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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2008

OR



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

Commission file number: 0-16467

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|California                                                     |  | 33-0098488                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|400 South El Camino Real, Suite 1100 San Mateo, California     |  | 94402-1708                          
|(Address of principal executive offices)                       |  | (Zip Code)                          

(650) 343-9300

(Registrants telephone number, including area code)

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition
of accelerated filer, large accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer   ̈            Accelerated Filer   ̈            Non-accelerated filer   ̈            Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes   ̈    No  x









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INDEX

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP



|           |  |                                                                                                       |  |         
|---------- |  | ----------------------------------------------------------------------------------------------------- |  | --------
|           |  |                                                                                                       |  | Page No.
|PART I     |  | FINANCIAL INFORMATION                                                                                 |  |         
|           |  |                                                                                                      
|Item 1.    |  | Consolidated Financial Statements of Rancon Realty Fund V (Unaudited):                                |  |         
|           |  |                                                                                                      
|           |  | Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007                            |  | 3       
|           |  |                                                                                                      
|           |  | Consolidated Statements of Operations for the three and nine months ended September 30, 2008 and
2007 |  | 4       
|           |  |                                                                                                      
|           |  | Consolidated Statement of Partners Equity for the nine months ended September 30, 2008               |  | 5       
|           |  |                                                                                                      
|           |  | Consolidated Statements of Cash Flows for the nine months ended September 30, 2008 and 2007           |  | 6       
|           |  |                                                                                                      
|           |  | Notes to Consolidated Financial Statements                                                            |  | 7-13    
|           |  |                                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                 |  | 14-17   
|           |  |                                                                                                      
|Item 3.    |  | Qualitative and Quantitative Disclosures About Market Risk                                            |  | 17      
|           |  |                                                                                                      
|Item 4.    |  | Controls and Procedures                                                                               |  | 18      
|           |  |                                                                                                      
|PART II    |  | OTHER INFORMATION                                                                                     |  |         
|           |  |                                                                                                      
|Item 1.    |  | Legal Proceedings                                                                                     |  | 18      
|           |  |                                                                                                      
|Item 1A.   |  | Risk Factors                                                                                          |  | 18      
|           |  |                                                                                                      
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                                           |  | 18      
|           |  |                                                                                                      
|Item 3.    |  | Defaults Upon Senior Securities                                                                       |  | 18      
|           |  |                                                                                                      
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                   |  | 18      
|           |  |                                                                                                      
|Item 5.    |  | Other Information                                                                                     |  | 18      
|           |  |                                                                                                      
|Item 6.    |  | Exhibits                                                                                              |  | 19      
|           | 
|SIGNATURES |  | 20                                                                                                   



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PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Balance Sheets

(in thousands,
except units outstanding)

(Unaudited)



