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, 1998
                               

                                       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 21
Total Pages: 22





<PAGE>



                                TABLE OF CONTENTS


                                                                     Pages

                                     PART I

Item 1.     Financial Statements

            Balance Sheets and Statement of Partners' Equity
              As of September 30, 1998 and December 31, 1997             3

            Statements of Operations
              For the three months and nine months ended
              September 30, 1998 and 1997                                4

            Statements of Cash Flows
              For the three months and nine months ended
              September 30, 1998 and 1997                                5

            Notes To Financial Statements                              6-9

Item 2.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations                      10-20


                                     PART II

Item 3. Defaults Upon Senior Securities                                 21

Item 6. Exhibits and Reports on Form 8-K                                21

Signatures                                                              22


                                      - 2 -

<PAGE>



PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
<TABLE>

                                NTS-PROPERTIES V,
                         A Maryland Limited Partnership

                BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
<CAPTION>


                                              As of               As of
                                        September 30, 1998  December 31, 1997*
                                        ------------------  ------------------
<S>                                           <C>             <C>                            
ASSETS

Cash and equivalents                          $   581,899     $   473,362
Cash and equivalents - restricted                 469,103          69,858
Accounts receivable, net of allowance
 for doubtful accounts of $4,487 (1998)
 and $13,304 (1997)                               236,705         291,504
Land, buildings and amenities, net
 (Note 7)                                      25,069,602      25,876,019
Asset held for sale                             1,152,868       1,152,868
Other assets                                      755,024         849,287
                                              -----------     -----------

                                              $28,265,201     $28,712,898
                                              ===========     ===========

LIABILITIES AND PARTNERS' EQUITY

Mortgages and note payable                    $20,958,283     $21,662,821
Accounts payable - operations                     201,710         284,829
Accounts payable - construction                    61,759          34,486
Security deposits                                 180,124         167,597
Other liabilities                                 595,226         189,570
                                              -----------     -----------

                                               21,997,102      22,339,303

Commitments and Contingencies

Partners' equity                                6,268,099       6,373,595
                                              -----------     -----------

                                              $28,265,201     $28,712,898
                                              ===========     ===========
</TABLE>
<TABLE>
<CAPTION>

                                      Limited         General
                                      Partners        Partner          Total
                                      --------        -------          -----
PARTNERS' EQUITY
<S>                                <C>             <C>             <C>
Capital contributions, net of
 offering costs                    $ 30,582,037    $        100    $ 30,582,137
Net income (loss) - prior years      (8,554,517)         27,388      (8,527,129)
Net income - current year                71,709             724          72,433
Cash distributions declared to
 date                               (15,389,204)       (155,528)    (15,544,732)
Repurchase of limited
 partnership Units                     (314,610)             --        (314,610)
                                   ------------    ------------    ------------

Balances at September 30, 1998     $  6,395,415    $   (127,316)   $  6,268,099
                                   ============    ============    ============

<FN>

*Reference is made to the audited financial statements in the Form 10-K as filed
with the Commission on March 30, 1998.
</FN>
</TABLE>
                                      - 3 -

<PAGE>
<TABLE>


                                NTS-PROPERTIES V,
                         A Maryland Limited Partnership

                            STATEMENTS OF OPERATIONS


<CAPTION>


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

                                                                1998                 1997               1998               1997
                                                            ------------         -----------         ----------         -----------

<S>                                                          <C>                 <C>                 <C>                <C>
REVENUES:
 Rental income                                               $ 1,495,037         $ 1,446,249         $ 4,737,423        $ 4,210,201
 Interest and other income                                         7,017               6,543              28,597             17,999
                                                             -----------         -----------         -----------        -----------

                                                               1,502,054           1,452,792           4,766,020          4,228,200

EXPENSES:
   Operating expenses                                            312,032             303,927             893,096            871,281
   Operating expenses - affiliated                               135,470             146,198             404,965            435,347
 Write-off of unamortized land
   improvements and amenities                                     13,157                  --              13,452                 --
   Amortization of capitalized
   leasing costs                                                   3,703               5,203              11,107             15,607
   Interest expense                                              415,727             440,130           1,265,288          1,330,524
   Management fees                                                90,123              86,144             281,015            252,239
   Real estate taxes                                             134,821             136,780             402,735            410,342
   Professional and administrative
   expenses                                                       30,173              29,674              93,872             87,837
   Professional and administrative
   expenses - affiliated                                          49,820              55,771             159,794            170,144
   Depreciation and amortization                                 373,908             418,783           1,168,263          1,248,673
                                                             -----------         -----------         -----------        -----------

                                                               1,558,934           1,622,610           4,693,587          4,821,994
                                                             -----------         -----------         -----------        -----------

Net income (loss)                                            $   (56,880)        $  (169,818)        $    72,433        $  (593,794)
                                                             ===========         ===========         ===========        ===========

Net income (loss) allocated to
  the limited partners                                       $   (56,311)        $  (168,120)        $    71,709        $  (587,856)
                                                             ===========         ===========         ===========        ===========
Net income (loss) per limited
  partnership unit                                           $     (1.66)        $     (4.78)        $      2.07        $    (16.73)
                                                             ===========         ===========         ===========        ===========
Weighted average number of
  limited partnership units                                       33,994              35,136              34,581             35,136
                                                             ===========         ===========         ===========        ===========


</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,
                                                                     ------------------                    -----------------

                                                                   1998               1997              1998                1997
                                                               -----------        -----------        -----------        -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                            <C>                <C>                <C>                <C>
Net income (loss)                                              $   (56,880)       $  (169,818)       $    72,433        $  (593,794)
Adjustments to reconcile net income (loss)
  to net cash provided by operating
  activities:
   Write-off of unamortized land
     improvements and amenities                                     13,157                 --             13,452                 --
   Amortization of capitalized leasing
     costs                                                           3,703              5,203             11,107             15,607
      Depreciation and amortization                                373,908            418,783          1,168,263          1,248,673
      Changes in assets and liabilities:
        Cash and equivalents - restricted                         (134,318)          (119,714)          (399,245)          (361,579)
        Accounts receivable                                         28,181             14,411             54,799             99,586
        Other assets                                                27,369             39,321             50,298             51,082
        Accounts payable - operations                              (98,198)            66,103            (83,119)            89,383
        Security deposits                                           (7,013)             3,251             12,527             24,862
        Other liabilities                                           92,692            276,093            405,656            568,425
                                                               -----------        -----------        -----------        -----------

