<PAGE>



                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-Q              

(Mark one)

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

        For the quarterly period ended September 30, 1997


                                       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                        0-13400

                NTS-PROPERTIES V, a Maryland Limited Partnership
             (Exact name of registrant as specified in its charter)

           Maryland                                     61-1051452
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

    10172 Linn Station Road
    Louisville, Kentucky                                  40223
(Address of principal executive                         (Zip Code)
offices)

Registrant's telephone number,
including area code                                (502) 426-4800

                               Not Applicable
              Former name, former address and former fiscal year,
                         if changed since last report

Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.

                                                     YES  X         NO

Exhibit Index: See page 20
Total Pages: 21





<PAGE>



                                TABLE OF CONTENTS


                                                                       Pages

                                     PART I

Item 1.     Financial Statements

            Balance Sheets and Statement of Partners' Equity
              As of September 30, 1997 and December 31, 1996               3

            Statements of Operations
              For the three months and nine months ended
          September 30, 1997 and 1996                                      4

            Statements of Cash Flows
              For the three months and nine months ended
              September 30, 1997 and 1996                                  5

            Notes To Financial Statements                                6-9

Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations                      10-19


                                     PART II

1.     Legal Proceedings                                                  20
2.     Changes in Securities                                              20
3.     Defaults upon Senior Securities                                    20
4.     Submission of Matters to a Vote of Security Holders                20
5.     Other Information                                                  20
6.     Exhibits and Reports on Form 8-K                                   20

Signatures                                                                21


                                      - 2 -

<PAGE>


<TABLE>

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

                                NTS-PROPERTIES V,
                         A Maryland Limited Partnership

                BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
<CAPTION>



                                                        As of             As of
                                                 September 30,1997  December 31, 1996*
                                                 -----------------  ------------------
ASSETS

<S>                                                  <C>             <C>        
Cash and equivalents                                 $   483,745     $   315,816
Cash and equivalents - restricted                        446,571          84,992
Accounts receivable, net of allowance
 for doubtful accounts of $10,951 (1997)
 and $15,899 (1996)                                      417,681         517,267
Land, buildings and amenities, net                    24,091,894      24,972,650
Asset held for development, net                        2,163,709       2,279,098
Asset held for sale                                    1,152,868       1,152,868
Other assets                                             915,228       1,011,565
                                                     -----------     -----------

                                                     $29,671,696     $30,334,256
                                                     ===========     ===========

LIABILITIES AND PARTNERS' EQUITY

Mortgages and note payable                           $21,899,811     $22,688,331
Accounts payable - operations                            345,834         256,451
Accounts payable - construction                          252,143         215,059
Security deposits                                        177,793         152,931
Other liabilities                                        608,289          39,865
                                                     -----------     -----------

                                                      23,283,870      23,352,637

Commitments and Contingencies

Partners' equity                                       6,387,826       6,981,619
                                                     -----------     -----------

                                                     $29,671,696     $30,334,256
                                                     ===========     ===========

</TABLE>
<TABLE>
<CAPTION>

                                      Limited        General
                                     Partners        Partner         Total
                                     --------        -------         -----
<S>                               <C>             <C>             <C>         
PARTNERS' EQUITY
Capital contributions, net of
 offering costs                   $ 30,582,037    $        100    $ 30,582,137
Net income (loss) - prior years     (7,952,573)         33,468      (7,919,105)
Net loss - current year               (587,856)         (5,938)       (593,794)
Cash distributions declared to
 date                              (15,389,204)       (155,528)    (15,544,732)
Repurchase of limited
 partnership Units                    (136,680)             --        (136,680)
                                  ------------    ------------    ------------

Balances at September 30, 1997    $  6,515,724    $   (127,898)   $  6,387,826
                                  ============    ============    ============

</TABLE>

*Reference is made to the audited financial statements in the Form 10-K as filed
 with the Commission on March 31, 1997.

                                      - 3 -

<PAGE>

<TABLE>


                                NTS-PROPERTIES V,
                         A Maryland Limited Partnership

                            STATEMENTS OF OPERATIONS

<CAPTION>


                                                        Three Months Ended                     Nine Months Ended
                                                           September 30,                          September 30
                                                           -------------                          ------------


                                                      1997                1996              1997               1996
                                                  ------------        -----------        -----------        -----------
<S>                                                <C>                <C>                <C>                <C>        
REVENUES:
 Rental income, net of provision
  for doubtful accounts of $ -0-
  (1997) and $3,110 (1996)                         $ 1,446,249        $ 1,466,449        $ 4,210,201        $ 4,253,047
 Interest and other income                               6,543              6,869             17,999             19,406
                                                   -----------        -----------        -----------        -----------

                                                     1,452,792          1,473,318          4,228,200          4,272,453

EXPENSES:
  Operating expenses                                   303,927            297,674            871,281            795,761
  Operating expenses - affiliated                      146,198            126,624            435,347            388,122
  Amortization of capitalized
   leasing costs                                         5,203              5,225             15,607             13,532
  Interest expense                                     440,130            476,080          1,330,524          1,543,009
  Management fees                                       86,144             85,068            252,239            254,162
  Real estate taxes                                    136,780            139,884            410,342            408,824
  Professional and administrative
   expenses                                             29,674             25,307             87,837             79,884
  Professional and administrative
   expenses - affiliated                                55,771             43,549            170,144            122,348
  Depreciation and amortization                        418,783            414,843          1,248,673          1,265,470
                                                   -----------        -----------        -----------        -----------

                                                     1,622,610          1,614,254          4,821,994          4,871,112
                                                   -----------        -----------        -----------        -----------

Loss before extraordinary item                        (169,818)          (140,936)          (593,794)          (598,659)
Extraordinary item - write-off
 of unamortized loan costs                                  --            (50,118)                --            (50,118)
                                                   -----------        -----------        -----------        -----------

Net loss                                           $  (169,818)       $  (191,054)       $  (593,794)       $  (648,777)
                                                   ===========        ===========        ===========        ===========

Net loss allocated to the
 limited partners                                  $  (168,120)       $  (189,143)       $  (587,856)       $  (642,289)
                                                   ===========        ===========        ===========        ===========