|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                  |  | September 30,2008 |         |   | December 31,2007 |  
|Assets                                                                                                                            |  |                   |         |   |                  |   |         |  
|Investments in real estate:                                                                                                       |  |                   |         |   |                  |   |         |  
|Rental properties                                                                                                                 |  | $                 | 77,792  |   |                  | $ | 77,162  |  
|Accumulated depreciation                                                                                                          |  |                   | (22,595 | ) |                  |   | (20,418 | )
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Rental properties, net                                                                                                            |  |                   | 55,197  |   |                  |   | 56,744  |  
|Construction in progress                                                                                                          |  |                   | 5,813   |   |                  |   | 4,708   |  
|Land held for development                                                                                                         |  |                   | 1,043   |   |                  |   | 1,043   |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total investments in real estate                                                                                                  |  |                   | 62,053  |   |                  |   | 62,495  |  
|Cash and cash equivalents                                                                                                         |  |                   | 7,277   |   |                  |   | 8,256   |  
|Note and accounts receivable, net                                                                                                 |  |                   | 97      |   |                  |   | 379     |  
|Deferred costs, net of accumulated amortization of $2,015 and $1,605 as of September 30, 2008 and December 31, 2007, respectively |  |                   | 3,097   |   |                  |   | 3,075   |  
|Prepaid expenses and other assets                                                                                                 |  |                   | 2,795   |   |                  |   | 2,734   |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total assets                                                                                                                      |  | $                 | 75,319  |   |                  | $ | 76,939  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Liabilities and Partners Equity (Deficit)                                                                                        |  |                   |         |   |                  |   |         |  
|Liabilities:                                                                                                                      |  |                   |         |   |                  |   |         |  
|Notes payable                                                                                                                     |  | $                 | 54,754  |   |                  | $ | 55,380  |  
|Accounts payable and other liabilities                                                                                            |  |                   | 1,583   |   |                  |   | 576     |  
|Construction costs payable                                                                                                        |  |                   |        |   |                  |   | 326     |  
|Prepaid rent                                                                                                                      |  |                   | 555     |   |                  |   | 391     |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total liabilities                                                                                                                 |  |                   | 56,892  |   |                  |   | 56,673  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Commitments and contingent liabilities (Note 7)                                                                                   |  |                   |         |   |                  |   |         |  
|Partners Equity (Deficit):                                                                                                       |  |                   |         |   |                  |   |         |  
|General Partner                                                                                                                   |  |                   | (1,187  | ) |                  |   | (961    | )
|Limited partners, 83,898 limited partnership units outstanding as of September 30, 2008 and December 31, 2007                     |  |                   | 19,614  |   |                  |   | 21,227  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total partners equity                                                                                                            |  |                   | 18,427  |   |                  |   | 20,266  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Total liabilities and partners equity                                                                                            |  | $                 | 75,319  |   |                  | $ | 76,939  |  
|                                                                                                                                  |  |                   |         |   |                  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



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RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Operations

(in thousands, except per unit amounts and units outstanding)

(Unaudited)



|                                                                 |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------------- |  | ------------------ | ------ | - | ----------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                 |  | Three months ended |        |   | Nine months ended |  
|                                                                 |  | September 30,      |        |   | September 30,     |  
|                                                                 |  | 2008               |        |   | 2007              |   |        | 2008 |  |   | 2007   |  
|Operating Revenue                                                |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|Rental revenue                                                   |  | $                  | 3,419  |   |                   | $ | 3,561  |      |  | $ | 10,173 |   |  | $ | 10,256 |  
|Tenant reimbursements                                            |  |                    | 397    |   |                   |   | 299    |      |  |   | 971    |   |  |   | 1,149  |  
|                                                                 |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|Total operating revenue                                          |  |                    | 3,816  |   |                   |   | 3,860  |      |  |   | 11,144 |   |  |   | 11,405 |  
|Operating Expenses                                               |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|Property operating                                               |  |                    | 1,938  |   |                   |   | 1,829  |      |  |   | 5,036  |   |  |   | 4,963  |  
|Depreciation and amortization                                    |  |                    | 1,153  |   |                   |   | 1,196  |      |  |   | 3,452  |   |  |   | 3,436  |  
|General and administrative                                       |  |                    | 203    |   |                   |   | 221    |      |  |   | 750    |   |  |   | 762    |  
|                                                                 |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|Total operating expenses                                         |  |                    | 3,294  |   |                   |   | 3,246  |      |  |   | 9,238  |   |  |   | 9,161  |  
|                                                                 |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|Operating income                                                 |  |                    | 522    |   |                   |   | 614    |      |  |   | 1,906  |   |  |   | 2,244  |  
|Interest and other income                                        |  |                    | 30     |   |                   |   | 141    |      |  |   | 132    |   |  |   | 459    |  
|Interest expense (including amortization of loan fees)           |  |                    | (780   | ) |                   |   | (758   | )    |  |   | (2,350 | ) |  |   | (2,350 | )
|                                                                 |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|Net (loss) income                                                |  | $                  | (228   | ) |                   | $ | (3     | )    |  | $ | (312   | ) |  | $ | 353    |  
|                                                                 |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|Basic and diluted net (loss) income per limited partnership unit |  | $                  | (2.44  | ) |                   | $ | (0.04  | )    |  | $ | (3.35  | ) |  | $ | 3.79   |  
|                                                                 |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  
|Weighted average number of limited partnership units outstanding |  |                    | 83,898 |   |                   |   | 83,899 |      |  |   | 83,898 |   |  |   | 83,900 |  
|                                                                 |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   |        |  

The accompanying notes are an integral part of these consolidated financial statements.