   Net cash provided by operating
      activities                                                   242,601            533,633          1,306,171          1,142,245
                                                               -----------        -----------        -----------        -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and
  amenities                                                        (53,620)            (8,721)          (323,604)          (185,796)
                                                               -----------        -----------        -----------        -----------

   Net cash used in investing activities                           (53,620)            (8,721)          (323,604)          (185,796)
                                                               -----------        -----------        -----------        -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in mortgages and note payable                                  --                 --            200,000                 --
Principal payments on mortgages and note
  payable                                                         (310,283)          (266,364)          (904,538)          (788,520)
Decrease (increase) in loan costs                                   (3,047)                --              8,438                 --
Repurchase of limited partnership Units                                 --                 --           (177,930)                --
                                                               -----------        -----------        -----------        -----------

   Net cash used in financing activities                          (313,330)          (266,364)          (874,030)          (788,520)
                                                               -----------        -----------        -----------        -----------

   Net increase (decrease) in cash and
      equivalents                                                 (124,349)           258,548            108,537            167,929

CASH AND EQUIVALENTS, beginning of period                          706,248            225,197            473,362            315,816
                                                               -----------        -----------        -----------        -----------

CASH AND EQUIVALENTS, end of period                            $   581,899        $   483,745        $   581,899        $   483,745
                                                               ===========        ===========        ===========        ===========

Interest paid on a cash basis                                  $   415,727        $   440,121        $ 1,264,981        $ 1,337,530
                                                               ===========        ===========        ===========        ===========

</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  1997 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, 1998 and 1997.

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  1) funds  received  for
      residential  security  deposits,  2) funds which have been  escrowed  with
      mortgage  companies  for  property  taxes  in  accordance  with  the  loan
      agreements and 3) funds reserved by the  Partnership for the repurchase of
      limited partnership Units.

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

      Pursuant  to  Section  16.4  of the  Partnership's  Amended  and  Restated
      Agreement of the Limited  Partnership,  the Partnership has established an
      Interest  Repurchase Reserve. On January 16, 1998, the Partnership elected
      to  resume  the  Repurchase  Program  and  fund  $30,000  to the  Interest
      Repurchase  Reserve.  On April 7, 1998, the Partnership elected to fund an
      additional $30,000 to the Interest Repurchase Reserve and on May 12, 1998,
      funded  an  additional   $11,850.   With  these  funds,   the  Partnership
      repurchased  479 Units at a price of $150 per Unit.  On May 26, 1998,  the
      Partnership elected to fund $96,000 to the Interest Repurchase Reserve and
      on June 1, 1998, the  Partnership  elected to fund an additional  $10,080.
      With the May 26 and June 1, 1998 fundings, the Partnership repurchased 663
      Units at a price of $160 per Unit. The offering  prices per Unit mentioned
      above were  established by the General  Partner in its sole discretion and
      do not purport to represent the fair market value or liquidation  value of
      the Unit.  From June 1996 to  September  30,  1998,  the  Partnership  has
      repurchased  a total of 1,882 Units for  $277,830.  Repurchased  Units are
      retired by the Partnership, thus increasing the percentage of ownership of
      each remaining limited partner investor.  The Interest  Repurchase Reserve
      was funded from cash reserves.  The balance in the  repurchase  reserve at
      September 30, 1998 was $100.














                                      - 6 -

<PAGE>



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

      Mortgages and note payable consist of the following:


                                                September 30,     December 31,
                                                    1998              1997
                                                ------------      -----------
     Mortgage payable with an insurance 
     company,  bearing interest at a fixed
     rate of 7.65%, due February 1, 2008, 
     secured by land and building (University  
     Business Center Phase I - see Note 7)     $  4,358,192        $  4,588,807
     
     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 8.125%, due August 1, 2008,
     secured by land and building                 3,704,429           3,881,569
     
     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 8.125%, due August 1, 2008,
     secured by land and building
     (University Business Center Phase II
     - see Note 7)                                3,550,718           3,720,508
     
     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 8.125%, due August 1, 2008,
     secured by land and building                 3,443,121           3,607,766
     
     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 7.2% due January 5, 2013,
     secured by land, buildings and
     amenities                                    2,796,550           2,871,146
     
     Mortgage payable with an insurance
     company, bearing interest at a fixed
     rate of 7.2% due January 5, 2013,
     secured by land, buildings and
     amenities                                    1,670,222           1,714,774
     
     Note payable to a bank, bearing
     interest at the Prime Rate, due
     February 1, 2009, secured by land
     and building (Commonwealth Business
     Center Phase II - see Note 7)                1,435,051           1,278,251
                                                -----------         -----------

                                               $ 20,958,283        $ 21,662,821
                                                ===========         ===========

     The Prime Rate was 8.25% at  September  30,  1998 and was 8.5% at December
     31, 1997.

     Based on the borrowing  rates  currently  available to the Partnership for
     mortgages   with  similar   terms,   the  fair  value  of  long-term  debt
     approximates carrying value.










                                      - 7 -

<PAGE>



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

      Pursuant to an agreement with the Partnership, property management fees of
      $281,015 and $252,239  for the nine months  ended  September  30, 1998 and
      1997, 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  $22,136 and $17,283 as a repair and  maintenance  fee during the
      nine  months  ended  September  30, 1998 and 1997,  respectively,  and has
      capitalized this cost as part of land, buildings and amenities.

      As  permitted  by an  agreement,  the  Partnership  also was  charged  the
      following  amounts from NTS Development  Company for the nine months ended
      September 30, 1998 and 1997.  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.