Net loss per limited partnership Unit:
 Loss before extraordinary item                    $     (4.78)       $     (3.91)       $    (16.73)       $    (16.58)
 Extraordinary item                                         --              (1.40)                --              (1.39)
                                                   -----------        -----------        -----------        -----------
Net loss per limited partnership
 Unit                                              $     (4.78)       $     (5.31)       $    (16.73)       $    (17.97)
                                                   ===========        ===========        ===========        ===========
Weighted average number of
 limited partnership Units                              35,136             35,647             35,136             35,748
                                                   ===========        ===========        ===========        ===========


</TABLE>


                                      - 4 -

<PAGE>

<TABLE>


                                NTS-PROPERTIES V,
                         A Maryland Limited Partnership


                            STATEMENTS OF CASH FLOWS

<CAPTION>


                                                                     Three Months Ended                     Nine Months Ended
                                                                       September 30,                          September 30,
                                                                       -------------                          -------------


                                                                 1997                1996               1997                1996
                                                                 ----                ----               ----                ----
                                                                   
<S>                                                        <C>                 <C>                 <C>                 <C>          
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                   $   (169,818)       $   (191,054)       $   (593,794)       $   (648,777)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
   Provision for doubtful accounts                                   --               3,110                  --               3,110
   Write-off of unamortized loan costs                               --              50,118                  --              50,118
   Amortization of capitalized leasing
     costs                                                        5,203               5,225              15,607              13,532
      Depreciation and amortization                             418,783             414,843           1,248,673           1,265,470
      Changes in assets and liabilities:
        Cash and equivalents - restricted                      (119,714)           (125,733)           (361,579)           (396,032)
        Accounts receivable                                      14,411             (17,326)             99,586              97,184
        Other assets                                             39,321              17,308              51,082            (100,880)
        Accounts payable - operations                            66,103              18,394              89,383              49,140
        Security deposits                                         3,251               9,902              24,862               8,955
        Other liabilities                                       276,093             154,561             568,425             417,154
                                                           ------------        ------------        ------------        ------------

   Net cash provided by operating
      activities                                                533,633             339,348           1,142,245             758,974
                                                           ------------        ------------        ------------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and
 amenities                                                       (8,721)           (134,656)           (185,796)           (264,509)
Decrease in cash and equivalents -
 restricted                                                          --                  --                  --              13,721
                                                           ------------        ------------        ------------        ------------

   Net cash used in investing activities                         (8,721)           (134,656)           (185,796)           (250,788)
                                                           ------------        ------------        ------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES
Increases in mortgages payable                                       --          12,046,020                  --          18,546,020
Principal payments on mortgages and
  notes payable                                                (266,364)        (11,758,447)           (788,520)        (18,447,526)
Additions to loan costs                                              --            (206,417)                 --            (268,903)
Repurchase of limited partnership Units                              --              (7,020)                 --             (56,970)
                                                           ------------        ------------        ------------        ------------

   Net cash provided by (used in)
      financing activities                                     (266,364)             74,136            (788,520)           (227,379)
                                                           ------------        ------------        ------------        ------------

   Net increase in cash and equivalents                         258,548             278,828             167,929             280,807

CASH AND EQUIVALENTS, beginning of period                       225,197             220,310             315,816             218,331
                                                           ------------        ------------        ------------        ------------
   
CASH AND EQUIVALENTS, end of period                        $    483,745        $    499,138        $    483,745        $    499,138
                                                           ============        ============        ============        ============

Interest paid on a cash basis                              $    440,121        $    502,490        $  1,337,530        $  1,582,947
                                                           ============        ============        ============        ============


</TABLE>



                                      - 5 -

<PAGE>



                                NTS-PROPERTIES V,
                         A Maryland Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS


The financial  statements included herein should be read in conjunction with the
Partnership's  1996 Annual Report.  In the opinion of the general  partner,  all
adjustments (only consisting of normal recurring  accruals) necessary for a fair
presentation  have been made to the  accompanying  financial  statements for the
three months and nine months ended September 30, 1997 and 1996.

1.   Use of Estimates in the Preparation of Financial Statements
     -----------------------------------------------------------

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during the reporting period.
     Actual results could differ from those estimates.

2.   Cash and Equivalents - Restricted
     ---------------------------------

     Cash and equivalents - restricted represents funds received for residential
     security  deposits  and  funds  which  have  been  escrowed  with  mortgage
     companies for property taxes in accordance with the loan agreements.

3.   Interest Repurchase Reserve
     ---------------------------

     Pursuant  to  Section  16.4  of  the  Partnership's  Amended  and  Restated
     Agreement of Limited Partnership,  the Partnership  established an Interest
     Repurchase  Reserve.  Through  September  30,  1997,  the  Partnership  has
     repurchased a total of 270 Units for $99,900. Repurchased Units are retired
     by the  Partnership,  thus  increasing  the  share  of  ownership  of  each
     remaining investor.

4.   Mortgages and Note Payable
     --------------------------

     Mortgages and note payable consist of the following:



                                               September 30,    December 31,
                                                   1997             1996
                                                   ----             ----
     Mortgage payable with an insurance 
     company,  bearing interest at a fixed 
     rate of 7.65%, due February 1, 2008,
     secured by land and building              $ 4,662,794     $  4,876,477

     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 8.125%, due August 1, 2008,
     secured by land and building                3,938,265        4,101,627

     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 8.125%, due August 1, 2008,
     secured by land and building                3,774,852        3,931,435

     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 8.125%, due August 1, 2008,
     secured by land and building                3,660,462        3,812,300


                              (Continued next page)


                                      - 6 -

<PAGE>


4.   Mortgages and Note Payable - Continued
     --------------------------------------

                                              September 30,    December 31,
                                                   1997            1996
                                                   ----            ----
     Mortgage payable with an insurance 
     company,  bearing interest at a fixed 
     rate of 7.5% due December 5, 2003, 
     secured by land, buildings and
     amenities                                $  2,860,449    $  2,893,401

     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 7.5% due December 5, 2003,
     secured by land, buildings and
     amenities                                   1,707,731       1,727,404

     Note payable to a bank, bearing
     interest at the Prime Rate, due
     February 1, 2009, secured by land
     and building                                1,295,258       1,345,687
                                              ------------    ------------

                                              $ 21,899,811    $ 22,688,331
                                              ============    ============

     The Prime Rate was 8.5% at September 30, 1997 and was 8.25% at December 31,
     1996.

     Based on the borrowing  rates  currently  available to the  Partnership for
     mortgages  with  similar  terms,  the  fair  value  of  long-term  debt  is
     approximately $23,300,000.