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RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statement of Partners Equity

For the nine months ended September 30, 2008

(in thousands)

(Unaudited)



|                                                    |  |                |        |   |                 |   |        |       |  |   |        |  
|--------------------------------------------------- |  | -------------- | ------ | - | --------------- | - | ------ | ----- |  | - | ------ | -
|                                                    |  | GeneralPartner |        |   | LimitedPartners |   |        | Total | 
|Balance (deficit) at December 31, 2007              |  | $              | (961   | ) |                 | $ | 21,227 |       |  | $ | 20,266 |  
|Net loss                                            |  |                | (31    | ) |                 |   | (281   | )     |  |   | (312   | )
|Distributions ($15.87 per limited partnership unit) |  |                | (195   | ) |                 |   | (1,332 | )     |  |   | (1,527 | )
|                                                    |  |                |        |   |                 |   |        |       |  |   |        |  
|Balance (deficit) at September 30, 2008             |  | $              | (1,187 | ) |                 | $ | 19,614 |       |  | $ | 18,427 |  
|                                                    |  |                |        |   |                 |   |        |       |  |   |        |  

The accompanying notes are an integral part of these consolidated financial statements.



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RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)



|                                                                                                                |  |                                |        |   |      |   |        |  
|--------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ------ | - | ---- | - | ------ | -
|                                                                                                                |  | Nine months endedSeptember 30, |       
|                                                                                                                |  | 2008                           |        |   | 2007 |  
|Cash flows from operating activities:                                                                           |  |                                |        |   |      |   |        |  
|Net (loss) income                                                                                               |  | $                              | (312   | ) |      | $ | 353    |  
|Adjustments to reconcile net (loss) income to net cash provided by operating activities:                        |  |                                |        |   |      |   |        |  
|Depreciation and amortization                                                                                   |  |                                | 3,452  |   |      |   | 3,436  |  
|Amortization of loan fees, included in interest expense                                                         |  |                                | 61     |   |      |   | 61     |  
|Changes in certain assets and liabilities:                                                                      |  |                                |        |   |      |   |        |  
|Accounts receivable                                                                                             |  |                                | 259    |   |      |   | 386    |  
|Deferred costs                                                                                                  |  |                                | (585   | ) |      |   | (508   | )
|Prepaid expenses and other assets                                                                               |  |                                | (61    | ) |      |   | (276   | )
|Accounts payable and other liabilities                                                                          |  |                                | 1,007  |   |      |   | 206    |  
|Prepaid rent                                                                                                    |  |                                | 164    |   |      |   | (12    | )
|                                                                                                                |  |                                |        |   |      |   |        |  
|Net cash provided by operating activities                                                                       |  |                                | 3,985  |   |      |   | 3,646  |  
|                                                                                                                |  |                                |        |   |      |   |        |  
|Cash flows from investing activities:                                                                           |  |                                |        |   |      |   |        |  
|Net additions to real estate investments                                                                        |  |                                | (2,834 | ) |      |   | (4,475 | )
|Purchase of short-term investment                                                                               |  |                                |       |   |      |   | (409   | )
|Payments received from tenant improvement note receivable                                                       |  |                                | 23     |   |      |   | 21     |  
|                                                                                                                |  |                                |        |   |      |   |        |  
|Net cash used for investing activities                                                                          |  |                                | (2,811 | ) |      |   | (4,863 | )
|                                                                                                                |  |                                |        |   |      |   |        |  
|Cash flows from financing activities:                                                                           |  |                                |        |   |      |   |        |  
|Principal payments on note payable                                                                              |  |                                | (626   | ) |      |   | (592   | )
|Loan fee and application deposit                                                                                |  |                                |       |   |      |   | (1     | )
|Advance from affiliate                                                                                          |  |                                |       |   |      |   | 550    |  
|Distributions to limited partners                                                                               |  |                                | (1,332 | ) |      |   | (1,158 | )
|Distributions to General Partner                                                                                |  |                                | (195   | ) |      |   | (129   | )
|Redemption of limited partnership units                                                                         |  |                                |       |   |      |   | (2     | )
|                                                                                                                |  |                                |        |   |      |   |        |  
|Net cash used for financing activities                                                                          |  |                                | (2,153 | ) |      |   | (1,332 | )
|                                                                                                                |  |                                |        |   |      |   |        |  
|Net decrease in cash and cash equivalents                                                                       |  |                                | (979   | ) |      |   | (2,549 | )
|Cash and cash equivalents at beginning of period                                                                |  |                                | 8,256  |   |      |   | 2,674  |  
|                                                                                                                |  |                                |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                                                      |  | $                              | 7,277  |   |      | $ | 125    |  
|                                                                                                                |  |                                |        |   |      |   |        |  
|Supplemental disclosure of cash flow information:                                                               |  |                                |        |   |      |   |        |  
|Cash paid for interest (net of capitalized interest of $0 and $34 at September 30, 2008 and 2007, respectively) |  | $                              | 2,289  |   |      | $ | 2,289  |  
|                                                                                                                |  |                                |        |   |      |   |        |  
|Supplemental disclosure of non-cash operating activities:                                                       |  |                                |        |   |      |   |        |  
|Write-off of fully depreciated rental property assets                                                           |  | $                              | 773    |   |      | $ | 1,100  |  
|                                                                                                                |  |                                |        |   |      |   |        |  
|Write-off of fully amortized deferred costs                                                                     |  | $                              | 152    |   |      | $ | 256    |  
|                                                                                                                |  |                                |        |   |      |   |        |  
|Supplemental disclosure of non-cash investing activities:                                                       |  |                                |        |   |      |   |        |  
|Additions to real estate investments included in construction costs payable                                     |  | $                              |       |   |      | $ | 618    |  
|                                                                                                                |  |                                |        |   |      |   |        |  
|Supplemental disclosure of non-cash financing activities:                                                       |  |                                |        |   |      |   |        |  
|Redemption of limited partnership units payable                                                                 |  | $                              |       |   |      | $ | 1      |  
|                                                                                                                |  |                                |        |   |      |   |        |  