                                     1998                   1997
                                   --------               --------
          Administrative          $ 199,930              $ 213,853
          Leasing                   144,138                175,730
          Property manager          255,366                267,286
          Other                      16,498                  4,832
                                   --------               --------

                                  $ 615,932              $ 661,701
                                   ========               ========


6.    Commitment and Contingencies
      ----------------------------

      On September 8, 1998,  the  Partnership  and the  Lakeshore/University  II
      ("L/U II") Joint  Venture,  an  affiliate  of the  General  Partner of the
      Partnership,  entered into a contract  with Silver City  Properties,  Ltd.
      ("the  Purchaser"),  an  affiliate  of Full Sail  Recorders,  Inc.  ("Full
      Sail"), for the sale of University  Business Center Phases I and II office
      buildings and the Phase III vacant land for an aggregate purchase price of
      $18,751,000 (specifically the prices for each property were $9,776,000 for
      Phase I and Phase  III;  $8,975,000  for Phase  II).  University  Business
      Center  Phase I and  Phase III are  owned by the  Partnership.  University
      Business  Center  Phase  II is  owned  by the L/U II  Joint  Venture.  The
      Partnership owns a 69% interest in this joint venture. Full Sail currently
      occupies  28% and  83% of the net  rentable  area of  University  Business
      Center Phases I and II,  respectively.  Concurrent with the signing of the
      contract,  the Purchaser  deposited  $50,000 into an escrow account.  This
      deposit will be applied to the purchase price at closing. The Purchaser is
      to close on the  properties  on or before  November  7,  1998.  See Note 7
      Subsequent Events. The contract permits the Purchaser to defer the closing
      of  the  purchase  of  the  Phase  III  vacant  land  until  the  18-month
      anniversary of the closing on Phase I and II.

      As of September 30, 1998, Lakeshore Business Center Phase I had a commit-
      ment of approximately $98,000 of tenant finish improvements resulting from
      a 3,049 square foot expansion by a current tenant. The Partnership's
      proportionate share of the commitment is approximately $68,000 or 69%. The
      project is expected to be completed during the fourth quarter of 1998. The
      source of funds for this project is expected to be cash flow from 
      operations and/or cash reserves.

      As of September 30, 1998,  the L/U II Joint Venture had a contract for the
      sale of approximately 2.4 acres of land adjacent to the Lakeshore Business
      Center  development for a purchase price of $528,405.  Concurrent with the
      signing of the contract,  the purchaser  deposited  into an escrow account
      $10,000.  This deposit  will be applied to the purchase  price at closing.
      The  purchaser  has until  November  17, 1998 to  determine if the land is
      satisfactory for their use. If the purchaser determines that it is

                                      - 8 -

<PAGE>




6.    Commitment and Contingencies - Continued
      ----------------------------------------

      satisfactory,  the contract requires that they proceed,  at their cost, to
      have the property  re-zoned to allow for a self-storage  facility.  If the
      purchaser is unable to obtain the re-zoning, they may cancel the contract.
      The General  Partner of the  Partnership  has met with city  officials who
      seem  interested in the project and have voiced a willingness  to consider
      the re-zoning  request.  If the re-zoning is granted,  the purchaser is to
      close on the property by February 1, 1999 or deposit an additional $10,000
      with the escrow agent for a 30-day delay.  The contract also allows for an
      additional  deposit of  $10,000  for one more delay in closing to April 3,
      1999.  The  Partnership  has a 69%  interest  in the  Joint  Venture.  The
      Partnership  has not yet determined  what the use of net proceeds would be
      from the sale of the land.

7.    Subsequent Events
      -----------------

      On October 6, 1998 pursuant to the contract executed on September 8, 1998,
      the Partnership and the  Lakeshore/University II ("L/U II") Joint Venture,
      an affiliate of the General  Partner of the  Partnership,  sold University
      Business  Center  Phases  I  and  II  office   buildings  to  Silver  City
      Properties,  Ltd. ("the Purchaser"),  an affiliate of Full Sail Recorders,
      Inc.  ("Full  Sail"),  for an  aggregate  purchase  price  of  $17,950,000
      ($8,975,000 for Phase I and $8,975,000 for Phase II).  University Business
      Center Phase I was owned by the  Partnership.  University  Business Center
      Phase II was owned by the L/U II Joint  Venture  of which the  Partnership
      owns a 69%  interest.  As of  September  30, 1998,  the carrying  value of
      University  Business Center Phase I land and building and University Phase
      III vacant  land was  approximately  $5,500,000  and  University  Business
      Center Phase I was encumbered by a mortgage  payable of $4,358,192.  As of
      September 30, 1998, the carrying value of University Business Center Phase
      II land and building was approximately  $7,300,000 and was encumbered by a
      mortgage payable of $5,128,872 ($5,000,000 and $3,550,718),  respectively,
      are  recorded on the  accompanying  balance  sheet).  Other net assets and
      liabilities  associated with these properties included on the accompanying
      balance  sheet  at  September  30,  1998  were not  significant.  The gain
      associated with this sale will be reflected in the fourth quarter of 1998.
      Portions of the proceeds  from this sale were  immediately  used to pay in
      full the outstanding debt (including interest and prepayment penalties) of
      $10,468,000  ($4,633,000 for Phase I and $5,835,000 for Phase II) on these
      properties.  The  Partnership  also  paid in full an  outstanding  debt of
      approximately $1,448,000 secured by Commonwealth Business Center Phase II,
      a building owned by the Partnership. It is anticipated that a distribution
      of approximately  $35 to $50 per Unit will be paid to the Limited Partners
      during the first quarter of 1999.  The  Partnership  will  consider  other
      alternatives  for the use of the remainder of the proceeds from this sale,
      including repayment of additional Partnership debt or possible development
      costs  associated  with  Lakeshore  Business  Center  III  which  is to be
      constructed on land owned by the L/U II Joint Venture. As permitted by the
      contract,  the  Purchaser has deferred the closing of the Phase III vacant
      land for a period of up to  18-months  after the closing  date of Phases I
      and II.

      On October 13, 1998, the  Partnership  and ORIG,  LLC, an affiliate of the
      Partnership,  commenced  a  Tender  Offer to  purchase  up to 1,200 of the
      Partnership's  limited  partnership  Units at a price  of $205  per  Unit.
      Although  the  Partnership  and ORIG,  LLC  believes  that  this  price is
      appropriate,  the price of $205 per Unit may not equate to the fair market
      value  or the  liquidation  value  of  the  Unit.  Approximately  $288,000
      ($246,000 to purchase 1,200 Units plus approximately  $42,000 for expenses
      associated  with the Offer) is required to purchase all 1,200  Units.  The
      Partnership  will purchase the first 600 Units  tendered and will fund its
      purchases and its portion of the expenses from cash reserves. If more than
      600 Units are tendered,  ORIG,  LLC will purchase up to an additional  600
      Units.  If more than 1,200 Units are tendered,  the  Partnership and ORIG,
      LLC may  choose  to  acquire  the  additional  Units  on the  same  terms.
      Otherwise,  tendered  Units  will be  purchased  on a pro rata basis up to
      1,200.  Units that are acquired by the Partnership will be retired.  Units
      that are  acquired by ORIG,  LLC will be held by it. The General  Partner,
      NTS-Properties  Associates V, does not intend to participate in the Tender
      Offer. The Tender Offer will expire January 11, 1999 unless extended.

