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 ....................................          --           10,538          2,364           --           12,902
    Distributions  ($0.81 per unit) ...............          --          (16,434)        (3,707)          --          (20,141)
    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 ...........          --            2,482         (2,482)          --             --
    Exercise of stock options .....................         7,500            207           --             --              207
    Issuance of restricted stock ..................        36,130            744           --             (744)          --
    Forfeiture of restricted stock ................        (2,176)          --             --             --             --
    Amortization of deferred compensation .........          --             --             --              105            105
                                                      -----------    -----------    -----------    -----------    -----------

Partners' capital, June 30 1997 ...................    24,886,166    $   259,253    $    54,293    $    (1,104)   $   312,442
                                                      ===========    ===========    ===========    ===========    ===========
</TABLE>
See Notes to Consolidated Financial Statements
                                  Page 5 of 25
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                              Six Months ended June 30,
                                                              -------------------------
                                                                  1997         1996
                                                                  ----         ----
<S>                                                            <C>          <C>      
Cash flows from operating activities
Net income .................................................   $  12,902    $  10,050
Adjustments to reconcile net income to net cash
  provided by operating  activities:
    Depreciation and amortization ..........................      13,183        9,960
    Amortization of deferred comp ..........................          81          350
    Gain on the sale of real estate assets .................      (5,253)        --
    Minority interest ......................................          30           39
    Write-off of development and acquisition costs .........         402           39
    Write-off of deferred loan costs .......................         294         --
Decrease (increase) in assets:
    Restricted cash ........................................      (6,896)        (437)
    Accounts and notes receivable ..........................         528         (494)
    Other assets ...........................................        (373)         206
(Decrease) increase in liabilities:
    Accounts payable and other liabilities .................       2,299         (883)
    Accrued interest .......................................       1,443          (64)
    Accrued property taxes .................................         329          901
    Resident security deposits .............................         590            2
    Prepaid rent ...........................................         285          (12)
                                                               ---------    ---------
Net cash provided by operating activities ..................      19,844       19,657

Cash flows from investing activities
Purchase of real estate assets .............................     (42,354)     (60,643)
Sale of real estate assets .................................       6,012         --
                                                               ---------    ---------
Net cash used in investing activities ......................     (36,342)     (60,643)

Cash flows from financing activities
Proceeds from Third Public Offering, net of expenses .......      35,415         --
Proceeds from Second Public Offering, net of expenses ......        --         41,107
Proceeds from exercise of options ..........................         207          160
Proceeds from mortgage notes and revolving
  credit facility ..........................................     184,306      176,221
Principal payments on mortgage notes .......................    (193,355)    (161,887)
Payment for loan costs .....................................      (1,473)        (315)
Distributions paid .........................................     (10,063)     (16,075)
Minority interest distributions ............................         (56)         (71)
                                                               ---------    ---------
Net cash provided by financing activities ..................      14,981       39,140
                                                               ---------    ---------


Net decrease in cash and cash equivalents ..................      (1,517)      (1,846)
Cash and cash equivalents, beginning of period .............       2,568        3,634
                                                               ---------    ---------
Cash and cash equivalents, end of period ...................   $   1,051    $   1,788
                                                               =========    =========


Supplemental information
Cash paid during the period for interest ...................   $  13,457    $  10,645
                                                               =========    =========

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

Origination of carryback mortgage notes arising from sale of
    apartment communities ..................................   $  15,120    $    --
                                                               =========    =========
Issuance of stock under restricted stock incentive plan ....   $      24    $    --
                                                               =========    =========
Conversion of units to common stock ........................   $   2,482    $     888
                                                               =========    =========
</TABLE>
See Notes to Consolidated Financial Statements
                                  Page 6 of 25
<PAGE>
                       EVANS WITHYCOMBE RESIDENTIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 1997
        (Amounts in thousands, except for number of units or shares and
                               per unit amounts)
                                   (Unaudited)

1.   Organization and Formation of the Company

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 operations  into selected  sub-markets in Southern  California.
The Operating  Partnership owns and manages 52 stabilized  multifamily apartment
communities   containing  14,723  units,  of  which  45  stabilized  multifamily
apartment communities are located in Phoenix and Tucson,  Arizona,  containing a
total of 12,325 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  three
multifamily  apartment  communities  comprising 720 units in its Phoenix market.
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 June 30, 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
June 30, 1997 and 1996, respectively.