The accompanying notes are an integral part of these consolidated financial statements.



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RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes
to Consolidated Financial Statements

(Unaudited)



|Note 1. | ORGANIZATION
|------- | ------------

Rancon Realty Fund V, a California Limited
Partnership (the Partnership), was organized in accordance with the provisions of the California Revised Limited Partnership Act for the purpose of acquiring, developing, operating and disposing of real property. The Partnership was
organized in 1985 and reached final funding in February 1989. The general partners of the Partnership are Daniel L. Stephenson and Rancon Financial Corporation (RFC), hereinafter collectively referred to as the General Partner. RFC is
wholly owned by Daniel L. Stephenson. The Partnership has no employees.

As of September 30, 2008, there were 83,898 units (Units)
outstanding.

The Partnership commenced on May 8, 1985 and shall continue until December 31, 2015, unless previously terminated in accordance
with the provisions of the Partnership agreement.

Allocation of Net Income and Net Loss

Allocation of net income and net loss is made pursuant to the terms of the Partnership agreement. Generally, net income and net losses from operations are allocated 90%
to the limited partners and 10% to the General Partner; however, if the limited partners and the General Partner have, as a result of an allocation of net loss, a deficit balance in their capital accounts, net loss shall not be allocated to the
limited partners and General Partner in excess of the positive balance until the balances of the limited partners and General Partners capital accounts are reduced to zero. Capital accounts shall be determined after taking into account
the other allocations and distributions for the fiscal year.

Net income other than net income from operations shall be allocated as follows:
(i) first, to the partners who have a deficit balance in their capital account, provided that, in no event shall the General Partner be allocated more than 5% of the net income other than net income from operations until the earlier of sale or
disposition of substantially all of the assets or the distribution of cash (other than cash from operations) equal to the Unit holders original invested capital; (ii) second, to the limited partners in proportion to and to the extent of
the amounts required to increase their capital accounts to an amount equal to the sum of the adjusted invested capital of their units plus an additional cumulative non-compounded 12% return per annum (plus additional amounts depending on the date
Units were purchased); (iii) third, to the partners in the minimum amount required to first equalize their capital accounts in proportion to the number of units owned, and then, to bring the sum of the balances of the capital accounts of the
limited partners and the General Partner into the ratio of 4 to 1; and (iv) the balance, if any, 80% to the limited partners and 20% to the General Partner. In no event shall the General Partner be allocated less than 1% of the net income other
than net income from operations for any period.

