SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    ---------
                                    FORM 10-K


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

         For the fiscal year ended December 31, 1996

                                       OR

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

         For the transition period from ___________ to ___________

Commission File Number 0-17626


                    SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
                                       and
                     FFCA INVESTOR SERVICES CORPORATION 88-B
               (Exact Name of Co-Registrants as Specified in Their
                            Organizational Documents)


      Delaware                                              86-0588512
----------------------                              ----------------------------
(Partnership State of                               (Partnership I.R.S. Employer
    Organization)                                         Identification No.)

       Delaware                                             86-0588514
----------------------                              ----------------------------
 (Corporation State of                              (Corporation I.R.S. Employer
    Incorporation)                                        Identification No.)

The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona                                                    85255
----------------------------------------                              --------
(Address of Principal Executive Offices)                              Zip Code

Co-Registrants' telephone number, including area code:        (602) 585-4500


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

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


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

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


         Indicate by check mark  whether the  Co-Registrants  (1) have 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
Co-Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No 
                                                  ---   ---

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

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates of the Co-Registrants: Not applicable.


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None
<PAGE>
                                     PART I
Item 1.  Business.

General

         Scottsdale  Land  Trust  Limited   Partnership,   a  Delaware   limited
partnership  (the  "Partnership"),  was  organized  on August 12, 1987 under the
Delaware Revised Uniform Limited  Partnership Act. The Partnership was organized
to (i) acquire approximately 261 gross acres of unimproved land (the "Property")
in Scottsdale,  Arizona, (ii) develop roads, water, sewer, drainage, utility and
similar on-site and off-site improvements  (collectively,  the "Infrastructure")
with  respect to the  Property,  (iii) sell the  Property on a  parcel-by-parcel
basis after  construction of the  Infrastructure  and (iv) make a participating,
first  mortgage loan to Franchise  Finance  Corporation of America  ("FFCA"),  a
Delaware  corporation,  which is an  affiliate  of the  general  partner  of the
Partnership,  so that FFCA may acquire a parcel of land within the  Property and
construct an office building thereon.  The general partner of the Partnership is
FFCA Management Company Limited Partnership, a Delaware limited partnership (the
"General  Partner").  Perimeter Center Management  Company ("PCMC"),  a Delaware
corporation,  is the  corporate  general  partner of the  General  Partner.  The
General Partner and PCMC have common ownership.

         FFCA Investor  Services  Corporation  88-B, a Delaware  corporation and
wholly-owned  subsidiary of PCMC, was  incorporated on August 11, 1987, to serve
as the initial limited partner of the Partnership and the owner of record of the
limited  partnership  interests  in the  Partnership.  The  limited  partnership
interests are assigned by FFCA Investor  Services  Corporation 88-B to investors
in the Partnership.  FFCA Investor  Services  Corporation 88-B conducts no other
business activity.  The Partnership and FFCA Investor Services  Corporation 88-B
are referred to collectively as the "Co-Registrants."

         The  statements  contained  in  this  report,  if not  historical,  are
forward-looking  statements and involve risks and uncertainties that could cause
actual results to differ materially from the results, financial or otherwise, or
other  expectations   described  in  such  forward-looking   statements.   These
statements are identified with the words  "expected",  "anticipated" or "plans".
Therefore,  forward-looking statements should not be relied upon as a prediction
of actual future results or occurrences.

The Offering

         On June 14, 1988,  the  Co-Registrants  commenced a public  offering of
$50,000,000 in units of assigned limited  partnership  interest (the "Units") in
the  Partnership  pursuant to a  Registration  Statement  on Form S-11 under the
Securities  Act of 1933,  as  amended.  The sale of the Units was  completed  on
November 23, 1988,  with a total of 50,000 Units sold to investors at $1,000 per
Unit  for a total  of  $50,000,000.  Purchasers  of the  Units  (the  "Holders")
acquired  such Units from FFCA  Investor  Services  Corporation  88-B as of that
date.  Subsequent  to that  
<PAGE>
date, no Holder has made any additional capital contribution.  The Holders share
in the benefits of ownership of the  Partnership's  assets,  including  its real
property investments, according to the number of Units held in substantially the
same manner as limited partners of the Partnership.

         After deducting organizational and offering expenses, including selling
commissions,  the  financial  advisory  fee,  property  acquisition  fee and due
diligence  expense  reimbursement  payable to Shearson  Lehman Hutton Inc.,  the
Partnership had $43,250,000 in net offering proceeds following the conclusion of
the offering of the Units.

Acquisition of the Property

         On June 7, 1988, the Partnership  entered into a Purchase Agreement for
the Property with The Westcor Company II Limited Partnership, an Arizona limited
partnership  ("Westcor  II").  The Property was purchased by the  Partnership on
December 1, 1988,  with the  Partnership  paying  $23,059,027 to Westcor II, and
$854,158  in  capitalized  closing  costs,  for a  total  acquisition  price  of
$23,913,185 (including certain reimbursements).

The FFCA Loan

         On December  29, 1988,  the  Partnership  entered into an  Acquisition,
Construction  and Term Loan Agreement (the "Loan  Agreement")  with FFCA,  under
which the Partnership  agreed to loan FFCA up to a maximum of $8,500,000 for the
acquisition of a 4.6-acre parcel of land within the Property (the "FFCA Parcel")
and the construction of an office building thereon (the "FFCA Office Building").
(The loan for the  acquisition  of the FFCA Parcel and the  construction  of the
FFCA  Office  Building  is  referred  to  hereafter  as  the   "Acquisition  and
Construction  Loan.") On the same date,  FFCA purchased the FFCA Parcel from the
Partnership at a purchase  price of $704,214,  which amount was advanced to FFCA
under the  Acquisition  and  Construction  Loan.  The purchase price of the FFCA
Parcel was  determined by  independent  appraisal to be the fair market value of
the parcel.

         Construction  of the FFCA Office  Building was  completed  during April
1990 and the maximum  $8,500,000 was advanced to FFCA under the  Acquisition and
Construction  Loan.  The FFCA Parcel  purchase price of $704,214 did not include
the portion of the cost of the  Infrastructure  which was  allocated to the FFCA
Parcel  when  such  Infrastructure  was  completed.   The  construction  of  the
Infrastructure  was substantially  completed by the end of the second quarter in
1990,  therefore,  such allocable  portion was added to the amount drawn by FFCA
under the Loan Agreement.  The total amount  allocated to FFCA was $197,371.  In
accordance with generally accepted accounting principles, the sale of the parcel
to FFCA will be  recognized  when the  amounts  loaned to FFCA are repaid to the
Partnership.

         Pursuant to the terms of the Loan  Agreement,  upon  expiration  of the
term of the  Acquisition  and  Construction  Loan in April 1990, the outstanding
principal balance thereunder 
                                       2
<PAGE>
was converted into a long-term  permanent loan (the "Permanent  Loan"). The term
of the Permanent  Loan is ten years and provides for payments of interest  only,
at a rate of ten  percent  per  year,  until  maturity,  at which  time the full
principal  amount must be repaid to the  Partnership.  The maturity  date of the
Permanent  Loan is May 1, 2000.  FFCA is  obligated  to pay this  interest  on a
monthly basis for interest  accrued in the previous  month.  The Permanent  Loan
also provides for the payment of  additional  interest  ("Additional  Interest")
upon maturity  based upon the increase,  if any, in the value of the FFCA Office
Building.  The amount of Additional Interest,  if any, to be paid by FFCA to the
Partnership  will equal the  greater of (i) 30% of the  increase in the value of
the FFCA Office Building  (including the FFCA Parcel) at the time of maturity of
the Permanent Loan or (ii)  $1,130,000.  The  obligations of FFCA under the Loan
Agreement are  guaranteed by the General  Partner.  During 1996,  1995 and 1994,
FFCA made all payments of interest on a timely basis. The payments were paid to,
and monitored by, an independent trustee on behalf of the Partnership.

         The FFCA Office  Building  influences  the quality and style of further
development of the Property,  which is known as "The Perimeter Center." The FFCA
Office Building  contains  approximately  56,000 square feet of office space and
approximately 40,000 square feet of subterranean parking.

         Currently,  FFCA is  obligated  under the Loan  Agreement  for  monthly
interest  payments  to the  Partnership.  The  failure  of FFCA to  perform  its
obligations under the Loan Agreement would have a material adverse effect on the
Partnership since the Partnership  anticipates using the payments under the Loan
Agreement,  in addition to the reserve  established from the net proceeds of the
offering  of the  Units,  and the  interest  earned on such  reserve to meet its
operating  expenses.  FFCA is a  self-administered  real estate investment trust
which invests in chain restaurant real estate throughout the United States.
FFCA's  common stock is listed and traded on the New York Stock  Exchange  under
the symbol "FFA."

Marketing and Sales Programs

         The Partnership has implemented a marketing program in cooperation with
state and local  economic  development  agencies  and the real estate  brokerage
community  for  recruitment  of new and  expanding  businesses  to The Perimeter
Center. The first phase of the plan was directed toward the local market through
a mailing to local  companies  to develop an interest in The  Perimeter  Center,
followed by a personal call or visit to follow up with interested  parties.  One
of these companies, TNT Bestway Transportation Inc. ("TNT Bestway"), purchased a
4.8-acre  parcel  of  land  in  The  Perimeter  Center  for  a  sales  price  of
approximately  $1 million on February 6, 1996 for the relocation of their office
from  downtown  Phoenix.  The  transaction  also gave TNT  Bestway  an option to
purchase an  additional  6.5 adjacent  acres  through  August 1998.  TNT Bestway
intends  to  construct  a 50,000  square  foot  office  building  with a planned
occupancy date in 1998.
                                       3
<PAGE>
         A second parcel sale was completed with Pacesetter,  Inc., a subsidiary
of St. Jude Medical Inc.,  on January 17, 1996.  Pacesetter,  Inc.  purchased an
11.8-acre parcel for a price of approximately $2.6 million with a right of first
refusal and option to purchase an additional 6 adjacent  acres  through  January
1999.  On February 2, 1996,  Pacesetter,  Inc.  began  construction  on a 62,000
square foot chip  manufacturing  plant to produce  computer chips for use in its
pacemakers  and on February 10, 1997,  held its grand opening.  This  biomedical
facility will employ over three hundred people.