5.   Related Party Transactions
     --------------------------

     Pursuant to an agreement with the Partnership,  property management fees of
     $252,239  and $254,162  for the nine months  ended  September  30, 1997 and
     1996,  respectively,  were paid to NTS Development Company, an affiliate of
     the  general  partner of the  Partnership.  The fee is equal to 5% of gross
     revenues  from  residential  properties  and  6%  of  gross  revenues  from
     commercial  properties.  Also  pursuant to an  agreement,  NTS  Development
     Company  will receive a repair and  maintenance  fee equal to 5.9% of costs
     incurred which relate to capital improvements. The Partnership has incurred
     $17,283 and $14,747 as a repair and  maintenance fee during the nine months
     ended September 30, 1997 and 1996,  respectively,  and has capitalized this
     cost as part of land, buildings and amenities.









                              (Continued next page)








                                      - 7 -

<PAGE>



5.   Related Party Transactions - Continued
     --------------------------------------

     As  permitted  by an  agreement,  the  Partnership  also  was  charged  the
     following  amounts from NTS  Development  Company for the nine months ended
     September 30, 1997 and 1996.  These  charges  include items which have been
     expensed  as  operating   expenses  -  affiliated   or   professional   and
     administrative expenses affiliated and items which have been capitalized as
     other assets or as land, buildings and amenities.



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

          Administrative               $ 213,853              $ 163,425
          Leasing                        175,730                167,680
          Property manager               267,286                234,029
          Other                            4,832                 23,604
                                        --------               --------

                                       $ 661,701              $ 588,738
                                        ========               ========


6.   Commitments and Contingencies
     -----------------------------

     Philip  Crosby  Associates,  Inc.  ("Crosby")  leased  100%  of  University
     Business   Center   Phase  II.  The   business   center  is  owned  by  the
     Lakeshore/University II (L/U II) Joint Venture in which the Partnership has
     a 69% interest. The original lease term was for seven years, and the tenant
     took occupancy in April 1991. During 1994, 1995 and 1996, Crosby sub-leased
     a portion of the business center. Currently, Crosby has sub-leased, through
     the end of their lease term,  approximately  85,000 square feet  (including
     approximately 10,000 square feet of mezzanine space) of University Business
     Center Phase II's approximately 88,000 square feet of net rentable area (or
     96%). Of the total being sub-leased,  approximately  73,000 square feet (or
     86%) is being leased by Full Sail Recorders,  Inc.  ("Full Sail"),  a major
     tenant at University Business Center Phase I. Through December 1996, Crosby
     continued to make rent payments  pursuant to the original lease terms.  The
     Joint Venture received notice that Crosby did not intend to pay full rental
     due under the original  lease  agreement  from and after January 1997.  The
     rental income from this property  accounted  for  approximately  15% of the
     Partnership's  total  revenues  during 1996.  The Joint Venture  instituted
     legal action against Crosby to seek resolution of the situation.  See below
     for a further  discussion  regarding the current status of the  litigation.
     Although the Joint Venture does not presently have lease agreements (except
     as noted below) with the sub-lessees noted above,  beginning  February 1997
     rent payments from these  sub-lessees  have been made directly to the Joint
     Venture. The Joint Venture is currently  negotiating directly with the sub-
     lessees to enter into lease agreements for the space presently  sublet.  At
     this  time,  the  future  leasing  and tenant  finish  costs  which will be
     required to release  this space are  unknown  except as noted below for the
     negotiations with Full Sail.

     In December  1995,  Full Sail signed a 33 month lease with the L/U II Joint
     Venture for the  approximately  41,000 square feet it currently  sub-leases
     from Crosby.  In November 1996,  Full Sail signed a lease  amendment  which
     increased the square  footage from 41,000 square feet to 48,000 square feet
     and extended the lease term from 33 months to 76 months.  In November 1996,
     Full Sail also  signed a 52 month  lease  for an  additional  approximately
     21,000 square feet it presently  sub-leases  from Crosby.  Both lease terms
     commence  April  1998  when the  Crosby  lease  ends.  As part of the lease
     negotiations,  Full Sail will receive a total of $450,000 in special tenant
     allowances ($200,000 resulting from the original lease signed December 1995
     and $250,000  resulting from the lease  amendment  signed  November  1996).
     Approximately  $92,000 of the total  allowance is to be  reimbursed by Full
     Sail to the L/U II Joint Venture. The Partnership's  proportionate share of
     the net commitment ($450,000 less

                                      - 8 -

<PAGE>



6.   Commitments and Contingencies - Continued
     -----------------------------------------

     $92,000) is approximately $247,000 or 69%. The tenant allowance will be due
     and  payable  to Full  Sail  pursuant  to the  previously  mentioned  lease
     agreements,  as  appropriate  invoices for tenant finish costs  incurred by
     Full Sail are  submitted to the L/U II Joint  Venture.  The source of funds
     for this commitment is expected to be cash flow from operations and/or cash
     reserves.

     Crosby has  abandoned  its business  and sold all or most of its  operating
     assets and has  informed the Joint  Venture  that Crosby may be  insolvent.
     During the third quarter of 1997, a conditional settlement was reached at a
     mediation conference with Crosby and its corporate parent, whereby, subject
     to the Joint Venture's  acceptance of the settlement  terms,  the corporate
     parent  has  agreed to pay a portion  of  Crosby's  liability  to the Joint
     Venture in full  satisfaction  of all claims  against Crosby and any of its
     affiliates.  The amount of the proposed  settlement is  substantially  less
     than the aggregate  liability of Crosby to the Joint Venture resulting from
     Crosby's  default  under its lease.  As a result,  the Joint Venture may be
     forced  to  seek  out  additional   sources  of  capital  to  fund  ongoing
     operations,  including, without limitation, from loans, the sale of assets,
     additional capital  contributions of its partners and/or the admission of a
     new  partner  or  partners,  or from  other  sources.  There is no  present
     assurance that any such needed capital will be available.


7.   Subsequent Event
     ----------------

     Subsequent to September 30, 1997, the L/U II Joint Venture  informed Crosby
     and its  corporate  parent  that it accepted  the terms of the  conditional
     settlement,  whereby  Crosby's  parent paid to the L/U II Joint Venture the
     sum of  $300,000  in full  satisfaction  of all  claims.  These  funds were
     received by the L/U II Joint Venture on October 23, 1997.