In the second quarter of 1996, the Company completed the Second Public Offering.
The net proceeds of $40,891  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 $150  million  unsecured  Revolving  Credit  Facility  (Revolving
Credit Facility).

In the first quarter of 1997, the Company  completed the Third Public  Offering.
The net proceeds of $35,415  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  use 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 six month period ended June 30,
1997 are not necessarily  indicative of the results that may be expected for the
year ended December 31, 1997.
                                  Page 7 of 25
<PAGE>
2.   Basis of Presentation (continued)

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.
Annual Report on 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 June 30,  1997 the  Operating
Partnership  does 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 $493 and $970 and $744 and $1,464,  for the three and
the six months ended June 30, 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
$10,802 and $12,060 at June 30, 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.
                                  Page 8 of 25
<PAGE>
3.   Summary of Significant Accounting Policies (continued)

Restricted Cash

Restricted cash includes restricted deposits held by third party  intermediaries
for the purpose of  completing  an IRS Section 1031 tax free  exchange,  sinking
fund accounts related to tax exempt bonds, property taxes and escrow accounts.

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 and the
six months ended June 30, 1997 and 1996,  respectively,  by the weighted average
number of units outstanding during the period.

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 Notes Receivable

The Operating Partnership's mortgage notes receivable consist of the following:

     $7.9 million  mortgage  note  receivable at a                $ 7,932      
     fixed  interest rate of 9.5 percent,  secured
     by  a  first  mortgage  lien  on  Deer  Creek
     Village Apartments, matures November 1, 1997.
     (Paid off on July 23, 1997.)                               
                                                                              
     $7.2 million  mortgage  note  receivable at a                  7,188
     fixed interest rate of 8.0 percent secured by
     a   first   mortgage   lien   on  The   Pines
     Apartments, matures November 1, 1997.


                                                                ----------   
                                                                  $15,120
                                                                ==========   
                                  Page 9 of 25
<PAGE>
5.   Mortgage and Notes Payable

The Operating  Partnership's  mortgage  notes and notes payable  consists of the
following:
                                                       June 30,    December 31,
                                                         1997         1996
                                                         ----         ----
                                                                                
     Mortgage  note  payable  at a fixed  interest   $        -   $     5,380
     rate of 8.0 percent,  monthly  principal  and                           
     interest   payments.   The  unpaid  principal                           
     balance was repaid on January 9, 1997.            
                                                                             
     Mortgage  note  payable  at a fixed  interest            -         4,340
     rate of 8.0 percent,  monthly  principal  and                           
     interest   payments.   The  unpaid  principal   
     balance was repaid on January 9, 1997.                                  
                                                                             
     Mortgage  note  payable  at a fixed  interest            -         8,951
     rate of 8.0 percent,  monthly  principal  and   
     interest   payments.   The  unpaid  principal                           
     balance was repaid on January 9, 1997.                                  
                                                                             
     Mortgage  note  payable  at a fixed  interest            -         6,225
     rate of 8.28 percent,  monthly  principal and                           
     interest   payments.   The  unpaid  principal                           
     balance was repaid on January 31, 1997.                                 
                                                                             
     Mortgage  note  payable  at a fixed  interest       12,000        12,065
     rate of 9.95 percent,  monthly  principal and                           
     interest payments through September 15, 1997,                           
     remaining balance due September 15, 1997. The                           
     unpaid  principal  balance was repaid on July                           
     15, 1997.                                                               
                                                                             
     Mortgage  note  payable  at a fixed  interest        3,166         3,182
     rate of 9.3 percent,  monthly  principal  and                           
     interest payments through September 15, 1997,                           
     remaining balance due September 15, 1997. The                           
     unpaid  principal  balance was repaid on July                           
     15, 1997.                                                               
                                                                          
     Mortgage note payable at fixed interest rates       18,252           -  
     ranging  from 6.25  percent  to 9.0  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. Secured                           
     by a first  mortgage  lien  on one  apartment       
     community. The mortgage note can be repaid at                           
     any  time  at  the  Operating   Partnership's                           
     option without prepayment penalty.                                      
                                                        
     $50  million  securitized  debt  at  a  fixed       49,250        49,509
     interest  rate  of  7.17   percent,   monthly                           
     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      130,563       130,520
     rate  of  7.98  percent,  with  an  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 $437 and $480 at June
     30, 1997 and December 31, 1996, respectively.