         On June 18,  1996,  G & D  Partnership  closed on  1.6-acres  and built
general offices for their corporate  headquarters.  The sales price for the land
was approximately  $440,000.  G & D Partnership,  a construction  company in the
Southwest, will have its grand opening in April 1997.

         On December 23, 1996, Integrated Circuit Engineering,  an international
company  involved in the research and  development  of computer  chips and wafer
fabrication,  purchased  3.5-acres for approximately $1 million.  Currently they
are building a 27,000 square foot building to serve as their  headquarters and a
research and development facility.

         Subsequent to December 31, 1996, there were additional  parcel sales at
The Perimeter Center. As of March 14, 1997, the Partnership's  1997 parcel sales
totaled  10.1  acres  of land to  three  companies  for a total  sales  price of
approximately  $2.9  million.  The  sites  will  include a  medical  and  dental
facility, a marketing headquarters and office space. Through March 14, 1997, the
Partnership sold  approximately  32 acres of land to unaffiliated  third parties
(excluding  the 4.6 acre  parcel  of land for the FFCA  Parcel).  The  remaining
acreage to be sold approximates 163 acres.

         A second major marketing  emphasis was conducted through personal calls
to expanding companies located in the Scottsdale  Industrial  Airpark,  which is
located  within two miles of The Perimeter  Center.  The  Scottsdale  Industrial
Airpark  is a mixed  use  commercial  and  industrial  park  and is the  nearest
competitor to The Perimeter Center.  Through the Scottsdale Chamber of Commerce,
the General Partner anticipates creating an increased interest in such companies
to relocate or expand to The Perimeter Center.

         The third emphasis of the Partnership's marketing approach is to target
the real estate brokerage  community and continually update the plat maps on new
purchases.  Mailings, faxes and an ad campaign continue to promote The Perimeter
Center.  The General Partner  believes that there is currently a vacancy rate in
North  Scottsdale  of  approximately  3% in office  space.  The General  Partner
believes this will result in additional  interest for potential purchases at The
Perimeter Center.

Development of the Property

         The Partnership's  primary  investment  objective is to achieve capital
appreciation  of the Property  through the  development of the  unimproved  land
therein and the  subsequent  sale of such  improved  land on a  parcel-by-parcel
basis.   Improvement  of  the  Property  has  primarily  been   accomplished  by
implementing a master plan for the  development of the Property,  developing the
                                       4
<PAGE>
Infrastructure and financing the acquisition of land and the construction of the
FFCA Office Building.

         To enhance and protect the value of the Property,  the  Partnership has
prepared and recorded certain conditions,  covenants and restrictions concerning
land use which consist of general  guidelines  for the orderly  development  and
improvement of the Property.  These guidelines address such land use concerns as
excavation,  landscaping,  signs,  parking areas,  setbacks,  artwork,  building
materials and construction designs, exterior lighting and access to utilities. A
property owners'  association  (Perimeter  Center Owners  Association,  Inc., an
Arizona   nonprofit   corporation)  has  been  formed  to  further  enhance  the
development of the Property.

         Approximately  $9,000,000  of the  proceeds  from the offering has been
used to construct the Infrastructure,  including roads, water, sewer,  drainage,
sidewalks,   bike  paths,  equestrian  trails  and  other  infrastructure.   The
construction  of the  Infrastructure  was  completed  in  1990.  To  the  extent
permitted by local  government  authorities  and utility  companies,  telephone,
electrical  and cable  television  lines  serving the Property  have been placed
underground  to enhance the  appearance  and  development  of the Property.  The
General Partner believes that such  Infrastructure will benefit the Property and
its  development  and sale. The General Partner does not anticipate any material
additions to the cost of the Infrastructure.

         In 1989,  the City of Scottsdale  announced  plans to build a temporary
four-lane  road along the future Outer Loop  freeway  route.  It is  tentatively
anticipated that construction of this Freeway will be completed in 2003, subject
to receipt of specially  allocated sales tax revenue.  The estimated  completion
date may be accelerated because the Arizona Department of Transportation revenue
is  currently  more than the amount  included  in the  original  projections.  A
portion  of the Pima  freeway  has been  funded to the year 2000 to Frank  Lloyd
Wright Boulevard,  about 1 mile south of The Perimeter Center;  from Frank Lloyd
Wright Boulevard to Scottsdale Road, the proposed schedule is for the year 2003.
Two major  projects  are being built to the West of The  Perimeter  Center which
could accelerate the completion of the freeway, the Sumitomo computer chip plant
and the Mayo Clinic Hospital.

Management Contract

         In accordance with its partnership  agreement,  the Partnership entered
into an exclusive management contract (the "Management  Agreement") with Westcor
II to develop  the  Infrastructure  and to manage the  Property.  The  following
paragraph  summarizes certain provisions of the Management  Agreement,  which is
referenced  in the  Exhibit  section  to this  Report.  Such  summaries  are not
intended  to be  complete,  and  reference  is  hereby  made  to the  Management
Agreement for further detail.

         Westcor II receives  certain  fees under the  Management  Agreement  in
connection  with the  management  of the  Property.  Westcor  II  provides  such
property  management services on an 
                                       5
<PAGE>
exclusive basis pursuant to the terms of the Management Agreement.  During 1996,
1995 and 1994, Westcor II received  approximately $36,000 each year in fees from
the  Partnership  under the Management  Agreement,  in accordance  with the 1994
amendment to the original Management Agreement. The 1994 amendment provided that
the property  management  fee be reduced  from  $125,000 per year to $36,000 per
year.  The Management  Agreement is renewable  annually  unless  canceled at the
discretion of the Partnership or Westcor II.

Parcel Leasing

         Although it is not currently  anticipated,  the Partnership may develop
or lease Parcels to take  advantage of  development  opportunities  but will not
build office or other buildings which have not been partially  pre-leased  prior
to the  commencement of  construction.  The General  Partner's policy will be to
receive leasing commitments representing at least 25% of the space available for
leasing prior to commencement of construction.  Construction  would be commenced
with a lesser  percentage of commitments  only in rental markets which indicate,
in the General Partner's  opinion,  sufficient  demand.  Such development may be
financed through cash reserves of the Partnership, debt secured by the developed
parcel or other  available  sources of capital.  The  Partnership may also enter
into participating or  non-participating  subordinated or unsubordinated  ground
leases to encourage  development  of the Property.  No such leases are currently
under consideration.

Competition

         The   Partnership's   major  source  of  competition  for  a  corporate
relocation are the major cities in the southwest such as Denver, Salt Lake City,
Las Vegas and  Albuquerque.  In the greater  Phoenix area,  Tempe's  Papago Park
Center,  the Arizona  State  University  Research  Park and Phoenix's Sky Harbor
Center are the major competitors for relocation  sites.  These corporate centers
offer tax  abatements  (subject to the  applicant's  qualification)  as they are
located on city land,  an incentive  not  available to The  Perimeter  Center in
Scottsdale. These three corporate centers, however, offer only leased land which
gives The  Perimeter  Center an advantage  with those  companies  interested  in
purchasing property.

         The  nearest  competition  to The  Perimeter  Center is the  Scottsdale
Industrial  Airpark  (the  "Airpark").  The  Airpark  tends to  attract  heavier
industrial users on the property and has pricing  competitive with The Perimeter
Center's lower-end parcels. The Perimeter Center, by contrast, is intended to be
developed with non-industrial type companies.

Real Estate Activities Near The Perimeter Center

         A number of large  residential  housing projects are underway or in the
planning  stages in the North  Scottsdale  area within a two-mile  radius of The
Perimeter  Center.  One mile  east of The  Perimeter  Center  is West  World,  a
facility  open to the public  which offers  western-type  
                                       6
<PAGE>
shows,  rodeos,  horse facilities,  food and musical  entertainment.  West World
hosts such  events as the  Scottsdale  Arabian  Horse Show and  Auction  and the
Barrett Jackson Classic Auto Auction.  One-half mile east of West World, a major
residential  community of 4,400 homes called  McDowell  Mountain  Ranch is under
development by Newhall Land & Farming Company of California.

         To the north and northeast of The Perimeter Center are properties under
development as planned residential  communities with homes ranging in price from
$150,000 to over  $1,000,000,  as well as adjoining golf courses.  Further north
are the Boulders  resort,  Troon North golf course,  Troon Country Club,  Desert
Mountain golf course and Desert Highlands golf course, all with residential real
estate.

         One-half mile west of The Perimeter Center is the Scottsdale Tournament
Players Club with two golf  courses,  the Desert  Course and the Stadium  Course
which is the site of the Phoenix Open Golf  Tournament  held each  January.  The
City of  Scottsdale  owns 80 acres  adjacent to The  Perimeter  Center  which is
reserved for temporary  parking for the Phoenix Open. The  Greenway/Hayden  Loop
Bridge was constructed between the Desert and Stadium courses which provides for
an  alternate  and  convenient  route from The  Perimeter  Center to Frank Lloyd
Wright  Boulevard.  Forty  acres  adjacent  to The  Perimeter  Center  is  being
developed by Coventry  Homes, a Del Webb  subsidiary,  with 174 homes ranging in
price from $165,000 to $185,000.