                                      - 9 -

<PAGE>



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Results of Operations
---------------------

The occupancy levels at the Partnership's  properties as of September 30 were as
follows:


                                                      1997             1996
                                                      ----             ----
Wholly-owned Properties
-----------------------

Commonwealth Business Center Phase II                   75%             90%

University Business Center Phase I                     100%             98%

Property Owned in Joint Venture
with NTS-Properties IV (Ownership %
at September 30, 1997)
------------------------------------

The Willows of Plainview Phase II (90%)                 90%             96%

Properties Owned Through Lakeshore/
University II Joint Venture (L/U II
Joint Venture) (Ownership % at
September 30, 1997)
-----------------------------------

Lakeshore Business Center Phase I (69%)                 99%             97%

Lakeshore Business Center Phase II (69%)                96%             83%

University Business Center Phase II (69%)               99%             99%

The rental and other income  generated by the  Partnership's  properties for the
three months and nine months ended September 30, 1997 and 1996 was as follows:


                                      Three Months Ended     Nine Months Ended
                                         September 30,         September 30,
                                         -------------         -------------

                                        1997      1996       1997        1996
                                       ------    ------     ------      ------
Wholly-owned Properties
-----------------------

Commonwealth Business Center
  Phase II                           $ 143,043 $ 160,983  $  406,621  $  392,953

University Business Center Phase I   $ 381,508 $ 355,076  $1,150,743  $1,069,250

Property Owned in Joint Venture
with NTS-Properties IV (Ownership
% at September 30, 1997)
----------------------------------

The Willows of Plainview
  Phase II (90%)                     $ 310,459 $ 303,860  $  907,840  $  873,419

Properties Owned Through
Lakeshore/University II Joint
Venture (L/U II Joint Venture)
(Ownership % at September 30,
1997)
------------------------------

Lakeshore Business Center
  Phase I (69%)                      $ 252,139 $ 237,867  $  738,665  $  720,035

Lakeshore Business Center
  Phase II (69%)                     $ 241,900 $ 201,317  $  719,161  $  580,731

University Business Center
  Phase II (69%)                     $ 119,897 $ 210,762  $  296,396  $  626,636

Revenues shown in the table above for  properties  owned through a joint venture
represent only the Partnership's percentage interest in those revenues.

                                     - 10 -

<PAGE>



Results of Operations - Continued
---------------------------------

The 15%  decrease in  occupancy at  Commonwealth  Business  Center Phase II from
September  30, 1996 to September  30, 1997 is a result of five tenant move- outs
totalling  approximately  25,200 square feet. The five move-outs consist of four
tenants  vacating  at the end of the lease  term  (23,600  square  feet) and one
tenant  (approximately 1,600 square feet) vacating the premises prior to the end
of the lease term due to bankruptcy.  There was no accrued income connected with
this lease.  The  move-outs are  partially  offset by four new leases  totalling
approximately 16,500 square feet. Included in this total is a one-year lease for
approximately 11,000 square feet. Average occupancy decreased from 90% (1996) to
74% (1997) for the three  months  ended  September 30 and from 75% (1996) to 73%
(1997) for the nine months ended  September 30. The increase in rental and other
income at  Commonwealth  Business  Center II for the nine months ended September
30,  1997  compared  to the same  period in 1996 is a result of an  increase  in
common area expense  reimbursements.  Tenants at  Commonwealth  Business  Center
Phase II reimburse the Partnership for common area expenses as part of the lease
agreements.  The  decrease in rental and other income at  Commonwealth  Business
Center Phase II for the three months ended September 30, 1997 as compared to the
same period in 1996 is due primarily to the decrease in average occupancy.

The 2%  increase  in  occupancy  at  University  Business  Center  Phase  I from
September 30, 1996 to September 30, 1997 is a result of one new lease  totalling
approximately 1,400 square feet. Average occupancy at University Business Center
Phase I  increased  from 97% (1996) to 100%  (1997) for the three  months  ended
September  30 and from 95%  (1996)  to 100%  (1997)  for the nine  months  ended
September  30. The  increase in rental and other income at  University  Business
Center Phase I for the three months and nine months ended  September 30, 1997 as
compared to the same periods in 1996 is primarily due to the increase in average
occupancy.

The Willows of Plainview Phase II's occupancy decreased from 96% as of September
30, 1996 to 90% as of September 30, 1997.  Average occupancy  decreased from 96%
(1996) to 91% (1997) for the three months ended  September 30 and decreased from
95% (1996) to 91% (1997) for the nine month  period.  Occupancy  at  residential
properties fluctuate on a continuous basis.  Period-ending occupancy percentages
represent occupancy only on a specific date; therefore, it is more meaningful to
consider average occupancy  percentages  which are  representative of the entire
period's results. In the opinion of the General Partner of the Partnership,  the
decrease in occupancy is only a temporary  fluctuation  and does not represent a
downward  trend.  The  increase  in rental  and other  income at The  Willows of
Plainview Phase II for the three months and nine months ended September 30, 1997
as  compared  to the same  periods in 1996 is  primarily  due to an  increase in
income from fully  furnished  units and an increase  in rental  rates  partially
offset  by  the  decrease  in  average  occupancy.  Fully  furnished  units  are
apartments which rent at an additional premium above base rent.

The 2% increase in occupancy at Lakeshore Business Center Phase I from September
30, 1996 to September 30, 1997 can be  attributed  to five new leases  totalling
approximately  7,500  square feet and an  expansion  by a current  tenant of its
existing space totalling  approximately 2,100 square feet.  Partially offsetting
the new leases are three tenants  vacating  prior to the end of the lease term -
one due to a downsizing  decision by the tenant's  parent  company (1,200 square
feet - tenant paid the L/U II Joint Venture a lease termination fee [recorded as
rental income] of approximately  $7,000 of which the Partnership'  proportionate
share is $4,800 or 69%),  one due to a decision by  management to allow a tenant
to terminate its lease early to accommodate a new long-term tenant (1,900 square
feet - tenant paid the L/U II Joint Venture a lease termination fee [recorded as
rental income] of approximately $5,000 of which the Partnership's  proportionate
share



                                     - 11 -

<PAGE>



Results of Operations - Continued
---------------------------------

is approximately  $3,500 or 69%) and one due to bankruptcy  (5,000 square feet -
tenant ceased rental  payments).  The write-off of accrued income connected with
these leases was not significant. Average occupancy at Lakeshore Business Center
Phase I  increased  from 97%  (1996) to 98% (1997)  for the three  months  ended
September  30 and  decreased  from 98%  (1996) to 96%  (1997) for the nine month
period.  The increase in rental and other income at  Lakeshore  Business  Center
Phase I for the  three  months  and nine  months  ended  September  30,  1997 as
compared  to the same  periods  in 1996 is due to an  increase  in  common  area
expense  reimbursements  and an increase in fees collected on lease terminations
(discussed  above).  Tenants at Lakeshore  Business Center Phase I reimburse the
L/U II Joint Venture for common area expenses as part of the lease agreement.