     $17.3   million  tax  exempt   bonds  with  a       17,300        17,300
     floating  interest  rate  based  on  the  tax
     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
     5.20 percent at June 30, 1997).

     $22.6   million  tax  exempt   bonds  with  a       22,650        22,650
     floating  interest  rate  based  on  the  tax
     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 5.56 percent at June 30, 1997).
                                  Page 10 of 25
<PAGE>
5.   Mortgage and Notes Payable (continued)

                                                       June 30,     December 31,
                                                         1997          1996
                                                         ----          ----

     $24.05   million  tax  exempt  bonds  with  a     $ 24,050      $ 24,050  
     floating  interest  rate  based  on  the  tax                             
     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 5.34 percent at June 30, 1997).           
                                                       
     $150  million   unsecured   Revolving  Credit       44,000        152,000 
     Facility with floating interest rate based on                             
     LIBOR  plus 1.15  percent or at the option of                             
     the  Operating  Partnership  at  prime  rate,                             
     interest payments only. Matures September 24,                             
     1999 (Effective interest rate of 7.23 percent     
     at June 30, 1997).                                
                                                       
     $75  million  senior  unsecured  notes with a       74,595             -  
     fixed coupon rate of 7.50 percent. Semiannual                             
     interest  only  payments  due  April  15  and                             
     October 15 commencing  October 15, 1997. Face                             
     amount of $75 million is due April 15,  2004.                             
     The balance is net of an unamortized discount                             
     of $405  at  June  30,  1997.  The  effective     
     interest  rate  inclusive of the benefit of a     
     treasury lock transaction is 7.18 percent.        
                                                       
     $50  million  senior  unsecured  notes with a       49,615              - 
     fixed   coupon   rate   of   7.625   percent.                             
     Semiannual  interest  only payments due April                             
     15 and  October  15  commencing  October  15,                             
     1997. Face amount of $50 million is due April                             
     15,   2007.   The   balance   is  net  of  an                             
     unamortized  discount  of $385  at  June  30,                             
     1997.  The effective  interest rate inclusive                             
     of the benefit of a treasury lock transaction     
     is 7.36 percent.                                  
                                                                               
                                                       --------       --------
                                                       $445,441       $436,172 
                                                       ========       ======== 

Scheduled  principal payments on debt,  assuming that the Operating  Partnership
exercises  its  options  to extend the  maturity  date on the  Revolving  Credit
Facility, are as follows:
<TABLE>
<CAPTION>
                   -------------------------------------------------------------------------------------
                      Mortgage      Mortgage      Senior                     Revolving
                       Notes          Loan       Unsecured    Tax-Exempt       Credit
                      Payable     Certificate      Notes        Bonds         Facility         Total
                   -------------------------------------------------------------------------------------
<S>                <C>           <C>           <C>          <C>           <C>             <C>        
1997               $    15,487   $         -   $         -  $         -   $         -     $    15,487
1998                       784             -             -            -             -             784
1999                       831             -             -            -        44,000          44,831
2000                       882             -             -            -             -             882
2001                       500       130,563             -            -             -         131,063
Thereafter              64,184             -       124,210       64,000             -         252,394
                   ------------- ------------- ------------ ------------- --------------- --------------
   Total           $    82,668   $   130,563   $   124,210  $    64,000   $    44,000     $   445,441
                   ============= ============= ============ ============= =============== ==============
</TABLE>
                 
On June 13, 1997,  the Operating  Partnership  amended its existing $225 million
Revolving  Credit  Facility with a bank group to decrease the commitment  amount
from $225 million to $150 million and decrease the interest rate from LIBOR plus
1.50 percent to LIBOR plus 1.15 percent.

The $150 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 11 of 25
<PAGE>
5.   Mortgage and Notes Payable (continued)

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.

6.   Distributions

On July 15, 1997, the Operating  Partnership  paid a distribution  of $0.405 per
unit ($10,099) to unitholders of record as of June 30, 1997.