         In addition,  a number of  construction  projects  are  planned,  under
construction  or completed one mile south of The Perimeter  Center,  including a
350-unit luxury apartment  complex, a business motel, and two new retail centers
including Target, TJ Maxx, Albertson's,  Fry's, and other retail stores, as well
as a 14-screen multiplex theater and numerous restaurants  including McDonald's,
Wendy's,  Taco Bell,  Boston  Market,  Subway,  Earls  restaurant and Los Olivos
Mexican restaurant.

         All of the above-mentioned  development is planned to result in, within
a two-mile  radius of The Perimeter  Center,  several new housing  developments;
freeway  access with the  completion of the Outer Loop freeway;  and  convenient
shopping,  entertainment  and dining  facilities to make The Perimeter  Center a
premier location for corporate offices.

Additional Information

         Compliance with federal, state and local law regarding the discharge of
materials into the  environment  or otherwise  relating to the protection of the
environment  has not had, and is not expected to have,  any adverse  effect upon
capital  expenditures,  earnings or the competitive position of the Partnership.
The  Partnership  is not presently a party to any  litigation or  administrative
proceeding with respect to its compliance with such environmental  standards. In
addition, the Partnership does not anticipate being required to expend any funds
in  the  near  future  for  environmental  protection  in  connection  with  its
respective operations.
                                       7
<PAGE>
         The  Partnership  does not believe  that any aspect of its  business is
significantly seasonal in nature.

         No portion of the Partnership's business is subject to renegotiation of
profits or  termination  of  contracts  or  subcontracts  at the election of the
United States Government.  The Partnership does not manufacture any products and
therefore does not require any raw materials in order to conduct their business.

         The  Partnership  and FFCA  Investor  Services  Corporation  88-B  (the
initial limited partner) have no employees.

Item 2.  Properties.

         Upon completion of the Partnership's public offering and acquisition of
the Property,  the Partnership owned debt-free  approximately 261 gross acres of
improved land located at the northwest  corner of the  intersection  of Bell and
Pima Roads in  Scottsdale,  Arizona which is zoned for  commercial  development.
Approximately  75% of the Property's  gross acres constitute net acres available
for sale or lease after the deduction of land  dedicated for  rights-of-way  for
streets and other land not available for  development.  Infrastructure  in place
includes gas, sewer,  water,  electricity,  telephone,  and all streets,  curbs,
gutter  and  sidewalk  work.  At  March  14,  1997,  the  Property  consists  of
approximately  163 acres available for sale. In 1996 and through March 14, 1997,
parcels were sold for between  $4.83 and $7.50 per square foot.  The Property is
north of  downtown  Scottsdale,  Arizona  and  approximately  two miles from the
Scottsdale Airport, a business commuter terminal. The following is a description
of the Property transactions completed as of March 14, 1997.

         FFCA Office Building

         On December 29, 1988,  FFCA  entered  into an  $8,500,000  Acquisition,
Construction and Term Loan Agreement for the acquisition of a 4.6-acre parcel of
land and the construction of an office building thereon containing approximately
56,000 square feet of office space, approximately 10,000 square feet for display
by the Fleischer Museum,  and  approximately  40,000 square feet of subterranean
parking.  The  construction  of the Office Building was completed in April 1990.
FFCA is a self-administered  real estate investment trust which invests in chain
restaurant real estate throughout the United States.

         Pacesetter, Inc.

         The sale transaction  with  Pacesetter,  Inc., a subsidiary of St. Jude
Medical, Inc. based in St. Paul,  Minnesota,  was completed on January 17, 1996.
It involved the sale of an 11.8-acre  parcel for a price of  approximately  $2.6
million.  The transaction also gives  Pacesetter,  Inc. a 
                                       8
<PAGE>
right of first  refusal and option to purchase an  additional  6 adjacent  acres
through January 1999. The new site is part of St. Jude Medical,  Inc.'s plans to
expand its pacemaker business. Construction of the new facility was completed in
February 1997.

         TNT Bestway Transportation, Inc.

         The sale transaction with TNT Bestway Transportation Inc. was completed
on February 6, 1996. It involved the sale of a 4.8-acre parcel for a sales price
of approximately $1 million. The transaction also gives TNT Bestway an option to
purchase an additional  6.5 adjacent  acres through  August 1998.  The site will
become the freight transportation company's regional office, covering California
to Texas.

         G & D Partnership

         The sale  transaction  with G & D Partnership was completed on June 18,
1996.  It  involved  the  sale  of a  1.64-acre  parcel  for a  sales  price  of
approximately $440,000. G & D Partnership operates a construction company in the
Southwest and will be building their corporate headquarters on the site.

         Integrated Circuit Engineering Corporation

         The sale transaction with Integrated  Circuit  Engineering  Corporation
(ICE) was  completed on December  23,  1996.  It involved the sale of a 3.8-acre
parcel  for  a  sales  price  of  approximately  $1  million.   ICE  serves  the
semiconductor  industry  through  market  research,  consulting,   publications,
seminars  and  semiconductor  laboratory  services.  The  new  site  will be the
corporation's world headquarters.

         Coyote View Plaza, L.L.C.

         The sale  transaction  with Coyote View Plaza L.L.C.  was  completed on
January 15, 1997.  It involved a 2.1-acre  parcel  which sold for  approximately
$500,000. The new site will be a medical and dental facility.

         Rhymes Transaction

         The sale  transaction with Douglas Rhymes was completed on February 20,
1997.  It  involved  the  sale  of a  1.8-acre  parcel  for  a  sales  price  of
approximately  $600,000.  The new site will be the  corporate  headquarters  for
Discover the World  Marketing  which  outsources  marketing  activities  for the
airline  industry  throughout the world.  An 18,000 square foot facility will be
built, a portion of which will be office space for rent.
                                        9
<PAGE>
         Cornwell Financial Corporation

         The sale transaction with Cornwell Financial  Corporation was completed
on February 28, 1997.  It involved the sale of two parcels of land  totaling 6.2
acres  for a sales  price of  approximately  $1.8  million.  Cornwell  Financial
Corporation develops office space.

Item 3.  Legal Proceedings.

         Neither  the  Co-Registrants  nor their  properties  are parties to, or
subject to, any material pending legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders.

         No  matter  was  submitted  to  a  vote  of  the  Holders  through  the
solicitation  of proxies or otherwise  during the fourth  quarter of fiscal year
1996.

                                     PART II

Item 5.  Market for Co-Registrants' Units and Related Security Holder Matters.

         Market  Information.  During  1996,  there  was no  established  public
trading  market for the Units,  and it is unlikely  that an  established  public
trading market for the Units will develop.

         Holders.  As of March 14, 1997,  there were 3,136 record holders of the
Units.

         Distributions.  In accordance with the Amended and Restated Certificate
and  Agreement  of Limited  Partnership  of the  Partnership  (the  "Partnership
Agreement"), the Partnership made no cash distributions to the Holders in fiscal
years 1995 or 1994.  The  following  cash  distributions  were made in 1996 from
proceeds received on the sale of land parcels during 1996:

           Date of          Number                Per Unit               Total
        Distribution        of Units          Distributions        Distributions
        ------------        --------          -------------        -------------

        March 31            50,000                $70.37             $3,518,500
        June 30             50,000                  6.14                307,000
        September 30        50,000                   -                      -
        December 31         50,000                 18.79                939,500
                                                  ------            -----------

                                                  $95.30             $4,765,000
                                                  ======             ==========

         Adjusted Capital  Contribution is defined in the Partnership  Agreement
as the Holder's  initial capital  contribution  reduced to not less than zero by
cash  distributions  to the Holders (a) 
                                       10
<PAGE>
from Parcel Revenues (as defined in the Partnership Agreement), (b) from Sale or
Refinancing  Proceeds (as defined in the  Partnership  Agreement),  (c) from any
principal  payments  received from the Acquisition and Construction Loan and the
Permanent  Loan or any other loan by the  Partnership,  or (d)  classified  as a
return of capital under generally accepted accounting  principles.  The Adjusted
Capital  Contribution  of the Holders  was  $923.49 per Unit as of December  31,
1996.

         The primary source of cash  distributions  in the future is expected to
be from the sale or lease of parcels of the  Property.  Generally,  net proceeds
received  from  the  sale  or  lease  of the  parcels  of the  Property  will be
distributed 100% to the Holders to the extent of the Adjusted Parcel  Investment
(as  defined in the  Partnership  Agreement)  of each  parcel,  plus a preferred
return on the Adjusted Parcel  Investment equal to a cumulative,  non-compounded
return of ten percent per annum. Thereafter,  approximately 50% of any remaining
proceeds will be distributed to the Holders. The Adjusted Parcel Investment,  as
defined in the Partnership Agreement,  is generally an amount which approximates
the  capital  contributions  of the Holders  invested  in a parcel,  including a
proportionate  amount of allocable  front-end  fees paid in connection  with the
organization  of the  Partnership,  the  offering  and sale of the Units and the
acquisition  of the  Property.  Distribution  of the  proceeds  from the sale or
refinancing  of parcels of the Property or of revenues from leased  parcels,  if
any,  are  anticipated  to be made at such times as the  General  Partner  deems
appropriate and in the best interest of the Partnership. The General Partner may
withhold  distributions  if  necessary  or  appropriate  for the  conduct of the
Partnership's   business  or  for  the   construction  of  buildings  for  other
improvements  on parcels in the  Property.  For a  complete  description  of the
manner in which the  disbursable  cash of the  Partnership and proceeds from the
sale or refinancing  of the parcels  comprising the Property will be distributed
and the manner in which the profits,  gains,  losses,  deductions and credits of
the Partnership  will be allocated,  reference is hereby made to Article Four of
the Partnership Agreement referenced as Exhibit 4 to this Report.
                                       11
<PAGE>
Item 6.  Selected Financial Data.