                                      - 9 -

<PAGE>
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         ---------------------------------------------------------------
         RESULTS OF OPERATIONS
         ---------------------

Management's  discussion  and  analysis of  financial  condition  and results of
operations  included herein should be read in conjunction with the Partnership's
1997 Annual Report.

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

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


                                                       1998          1997
                                                       ----          ----
Wholly-owned Properties
-----------------------

Commonwealth Business Center Phase II                    77%          75%

University Business Center Phase I                      100%         100%

Property Owned in Joint Venture
with NTS-Properties IV (Ownership
% at September 30, 1998)
-------------------=--------------

The Willows of Plainview Phase II (90%)                  89%          90%

Properties Owned Through Lakeshore/
University II Joint Venture (L/U II
Joint Venture) (Ownership % at
September 30, 1998)
------------------------------------

Lakeshore Business Center Phase I (69%)                  82%          99%

Lakeshore Business Center Phase II (69%)                 86%          96%

University Business Center Phase II (69%)                88%          99%

The rental and other income  generated by the  Partnership's  properties for the
three months and nine months ended September 30, 1998 and 1997 was as follows:


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

                                    1998         1997        1998        1997
                                   ------       ------     --------    --------
Wholly-owned Properties
-----------------------

Commonwealth Business Center
  Phase II                        $ 141,937   $ 143,043  $  455,396   $  406,621

University Business Center
  Phase I                         $ 389,410   $ 381,508  $1,171,585   $1,150,743

Property Owned in Joint Venture
with NTS-Properties IV (Ownership
% at September 30, 1998)
---------------------------------

The Willows of Plainview
  Phase II (90%)                  $ 313,362   $ 310,459  $  897,439   $  907,840

                              (Continued next page)

                                     - 10 -

<PAGE>


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

                                    Three Months Ended        Nine Months Ended
                                       September 30,            September 30,
                                    ------------------        -----------------
                                     
                                   1998          1997          1998       1997
                                 --------      --------      --------   --------

Properties Owned Through
Lakeshore/University II Joint
Venture (L/U II Joint Venture)
(Ownership % at September 30,
1998)
-----------------------------

Lakeshore Business Center
  Phase I (69%)                 $ 217,657     $ 252,139     $ 794,834  $ 738,665

Lakeshore Business Center       $ 243,970     $ 241,900     $ 906,648  $ 719,161
  Phase II (69%)

University Business Center      $ 192,889     $ 119,897     $ 530,061  $ 296,396
  Phase II (69%)

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

The 2% increase in  occupancy  at  Commonwealth  Business  Center  Phase II from
September  30,  1997 to  September  30,  1998,  is a result  of five new  leases
totaling  approximately  12,400 square feet. Partially offsetting the new leases
is one tenant who  vacated  approximately  11,200  square feet at the end of the
lease term.  Average  occupancy  increased from 74% (1997) to 77% (1998) for the
three months  ended  September 30 and from 73% (1997) to 80% (1998) for the nine
months  ended  September  30.  The  increase  in  rental  and  other  income  at
Commonwealth  Business  Center Phase II for the nine months ended  September 30,
1998 as  compared  to the same  period  in 1997 is a result of the  increase  in
average occupancy and 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.  Rental  and  other  income at
Commonwealth  Business  Center Phase II for the three months ended September 30,
1998 as compared to the same period in 1997 remained fairly constant.

Occupancy at  University  Business  Center I was 100% at September  30, 1997 and
September  30, 1998.  Average  occupancy at University  Business  Center Phase I
remained  constant at 100% for the three months and 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, 1998 as compared to
the same  periods in 1997 is primarily  due to  increased  rental rates on lease
renewals during the twelve month period.

The Willows of Plainview  Phase II's  occupancy  decreased from 90% at September
30, 1997 to 89% at September  30, 1998.  Average  occupancy  decreased  from 91%
(1997) to 88% (1998) for the three months ended September 30 and from 91% (1997)
to 85% (1998) for the nine months ended  September 30.  Occupancy at residential
properties fluctuates 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.  The  decrease  in rental and other  income at The Willows of
Plainview  Phase II for the nine months ended  September 30, 1998 as compared to
the same period in 1997 is primarily due to a decrease in average occupancy. The
decrease  in rental and other  income at The  Willows of  Plainview  Phase II is
partially offset by an increase in income from fully-furnished units. Rental and
other income for the three months  ended  September  30, 1998 as compared to the
same period in 1997 increased due to an increase in income from  fully-furnished
units.  The increase is partially  offset by the decrease in average  occupancy.
Fully-furnished  units are apartments which rent at an additional  premium above
base rent.  Therefore,  it is possible  for average  occupancy  to decrease  and
revenues to increase when the number of fully-furnished units has increased.


                                     - 11 -

<PAGE>



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

The  17%  decrease  in  occupancy  at  Lakeshore  Business  Center  Phase I from
September  30,  1997 to  September  30,  1998 can be  attributed  to nine tenant
move-outs  totaling  approximately  25,000 square feet.  Two of the nine tenants
vacated  prior to the end of the lease term.  The  write-off  of accrued  income
connected  with these leases was not  significant.  The remaining  seven tenants
vacated at the end of the lease term. The move-outs are partially offset by four
new leases  totaling  approximately  7,300  square  feet.  Average  occupancy at
Lakeshore  Business  Center Phase I decreased  from 98% (1997) to 81% (1998) for
the three  months  ended  September 30 and from 96% (1997) to 90% (1998) for the
nine month period. The increase in rental and other income at Lakeshore Business
Center Phase I for the nine months ended  September  30, 1998 as compared to the
same period in 1997 is due  primarily  to a $61,000  lease  buy-out  received in
February 1998 (the Partnership's proportionate share is approximately $42,200 or
69%).  The lease  buy-out  income was received from a tenant whose lease expires
during July 1999; however,  the tenant has notified the Partnership that it will
vacate  the  space  at the  end  of  1998  due  to the  fact  that  it  will  be
consolidating  several of its regional offices. The increase in rental and other
income  for the nine  month  period is also due to an  increase  in common  area
expense reimbursements. Tenants at the business center reimburse the Partnership
for common  area  expenses as part of the lease  agreements.  The  increases  in
rental and other  income for the nine month period are  partially  offset by the
decrease in average  occupancy.  The decrease in rental and other income for the
three months ended  September 30, 1998 as compared to the same period in 1997 is
primarily a result of the decrease in average occupancy.