The 13%  increase  in  occupancy  at  Lakeshore  Business  Center  Phase II from
September  30, 1996 to September  30, 1997 can be  attributed to five new leases
totaling  approximately  17,000 square feet which includes  approximately  5,700
square feet in  expansions by Lambda  Physik,  a current  tenant.  Lambda Physik
leases  nearly  12,700  square  feet and has  become the  largest  tenant in the
building  occupying  approximately  13% of the building's  total rentable square
feet. Partially offsetting the new leases is one tenant move-out,  at the end of
the lease term,  of  approximately  4,800  square  feet.  Average  occupancy  at
Lakeshore  Business  Center Phase II increased from 81% (1996) to 95% (1997) for
the three months ended  September 30 and increased from 78% (1996) to 93% (1997)
for the nine month period.  The increase in rental and other income at Lakeshore
Business  Center Phase II for the three  months and nine months ended  September
30,  1997 as  compared  to the  same  periods  in 1996 is due  primarily  to the
increase in average occupancy.

As of September 30, 1997,  Lakeshore  Business Center Phase II has approximately
4,200 square feet of additional space leased by a tenant who currently  occupies
approximately  1,300 square feet in Lakeshore Business Center Phase I. The lease
is for six years and the tenant is expected to take occupancy  during the fourth
quarter of 1997.  With the new lease,  the business  center's  occupancy  should
improve to 100%.

Philip Crosby  Associates,  Inc.  ("Crosby") leased 100% of University  Business
Center  Phase II. The original  lease term was for seven  years,  and the tenant
took occupancy in April 1991. As a result of Crosby downsizing and sub-leasing a
portion of its leased  space,  occupancy  has  decreased to 99% at September 30,
1997 and 1996.  During  January  1997,  Crosby  vacated the  remaining  space it
occupied at the business  center.  See below for a further  discussion of Crosby
and its leased space.

The decrease in rental and other income at University  Business  Center Phase II
for the three months and nine months ended September 30, 1997 as compared to the
same periods in 1996 is due to the  following.  Through the end of 1996,  Crosby
continued  to make rent  payments  pursuant to the original  lease term.  During
1996, the Joint Venture  received  notice that Crosby did not intend to pay full
rental due under the lease  agreement from and after January 1997.  Although the
Joint Venture does not presently have lease  agreements  (except as noted below)
with Crosby's sub-tenants,  beginning February 1997, rent payments from Crosby's
sub-tenants (see discussion below) are being made directly to the Joint Venture,
which are substantially less than what Crosby owed. Currently, the Joint Venture
is  recognizing  income  to the  extent  of what is  being  collected  from  the
sub-tenants.  The  decrease in rental and other income for the nine month period
is also due to the fact that  approximately  $70,000 of accrued income connected
with the Crosby lease was written-off during the first quarter of 1997, of which
the Partnership's proportionate share is approximately $48,000 or 69%.



                                     - 12 -

<PAGE>



Results of Operations - Continued
----------------------------------

In cases of tenants who cease making rental  payments or abandon the premises in
breach of their lease,  the Partnership  pursues  collection  through the use of
collection agencies or other remedies available by law when practical.  In cases
where tenants have vacated as a result of bankruptcy,  the Partnership has taken
legal  action when it was thought  there could be a possible  collection.  There
have been no funds recovered as a result of these actions during the nine months
ended September 30, 1997 and 1996.

Current  occupancy  levels are considered  adequate to continue the operation of
the Partnership's  properties without the need of any additional  financing.  In
the opinion of the General  Partner of the  Partnership,  the occupancy level at
Commonwealth Business Center Phase II is not indicative of trends in the area in
which the property is located.  See the Liquidity and Capital  Resources section
of  this  item  for  a  discussion   regarding  the  cash  requirements  of  the
Partnership's current debt financings.

The change in  interest  and other  income for the three  months and nine months
ended  September  30,  1997 as  compared  to the  same  periods  in 1996 was not
significant.

Operating  expenses  increased  for the nine months ended  September 30, 1997 as
compared to the same period in 1996 due primarily to increased  janitorial costs
at Commonwealth Business Center Phase II, increased utility expenses and heating
and air conditioning  repairs and maintenance costs at Lakeshore Business Center
Phase I and increased  legal fees at University  Business Center Phase II (which
primarily relate to the Crosby default - see discussion  below). The increase in
operating  expenses  can  also be  attributed  to  increased  replacement  costs
(carpet,  vinyl and landscaping) along with increased  expenses  associated with
fully furnished units at The Willows of Plainview Phase II. Partially offsetting
the increase in operating  expenses are  decreased  exterior  painting  costs at
University Business Center Phase I and decreased  janitorial costs at University
Business  Center Phase II. The change in operating  expenses for the three month
period was not significant.

The  increase in operating  expenses - affiliated  for the three months and nine
months ended  September  30, 1997 as compared to the same periods in 1996 is due
primarily to increased  leasing costs at  Commonwealth  Business Center Phase II
and increased property management costs at all of the Partnership's  properties.
Operating  expenses - affiliated are expenses incurred for services performed by
employees of NTS Development Company, an affiliate of the General Partner of the
Partnership.

The change in the amortization of capitalized leasing costs for the three months
and nine months ended September 30, 1997 as compared to the same periods in 1996
was not significant.

The  decrease in interest  expense  for the three  months and nine months  ended
September  30,  1997 as compared to the same  periods in 1996 is  primarily  the
result of the lower interest rate on the permanent  financings  obtained in July
1996 by the L/U II Joint  Venture  (8.125%  compared  to  10.6% on the  previous
debt).  The  decrease in interest  expense can also be  attributed  to continued
principal  payments on the mortgages and note payable of the Partnership and its
Joint Venture  properties.  See the Liquidity and Capital  Resources  section of
this item for details regarding the Partnership's debt.

Management  fees are  calculated as a percentage of cash  collections;  however,
revenue  for  reporting  purposes  is on the  accrual  basis.  As a result,  the
fluctuations of revenues  between  periods will differ from the  fluctuations of
management fee expense.