         The following  selected  financial  data should be read in  conjunction
with the Financial  Statements  and the related notes  attached as an exhibit to
this Report.
<TABLE>
<CAPTION>
                                            Year Ended December 31,

                                   1996           1995           1994           1993            1992
                               ------------   ------------   ------------   ------------    ------------
<S>                            <C>            <C>            <C>            <C>             <C>         
Revenues                       $  5,981,588   $    920,426   $    892,589   $    889,361    $    927,138
Net Income (Loss)                 1,974,758         46,044        153,430       (407,529)       (599,703)
Net Income (Loss) Per
   Limited Partnership Unit           39.49            .91           3.04          (8.07)         (11.87)
Total Assets                     40,259,651     42,024,785     41,989,599     41,858,418      42,445,522
Distributions of Cash from
    Operations to Holders         4,765,456           --             --             --              --
Distributions of Cash from
    Operations Per Unit               95.30           --             --             --              --
Return of Capital to Holders           --             --             --             --              --
Return of Capital Per Unit             --             --             --             --              --
</TABLE>

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

Liquidity and Capital Resources

         The Partnership  received $50,000,000 in gross proceeds from its public
offering of the Units on November 23, 1988. After deducting  organizational  and
offering  expenses,  including  selling  expenses,  the financial  advisory fee,
property  acquisition  fee and due diligence  expense  reimbursement  payable to
Shearson  Lehman Hutton Inc., the  Partnership  had  $43,250,000 in net proceeds
available for investment.  On December 1, 1988, the Partnership used $23,913,185
to acquire the  Property.  The  remaining  net  offering  proceeds  were used to
complete the  construction of the  Infrastructure  and to fully fund the loan to
FFCA  for  the  FFCA  Office  Building  and  establish  an  initial  reserve  of
approximately  $2,800,000.  Interest payments under the Loan Agreement with FFCA
and interest earned on the  Partnership's  reserves have been the  Partnership's
primary sources of revenue in 1995 and 1994. The Partnership's primary source of
revenue in 1996 was from land sales.

         It is anticipated that the Partnership's  revenues along with remaining
reserves of  approximately  $1.3  million at December  31,  1996,  to the extent
required, will be sufficient to pay the Partnership's operating expenses in 1997
and  that  cash  proceeds  from  the  sale  of  parcels  will be  available  for
distribution to the Holders.  At December 31, 1996, the Partnership had cash and
marketable  securities  with a  maturity  of three  months  or less  aggregating
$2,418,201  of which  $939,500  was paid out to the Holders in February  1997 as
their fourth quarter 1996 distribution,  and the remainder of which will be held
by the  Partnership  for  reserves.  The  
                                       12
<PAGE>
liquidity of the Partnership may be adversely affected by a significant increase
in property taxes levied on the Property and an increase in expenses  associated
with the maintenance of the Property.  There can be no assurance that the income
of the Partnership and the amount of the reserve  established by the Partnership
will be sufficient to meet the Partnership's  operating  expenses in the future.
Although not currently anticipated,  the General Partner has the power to borrow
funds on behalf of the  Partnership if it deems such borrowing to be in the best
interests of the  Partnership.  In connection with such  borrowing,  the General
Partner  may  mortgage,   pledge  or  otherwise   encumber  the  assets  of  the
Partnership,  including the Property.  There is no  assurance,  however,  that a
lender  would be  willing  to loan money to the  Partnership  on a  non-recourse
basis.

         During 1996, the  Partnership  sold four parcels of land which provided
for cash sales prices aggregating  approximately $5 million for 22 acres of land
to  unaffiliated  third  parties.  The  parcels  had a  total  original  cost of
approximately  $2.8  million  and  closing  and  other  costs  of  approximately
$240,000.  These parcel  sales  resulted in gains of  approximately  $2 million.
Distributions declared from the parcel sales amounted to $4,765,456 in 1996.

         At  December  31,  1996,  the  Partnership  had  five  parcels  of land
(approximately  21.4 acres) with an aggregate cost of  approximately  $3 million
under contract for sale for  approximately  $5.7 million to  unaffiliated  third
parties. One contract provides for a right of first refusal on an additional 9.4
acres (two parcels) of land for a period of up to two years on one parcel and up
to three  years on the other  parcel.  Subsequent  to  December  31,  1996,  the
Partnership  closed the sale of three of these parcels and  recognized a gain of
approximately $975,000. Approximately 163 acres remain available for sale within
The  Perimeter   Center  and  the  Partnership  has  entered  into   preliminary
negotiations  for  the  sale  of  several  of  the  smaller  land  parcels.  The
Partnership cannot determine which, if any, of these negotiations will result in
the sale of a land parcel and, therefore, cannot predict the timing or amount of
any future cash distributions.

         The General  Partner  knows of no other trends,  demands,  commitments,
events or  uncertainties  that will result in or that are  reasonably  likely to
result in the Partnership's  liquidity  increasing or decreasing in any material
way.

         FFCA Investor  Services  Corporation 88-B serves as the initial limited
partner  of the  Partnership  and the  owner of record  of the  limited  partner
interests in the  Partnership,  the rights and benefits of which are assigned by
FFCA Investor  Services  Corporation 88-B to investors in the Partnership.  FFCA
Investor  Services  Corporation  88-B has no other business  activity and has no
capital resources.
                                       13
<PAGE>
Results of Operations

Fiscal Year Ended December 31, 1996 Compared to
    Fiscal Year Ended December 31, 1995

         Total revenues were  $5,981,588 for the year ended December 31, 1996 as
compared to $920,426  for the year ended  December  31,  1995.  The  increase in
revenues  relates  primarily  to land sales of $5 million  and to an increase in
interest income earned on temporary  investment  securities held during the year
resulting from land sale proceeds invested, prior to distribution to the limited
partners.

         Total expenses  increased to $4,006,830 for the year ended December 31,
1996 from $874,382 for the year ended December 31, 1995. The increase  primarily
represents  the cost of land sales  aggregating  $3,036,171,  which includes the
original land and  infrastructure  costs totaling  $2,797,923 and costs totaling
$238,248 related to closing the sales transactions. In addition, General Partner
fees were  higher in 1996  than in 1995  because  the  General  Partner,  in its
discretion,   permanently  waived  approximately  $109,000  of  the  partnership
management fees otherwise  payable by the  Partnership in 1995.  Marketing costs
also  increased  from  $67,737 in 1995 to $81,436 in 1996  related to  increased
marketing efforts at The Perimeter  Center.  The decrease in property taxes from
$186,455  in 1995 to  $175,626 in 1996  resulted  from the sale of land  parcels
during 1996.

Fiscal Year Ended December 31, 1995 Compared to
    Fiscal Year Ended December 31, 1994

         Total  revenues were  $920,426 for the year ended  December 31, 1995 as
compared to $892,589  for the year ended  December  31,  1994.  The  increase in
revenues relates to an increase in interest earned on temporary  investments due
to higher interest rates earned on these investments.

         Total  expenses  increased to $874,382 for the year ended  December 31,
1995 from  $739,159  for the year ended  December  31,  1994.  The  increase  of
approximately  $135,000 is due to increases in General  Partner fees,  marketing
costs and  property  taxes.  The  General  Partner,  in its  discretion,  waived
approximately $109,000 of the partnership management fee in 1995 and $212,000 in
1994.  The waiver was granted in order to reduce the  Partnership's  reliance on
cash reserves to fund operations. Marketing costs increased from $14,030 in 1994
to $67,737 in 1995 related to increased  marketing  efforts by the  Partnership.
Property  taxes  amounted  to  $186,455 in 1995 as compared to $150,247 in 1994.
Property  tax  expense  in 1994 was  lower  than in 1995 due to a refund of 1993
taxes  approximating  $30,000  received in 1994 as a result of a successful  tax
appeal.
                                       14
<PAGE>
Inflation

         Inflation in future periods may tend to cause capital  appreciation  of
land in  general;  however,  the value of any  particular  land,  including  the
Property,  may increase at a rate  different from the inflation rate or decrease
based  upon  other  factors,  such as the  demand for land in the area where the
particular  land is located and the  availability of comparable land in the same
area.  If the  Partnership  decides to lease  parcels of the  Property,  capital
appreciation  may cause an  increase in the amount of lease  payments  due under
future  leases  just as it may  cause an  increase  in the  value  of the  land.
Inflation  may,  however,  have an adverse  impact on the  profitability  of the
Partnership  because of  increases  in its  operating  expenses,  as well as any
possible lessees' operating expenses.

Item 8.  Financial Statements and Supplementary Data.

         The financial  statements of the Co-Registrants  required by Regulation
S-X are attached to this Report. Reference is made to Item 14 below for an index
to the financial statements and financial statement schedule.

Item 9.  Disagreements on Accounting and Financial Disclosure.

         None.

                                    PART III

Item 10. Directors and Executive Officers.