As of September 30, 1998 Lakeshore Business Center Phase I has 3,049 square feet
of additional  space leased to a current tenant.  The tenant is expected to take
occupancy of the additional  space during the fourth quarter of 1998.  With this
expansion,  the  business  center's  occupancy  should  improve to 85%.  See the
Liquidity  and  Capital  Resources  Section of this item for the  tenant  finish
commitment related to this lease.

The 10%  decrease  in  occupancy  at  Lakeshore  Business  Center  Phase II from
September  30, 1997 to September 30, 1998 can be attributed to five tenant move-
outs totaling  approximately  19,000 square feet. The move-outs consist of three
tenants  (4,500 square feet) vacating prior to the end of the lease term. One of
the three tenants  (2,300 square feet) is continuing to pay rent through the end
of the lease term  (February  2000).  There was no write-off  of accrued  income
associated with the other two leases.  One tenant (4,500 square feet) vacated at
the end of the lease term and one tenant negotiated a lease termination  (10,000
square feet - the tenant paid the L/U II Joint Venture a lease  termination  fee
{recorded as rental income} of $185,000 of which the Partnership's proportionate
share is approximately  $128,000 or 69%). Partially offsetting the move-outs are
three new leases  totaling  approximately  10,000 square feet which  includes an
expansion  of  approximately  2,000  square  feet by the  largest  tenant in the
building  which  occupies  approximately  15% of the  building's  total rentable
square feet.  Average occupancy at Lakeshore  Business Center Phase II decreased
from 95%  (1997) to 90%  (1998)  for the three  months  ended  September  30 and
increased from 93% (1997) to 95% (1998) for the nine month period.  The increase
in rental and other  income at Lakeshore  Business  Center Phase II for the nine
months  ended  September  30, 1998 as compared to the same period in 1997 is due
primarily to the termination fee paid to the L/U II Joint Venture,  as discussed
above.  Also  contributing  to the  increase  in rental  and other  income is an
increase  in  average   occupancy   and  an  increase  in  common  area  expense
reimbursements.  Tenants at the business  center  reimburse the  partnership for
common area expenses as part of the lease agreements. Rental and other income at
Lakeshore Business Center Phase II for the three months ended September 30, 1998
as compared to the same period in 1997 remained fairly constant.

In the  opinion of the  General  Partner of the  Partnership,  the  decrease  in
occupancy  at  Lakeshore  Business  Center  Phases I and II is only a  temporary
fluctuation and does not represent a downward occupancy trend.





                                     - 12 -

<PAGE>



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

The 11%  decrease in  occupancy  at  University  Business  Center  Phase II from
September  30, 1997 to September  30, 1998 is the result of one of Philip Crosby
Associates,  Inc's  ("Crosby")  sub-tenants  (approximately  9,000  square feet)
vacating at the end of Crosby's lease term (March 31, 1998) and one tenant move-
out of approximately 3,700 square feet. The move-outs are partially offset by an
expansion  of  approximately  3,700  square  feet  by  one  of  Crosby's  former
subtenants, Full Sail Recorders,  Inc.("Full Sail"). In 1995 and 1996, Full Sail
had signed  leases with the Joint  Venture for the  approximately  73,000 square
feet it was leasing from  Crosby.  These leases  commenced  April 1, 1998.  (See
below for a discussion  regarding  Crosby and Full Sail).  Average  occupancy at
University  Business Center Phase II decreased from 99% (1997) to 86% (1998) for
the three months ended  September 30 and decreased from 99% (1997) to 91% (1998)
for the nine month period. The increase in rental and other income at University
Business  Center  Phase II for the  nine  months  ended  September  30,  1998 as
compared  to the  same  period  in  1997  is  primarily  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 was approximately $48,000 or 69%. The increase in rental and
other income at  University  Business  Center Phase II for the nine month period
can also be  attributed  to two leases  that became  effective  during 1998 at a
higher  rental  rate than the  sub-tenant  rate and an  increase  in common area
expense  reimbursements.  The increase in rental and other income at  University
Business  Center  Phase II for the three  months  ended  September  30,  1998 as
compared  to the same  period in 1997 is a result of an  increase in common area
expense reimbursements.  Sub-tenants at the business center were not required to
reimburse the  Partnership  for common area expenses.  However,  as part of Full
Sail's lease agreement,  which commenced April 1, 1998, Full Sail is required to
reimburse the  Partnership  for such  expenses,  attributing  to the increase in
rental and other income beginning the second quarter of 1998.

Philip Crosby Associates,  Inc. ("Crosby")  previously leased 100% of University
Business  Center Phase II, which is owned by the  Lakeshore/University  II ("L/U
II") Joint Venture.  The original lease term was for seven years, and the tenant
took occupancy in April 1991.  During 1994,  1995 and 1996,  Crosby  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%)
was  leased  by Full Sail  Recorders,  Inc.  ("Full  Sail"),  a major  tenant at
University  Business  Center  Phase I. During  this period and 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,  including  and
subsequent to January 1997. Although the Joint Venture did not have formal lease
agreements  with the  sub-lessees  noted  above  during this  period,  beginning
February 1997 and through  March 31, 1998 rent  payments from these  sub-lessees
were made directly to the Joint Venture.

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 possible collection.  There have
been no funds  recovered  as a result of these  actions  during the nine  months
ended September 30, 1998 and 1997.

Current  occupancy  levels are considered  adequate to continue the operation of
the Partnership's  properties without the need of any additional financing.  See
the  Liquidity  and  Capital  Resources  section  of this item for a  discussion
regarding the cash requirements of the Partnership's current debt financings.





                                     - 13 -

<PAGE>



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

Interest and other income includes income from  short-term  investments  made by
the Partnership with cash reserves.  Interest and other income increased for the
nine  months  ended  September  30,  1998 as compared to the same period in 1997
primarily as a result of an increase in cash reserves  available for investment.
Interest  and other  income for the three  months  ended  September  30, 1998 as
compared to the same period in 1997 remained fairly constant.