Net loss other than net loss from operations is allocated 99% to the limited partners and 1% to the
General Partner. Such net losses will be allocated among limited partners as necessary to equalize their capital accounts in proportion to their Units, and thereafter will be allocated in proportion to their Units.

The terms of the Partnership agreement call for the General Partner to restore any deficits that may exist in its capital account after allocation of gains and losses
from the sale of the final property owned by the Partnership, but prior to any liquidating distributions being made to the partners.

Distribution of
Cash

The Partnership shall make annual or more frequent distributions of substantially all cash available to be distributed to partners as
determined by the General Partner, subject to the following: (i) distributions may be restricted or suspended for limited periods when the General Partner determines in its absolute discretion that it is in the best interests of the
Partnership; and (ii) all distributions are subject to the payment of Partnership expenses and maintenance of reasonable reserves for debt service, alterations and improvements, maintenance, replacement of furniture and fixtures, working
capital and contingent liabilities.

All excess cash from operations shall be distributed 90% to the limited partners and 10% to the General Partner.

All cash from sales or refinancing and any other cash determined by the General Partner to be available for distribution other than cash from operations
shall be distributed in the following order of priority: (i) first, 1% to the General Partner and 99% to the limited partners in proportion to the outstanding positive amounts of Adjusted Invested Capital (as defined in the Partnership
agreement) for each of their Units until Adjusted Invested Capital (as defined in the Partnership agreement) for each Unit is reduced to zero; (ii) second, 1% to the General Partner and 99% to the limited partners until each of the limited
partners has received an amount which, including cash from operations previously distributed to the limited partners, equals a 12% annual cumulative non-compounded return on the Adjusted Invested Capital (as defined in the Partnership agreement) of
their Units plus such limited partners Limited Incremental Preferential Return (as defined in the Partnership agreement), if any, with respect to each such Unit, on the Adjusted Investment Capital (as defined in the Partnership agreement) of
such Units for the twelve month period following the date upon which such Unit was purchased from the Partnership and following the admission of such limited



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RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)



partner; (iii) third, 99% to the General Partner and 1% to the limited partners, until the General Partner has received an amount equal to 20% of all
distributions of cash from sales or refinancing; and (iv) the balance, 80% to the limited partners, pro rata in proportion to the number of Units held by each, and 20% to the General Partner.



|Note 2. | SIGNIFICANT ACCOUNTING POLICIES
|------- | -------------------------------

Basis of Presentation

The accompanying financial statements present the consolidated financial position of the Partnership and its subsidiaries as of September 30,
2008 and December 31, 2007, the consolidated results of operations of the Partnership and its subsidiaries for the three and nine months ended September 30, 2008 and 2007, and cash flows of the Partnership for the nine months ended
September 30, 2008 and 2007. All significant intercompany transactions, receivables and payables have been eliminated in consolidation.

In the
opinion of the General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated financial position of the Partnership as of
September 30, 2008 and December 31, 2007, and the related consolidated statements of operations for the three and nine months ended September 30, 2008 and 2007, the consolidated statement of partners equity for the nine months
ended September 30, 2008 and the consolidated statements of cash flows for the nine months ended September 30, 2008 and 2007.

Reclassification

Certain items in the consolidated financial statements for prior periods have been reclassified to conform to the
current periods presentation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America 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 results of operations during the reporting period. Actual results could differ from those estimates.

Rental Properties

Rental properties, including the related
land, are stated at depreciated cost unless events or circumstances indicate that such amounts cannot be recovered, in which case, the carrying value of the property is reduced to its estimated fair value. Estimated fair value: (i) is based
upon the Partnerships plans for the continued operations of each property; and (ii) is computed using estimated sales price, as determined by prevailing market values for comparable properties and/or the use of capitalization rates
applied to annualized net operating income based upon the age, construction and use of the building. The fulfillment of the Partnerships plans related to each of its properties is dependent upon, among other things, the presence of economic
conditions which will enable the Partnership to continue to hold and operate the properties prior to their eventual sale. Due to uncertainties inherent in the valuation process and in the economy, it is reasonably possible that the actual results of
operating and disposing of the Partnerships properties could be materially different than current expectations. Rental properties are reviewed for impairment whenever there is a triggering event and at least annually.