         The Partnership,  the General Partner and the Company have no directors
or  executive  officers.  PCMC is the  corporate  general  partner and Morton H.
Fleischer is an individual  general partner of the General Partner.  The General
Partner  has  responsibility  for  all  of  the  Partnership's  operations.  The
directors and executive officers of PCMC and FFCA Investor Services  Corporation
88-B are as follows:


PCMC

                                    Directors
             Name                                     Position Held Since
             ----                                     -------------------


Morton H. Fleischer                                           1993
                                       15
<PAGE>
                                    Officers
<TABLE>
<CAPTION>
                                                                                   Associated With
Name                                        Positions Held                           PCMC Since
----                                        --------------                           ----------
<S>                                 <C>                                                 <C> 
Morton H. Fleischer                 President and Chief Executive Officer               1993
John R. Barravecchia                Executive Vice President, Chief Financial Officer,
                                    Treasurer and Assistant Secretary                   1993
Christopher H. Volk                 Executive Vice President, Chief Operating
                                    Officer, Secretary and Assistant Treasurer          1993
Dennis L. Ruben                     Executive Vice President, General Counsel
                                            and Assistant Secretary                     1994
Stephen G. Schmitz                  Executive Vice President, Chief Investment
                                            Officer and Assistant Secretary             1995
Catherine F. Long                   Senior Vice President-Finance, Principal
                                    Accounting Officer, Assistant Secretary
                                            and Assistant Treasurer                     1993
</TABLE>

FFCA INVESTOR SERVICES CORPORATION 88-B

                                    Director
               Name                                   Position Held Since
               ----                                   -------------------

Morton H. Fleischer, Chairman                               1986

                                    Officers
<TABLE>
<CAPTION>
                                                                                                 Position Held
               Name                                       Positions Held                              Since
               ----                                       --------------                              -----
<S>                                           <C>                                                     <C> 
Morton H. Fleischer                           Chairman of the Board of Directors                      1986
John R. Barravecchia                          President, Secretary and Treasurer                      1990
Christopher H. Volk                           Vice President, Assistant Secretary and                 1994
                                              Assistant Treasurer
</TABLE>

         All of the foregoing directors and executive officers have been elected
to serve a one year term and until their  successors  are elected and qualified.
There are no arrangements or understandings between or among any of the officers
or directors and any other person  pursuant to which any officer or director was
selected as such.  There are no family  relationships  among any  directors  and
officers.
                                       16
<PAGE>
Business Experience

         The business experience during the past five years of each of the above
directors and executive officers is as follows:

         Morton H. Fleischer, age 60, served as a director,  President and Chief
Executive  Officer  of PCMC since  1993,  and as  Chairman  of the Board of FFCA
Investor  Services  Corporation  88-B since 1986.  Mr.  Fleischer also serves as
President,  Chief  Executive  Officer  and  Chairman  of the Board of  Franchise
Finance  Corporation  of  America,  a  Delaware   corporation   ("FFCA")  having
previously  served as a  director,  President  and Chief  Executive  Officer  of
Franchise  Finance  Corporation  of America I ("FFCA I"), a predecessor of FFCA,
from 1980 to 1994. Mr. Fleischer is an individual general partner of the General
Partner,  and is a general partner (or general partner of a general  partner) of
the following public limited partnerships: Participating Income Properties 1986,
L.P.;   Participating  Income  Properties  II,  L.P.  and  Participating  Income
Properties III Limited Partnership.

         John R.  Barravecchia,  age 41,  served  as  President,  Secretary  and
Treasurer of FFCA Investor  Services  Corporation  88-B since 1990. He served as
Chief  Financial  Officer of PCMC since 1993 and as Senior  Vice  President  and
Treasurer  since  1994.  In 1995,  Mr.  Barravecchia  was named  Executive  Vice
President  of  PCMC.  Mr.  Barravecchia   currently  serves  as  Executive  Vice
President,  Chief Financial Officer,  Treasurer and Assistant  Secretary of FFCA
and served in various  capacities for FFCA I from 1984 to 1994. He was appointed
Vice  President  and Chief  Financial  Officer of FFCA I in December  1986,  and
Senior  Vice  President  in October  1989.  Mr.  Barravecchia  was  elected as a
director  of FFCA I in March  1993 and  Treasurer  in  December  1993.  Prior to
joining FFCA I, Mr.  Barravecchia was associated with the  international  public
accounting firm of Arthur Andersen LLP.

         Christopher  H.  Volk,  age 40,  served  as Vice  President,  Assistant
Secretary and Assistant  Treasurer of FFCA Investor  Services  Corporation  88-B
since  1994,  and  served  as  Secretary  of PCMC  since  1993 and  Senior  Vice
President--Underwriting  and Research  since 1994.  In 1995,  Mr. Volk was named
Executive Vice President and Chief Operating Officer of PCMC. Mr. Volk currently
serves as Executive  Vice  President,  Chief  Operating  Officer,  Secretary and
Assistant  Treasurer  of FFCA.  He joined  FFCA I in 1986 and  served in various
capacities  in FFCA I's capital  preservation  and  underwriting  areas prior to
being named Vice  President-Research  in October 1989. In December  1993, he was
appointed Secretary and Senior Vice  President-Underwriting and Research of FFCA
I, and he was elected as a director  of FFCA I in March  1993.  Prior to joining
FFCA I, Mr. Volk was employed  for six years with the National  Bank of Georgia,
where his last position was Assistant  Vice  President and Senior  Correspondent
Banking Credit  Officer.  Mr. Volk is a member of the Association for Investment
Management and Research and the Phoenix Society of Financial Analysts.
                                       17
<PAGE>
         Dennis L. Ruben,  age 44,  served as Senior Vice  President and General
Counsel for PCMC since  1994.  Mr.  Ruben was named  Executive  Vice  President,
General  Counsel and Assistant  secretary of PCMC in February 1997. He currently
serves in the same capacity for FFCA and served as attorney and counsel for FFCA
I from 1991 to 1994. In December  1993, he was appointed  Senior Vice  President
and General Counsel of FFCA I. Prior to joining FFCA I, Mr. Ruben was associated
with the law firm of Kutak Rock from 1980 until March 1991.  Mr.  Ruben became a
partner of Kutak Rock in 1984. Mr. Ruben has been admitted to the Iowa, Nebraska
and Colorado bars.

         Stephen G. Schmitz,  age 42, served as Senior Vice  President-Corporate
Finance of PCMC since January 1996. He was named Executive Vice President, Chief
Investment  Officer  and  Assistant  Secretary  of PCMC  in  February  1997.  He
currently  serves in the same capacity for FFCA.  Mr.  Schmitz served in various
positions  as an officer  of FFCA I from 1986 to June 1, 1994.  Prior to joining
FFCA I, Mr.  Schmitz was a  commercial  lender  with Mellon Bank in  Pittsburgh,
where his last position was Vice-President and Section Manager.

         Catherine  F.  Long,  age 40,  served  as Vice  President--Finance  and
Principal Accounting Officer of PCMC since 1994, and Vice President from 1993 to
1994. In February 1997 she was named Senior Vice  President-Finance of PCMC. She
currently serves as Senior Vice President-Finance, Principal Accounting Officer,
Assistant  Secretary  and  Assistant  Treasurer  of  FFCA  and  served  as  Vice
President-Finance  of FFCA I from  1990  to  1993.  In  December  1993,  she was
appointed  Principal  Accounting  Officer of FFCA I. From  December  1978 to May
1990, Ms. Long was associated with the  international  public accounting firm of
Arthur Andersen LLP. Ms. Long is a certified  public  accountant and is a member
of the Arizona Society of Certified Public Accountants.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Based  solely  upon a review  of Forms 3 and 4 and  amendments  thereto
furnished  to the  Co-Registrants  during  fiscal  year  1996  and  Forms  5 and
amendments thereto furnished to the  Co-Registrants  with respect to fiscal year
ended December 31, 1996 (the "Forms"),  and any written  representations  by the
directors and executive officers of FFCA Investor Services  Corporation 88-B and
PCMC, the Co-Registrants  have not identified herein any such person that failed
to file on a timely basis the Forms  required by Section 16(a) of the Securities
Exchange Act of 1934 for fiscal year 1996.

Item 11. Executive Compensation.

         Pursuant  to   provisions   contained  in  the   agreement  of  limited
partnership  which governs the  Partnership,  the officers and directors of PCMC
serve in such capacities without remuneration from the Partnership.
                                       18
<PAGE>
         The  Partnership is required to pay a partnership  management fee and a
subordinated  incentive share of sale or refinancing proceeds or parcel revenues
to the General  Partner,  and the General Partner is entitled to receive a share
of cash  distributions,  when and as made to the  Holders and a share of profits
and losses. Reference is made to Note 7 of the Notes to the Financial Statements
of the  Partnership  which are filed with this Report for a  description  of the
fees paid to the General Partner in 1996.

         FFCA Investor Services  Corporation 88-B serves as assignor and initial
limited partner without compensation from the Partnership. It is not entitled to
any share of the profits,  losses or cash distributions of the Partnership.  The
director and officers of FFCA Investor  Services  Corporation 88-B serve without
compensation from FFCA Investor Services Corporation 88-B or the Partnership.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

         As of  December  31,  1996,  no  person  or  group  was  known  by  the
Partnership  to own  directly or  beneficially  more than 5% of the  outstanding
Units of the Partnership.

         The General Partner of the  Partnership and its general  partners owned
no Units as of December  31,  1996.  The  directors  and officers of the General
Partner's  corporate general partner,  PCMC,  individually and as a group, owned
less than 1% of the Units as of December  31,  1996.  PCMC is owned by Morton H.
Fleischer.

         FFCA  Investor  Services  Corporation  88-B  has  an  interest  in  the
Partnership as a limited  partner and it serves as the owner of record of all of
the limited partnership  interests assigned by it to the Holders.  However, FFCA
Investor  Services  Corporation  88-B has no right to vote its  interest  on any
matter and it must vote the assigned interests as directed by the Holders.  FFCA
Investor Services Corporation 88-B is wholly owned by PCMC.