Operating expenses for the three months and nine months ended September 30, 1998
as compared to the same periods in 1997 remained fairly constant.

The  decrease in  operating  expenses -  affiliated  for the nine  months  ended
September  30, 1998 as compared to the same period in 1997 is due  primarily  to
decreased  leasing costs at Commonwealth  Business Center Phase II and decreased
property  management  costs at all of the  Partnership's  properties  except for
Commonwealth Business Center Phase II and the Willows of Plainview Phase II. The
decrease in operating expenses - affiliated for the three months ended September
30,  1998 as  compared  to the  same  period  in 1997 is a result  of  decreased
property  management  costs at Lakeshore  Business  Center Phase I and decreased
leasing costs at  Commonwealth  Business Center Phase II.  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 1998  write-off  of  unamortized  land  improvements  and  amenities  can be
attributed  to The Willows of Plainview  Phase II. The write-off was a result of
new property  signage,  updating the model apartments and pool  renovations.  In
order to complete these  projects,  it was necessary to replace assets which had
not been fully  depreciated.  This  results in a write-off of  unamortized  land
improvements and amenities.

Amortization  of capitalized  leasing costs for the three months and nine months
ended September 30, 1998 as compared to the same periods in 1997 remained fairly
constant.

The  decrease in interest  expense  for the three  months and nine months  ended
September  30,  1998 as compared to the same  periods in 1997 is  primarily  the
result of continued  principal payments on the mortgages and note payable of the
Partnership and its Joint Venture  properties.  The decrease is partially offset
by an additional  draw of $200,000  from a note payable in  accordance  with the
terms of the note. 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.

Real estate taxes, professional and administrative expenses and professional and
administrative expenses-affiliated remained fairly constant for the three months
and nine months  ended  September  30,  1998 as compared to the same  periods in
1997.  Professional  and  administrative  expenses  -  affiliated  are  expenses
incurred for services  performed by  employees of NTS  Development  Company,  an
affiliate of the General Partner.

Depreciation and amortization expense for the three months and nine months ended
September 30, 1998 as compared to the same periods in 1997  decreased  primarily
as a result  of a  portion  of the  Partnership's  assets  having  become  fully
depreciated.  The  decrease  is  partially  offset  by the  addition  of  assets
(primarily tenant improvements at the commercial properties and various projects
at the residential property)at all of the Partnership's properties. Depreciation
is computed using the  straight-line  method over the estimated  useful lives of
the assets which are 5 - 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 $40,000,000.


                                     - 14 -

<PAGE>



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

As of September 30, 1998, the  Partnership had a mortgage loan with an insurance
company in the amount of  $4,358,192.  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.

Subsequent to September 30, 1998, the  Partnership  used proceeds  received from
the sale of University  Business  Center Phase I to repay in full the $4,358,192
mortgage payable. See below for the details of this sale.

As of September 30, 1998, the L/U II Joint Venture had three mortgage loans with
an insurance  company.  The  outstanding  balances of the loans at September 30,
1998 were $5,350,902,  $5,128,872 and $4,973,452 for a total of $15,453,226. The
loans are  recorded  as a  liability  of the Joint  Venture.  The  Partnership's
proportionate  share  in  the  loans  at  September  30,  1998  was  $3,704,429,
$3,550,718  and  $3,443,121  respectively,  for  a  total  of  $10,698,268.  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.

Subsequent  to  September  30,  1998,  the L/U II Joint  Venture  used  proceeds
received from the sale of University  Business  Center Phase II to repay in full
the $5,128,872 mortgage payable. See below for the details of this sale.

As of September  30, 1998,  The Willows of Plainview  Phase II Joint Venture had
two mortgage  loans each with an insurance  company in the amount of  $3,112,118
and $1,858,694.  The mortgages are recorded as a liability of the Joint Venture.
The Partnership's  proportionate share of the mortgages as of September 30, 1998
was $4,466,772  ($2,796,550 and  $1,670,222).  Both mortgages are due January 5,
2013,  currently  bear  interest  at a fixed rate of 7.2% and are secured by the
land,  buildings and amenities of the Joint Venture.  Current monthly  principal
payments on both mortgages are based upon a 15-year  amortization  schedule.  At
maturity,  the  note  will  have  been  repaid  based  on the  current  rate  of
amortization.

As of September 30, 1998, the  Partnership had a note payable with a bank in the
amount  of  $1,435,051.  On  February  1,  1998,  the  Partnership  received  an
additional  $200,000 funding from this note payable in accordance with the terms
of the loan agreement.  The note payable is due February 1, 2009, bears interest
at the Prime Rate and is  secured  by  Commonwealth  Business  Center  Phase 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.

Subsequent to September 30, 1998, the  Partnership  used proceeds  received from
the sale of University  Business  Center Phase I to repay in full the $1,435,051
note payable. See below for the details of this sale.

Cash provided by operating activities was $1,306,171 and $1,142,245 for the nine
months ended September 30, 1998 and 1997, respectively. No distribution has been
made since March 31, 1994. 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 $581,899 and $483,745 at September 30, 1998
and 1997, respectively.

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.

                                     - 15 -

<PAGE>



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

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 financing activities are from a decrease in loan
costs (refund of application fee) and from a debt funding received in 1998 (loan
secured by the assets of Commonwealth Business Center Phase II). Cash flows used
in  financing  activities  are for  principal  payments  on  mortgages  and note
payable,  the  repurchase  of  limited  partnership  Units and loan  costs.  The
Partnership does not expect any material changes in the mix and relative cost of
capital  resources  except for the repayment of various  mortgages  payable,  as
discussed above.

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.

Due to the fact that no  distributions  were made during the nine  months  ended
September  30,  1998 and 1997,  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.

All divisions of NTS, the General Partner of the Partnership,  are reviewing the
effort  necessary to prepare our  information  systems (IT) and  non-information
technology  with embedded  technology  (ET) for the Year 2000.  The  information
technology  solutions have been addressed  separate from the Year 2000 since the
company saw the need to move to more advanced  management and accounting systems
made available by new technology and software  developments during the decade of
the 1990's.