Depreciation is provided using the straight-line method over the useful lives of the respective assets. The useful lives are as follows:



|                          |  |                                                                                                 
|------------------------- |  | ------------------------------------------------------------------------------------------------
|Building and improvements |  | 5 to 40 years                                                                                   
|Tenant improvements       |  | Lesser of the initial term of the related lease or the estimated useful life of the improvements
|Furniture and equipment   |  | 5 to 7 years                                                                                    

Construction In Progress and Land Held for Development

Construction in progress and land held for development are stated at cost, unless events or circumstances indicate that cost cannot be recovered, in which case the
carrying value is reduced to estimated fair value. Estimated fair value: (i) is based on the Partnerships plans for the development of each property; and (ii) considers the cost to complete and the estimated fair value of the
completed project. The fulfillment of the Partnerships plans related to each of its properties is dependent upon, among other things, the presence of economic conditions which will enable the Partnership to either hold the properties for
eventual sale or obtain financing to further develop the properties. Construction in progress and land held for development are reviewed for impairment whenever there is a triggering event and at least annually.



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##### Table of Contents

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)



The pre-development costs for a new project include survey fees and consulting fees. Interest, property taxes and
insurance related to the new project are capitalized during periods activities necessary to get the project ready for its intended use are in progress. The capitalization ends when the construction is substantially completed and the project is ready
for its intended use.

Cash and Cash Equivalents

The Partnership considers certificates of deposit and money market funds with original maturities of less than ninety days when purchased to be cash and cash equivalents.

Deferred Costs

Deferred loan fees are capitalized and amortized on a straight-line basis,
which approximates the effective interest method, over the life of the related loan. Deferred lease commissions are capitalized and amortized on a straight-line basis over the initial fixed term of the related lease agreements.

Revenues

The Partnership recognizes rental revenue on a
straight-line basis over the term of the leases. Actual amounts collected could be lower or higher than the amounts recognized on a straight-line basis if specific tenants are unable to pay rent that the Partnership has previously recognized as
revenue. For tenants with percentage rent, the Partnership recognizes revenue when the tenants specified sales targets have been met. The reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized
as revenue on an estimated basis and the differences between estimated and actual amounts are recognized as revenue in the subsequent year when the amounts are collected. However, where actual expenses are significantly different from estimates, the
Partnership will accrue the differences in the same period. The Partnership periodically evaluates the collectability of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of
tenants to make required payments under the lease agreements.

Net (Loss) Income Per Limited Partnership Unit

Net (loss) income per Unit is calculated using the weighted average number of Units outstanding during the period and the limited partners allocable share of the
net (loss) income.

Net (loss) income per Unit is as follows (in thousands, except for weighted average units and per unit amounts):



|                                                                                    |  |                                              |     |   |                                              |   |        |                                             |  |                 |                                             |  |                |        |   |                 |   |     |                |  |                 |        |   |  |   |    |  |   |       
|----------------------------------------------------------------------------------- |  | -------------------------------------------- | --- | - | -------------------------------------------- | - | ------ | ------------------------------------------- |  | --------------- | ------------------------------------------- |  | -------------- | ------ | - | --------------- | - | --- | -------------- |  | --------------- | ------ | - |  | - | -- |  | - | ------
|                                                                                    |  | For the three months endedSeptember 30,
2008 |     |   | For the three months endedSeptember 30,
2007 |   |        | For the nine months endedSeptember 30,
2008 |  |                 | For the nine months endedSeptember 30,
2007
|Income (loss) allocation:                                                           |  | GeneralPartner                               |     |   | LimitedPartners                              |   |        | GeneralPartner                              |  | LimitedPartners |                                             |  | GeneralPartner |        |   | LimitedPartners |   |     | GeneralPartner |  | LimitedPartners
|Net (loss) income                                                                   |  | $                                            | (23 | ) |                                              | $ | (205   | )                                           |  | $               |                                            |  | $              | (3     | ) |                 | $ | (31 | )              |  | $               | (281   | ) |  | $ | 35 |  | $ | 318   
|Weighted average number of limited partnership units outstanding during each period |  |                                              |     |   |                                              |   | 83,898 |                                             |  |                 |                                             |  |                | 83,899 |   |                 |   |     |                |  |                 | 83,898 |   |  |   |    |  |   | 83,900
|Basic and diluted (loss) income per limited partnership unit:                       |  |                                              |     |   |                                              | $ | (2.44  | )                                           |  |                 |                                             |  | $              | (0.04  | ) |                 |   |     |                |  | $               | (3.35  | ) |  |   |    |  | $ | 3.79  