Item 13. Certain Relationships and Related Transactions.

         Since the beginning of the Co-Registrants' last fiscal year, there have
been  no  significant   transactions   or  business   relationships   among  the
Co-Registrants,  the  General  Partner  and  PCMC or their  affiliates  or their
management other than those described in Items 1, 7, 10 and 11 above.
                                       19
<PAGE>
                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

         The following documents are filed as part of this Report:

         1.       Financial Statements

                  The Partnership

                  Report of independent public accountants  
                  Balance Sheets as of December 31, 1996 and 1995  
                  Statements of Operations for the years ended
                    December 31, 1996, 1995 and 1994
                  Statements of Changes In Partners' Capital for the
                    years ended December 31, 1996, 1995 and 1994
                  Statements of Cash Flows for the years ended
                    December 31, 1996, 1995 and 1994
                  Notes to Financial Statements

                  FFCA Investor Services Corporation 88-B

                  Report of independent public accountants
                  Balance Sheet as of December 31, 1996
                  Notes to Balance Sheet

         2.       Financial Statement Schedules

                  Schedule III-Schedule of Real Estate as of
                    December 31, 1996

                           All other  schedules  are omitted  since they are not
                  required,  are  inapplicable,  or the required  information is
                  included in the financial statements or notes thereto.

         3.       Exhibits

                  99.  Annual  Portfolio  Valuation of Cushman & Wakefield as of
                    December 31, 1996.
                                       20
<PAGE>
                           Pursuant to Rule 12b-32 under the Securities Exchange
                  Act of 1934, as amended, the following  documents,  filed with
                  the  Securities  and Exchange  Commission on March 31, 1994 as
                  exhibits to the Co-Registrants'  Form 10-K for the fiscal year
                  ended  December 31, 1993,  Commission  File No.  0-17626,  are
                  incorporated herein by this reference.
                                                                       Form 10-K
                                                                      Exhibit No
                                                                      ----------

                           First Amendment to Exclusive Management        10.1
                           Agreement    by   and    between    the
                           Partnership  and The Westcor Company II
                           Limited Partnership, dated May 1, 1990. 
                           
                           Second     Amendment    to    Exclusive        10.2
                           Management Agreement by and between the
                           Partnership  and The Westcor Company II
                           Limited  Partnership,  dated January 1,
                           1994.                                   
                           
                           Pursuant to Rule 12b-32 under the Securities Exchange
                  Act of 1934, as amended, the following  documents,  filed with
                  the  Securities  and Exchange  Commission on March 24, 1989 as
                  exhibits to the Co-Registrants'  Form 10-K for the fiscal year
                  ended December 31, 1988,  Commission  File No.  33-18041,  are
                  incorporated herein by this reference.

                                                                      Form 10-K
                                                                     Exhibit No.
                                                                     -----------

                           The  Amended and  Restated  Certificate         4
                           and  Agreement  of Limited  Partnership
                           which governs the Partnership, as filed
                           with the Secretary of State of Delaware
                           on November 23, 1988.                  
                           
                           Acquisition, Construction and Term Loan        10
                           Agreement    by   and    between    the
                           Partnership   and   Franchise   Finance
                           Corporation  of  America,  dated  as of
                           December 29, 1988.                     
                           
                           Pursuant to Rule 12b-32 under the Securities Exchange
                  Act of 1934, as amended, the following  documents,  filed with
                  the  Securities  and Exchange  Commission  on June 14, 1988 as
                  exhibits to the Co-Registrants' Registration Statement on Form
                  S-11,  Registration No. 33-18041,  are incorporated  herein by
                  this reference.
                                       21

<PAGE>
                                                                     Exhibit No.
                                                                     -----------

                           The Certificate of Incorporation  which        4(b)
                           governs    FFCA    Investor    Services
                           Corporation  88-B,  as  filed  with the
                           Secretary   of  State  of  Delaware  on
                           August 11, 1987.                       
                           
                           Bylaws   of  FFCA   Investor   Services        4(c)
                           Corporation 88-B.                               

                           Exclusive  Management  Contract  by and       10(c)
                           between the Partnership and The Westcor
                           Company II Limited  Partnership,  dated
                           as of June 7, 1988.                    
                           
                  Reports on Form 8-K

                           No   reports   on  Form   8-K   were   filed  by  the
                           Co-Registrants  during the last quarter of the fiscal
                           year ended December 31, 1996.
                                       22
<PAGE>
                                   SIGNATURES


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

                                       SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP

                                        By  FFCA MANAGEMENT COMPANY LIMITED 
                                            PARTNERSHIP, General Partner



Date:  March 26, 1997                       By /s/ Morton H. Fleischer
                                               ---------------------------------
                                            Morton H. Fleischer, General Partner

                                            By  PERIMETER CENTER MANAGEMENT 
                                                COMPANY, Corporate General 
                                                Partner


Date:  March 26, 1997                       By /s/ Morton H. Fleischer
                                               ---------------------------------
                                            Morton H. Fleischer, Chairman of the
                                            Board, President and Chief Executive
                                            Officer

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

         SIGNATURES  OF REQUIRED  OFFICERS AND  DIRECTORS  OF  PERIMETER  CENTER
         MANAGEMENT  COMPANY,  CORPORATE  GENERAL  PARTNER  OF  FFCA  MANAGEMENT
         COMPANY LIMITED  PARTNERSHIP,  GENERAL PARTNER OF SCOTTSDALE LAND TRUST
         LIMITED PARTNERSHIP.



Date:  March 26, 1997                   By /s/ Morton H. Fleischer
                                           -------------------------------------
                                                Morton H. Fleischer, Chairman of
                                                the Board, President, Chief 
                                                Executive Officer and Director
<PAGE>
Date:  March 26, 1997                   By /s/ John R. Barravecchia
                                           -------------------------------------
                                               John R. Barravecchia, Executive 
                                               Vice President, Chief Financial 
                                               Officer, Treasurer and Assistant
                                               Secretary


Date:  March 26, 1997                   By /s/ Catherine F. Long
                                           -------------------------------------
                                               Catherine F. Long, Senior Vice 
                                               President-Finance and Principal 
                                               Accounting Officer, Assistant 
                                               Secretary and Assistant Treasurer


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

                                               FFCA INVESTOR SERVICES
                                               CORPORATION 88-B



Date:  March 26, 1997                   By /s/ Morton H. Fleischer
                                           -------------------------------------
                                               Morton H. Fleischer, Sole 
                                               Director



Date:  March 26, 1997                   By /s/ John R. Barravecchia
                                           -------------------------------------
                                               John R. Barravecchia, President, 
                                               Secretary, Principal Financial 
                                               Officer and Principal Accounting 
                                               Officer
<PAGE>
                    SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
                                       and
                     FFCA INVESTOR SERVICES CORPORATION 88-B



                            --------------------------
                                  Exhibit Index
                            --------------------------


<TABLE>
<CAPTION>
                                            <S>                                                               <C>
                                                                                                              Sequentially
                                            Exhibit                                                           Numbered Page
                                            -------                                                           -------------
               99. Annual Portfolio Valuation of Cushman & Wakefield
                     as of December 31, 1996.

                  Pursuant to Rule 12b-32 under the  Securities  Exchange Act of
         1934, as amended,  the following  documents,  filed with the Securities
         and  Exchange   Commission  on  March  31,  1994  as  exhibits  to  the
         Co-Registrants'  Form 10-K for fiscal  year ended  December  31,  1993,
         Commission File No. 0-17626, are incorporated herein by this reference.

                                                                                                              Form 10-K
                                                                                                              Exhibit No.
                                                                                                              -----------


          First Amendment to Exclusive Management                                                                  10.1
          Agreement by and between the Partnership and
          The Westcor Company II Limited Partnership, dated May 1, 1990.


          Second Amendment to Exclusive Management                                                                 10.2
          Agreement by and between the Partnership and
          The Westcor Company II Limited Partnership, dated January 1, 1994.
</TABLE>

                  Pursuant to Rule 12b-32 under the  Securities  Exchange Act of
         1934, as amended,  the following  documents,  filed with the Securities
         and  Exchange   Commission  on  March  24,  1989  as  exhibits  to  the
         Co-Registrants'  Form 10-K for fiscal  year ended  December  31,  1988,
         Commission  File  No.  33-18041,   are  incorporated   herein  by  this
         reference.
<PAGE>
                                                                      Form 10-K
                                                                     Exhibit No.
                                                                     -----------

The Amended and Restated Certificate and Agreement                        4
of Limited Partnership which governs the Partnership, as
filed with the Secretary of State of Delaware on
November 23, 1988.


Acquisition, Construction and Term Loan Agreement by and                 10
between the Partnership and Franchise Finance Corporation of
America, dated as of December 29, 1988.

         Pursuant to Rule 12b-32 under the  Securities  Exchange Act of
1934, as amended,  the following  documents,  filed with the Securities
and  Exchange   Commission   on  June  14,  1988  as  exhibits  to  the
Co-Registrants'  Registration Statement on Form S-11,  Registration No.
33-18041, are incorporated herein by this reference.

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

The Certificate of Incorporation which governs the                        4(b) 
Corporation, as filed with the Secretary of State
of Delaware on August 11, 1987.