                                     - 13 -

<PAGE>



Results of Operations - Continued
---------------------------------

The changes in real  estate  taxes for the three  months and nine  months  ended
September 30, 1997 as compared to the same periods in 1996 were not significant.

The increase in professional  and  administrative  expenses for the three months
and nine months ended September 30, 1997 as compared to the same periods in 1996
is the result of increased outside accounting expenses.

The increase in professional  and  administrative  expenses - affiliated for the
three  months and nine months ended  September  30, 1997 as compared to the same
periods in 1996 is primarily the result of increased salary costs.  Professional
and  administrative  expenses - affiliated  are  expenses  incurred for services
performed by employees of NTS Development  Company,  an affiliate of the General
Partner.

The changes in depreciation  and  amortization  expense for the three months and
nine months  ended  September  30, 1997 as compared to the same  periods in 1996
were not significant.  Depreciation is computed using the  straight-line  method
over the  estimated  useful lives of the assets which are 10 - 30 years for land
improvements, 30 years for buildings, 5 - 30 years for building improvements and
5 - 30 years for amenities.  The aggregate cost of the Partnership's  properties
for Federal tax purposes is approximately $39,800,000.

The 1996 write-off of unamortized loan costs (recorded as an extraordinary item)
relates  to  loan  costs  associated  with  the  Lakeshore/University  II  Joint
Venture's  notes payable.  The  unamortized  loan costs were expensed due to the
fact that the notes were  retired in 1996 prior to their  maturity  (January 31,
1998) as a result of permanent  financings obtained by the Joint Venture in July
1996.

Liquidity and Capital Resources
-------------------------------

Cash provided by operating  activities  was $1,142,245 and $758,974 for the nine
months ended September 30, 1997 and 1996,  respectively.  No distributions  were
declared  during  the  nine  months  ended  September  30,  1997  or  1996.  The
Partnership plans to resume  distributions  once the Partnership has established
adequate  cash  reserves,  which would  include  funds for future  tenant finish
improvements,  and the cash flow from operations is sufficient,  in management's
opinion,  to pay  distributions.  Cash reserves (which are unrestricted cash and
equivalents  as shown on the  Partnership's  balance sheet at September 30) were
$483,745 and $499,138 at September 30, 1997 and 1996, respectively.

The  primary  source of future  liquidity  and  distributions  is expected to be
derived from cash generated by the Partnership's  properties after adequate cash
reserves are  established  for future  leasing  costs,  tenant  finish costs and
capital improvements.

As of September 30, 1997, the  Partnership had a mortgage loan with an insurance
company in the amount of  $4,662,794.  The  mortgage  payable is due February 1,
2008,  bears  interest  at a fixed rate of 7.65% and is  secured  by  University
Business  Center  Phase I.  Monthly  principal  payments  are based on a 12-year
amortization  schedule. At maturity, the mortgage will have been repaid based on
the current rate of amortization.

As of September 30, 1997, the L/U II Joint Venture had three mortgage loans with
an insurance  company.  The  outstanding  balances of the loans at September 30,
1997 were $5,688,669,  $5,452,624 and $5,287,393 for a total of $16,428,686. The
loans are recorded as a liability of the Joint Venture.



                                     - 14 -

<PAGE>



Liquidity and Capital Resources - Continued
-------------------------------------------

The  Partnership's  proportionate  share in the loans at September  30, 1997 was
$3,938,265, $3,774,852 and $3,660,462, respectively, for a total of $11,373,579.
The mortgages  bear interest at a fixed rate of 8.125%,  are due August 1, 2008,
and are secured by the assets of the Joint Venture.  Monthly principal  payments
are based upon a 12-year amortization schedule. At maturity, the loans will have
been repaid based on the current rate of amortization.

As of  September  30, 1997,  The Willows of Plainview  Phase II had two mortgage
loans each with an insurance company in the amount of $3,183,937 and $1,900,858.
The  mortgages  are  recorded  as  a  liability  of  the  Joint   Venture.   The
Partnership's  proportionate share of the mortgages as of September 30, 1997 was
$4,568,180 ($2,860,449 and $1,707,731). Both mortgages are due December 5, 2003,
currently  bear  interest  at a fixed rate of 7.5% and are  secured by the land,
buildings and amenities of the Joint Venture. Current monthly principal payments
on  both  mortgages  are  based  upon  a  27-year  amortization   schedule.  The
outstanding  balance at maturity based on the current rate of amortization would
be $4,449,434 ($2,786,095 and $1,663,339).

Subsequent  to  September  30,  1997,  The Willows of  Plainview  Phase II Joint
Venture  submitted an  application  with an insurance  company for $5,100,000 of
debt  financing.  The proceeds from the loan will be used to pay off the current
mortgages  (as  discussed  above)  which are secured by The Willows of Plainview
Phase II of approximately  the same amount.  The Joint Venture  anticipates that
the financing will be completed in the near term.

As of September 30, 1997, the  Partnership had a note payable with a bank in the
amount of $1,295,258.  The note payable is due February 1, 2009,  bears interest
at the Prime Rate and is secured by Commonwealth  Business Center Phase II ("CBC
II"). Under the loan agreement,  an additional  $200,000 is available for future
funding  and will be  disbursed  by  February  1, 1999 in one  advance  when the
following conditions are met: 1) CBC II reaches a minimum occupancy of 75% based
on leases  acceptable  to the bank with a  minimum  term of not less than  three
years.  2) CBC II achieves a minimum gross monthly base rental income of $37,500
for at least three months,  3) the Partnership is not in default on the loan and
4) the bank receives  tenant estoppel  certificates  from the tenants of CBC II.
Monthly  principal  payments are based on a 13-year  amortization  schedule.  At
maturity,  the  note  will  have  been  repaid  based  on the  current  rate  of
amortization.