The PILOT software system,  purchased in the early 1990's, needed to be replaced
by a windows based network system both for our headquarters  functions and other
locations.  The real estate accounting system developed,  sold, and supported by
the Yardi Company of Santa  Barbara,  California  has been selected to supercede
PILOT. The Yardi system is compatible with Year 2000 and beyond.  This system is
being  implemented with the help of third party  consultants and should be fully
operational by the third quarter of 1999. Our system for multi-family  apartment
locations was converted to GEAC's Power Site System  earlier in 1998 and is Year
2000 compliant.

The few remaining  systems not addressed by these conversions are being modified
by our in-house staff of programmers.  The Hewlett Packard 3000 system, used for
PILOT and custom applications, was purchased in 1997 and will be part of our new
network.  It will be retained as long as necessary to assure  smooth  operations
and has been upgraded to meet Year 2000 requirements.

All risks identified with information technology are believed to be addressed by
these plans.

The cost of these advances in our systems  technology is not all attributable to
the Year  2000  issue  since  we had  already  identified  the need to move to a
network  based system  regardless of the Year 2000.  The costs  involved will be
approximately  $60,000  over  1998  and  1999.  These  costs  include  hardware,
software, internal staff and outside consultants.

NTS  property  management  staff has been  surveying  our  vendors  to  evaluate
embedded technology in our alarm systems,  HVAC controls,  telephone systems and
other  computer  associated  facilities.  In a few  cases,  equipment  is  being
replaced. In some cases circuitry is being upgraded.  The cost involved is still
being evaluated. There are no known significant risks that are currently without
solutions.  Management  anticipates that applications  involving ET will be Year
2000 compliant by the third quarter of fiscal year 1999.





                                     - 16 -

<PAGE>



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

We are also currently  addressing the Year 2000 readiness of third parties whose
business interruption could have a material negative impact on our business. All
significant  vendors and tenants have  indicated  that they will be compliant by
the end of 1999. Such assurances are being evaluated and documented.

Management has determined that at our current state of readiness,  the need does
not  presently  exist for a  contingency  plan. We will continue to evaluate the
need for such a plan.

Despite diligent preparation,  unanticipated  third-party failures, more general
public   infrastructure   failures  or  failure  to  successfully  conclude  our
remediation  efforts as planned  could  have a  material  adverse  impact on our
results  of  operations,  financial  conditions  and/or  cash  flows in 1999 and
beyond.

As of September 30, 1998, Lakeshore Business Center Phase I had a commitment for
approximately  $98,000  of tenant  finish  improvements  resulting  from a 3,049
square foot expansion by a current tenant. The Partnership's proportionate share
of the commitment is approximately $68,000 or 69%. The project is expected to be
completed  during  the  fourth  quarter  of 1998.  The  source of funds for this
project is expected to be cash flow from operations and/or cash reserves.

The  Partnership  had no other material  commitments  for renovations or capital
improvements at September 30, 1998.

In the next twelve  months,  the demand on future  liquidity is  anticipated  to
increase as a result of future leasing activity at Commonwealth  Business Center
Phase II and Lakeshore Business Center Phases I and II. 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 Partnership  also  anticipates a demand of future liquidity as a result of a
planned renovation of the community's clubhouse at The Willows of Plainview.  At
this time, the cost and extent of the renovation  has not been  determined.  The
cost of the common clubhouse renovation will be shared  proportionately by Phase
I and Phase II of The Willows of Plainview. The source of funds for this project
will be cash flow from operations and/or cash reserves.

Pursuant to Section 16.4 of the Partnership's  Amended and Restated Agreement of
the Limited Partnership,  the Partnership has established an Interest Repurchase
Reserve.  On January 16, 1998, the Partnership  elected to resume the Repurchase
Program and fund an additional $30,000 to the Interest  Repurchase  Reserve.  On
April  7,  1998,  the  Partnership  elected  to  fund  $30,000  to the  Interest
Repurchase Reserve and on May 12, 1998, funded an additional $11,850. With these
funds, the Partnership repurchased 479 Units at a price of $150 per Unit. On May
26, 1998,  the  Partnership  elected to fund $96,000 to the Interest  Repurchase
Reserve  and on June 1, 1998,  the  Partnership  elected  to fund an  additional
$10,080. With the May 26 and June 1, 1998 fundings, the Partnership  repurchased
663 Units at a price of $160 per Unit.  The offering  prices per Unit  mentioned
above were  established by the General Partner in its sole discretion and do not
purport to  represent  the fair market value or  liquidation  value of the Unit.
From June 1996 to September 30, 1998, the Partnership has repurchased a total of
1,882 Units for $277,830. Repurchased Units are retired by the Partnership, thus
increasing  the  percentage  of  ownership  of each  remaining  limited  partner
investor.  The Interest  Repurchase  Reserve was funded from cash reserves.  The
balance in the repurchase reserve at September 30, 1998 was $100.

On October  13,  1998,  the  Partnership  and ORIG,  LLC,  an  affiliate  of the
Partnership,   commenced  a  Tender  Offer  to  purchase  up  to  1,200  of  the
Partnership's  limited  partnership Units at a price of $205 per Unit.  Although
the Partnership and ORIG, LLC believes that this price is appropriate, the price
of $205 per Unit may not  equate  to the fair  market  value or the  liquidation
value of the Unit. Approximately $288,000 ($246,000 to purchase 1,200 Units plus

                                     - 17 -

<PAGE>



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

approximately  $42,000 for  expenses  associated  with the Offer) is required to
purchase  all 1,200 Units.  The  Partnership  will  purchase the first 600 Units
tendered and will fund its  purchases  and its portion of the expenses from cash
reserves. If more than 600 Units are tendered,  ORIG, LLC will purchase up to an
additional 600 Units. If more than 1,200 Units are tendered, the Partnership and
ORIG,  LLC may  choose  to  acquire  the  additional  Units on the  same  terms.
Otherwise,  tendered  Units will be  purchased  on a pro rata basis up to 1,200.
Units that are  acquired  by the  Partnership  will be  retired.  Units that are
acquired by ORIG,  LLC will be held by it. The General  Partner,  NTS-Properties
Associates V, does not intend to  participate  in the Tender  Offer.  The Tender
Offer will expire January 11, 1999 unless extended.

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. 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.

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.

As of September 30, 1998,  the  Partnership  owned  approximately  6.21 acres of
land, adjacent to the University Place development in Orlando,  Florida which is
zoned for commercial development. See below for additional information regarding
the Phase III vacant land.