Bylaws of FFCA Investor Services Corporation 88-B.                        4(c)

Exclusive Management Contract by and between the                         10(c)
Partnership and The Westcor Company II Limited Partnership,
dated as of June 7, 1988.
<PAGE>
Report of Independent Public Accountants



To Scottsdale Land Trust Limited Partnership:

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

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly,  in all material  respects,  the financial  position of Scottsdale  Land
Trust Limited  Partnership  as of December 31, 1996 and 1995, and the results of
its  operations  and its cash  flows for each of the three  years in the  period
ended  December  31,  1996 in  conformity  with  generally  accepted  accounting
principles.

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



ARTHUR ANDERSEN LLP

Phoenix, Arizona,
     January 17, 1997.
<PAGE>
                    SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
                    -----------------------------------------

                   BALANCE SHEETS - DECEMBER 31, 1996 AND 1995
                   -------------------------------------------
<TABLE>
<CAPTION>
                                                                1996            1995
                                                            ------------    ------------
<S>                                                         <C>             <C>         

                                     ASSETS
                                     ------

CASH AND CASH EQUIVALENTS                                   $  2,418,201    $  1,362,963

LAND HELD FOR SALE                                            26,326,289      30,087,685

LAND SUBJECT TO SALE AGREEMENTS (Note 3)                       2,980,166       2,016,693

LAND SUBJECT TO SALE AGREEMENT
      WITH AFFILIATE (Note 4)                                    788,287         788,287

LOAN RECEIVABLE FROM AFFILIATE (Notes 1 and 4)                 7,598,415       7,598,415

PREPAID EXPENSES AND OTHER                                       148,293         170,742
                                                            ------------    ------------

                 Total assets                               $ 40,259,651    $ 42,024,785
                                                            ============    ============

                        LIABILITIES AND PARTNERS' CAPITAL
                        ---------------------------------

DISTRIBUTION PAYABLE TO LIMITED PARTNERS                    $    939,956    $       --

PAYABLE TO GENERAL PARTNER                                        58,481          27,097

ACCOUNTS PAYABLE AND ACCRUED EXPENSES                            160,927         106,703
                                                            ------------    ------------

                  Total liabilities                            1,159,364         133,800
                                                            ------------    ------------

PARTNERS' CAPITAL (DEFICIT):
      General partner                                            (12,529)        (12,601)
      Limited partners                                        39,112,816      41,903,586
                                                            ------------    ------------

                 Total partners' capital                      39,100,287      41,890,985
                                                            ------------    ------------

                 Total liabilities and partners' capital    $ 40,259,651    $ 42,024,785
                                                            ============    ============
</TABLE>
      The accompanying notes are an integral part of these balance sheets.
<PAGE>
                    SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
                    -----------------------------------------

                            STATEMENTS OF OPERATIONS
                            ------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
              ----------------------------------------------------
<TABLE>
<CAPTION>
                                                1996         1995         1994
                                             ----------   ----------   ----------
<S>                                          <C>          <C>          <C>     
REVENUES:
         Land sales                          $5,003,703   $     --     $     --
         Interest on loan to affiliate          850,000      850,000      850,000
         Interest on investments and other      127,885       70,426       42,589
                                             ----------   ----------   ----------

                                              5,981,588      920,426      892,589
                                             ----------   ----------   ----------
EXPENSES:
         Cost of land sales                   3,036,171         --           --
         General partner fees (Note 7)          360,752      266,264      163,378
         Property management fees (Note 5)       36,000       36,000       36,000
         Marketing                               81,436       67,737       14,030
         Property taxes                         175,626      186,455      150,247
         Other operating                        316,845      317,926      375,504
                                             ----------   ----------   ----------

                                              4,006,830      874,382      739,159
                                             ----------   ----------   ----------

NET INCOME                                   $1,974,758   $   46,044   $  153,430
                                             ==========   ==========   ==========

NET INCOME ALLOCATED TO (Note 1):
         General partner                     $       72   $      460   $    1,534
         Limited partners                     1,974,686       45,584      151,896
                                             ----------   ----------   ----------

                                             $1,974,758   $   46,044   $  153,430
                                             ==========   ==========   ==========

NET INCOME PER LIMITED
         PARTNERSHIP UNIT (based on 50,000
         units held by limited partners)     $    39.49   $      .91   $     3.04
                                             ==========   ==========   ==========
</TABLE>
        The accompanying notes are an integral part of these statements.
<PAGE>
                    SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
                    -----------------------------------------

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                   ------------------------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
              ----------------------------------------------------
<TABLE>
<CAPTION>
                                                                  General         Limited
                                                                  Partner         Partners          Total
                                                                ------------    ------------    ------------
<S>                                                             <C>             <C>             <C>         
BALANCE,  December 31, 1993                                     $    (14,595)   $ 41,706,106    $ 41,691,511

         Net income                                                    1,534         151,896         153,430
                                                                ------------    ------------    ------------

BALANCE,  December 31, 1994                                          (13,061)     41,858,002      41,844,941

         Net income                                                      460          45,584          46,044
                                                                ------------    ------------    ------------

BALANCE,  December 31, 1995                                          (12,601)     41,903,586      41,890,985

         Net income                                                       72       1,974,686       1,974,758

         Distributions to limited partners (Note 1)                     --        (4,765,456)     (4,765,456)
                                                                ------------    ------------    ------------

BALANCE,  December 31, 1996                                     $    (12,529)   $ 39,112,816    $ 39,100,287
                                                                ============    ============    ============
</TABLE>
        The accompanying notes are an integral part of these statements.
<PAGE>
                    SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
                    -----------------------------------------

                            STATEMENTS OF CASH FLOWS
                            ------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
              ----------------------------------------------------
<TABLE>
<CAPTION>
                                                         1996           1995           1994
                                                      -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                        $ 1,974,758    $    46,044    $   153,430
    Adjustments to net income:
      Change in assets and liabilities:
        Decrease in land held for sale                  3,761,396           --             --
        Increase in land subject to sale agreements      (963,473)          --             --
        Decrease (increase) in prepaid expenses
          and other                                        22,449         (1,707)         9,553
        Increase in payable to general partner             31,384         27,097           --
        Increase (decrease) in accounts payable
          and accrued expenses                             54,224        (37,955)       (22,249)
                                                      -----------    -----------    -----------

          Net cash provided by operating activities     4,880,738         33,479        140,734
                                                      -----------    -----------    -----------

CASH FLOWS FOR FINANCING ACTIVITIES:
    Limited partner distributions declared (Note 1)    (4,765,456)          --             --   
    Increase in distribution payable                      939,956           --             --
                                                      -----------    -----------    -----------

          Net cash used in financing activities        (3,825,500)          --             --
                                                      -----------    -----------    -----------

NET INCREASE IN CASH
    AND CASH EQUIVALENTS                                1,055,238         33,479        140,734

CASH AND CASH EQUIVALENTS,
    beginning of year                                   1,362,963      1,329,484      1,188,750
                                                      -----------    -----------    -----------

CASH AND CASH EQUIVALENTS,
    end of year                                       $ 2,418,201    $ 1,362,963    $ 1,329,484
                                                      ===========    ===========    ===========
</TABLE>
        The accompanying notes are an integral part of these statements.
<PAGE>
                    SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
                    -----------------------------------------

                          Notes to Financial Statements
                          -----------------------------

                           December 31, 1996 and 1995
                           --------------------------

1)  ORGANIZATION:
    -------------

         Scottsdale Land Trust Limited  Partnership (the Partnership) was formed
on August 12, 1987 under the Delaware Revised Uniform Limited Partnership Act to
acquire  and  develop 261 acres of land (the  Property)  located in  Scottsdale,
Arizona that is zoned for  commercial  use. In  addition,  the  Partnership  has
financed  $8.5  million for the  acquisition  of five acres of the  Property and
construction  of an  office  building  which is the  corporate  headquarters  of
Franchise Finance  Corporation of America (FFCA) (see Note 4). The Partnership's
primary investment objective is to achieve capital appreciation through the sale
of the improved land. The general  partner of the Partnership is FFCA Management
Company Limited  Partnership  (the General  Partner),  an affiliate of FFCA. The
Partnership  will expire  December 31, 2047, or sooner,  in accordance  with the
terms of the Partnership agreement.

         Investors acquired units of assigned limited partnership  interest (the
limited  partnership  units)  in the  Partnership  from FFCA  Investor  Services
Corporation  88-B  (the  Initial  Limited  Partner),   a  Delaware   corporation
wholly-owned by Perimeter Center Management Company, an affiliate of the General
Partner.   Holders  of  the  units  have  all  of  the  economic   benefits  and
substantially  the same rights and powers of limited partners;  therefore,  they
are referred to herein as "limited partners."

         The Partnership agreement provides for allocation of profits and losses
and cash distributions among its partners as follows:

         Profits and Losses: Profits and losses are allocated 99% to the limited
         partners and 1% to the General Partner,  except that gain from the land
         sales will be  allocated  to the  partners  and The Westcor  Company II
         Limited  Partnership  (the  Manager)  as  provided  in the  Partnership
         agreement.

         Cash Distributions: Cash from operations, as defined in the Partnership
         agreement,  after  payment  of  fees  to the  General  Partner  and the
         creation or  restoration  of cash  reserves,  is  allocated  99% to the
         limited partners and 1% to the General Partner.  Cash proceeds from the
         sale of property are not  considered  cash from  operations  but,  when
         distributed,  represent  a  partial  return  of the  limited  partners'
         initial  $1,000 per unit capital  contribution.  Based on the amount of
         such distributions,  the limited partner Adjusted Capital Contribution,
         as  defined in the  Partnership  agreement,  at  December  31,  1996 is
         $923.49 per unit.