7.    Management Fees

The Operating Partnership,  through the Management Company,  performs management
services for certain  unaffiliated  communities.  Management  fees received from
managed  communities were $119 and $664 for the three months ended June 30, 1997
and 1996 and $230 and $951 for the six  months  ended  June 30,  1997 and  1996,
respectively.  The Second Quarter 1996 balance includes a one time non-recurring
$500 termination fee received from the sale of management contracts.

8.   Stock Incentive Plan

Stock Option Plan

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 six months ended June 30, 1997 is as follows:

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

Options outstanding at December 31, 1996            908,850          $20.63
         Exercised                                   (7,500)          20.00
         Granted                                    241,500           20.49
         Forfeited                                  (32,225)          20.84
                                                  ---------          ------
Options outstanding at June 30, 1997              1,110,625          $20.66
                                                  =========          ======

Options exercisable:
         December 31, 1996                          357,700          $19.98
         June 30, 1997                              521,125          $20.46

Options to purchase  719,375 and 901,650  shares of common stock were  available
for grant under the plan at June 30, 1997 and December 31, 1996, respectively.
                                 Page 12 of 25
<PAGE>
Executive Stock Incentive Plan

Prior  to  the  Initial  Public  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 remained  employees of the Company  during such 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 $180 and $60 and $350 for the three
and six months  ended  June 30,  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 December 31, 1996,     74,346
       Forfeited                                                       (1,174)
                                                                       ------ 
       Restricted stock at June 30, 1997                               73,172
                                                                       ======

       Number of shares vested at June 30, 1997                        27,600

Restricted Stock Program

The Company has awarded 45,220 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 seven 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 $27 and $11 and $45 and $20,  for the
three and six months ended June 30, 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.

9.   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
June 30, 1997 as follows:


                                                                       Dollars
                                                                       -------
                                                                      
            Balance at December 31, 1996                                 $827
            Allocation of net income                                       30
            Distributions paid                                            (56)
                                                                         ---- 
            Balance at June 30, 1997                                     $801
                                                                         ====
                                 Page 13 of 25
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS
         (Amounts in thousands, except apartment data and number of shares 
         and 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 and the six months ended June 30, 1997
and  1996,   respectively,   were   significantly   affected  by   acquisitions,
developments and expansions.

Comparison  of Results of  Operations  for the Three Months and Six Months Ended
June 30, 1997 to the Three and Six Months Ended June 30, 1996
<TABLE>
<CAPTION>
                                Three Months Ended                              Six Months Ended                   
                            ----------------------------                  --------------------------            
                                     June 30,                                      June 30,
                            ----------------------------     Percentage   --------------------------  Percentage
                                  1997       1996             Change            1997      1996          Change         
                                  ----       ----             ------            ----      ----          ------         
<S>                             <C>        <C>                 <C>            <C>        <C>             <C>          
Rental income                   $27,713    $22,078              25.5%         $54,865    $44,214          24.1%        
Third party management                                                                                                 
    fees                            120        664             (81.9)             230        951         (75.8)        
Interest and other                1,760      1,343              31.0            3,505      3,081          13.8         
                                -------    -------             -----          -------    -------         -----         
     Total revenues              29,593     24,085              22.9           58,600     48,246          21.5         
                                                                                                                       
Property operating and                                                                                                 
  maintenance (1)                 9,495      7,798              21.8           19,169     15,119          26.8         
Property management                 633        824             (23.2)           1,540      1,708          (9.8)        
General and administrative          253        376             (32.7)             673        797         (15.6)        
Interest                          8,013      5,469              46.5           15,402     10,893          41.4         
Depreciation and                                                                                                       
    amortization                  6,459      4,870              32.6           12,637      9,640          31.1         
                                -------    -------             -----          -------    -------         -----         
Total expenses                   24,853     19,337              28.5           49,421     38,157          29.5         
                                -------    -------             -----          -------    -------         -----         
Income before minority                                                                                                 
    interest, gain on sale                                                                                             
    of real estate assets and                                                                                          
    extraordinary item          $ 4,740    $ 4,748              (0.2)%        $ 9,179    $10,089          (9.0)%       
                                =======    =======             =====          =======    =======         =====         
Weighted average monthly                                                                                               
    rental revenue per unit,                                                                                           
    net of concessions          $   682    $   671                            $   684    $   653                       
                                =======    =======                            =======    =======                       
Weighted average number                                                                                                
    of apartments                15,272     12,302                             15,019     12,116                       
                                =======    =======                            =======    =======                       
Economic occupancy (2)             86.5%      88.3%                              87.7%      90.3%        
                                =======    =======                            =======    =======                       
</TABLE>
                                 Page 14 of 25
<PAGE>
         (1)      The  Operating  Partnership  defines  property  operating  and
                  maintenance expense as repairs and maintenance, other property
                  operating, advertising expense and real estate taxes.
         (2)      Stabilized properties only.