The  majority  of  the  Partnership's   cash  flow  is  derived  from  operating
activities.  Cash  flows used in  investing  activities  are for  tenant  finish
improvements  and for  other  capital  additions  and are  funded  by  operating
activities.  Changes to current tenant finish improvements are a typical part of
any lease negotiation.  Improvements generally include a revision to the current
floor plan to  accommodate  a tenant's  needs,  new  carpeting  and paint and/or
wallcovering.  The extent and cost of these  improvements  are determined by the
size of the space and whether the  improvements are for a new tenant or incurred
because of a lease renewal.  Cash flows provided by investing activities in 1996
were the result of the  release of funds which were being  escrowed  for capital
expenditures,  leasing  commissions  and tenant  improvements  at the properties
owned by the L/U II Joint  Venture as  required by a 1995 loan  agreement.  Cash
flows provided by financing  activities are from debt  refinancings  obtained in
1996 (loans  secured by the assets of  Commonwealth  Business  Center  Phase II,
University  Business  Center Phase I and the L/U II Joint  Venture).  Cash flows
used in financing activities are for loan costs, principal payments on mortgages
and  notes  payable  and  the  repurchase  of  limited  partnership  Units.  The
Partnership does not expect any material changes in the mix and relative cost of
capital resources.



                                     - 15 -

<PAGE>



Liquidity and Capital Resources - Continued
-------------------------------------------

Due to the fact that no  distributions  were made during the nine  months  ended
September  30,  1997 and 1996,  the table  which  presents  that  portion of the
distribution  that  represents  a return  of  capital  on a  Generally  Accepted
Accounting Principle basis has been omitted.

As of September 30, 1997, the  Partnership  has accrued  approximately  $166,000
(included  in  the  accounts   payable  -  construction   balance)  for  certain
improvements to the undeveloped  land at the University Place  development.  The
purchaser  of the  approximately  1 acre tract of land at the  University  Place
development paid the cost of these improvements.  The Partnership will reimburse
the  purchaser  for these costs,  along with  interest at the Prime Rate, at the
earlier of (1) the start of  construction  of University  Business  Center Phase
III, (2) the sale by the Partnership of any portion of the remaining undeveloped
land, or (3) five years from the date of the Agreement (agreement dated November
1992).

The remaining  balance in accounts  payable - construction at September 30, 1997
represents  payables  that are a result of tenant  finish  improvements.  Tenant
finish improvements are a typical part of any lease negotiation.

Philip Crosby  Associates,  Inc.  ("Crosby") leased 100% of University  Business
Center  Phase II. The original  lease term was for seven  years,  and the tenant
took occupancy in April 1991.  During 1994, 1995 and 1996,  Crosby  sub-leased a
portion of the business center. Currently, Crosby has sub-leased through the end
of their lease term,  approximately 85,000 square feet (including  approximately
10,000 square feet of mezzanine space) of University  Business Center Phase II's
approximately  88,000  square feet of net rentable  area (or 96%).  Of the total
being sub-leased,  approximately  73,000 square feet (or 86%) is being leased by
Full Sail Recorders,  Inc. ("Full Sail"), a major tenant at University  Business
Center Phase I. Through  December 1996,  Crosby  continued to make rent payments
pursuant to the original lease terms.  During 1996,  the Joint Venture  received
notice  that  Crosby  did not intend to pay full  rental due under the  original
lease  agreement  from and after  January  1997.  The  rental  income  from this
property  accounted for approximately  15% of the  Partnership's  total revenues
during 1996.  The Joint Venture  instituted  legal action against Crosby to seek
resolution of this situation.  See below for a further discussion  regarding the
current status of the litigation.  Although the Joint Venture does not presently
have lease agreements  (except as noted below) with the sub-lessees noted above,
beginning  February  1997 rent payments  from these  sub-lessees  have been made
directly  to the Joint  Venture.  The Joint  Venture  is  currently  negotiating
directly  with the  sub-lessees  to enter  into lease  agreements  for the space
presently sublet. At this time, the future leasing and tenant finish costs which
will be required to release this space are unknown except as noted below for the
negotiations with Full Sail.

Crosby has abandoned  its business and sold all or most of its operating  assets
and has informed  the Joint  Venture  that Crosby may be  insolvent.  During the
third  quarter of 1997,  a  conditional  settlement  was  reached at a mediation
conference with Crosby and its corporate parent,  whereby,  subject to the Joint
Venture's acceptance of the settlement terms, the corporate parent has agreed to
pay a portion of Crosby's liability to the Joint Venture in full satisfaction of
all claims against Crosby and any of its affiliates.  The amount of the proposed
settlement is substantially  less than the aggregate  liability of Crosby to the
Joint Venture resulting from Crosby's default under its lease. As a result,  the
Joint  Venture may be forced to seek out  additional  sources of capital to fund
ongoing  operations,  including,  without  limitation,  from loans,  the sale of
assets, additional capital contributions of its partners and/or the admission of
a new partner or partners, or from other sources.  There is no present assurance
that any such needed capital will be available.


                                     - 16 -

<PAGE>



Liquidity and Capital Resources - Continued
-------------------------------------------

Subsequent to September 30, 1997, the L/U II Joint Venture  informed  Crosby and
its corporate  parent that it accepted the terms of the conditional  settlement,
whereby  Crosby's parent paid to the L/U II Joint Venture the sum of $300,000 in
full  satisfaction of all claims.  These funds were received by the L/U II Joint
Venture on October 23, 1997.

In  December  1995,  Full  Sail  signed a 33 month  lease  with the L/U II Joint
Venture  for  approximately  41,000  square  feet  of  the  space  it  currently
sub-leases  from Crosby.  In November 1996,  Full Sail signed a lease  amendment
which increased the square footage from 41,000 square feet to 48,000 square feet
and extended the lease term from 33 months to 76 months.  In November 1996, Full
Sail also signed a 52 month lease for an additional  approximately 21,000 square
feet it presently  sub-leases from Crosby.  Both lease terms commence April 1998
when  Crosby's  lease ends.  As part of the lease  negotiations,  Full Sail will
receive a total of $450,000 in special  tenant  allowances  ($200,000  resulting
from the original  lease signed  December 1995 and $250,000  resulting  from the
lease  amendment  signed  November  1996).  Approximately  $92,000  of the total
allowance  is to be  reimbursed  by Full Sail to the L/U II Joint  Venture.  The
Partnership's  proportionate share of the net commitment ($450,000 less $92,000)
is  approximately  $247,000 or 69%. The tenant allowance will be due and payable
to  Full  Sail  pursuant  to  the  previously  mentioned  lease  agreements,  as
appropriate invoices for tenant finish costs incurred by Full Sail are submitted
to the L/U II Joint  Venture.  The  sources  of funds  for  this  commitment  is
expected to be cash flows from operations and/or cash reserves.

The  Partnership  had no other material  commitments  for renovations or capital
improvements at September 30, 1997.