2)  SIGNIFICANT ACCOUNTING POLICIES:
    --------------------------------

         Financial  Statements - The financial statements of the Partnership are
  prepared on the accrual basis of accounting.  The preparation of the financial
  statements  in  conformity  with  generally  accepted  accounting   principles
  requires management to make estimates and assumptions that affect the reported
  amounts of assets and liabilities at the date of the financial  statements and
  the reported  amounts of revenues and expenses  during the  reporting  period.
  Although  management  believes its estimates are  reasonable,  actual  results
  could differ from those estimates.

         Cash and Cash  Equivalents  -  Investment  securities  that are  highly
liquid and have  maturities  of three months or less at the date of purchase are
classified as cash equivalents.  Cash equivalents include United States Treasury
securities  of  $1,349,448  and  $1,105,326  at  December  31,  1996  and  1995,
respectively, and bank repurchase agreements (which are collateralized by United
States  Treasury and Government  obligations)  of $925,122 at December 31, 1996.
Short-term  investments  are  recorded  at cost  plus  accrued  interest,  which
approximates market value.
<PAGE>
         Development Costs and Land Sales - During the development  phase, costs
directly related to the acquisition of the Property,  such as appraisals,  plans
and finders fees, were capitalized to the cost of the Property.  The Partnership
also   capitalized  real  estate  taxes  and  other  holding  costs  during  the
development  of the  Property  and the  construction  of the land  improvements.
Common costs and improvements are allocated based on each parcel's relative fair
value and charged to an individual parcel where specifically  identifiable.  The
Property  is carried at cost,  which does not exceed  estimated  net  realizable
value.

3) LAND SUBJECT TO SALE AGREEMENTS:
   -------------------------------

         At  December  31,  1996,  the  Partnership  had  five  parcels  of land
(approximately  21.4 acres), with an aggregate cost of approximately $3 million,
under contract for sale for  approximately  $5.7 million to  unaffiliated  third
parties. One contract provides for a right of first refusal on an additional 9.4
acres (two parcels) of land for a period of up to two years on one parcel and up
to three  years on the other  parcel.  Subsequent  to  December  31,  1996,  the
Partnership  closed  the sale of one 2.1 acre  parcel and  recognized  a gain of
approximately $50,000.

4)  LAND SUBJECT TO SALE AGREEMENT WITH AFFILIATE:
    ---------------------------------------------

         As provided in the Partnership agreement,  the Partnership entered into
an  agreement  on  December  29,  1988 to sell  approximately  five acres of the
Property  (the Parcel) to FFCA at a purchase  price  determined  by  independent
appraisal  to be the fair  market  value of the  unimproved  Parcel and  related
improvements. In connection with the sale agreement, the Partnership also funded
the  construction  of an office  building on the Parcel  which is the  corporate
headquarters of FFCA.  This loan to FFCA for the acquisition of the Parcel,  the
office building and the parcel improvements totaled $8.5 million.

         FFCA is obligated to pay the Partnership  monthly  payments of interest
at the rate of 10% per year for ten years.  In May 2000,  the entire  balance of
the loan is due. FFCA is obligated to pay the Partnership,  upon the maturity of
the loan, by  acceleration  or  otherwise,  additional  interest  based upon the
increase,  if  any,  in  the  value  of the  FFCA  office  building  (Additional
Interest).  The amount of  Additional  Interest,  if any,  will be calculated in
accordance with the related loan agreement as the greater of 30% of the increase
in value of the FFCA office building or $1.13 million.  FFCA payment obligations
to the  Partnership  are secured by the Parcel,  the FFCA office  building,  the
parcel improvements and the General Partner's guaranty.

         The fair  value  of the  Partnership's  loan  receivable  from  FFCA is
estimated by discounting  the future cash flows using the current rates at which
similar loans would be made to borrowers with similar credit ratings and for the
same  remaining  maturities.  The fair value at December  31,  1996  exceeds the
carrying amount by $1.7 million;  however, changes in the fair value of the loan
receivable do not result in the  realization  or  expenditure of cash unless the
loan is actually paid off.

          The sale of the Parcel to FFCA will be recognized in the Partnership's
financial  statements  when  the  amounts  loaned  to  FFCA  are  repaid  to the
Partnership.

5)  MANAGEMENT CONTRACT:
    -------------------

         The Partnership has entered into a management contract with the Manager
to  develop  and manage the  Property.  The  management  contract  is  renewable
annually. Under the management contract, the Manager is entitled to receive fees
for services  performed in connection with managing the Property's  development.
During 1996,  1995 and 1994, the planning and property  management  fees paid or
accrued to the Manager (payable in monthly installments) were $36,000 each year.

         After  the  limited  partners  have  received   specified   returns  in
accordance with the Partnership agreement, a subordinated contingent interest of
25% of all remaining  sale or  refinancing  proceeds or parcel  revenues will be
payable to the Manager.
<PAGE>
6)  INCOME TAXES:
    ------------

         The Partnership is not directly subject to income taxes;  rather,  each
partner is subject to income taxes on his distributable share of taxable income.
The Partnership tax returns and the amount of distributable  partnership profits
or losses are subject to examination by Federal and state taxing authorities. If
examinations  by  taxing   authorities   result  in  changes  to   distributable
partnership  profits or losses,  the tax  liabilities  of the partners  could be
changed accordingly.

         The following is a reconciliation of net income for financial reporting
purposes to income  reported for Federal income tax purposes for the years ended
December 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
                                                 1996           1995          1994
                                              -----------    -----------   -----------
<S>                                           <C>            <C>           <C>        
Net income for financial reporting purposes   $ 1,974,758    $    46,044   $   153,430
Differences for tax purposes in:
     Capitalized land inventory costs             230,557        251,826       202,925
     Additional Interest on FFCA loan             122,857        111,300       100,831
     Gain on sale of land                      (1,060,765)          --            --
     Other                                          3,279          2,949          --
                                              -----------    -----------   -----------

Taxable income to partners                    $ 1,270,686    $   412,119   $   457,186
                                              ===========    ===========   ===========
</TABLE>

For  Federal  income tax  reporting  purposes,  taxable  income to  partners  is
reported  on the  accrual  basis of  accounting  and is  classified  as ordinary
income.

         At December 31,  1996,  the tax bases of the  Partnership's  assets and
liabilities  exceed the amounts  recorded for  financial  reporting  purposes by
$1,886,121.  This difference results primarily from differences in the treatment
of capitalized land inventory  costs,  the Additional  Interest on the FFCA loan
and the gain recognized on the sale of the land parcels for financial  reporting
and tax reporting purposes.

7)  TRANSACTIONS WITH RELATED PARTIES:
    ----------------------------------

         Under the terms of the  Partnership  agreement,  the General Partner is
entitled to compensation for services  performed in connection with managing the
affairs of the Partnership.  During 1996, 1995 and 1994, fees paid or accrued to
the General Partner were as follows:
                                                  1996       1995       1994
                                                --------   --------   --------
 Partnership management fee (3/4 of 1% of the
    Assets Under Management, payable monthly)   $360,752   $266,264   $163,378
                                                ========   ========   ========

         In 1995 and 1994,  the General  Partner  waived  $108,736 and $211,622,
respectively,  of the partnership  management fee otherwise  receivable from the
Partnership  in order to reduce the  Partnership's  reliance on cash reserves to
fund operations.  As the Partnership  began the sale of parcels in 1996, none of
the partnership management fee was waived.

         FFCA incurs  expenses on behalf of the  Partnership  for maintenance of
the books and records and for computer,  investor and legal  services  performed
for the  Partnership.  These expenses are  reimbursable  in accordance  with the
Partnership  agreement and are less than the amount which the Partnership  would
have paid to  independent  parties  for  comparable  services.  The  Partnership
reimbursed  FFCA  $25,360 in 1996,  $18,025 in 1995 and $24,122 in 1994 for such
expenses.
<PAGE>
                                                                    SCHEDULE III


                    SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
                    -----------------------------------------

                             SCHEDULE OF REAL ESTATE
                             -----------------------
                             AS OF DECEMBER 31, 1996
                             -----------------------
<TABLE>
<CAPTION>
                                                                                       Cost             Gross Amount
                                                                                    Capitalized           At Which
                                                                  Initial Cost     Subsequent to         Carried At        Date
  Description           Location              Encumbrances       to Partnership     Acquisition      December 31, 1996   Acquired
---------------  ------------------------  ------------------    --------------  -----------------   -----------------  ----------
<S>                <C>                     <C>                     <C>               <C>                 <C>             <C> 
Improved land                                Subject to
    239 acres      Scottsdale, Arizona     sales agreement (3)     $23,913,185       $8,979,480          $30,094,742     Nov. 1988
                                                                   ===========       ==========          ===========
</TABLE>

         Notes:

                  (1)      The aggregate cost for Federal income tax purposes is
                           $30,556,946

                  (2)      There are no prior liens.

                  (3)      In  1988,  the  Partnership   entered  into  a  sales
                           agreement to sell five acres of land,  with a cost to
                           the  Partnership  of  approximately  $788,000,  to an
                           affiliate  for an amount  determined  by  independent
                           appraisal  to be the fair market value of the parcel.
                           In 1996,  the  Partnership  entered  into four  sales
                           agreements to sell  approximately 21.4 acres of land,
                           with  an  aggregate   cost  to  the   Partnership  of
                           approximately   $3  million  to  unaffiliated   third
                           parties.

                  (4)      There were no transactions in real estate during 1995
                           and 1994. Transactions in real estate during 1996 are
                           summarized as follows: 
                                                               Cost
                                                            ------------

Balance, December 31, 1995                                  $ 32,892,665
           Cost of land sold                                  (2,797,923)
                                                            ------------

Balance, December 31, 1996                                  $ 30,094,742
                                                            ============