Rental revenues increased by $5,635 and $10,651 or 25.5 percent and 24.1 percent
for the three and six months  ended June 30,  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.

Third party  management  fees  decreased  $544 and $721 or 81.9 percent and 75.8
percent due to the sale of several  properties  in the  management  portfolio in
1996  including  a $500 one  time  termination  fee for the  sale of  management
contracts received in the Second Quarter of 1996.

Interest  and other  income  for the three and six months  ended  June 30,  1997
increased  $417 and $424 or 31.0  percent  and 13.8  percent as  compared to the
similar period in 1996 as a result of an increase in the weighted average number
of units.

Property operating and maintenance  expense increased due to the increase in the
weighted  average  number of  apartments  for the three and the six months ended
June 30, 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 $493 and $971 of interest for
the three and six months ended June 30, 1997 compared to $744 and $1,464 for the
same periods 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 39 stabilized properties containing 10,551 apartment units that were
owned by the  Operating  Partnership  for the three  months and six months ended
June 30, 1997 and 1996.  Same store portfolio was adjusted in the second quarter
1997 to  reflect  the  sale of  Deer  Creek  Village  and  The  Pines  apartment
communities.
<TABLE>
<CAPTION>
                          Three Months Ended                           Six Months Ended
                               June 30,                                    June 30,                         
                      ---------------------------    Percentage  ---------------------------     Percentage
                            1997        1996           Change         1997          1996           Change
                            ----        ----           ------         ----          ----           ------
<S>                      <C>        <C>                <C>         <C>        <C>                  <C>   
Rental income            $ 18,504   $   18,868         (1.9)%      $ 37,518   $   38,329           (2.1)%
Other income                1,052          819         28.4           2,124        1,910           11.2  
                         --------   ----------         ----        --------   ----------           ----  
                           19,556       19,687         (0.7)         39,642       40,239           (1.5) 
Property operating and                                                                                 
    maintenance             6,783        6,610          2.6          13,430       12,975            3.5  
                         --------   ----------         ----        --------   ----------           ----  
Property net operating                                                                                 
    income               $ 12,773   $   13,077         (2.3)%      $ 26,212   $   27,264           (3.9)%
                         ========   ==========         ====        ========   ==========           ====  
Weighted average                                                                                       
    monthly rental                                                                                     
    revenue per unit,                                                                                  
    net of concessions   $    676     $    675                     $    676   $      670               
                         ========   ==========                     ========   ==========                   
Economic occupancy           86.5%        88.4%                        87.7%        90.3%              
                         ========   ==========                     ========   ==========                 
</TABLE>

Rental  income for the three and six months ended June 30, 1997  decreased  $364
and $811 as  compared to the same period in 1996 as a result of a decline in the
average economic occupancy. Other income for the three and six 
                                 Page 15 of 25
<PAGE>
months ended June 30, 1997 increased as a result of higher ancillary income such
as redecoration and application fees, and lease termination fees.

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 and six month  periods  ended June 30, 1997 as
compared to the three and six month  periods  ended June 30, 1996 are the result
of the increase in the weighted average number of apartments.
<TABLE>
<CAPTION>

                                                 Three Months Ended            Six Months Ended
                                                      June 30,                     June 30,
                                             ------------------------     ------------------------
                                                 1997          1996           1997          1996
                                             -----------   ----------     ----------    ----------
<S>                                          <C>           <C>            <C>           <C>       
          Rental income                      $     2,935   $    2,286     $    5,997    $    4,180
          Other income                               137          127            296           262
                                             -----------   ----------     ----------    ----------
                                                   3,072        2,413          6,293         4,442