On September 8, 1998,  the  Partnership  and the L/U II Joint Venture ("L/U II")
entered into a contract with Silver City Properties,  Ltd. ("the Purchaser"), an
affiliate of Full Sail Recorders, Inc. ("Full Sail"), for the sale of University
Business  Center Phases I and II office  buildings and the Phase III vacant land
for an aggregate purchase price of $18,751,000 (specifically the prices for each
property were  $9,776,000  for Phase I and Phase III;  $8,975,000 for Phase II).
University  Business Center Phase I and Phase III are owned by the  Partnership.
University  Business  Center Phase II is owned by the L/U II Joint Venture.  The
Partnership  owns a 69%  interest  in this joint  venture.  Full Sail  currently
occupies  28% and 83% of the net rentable  area of  University  Business  Center
Phases I and II, respectively.  Concurrent with the signing of the contract, the
Purchaser deposited $50,000 into an escrow account. This deposit will be applied
to the purchase price at closing. The Purchaser is to close on the properties on
or before November 7, 1998. See below for additional  information regarding this
transaction.  The  contract  permits the  Purchaser  to defer the closing of the
purchase  of the Phase III vacant  land until the  18-month  anniversary  of the
closing on Phases I and II.

On October 6, 1998 pursuant to the contract  executed on September 8, 1998,  the
Partnership and the L/U II Joint Venture sold University  Business Center Phases
I and II office buildings to Silver City Properties,  Ltd. ("the Purchaser"), an
affiliate of Full Sail Recorders,  Inc. ("Full Sail"), for an aggregate purchase
price of  $17,950,000  ($8,975,000  for Phase I and  $8,975,000  for Phase  II).
University Business Center Phase I was owned by the Partnership. University

                                     - 18 -

<PAGE>



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

Business  Center  Phase II was  owned by the L/U II Joint  Venture  of which the
Partnership owns a 69% interest. As of September 30, 1998, the carrying value of
University  Business  Center Phase I land and building and University  Phase III
vacant land was approximately  $5,500,000 and University Business Center Phase I
was encumbered by a mortgage  payable of  $4,358,192.  As of September 30, 1998,
the carrying value of University  Business Center Phase II land and building was
approximately  $7,300,000 and was encumbered by a mortgage payable of $5,128,872
($5,000,000  and  $3,550,718),  respectively,  are recorded on the  accompanying
balance  sheet).  Other  net  assets  and  liabilities   associated  with  these
properties included on the accompanying balance sheet at September 30, 1998 were
not  significant.  The gain  associated  with this sale will be reflected in the
fourth quarter of 1998. Portions of the proceeds from this sale were immediately
used to pay in full the  outstanding  debt  (including  interest and  prepayment
penalties) of $10,468,000  ($4,633,000  for Phase I and $5,835,000 for Phase II)
on these  properties.  The Partnership  also paid in full an outstanding debt of
approximately  $1,448,000 on  Commonwealth  Business Center Phase II, a building
owned by the Partnership. It is anticipated that a distribution of approximately
$35 to $50 per  Unit  will be paid to the  Limited  Partners  during  the  first
quarter of 1999. The Partnership will consider other alternatives for the use of
the remainder of the proceeds from this sale,  including repayment of additional
Partnership  debt  or  possible  development  costs  associated  with  Lakeshore
Business Center III which is to be constructed on land owned by the L/U II Joint
Venture. As permitted by the contract, the Purchaser has deferred the closing of
the Phase III vacant land for a period of up to 18-months after the closing date
of Phase I and II.

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, 1998 in the asset held for
sale is $1,152,868. The Joint Venture continues to actively market the asset for
sale.  In  management's  opinion,  the net book value of the asset held for sale
approximates  the fair market value less cost to sell. See below for information
regarding a contract for the sale of a portion of this land.

As of September  30, 1998,  the L/U II Joint Venture had a contract for the sale
of  approximately  2.4 acres of land adjacent to the Lakeshore  Business  Center
development for a purchase price of $528,405. Concurrent with the signing of the
contract,  the purchaser deposited into an escrow account $10,000.  This deposit
will be  applied to the  purchase  price at  closing.  The  purchaser  has until
November 17, 1998 to determine if the land is satisfactory for their use. If the
purchaser  determines that it is satisfactory,  the contract  requires that they
proceed,  at  their  cost,  to  have  the  property  re-zoned  to  allow  for  a
self-storage facility. If the purchaser is unable to obtain the re-zoning,  they
may cancel the contract.  The General  Partner of the  Partnership  has met with
city officials who seem  interested in the project and have voiced a willingness
to consider the re-zoning request. If the re-zoning is granted, the purchaser is
to close on the  property by February 1, 1999 or deposit an  additional  $10,000
with the  escrow  agent for a 30-day  delay.  The  contract  also  allows for an
additional  deposit of  $10,000  for one more delay in closing to April 3, 1999.
The Partnership has a 69% interest in the Joint Venture. The Partnership has not
yet determined what the use of net proceeds would be from the sale of the land.

Some of the statements included in Item 2, Management's  Discussion and Analysis
of  Financial  Condition  and Results of  Operations,  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.

                                     - 19 -

<PAGE>



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

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 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.

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.








































                                     - 20 -

<PAGE>



PART II.  OTHER INFORMATION

8.      Defaults Upon Senior Securities
        -------------------------------

        None.

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

        (a)    Exhibits

               Exhibit 27. Financial Data Schedule

        (b)    Reports on Form 8-K

               Form 8-K was filed on  September  14,  1998 to report in Item 5
               that  the  Partnership  and the  Lakeshore/University  II Joint
               Venture  had  entered  into  two  contracts  with  Silver  City
               Properties,  Ltd. for the sale of  University  Business  Center
               Phases I and II office buildings and Phase III vacant land.

Items 1,2,4 and 5 are not applicable and have been omitted.


                                     - 21 -

<PAGE>



                                   SIGNATURES
                                   ----------

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  NTS-Properties  V 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/ Richard L. Good
                                              -------------------
                                              Richard L. Good
                                              President

                                              /s/ Lynda J. Wilbourn
                                              ---------------------
                                              Lynda J. Wilbourn
                                              Vice President
                                              Principal Accounting Officer



Date: November 13, 1998
      


                                     - 22 -

<PAGE>