In the next twelve  months,  the demand on future  liquidity is  anticipated  to
increase  as a result  of the  commitments  made  for a  special  tenant  finish
allowance (see above). A demand on future liquidity is also expected as a result
of the Crosby  situation  at  University  Business  Center  Phase II  (discussed
above). Additionally, the Partnership will continue its efforts to lease current
unoccupied space at its commercial properties.  At this time, the future leasing
and tenant  finish  costs which will be required to renew the current  leases or
obtain  new  tenants  are  unknown.  It is  anticipated  that the cash flow from
operations  and  cash  reserves  will be  sufficient  to meet  the  needs of the
Partnership.

The following  describes the efforts being taken by the  Partnership to increase
the occupancy levels at the Partnership's  properties.  At Commonwealth Business
Center  Phase II, the leasing and  renewal  negotiations  are handled by leasing
agents, employees of NTS Development Company,  located in Louisville,  Kentucky.
The leasing agents are located in the same city as the property. All advertising
is  coordinated  by  NTS  Development   Company's  marketing  staff  located  in
Louisville,  Kentucky. At University Business Center Phases I and II in Orlando,
Florida,  the  Partnership  has an on-site  leasing  agent,  an  employee of NTS
Development  Company,  who makes calls to potential  tenants,  negotiates  lease
renewals with current tenants and manages local  advertising with the assistance
of the NTS  Development  Company's  marketing  staff.  The  leasing  and renewal
negotiations  at  Lakeshore  Business  Center  Phases I and II are  handled by a
leasing agent, an employee of NTS Development Company,  located at the Lakeshore
Business  Center  development.  At  the  Willows  of  Plainview  Phase  II,  the
Partnership has an on-site leasing staff,  employees of NTS Development Company,
who handle all  on-site  visits  from  potential  tenants,  make visits to local
companies to promote  fully  furnished  units,  negotiate  lease  renewals  with
current  residents and coordinate  all local  advertising  with NTS  Development
Company's marketing staff.


                                     - 17 -

<PAGE>



Liquidity and Capital Resources - Continued
-------------------------------------------

Leases  at the  Partnership's  commercial  properties  provide  for  tenants  to
contribute toward the payment of common area expenses, insurance and real estate
taxes.  Leases at the Partnership's  Florida commercial  properties also provide
for rent  increases  which are based upon increases in the consumer price index.
These  lease  provisions,  along  with  the fact  that  residential  leases  are
generally for a period of one year, should protect the Partnership's  operations
from the impact of inflation and changing prices.

The Partnership owns approximately 6.21 acres of land adjacent to the University
Place development in Orlando, Florida which is zoned for commercial development.
Included in the cost of $2,163,709 is land cost, capitalized interest and common
area costs.  The Partnership  currently plans to use the remaining land to build
University  Business  Center Phase III but this decision will be based on market
conditions,   availability  of  financing  and  availability  of  the  necessary
resources  from  the  Partnership.  If  market  conditions  are  favorable,  the
Partnership will also consider the sale of such land to another developer.

The L/U II Joint  Venture owns  approximately  6.2 acres of land adjacent to the
Lakeshore  Business  Center  development  in  Ft.   Lauderdale,   Florida.   The
Partnership's proportionate interest at September 30, 1997 in the asset held for
sale is $1,152,868. The Joint Venture continues to actively market the asset for
sale.

Some of the statements included in Item 2, Management's  Discussion and Analysis
of Financial Condition and Results of Operations,  and elsewhere in this report,
may be  considered  to be  "forward-looking  statements"  since such  statements
relate to matters which have not yet occurred. For example,  phrases such as the
Partnership "anticipates",  "believes" or "expects" indicate that it is possible
that the event  anticipated,  believed  or expected  may not occur.  Should such
event not occur,  then the result which the  Partnership  expected  also may not
occur or occur in a different manner, which may be more or less favorable to the
Partnership.  The  Partnership  does not undertake any  obligations  to publicly
release the result of any revisions to these forward looking statements that may
be made to reflect any future events or circumstances.

Any forward-looking  statements included in Management's Discussion and Analysis
of Financial  Condition and Results of Operations,  or elsewhere in this report,
which reflect  management's best judgement based on factors known, involve risks
and uncertainties. Actual results could differ materially from those anticipated
in any forward-looking  statements as a result of a number of factors, including
but not  limited  to those  discussed  below.  Any  forward-looking  information
provided by the  Partnership  pursuant to the safe harbor  established by recent
securities legislation should be evaluated in the context of these factors.

The Partnership's principal activity is the leasing and management of commercial
office  buildings,  business  centers  and  an  apartment  complex.  If a  major
commercial  tenant  or a large  number of  apartment  lessees  default  on their
leases,  the  Partnership's   ability  to  make  payments  due  under  its  debt
agreements, payment of operating costs and payment of other partnership expenses
would be directly  impacted.  A lessee's ability to make payments are subject to
risks  generally  associated  with real  estate,  many of which are  beyond  the
control of the  Partnership,  including  general or local  economic  conditions,
competition, interest rates, real estate tax rates, other operating expenses and
acts of God.





                                     - 18 -

<PAGE>



Liquidity and Capital Resources - Continued
-------------------------------------------

A portion of the Partnership's debt service is based on variable interest rates;
any  fluctuations in the rate are beyond the control of the  Partnership.  These
variances could, for example,  impact the Partnership's  projected cash flow and
cash  requirements  as well as its ability to pay  distributions  to the limited
partners.



















                                     - 19 -

<PAGE>



PART II.  OTHER INFORMATION

1.      Legal Proceedings

        None

2.      Changes in Securities

        None

3.      Defaults upon Senior Securities

        None

4.      Submission of Matters to a Vote of Security Holders

        None

5.      Other Information

        None

6.      Exhibits and Reports on Form 8-K

          (a)  Exhibits

                 Exhibit 27. Financial Data Schedule

          (b)    Reports on Form 8-K

                 No reports on Form 8-K were filed during the three months ended
                 September 30, 1997.






                                     - 20 -



<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  NTS-Properties V, a Maryland Limited Partnership,  has duly caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                  NTS-PROPERTIES V, a Maryland Limited
                                   Partnership
                                              (Registrant)


                                  By:     NTS-Properties Associates V,
                                          General Partner
                                          By: NTS Capital Corporation,
                                                General Partner


                                                /s/ John W. Hampton
                                                John W. Hampton
                                                Senior Vice President



Date:    November 12, 1997






                                     - 21 -

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