          Property operating and maintenance         955          769          1,917         1,422
                                             -----------   ----------     ----------    ----------

          Property net operating income      $     2,117   $    1,644     $    4,376    $    3,020
                                             ===========   ==========     ==========    ==========
          Weighted average number of
              apartments                           1,444        1,180          1,444         1,027
                                             ===========   ==========     ==========    ==========
</TABLE>

Development and Lease Up Communities

Development  and lease up  communities  consist of the  development  of five new
apartment  communities and the expansion of two 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 and the six month periods ended June 30, 1997
as compared to the three and the six month  periods  ended June 30, 1996 are the
result of an increase in the weighted average number of apartments.
<TABLE>
<CAPTION>
                                                Three Months Ended            Six Months Ended
                                                     June 30,                     June 30,
                                             ------------------------     ------------------------
                                                 1997          1996           1997          1996
                                             -----------   ----------     ----------    ----------
<S>                                          <C>           <C>            <C>           <C>       
          Rental income                      $     1,700   $      101     $    3,049    $      103
          Other income                               133           24            254            25
                                             -----------   ----------     ----------    ----------
                                                   1,833          125          3,303           128

          Property operating and maintenance         435          109          1,047           125
                                             -----------   ----------     ----------    ----------

          Property net operating income      $     1,398   $       16     $    2,256    $        3
                                             ===========   ==========     ==========    ==========
          Weighted average number of
              apartments in lease up                 869           69            782            36
                                             ===========   ==========     ==========    ==========
</TABLE>
                                 Page 16 of 25
<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 was
one acquisition of an apartment  community  during the first six months of 1996,
Canyon Crest Views a 178 unit apartment  community that was acquired on June 27,
1996.
<TABLE>
<CAPTION>
                                                 Three Months Ended            Six Months Ended
                                                      June 30,                     June 30,
                                             ---------------------------- ---------------------------
                                                 1997          1996           1997          1996
                                             -----------   ----------     ----------    ----------
<S>                                          <C>           <C>            <C>           <C>       
          Rental income                      $     3,800   $       18     $    6,739    $       18
          Other income                               138            -            211             -
                                             -----------   ----------     ----------    ----------
                                                   3,938           18          6,950            18

          Property operating and maintenance       1,110            2          2,264             2
                                             -----------   ----------     ----------    ----------

          Property net operating income      $     2,828   $       16     $    4,686    $       16
                                             ===========   ==========     ==========    ==========
          Weighted average number of
              apartments                           1,906            2          1,740             -
                                             ===========   ==========     ==========    ==========
</TABLE>

Dispositions

Dispositions  consist of two properties  containing 502 apartment  units,  which
were sold by the Operating  Partnership in June 1997. There were no dispositions
of apartment communities during 1996.
<TABLE>
<CAPTION>
                                                Three Months Ended            Six Months Ended
                                                     June 30,                     June 30,
                                             ------------------------     ------------------------    
                                                 1997          1996           1997          1996
                                             -----------   ----------     -----------   ----------
<S>                                          <C>           <C>            <C>           <C>       
          Rental income                      $       774   $      805     $     1,562   $    1,584
          Other income                                41           35              82           70
                                             -----------   ----------     -----------   ----------
                                                     815          840           1,644        1,654

          Property operating and maintenance         212          308             511          595
                                             -----------   ----------     -----------   ----------

          Property net operating income      $       603   $      532     $     1,133   $    1,059
                                             ===========   ==========     ===========   ==========
          Weighted average number of
              apartments                             502          502             502          502
                                             ===========   ==========     ===========   ==========
</TABLE>

Liquidity and Capital Resources

Liquidity

The Operating  Partnership's net cash provided by operating  activities of $19.7
million for the six months ended June 30, 1996 was  comparable  to $19.8 million
for the six  months  ended  June 30,  1997  principally  due to a  reduction  in
accounts payable and other  liabilities  related to the decrease in construction
activity and the net increase in net income related to the  extraordinary  items
of the loss  from the early  extinguishment  of debt and the gain on the sale of
real estate assets. Net cash used in investing  activities  decreased from $60.6
million  for the six months  ended June 30,  1996 to $36.4  million  for the six
months  ended  June 30,  1997.  The  decrease  is the result of a  reduction  in
construction  activity  for the first six  months  of 1997 of $22.3  million  as
compared to $46.2 million for the first six months of 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 decreased from $39.1 million for
the six months  ended June 30, 1996 to $15.0  million  for the six months  ended
June 30,  1997 due to less  borrowings  taking  place  on the  Revolving  Credit
Facility as a result of the reduction in construction activity.
                                 Page 17 of 25
<PAGE>
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,  issuance of 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 the Company's 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  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 June 30,  1997,  the  Operating  Partnership's  total debt was  approximately
$445.4   million  and  the   Operating   Partnership's   debt  to  total  market
capitalization  (Market Equity plus Debt) was  approximately  46.2 percent.  The
Operating  Partnership  received an investment  grade security  rating of "BBB-"
from Standard & Poor's Corporation, "Baa3" from Moody's Investors Service, Inc.,
and " BBB-" from Fitch Investors Service,  L.P. 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 & Poor's  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
Investors  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,  L.P.  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 June 30,
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  $33.4 million at
June 30, 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.  On
July 15, 1997, the Operating  Partnership  repaid two additional  mortgages with
unpaid principal balances of approximately  $15.2 million with proceeds from the
Revolving Credit Facility.  There were no prepayment  penalties  associated with
the repayment of these two mortgages.
                                 Page 18 of 25
<PAGE>
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 $49.3 million at June 30, 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 the 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 & Poor's.

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 and Deer Creek
Village, which were sold in June 1997, and La Valencia.

Senior Unsecured Notes

On April 2, 1997, the Company  through 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.

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 June 30, 1997 with  interest  rates ranging from 5.20
percent to 5.56 percent.

Revolving Credit Facility

On June 13, 1997,  the Operating  Partnership  amended its existing $225 million
unsecured Revolving Credit Facility with a bank group to decrease the commitment
amount from $225 million to $150  million and decrease the interest  rate from a
floating  rate of London  Inter Bank Offered Rate (LIBOR ) plus 150 basis points
(100 basis points  equals one percent) to 115 basis points (or, at the option of
the Company,  at the prime rate  announced by the banks).  The Revolving  Credit
Facility  has a term of three years which  expires in  September  1999,  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 June 30,
1997, there was 
                                 Page 19 of 25
<PAGE>
$44.0 million  outstanding on the Revolving Credit  Facility,  with an effective
interest rate of 7.23 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.

The table below outlines the Operating  Partnership's  debt structure as of June
30, 1997.
<TABLE>
<CAPTION>
                                                                       Outstanding   Weighted Average
                                                                         Balance       Interest Rate
                                                                       -----------   ----------------
<S>                                                                   <C>                     <C>  
Fixed Rate Debt:
   Mortgage Debt
     Conventional................................................     $     82,668            7.60%
     Mortgage Loan Certificates..................................          130,563            8.05
   Unsecured
     $75 million senior notes ...................................           74,595            7.18
     $50 million senior notes ...................................           49,615            7.36
                                                                      ------------     -----------
         Total Fixed Rate Debt...................................          337,441            7.63

Variable Rate Debt:
   Tax Exempt Bonds..............................................           64,000            5.40
   Revolving Credit Facility.....................................           44,000            7.23
                                                                      ------------     -----------
         Total Variable Rate Debt................................          108,000            6.10
                                                                      ------------     -----------
         Total Debt..............................................     $    445,441            7.28%
                                                                      ============     =========== 
</TABLE>

The Operating Partnership had 6,140 unencumbered  apartment units related to the
Stabilized  Communities  and 720  unencumbered  apartment  units  related to the
Communities Under Construction and in Lease-Up at June 30, 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 were
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 its Revolving Credit Facility.

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  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 were  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
its Revolving Credit Facility.
                                 Page 20 of 25
<PAGE>
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.
<TABLE>
<CAPTION>
                                                     Three Months Ended         Six Months Ended
                                                          June 30,                  June 30,
                                                 --------------------------------------------------
                                                     1997          1996        1997          1996
                                                 -----------   ----------  -----------   ----------
<S>                                              <C>           <C>         <C>           <C>       
          Income before minority interest,
            gain on sale of real estate assets
            and extraordinary item               $     4,740   $    4,748  $     9,179   $   10,089
          Depreciation and amortization, net
              of corporate depreciation                6,386        4,831       12,498        9,562
          Amortization of executive deferred
              compensation expense                        30          180           60          350
                                                 -----------   ----------  -----------   ----------
          Funds from Operations                  $    11,156   $    9,759  $    21,737   $   20,001
                                                 ===========   ==========  ===========   ==========
</TABLE>

Number of Units

The Operating  Partnership had 24,415,225 and 21,320,722 weighted average number
of units at June 30, 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.
                                 Page 21 of 25
<PAGE>
Acquisition of assets and community expenditures are as follows:
<TABLE>
<CAPTION>
                                             Three Months Ended June 30,     Six Months Ended June 30,
                                                1997             1996          1997             1996
                                             ----------       ---------      ---------       ---------

<S>                                          <C>              <C>            <C>             <C>      
New community development                    $   12,532       $  15,895      $  22,325       $  46,171
Acquisitions                                          -          13,018         34,800          13,018
Nonrecurring capital expenditures:
  Vehicle access control gates                      412               -            725               -
  Computer upgrade                                   81              23            152              51
Recurring capital expenditures:
  Community additions and                    
      improvements                                1,490             913          2,042           1,329
  Corporate additions and improvements               34               -             46               -
                                             ----------       ---------      ---------       ---------
                                             $   14,549       $  29,849      $  60,090       $  60,569
                                             ==========       =========      =========       =========
</TABLE>

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    
                                        ----              ------ 
     Total                               720              $   45                                            
                                        ====              ======                                              
</TABLE>

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

The Operating  Partnership is actively pursuing and in preliminary  negotiations
regarding the acquisition of 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.
                                 Page 22 of 25
<PAGE>
Disposition Activity

During  the  second  quarter  of  1997,  the  Operating   Partnership  sold  two
properties,  Deer Creek Village and The Pines,  containing 502 apartment  units.
The aggregate sales price was  approximately  $22.4 million  resulting in a gain
from the sale of approximately $5.2 million. The Operating  Partnership received
cash  of  approximately  $7.3  million  and  two  carryback  mortgage  notes  of
approximately  $15.1 million.  The mortgage notes are secured by a first deed of
trust on the two properties and mature in November 1997. The buyer may repay the
two mortgage notes at anytime without prepayment penalties.

Apartment Communities

The following  sets forth certain  information  regarding the current  apartment
communities  at June 30, 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
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
Towne Square                                       Chandler            468        Acq/Dev       1992/1995
Villa Encanto                                      Phoenix             382       Developed        1983
Village at Lakewood                                Phoenix             240       Developed        1988
                                                                 ---------
                                                                     8,254
   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                                               10,551
                                                                 =========
</TABLE>
                                 Page 23 of 25
<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 (3)                                     Tucson             238       Developed       1995/96
Harrison Park Expansion Phase II (3)                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                                                               15,443
                                                                 =========

Dispositions
Arizona
Deer Creek Village                                 Phoenix           308          Acquired        1991
The Pines                                            Mesa            194          Acquired        1992
                                                                 -------
                                                                     502
                                                                 =======
</TABLE>
(1)      Community reached stabilized occupancy in the first quarter 1997
(2)      Community is in lease-up
(3)      Community reached stabilized occupancy in the second quarter 1997
                                 Page 24 of 25
<PAGE>
PART II     OTHER INFORMATION

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

(b) A Form 8-K was filed on April 2, 1997 reporting under Item 5 the filing of a
Prospectus  Supplement  relating to the issuance and sale of $75 million  senior
unsecured  notes due April 15, 2004 and $50 million senior  unsecured  notes due
April 15, 2007 and Item 7 exhibits  relating  to the sale and  issuance of these
notes.


                                   SIGNATURES

In accordance with the requirements of the Securities  Exchange Act of 1934, the
Registrant has 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



August 11, 1997                       /s/ Stephen O. Evans
------------------------              --------------------------------------
 (Date)                               Stephen O. Evans,
                                      Chairman of the Board and
                                      Chief Executive Officer




August 11, 1997                       /s/ Paul R. Fannin
------------------------              --------------------------------------
 (Date)                               Paul R. Fannin,
                                      Senior Vice President and
                                      Chief Financial Officer

                                 Page 25 of 25