Income Taxes

No provision for income taxes is included in the accompanying consolidated financial statements as the Partnerships results of operations are allocated to the partners for inclusion in their respective income tax returns. Net income
(loss) and partners equity (deficit) for financial reporting purposes will differ from the Partnerships income tax return because of different accounting methods used for certain items, including depreciation expense, capitalization of
development period interest and property taxes, income recognition and provisions for impairment of investments in real estate.



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##### Table of Contents

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)



Concentration Risk

Two tenants (Northrop Grumman Corporation and Arrowhead Central Credit Union) represented a combined 25% and one tenant (Northrop Grumman Corporation) represented 15% of operating revenue for the nine months ended September 30, 2008.

New Accounting Pronouncements

In September
2006, the Financial Accounting Standards Board (FASB) issued Statement No. 157, Fair Value Measurements (SFAS No. 157),which defines fair value, establishes a framework for measuring fair value and
enhances disclosure requirements for fair value measurements. SFAS No. 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market
for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS No. 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the
use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value. The Partnership adopted SFAS No. 157 with respect to its financial assets and liabilities but not with
respect to its nonfinancial assets (such as real estate, which is not subject to annual fair value measurements) as those provisions of SFAS No. 157 have been deferred. There was no material impact on the Partnerships financial position,
results of operations or cash flows and no financial assets and liabilities requiring disclosure under SFAS No. 157.

In February 2007, the FASB
issued Statement No. 159,The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159). SFAS No. 159 expands opportunities to use fair value measurement in financial reporting and permits
entities to choose to measure many financial instruments and certain other items at fair value. This Statement is effective for fiscal years beginning after November 15, 2007. The Partnership has adopted SFAS No. 159 with no
material impact on its financial position, results of operations and cash flows.

In December 2007, the FASB issued SFAS No. 141(R), Business
Combinations (SFAS No. 141(R)), which improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its
effects. This Statement is effective for fiscal years beginning after December 15, 2008. The Partnership does not believe that the adoption of SFAS No. 141(R) will have a material impact on its financial position, results of
operations and cash flows, except that transaction costs will be expensed as incurred.

In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements an Amendment of ARB No. 51 (SFAS No. 160), which clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity
that should be reported as equity in the consolidated financial statements. This Statement is effective for fiscal years beginning after December 15, 2008. The Partnership does not believe that the adoption of SFAS No. 160 will have a
material impact on its financial position, results of operations and cash flows.

In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133(SFAS No. 161), which requires companies to provide additional disclosures about their objectives and strategies for using derivative
instruments, how the derivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and related interpretations, and how the derivative instruments and related
hedged items affect their financial statements. SFAS No. 161 also requires companies to disclose information about credit risk-related contingent features in their hedged positions. SFAS No. 161 is effective for fiscal years and interim
periods beginning after November 15, 2008. The Partnership does not believe that the adoption of SFAS No. 161 will have a material impact on its financial condition or operating results.

In October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active
(FSP 157-3). FSP 157-3 clarified the application of FAS 157. FSP 157-3 clarified how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP 157-3 was effective
upon issuance, including prior periods for which financial statements had not been issued. The implementation of this standard did not have an impact on the Partnerships financial position, results of operations and cash flows.

Reference to 2007 audited consolidated financial statements

These unaudited consolidated financial statements should be read in conjunction with the notes to audited consolidated financial statements included in the Partnerships December 31, 2007 audited consolidated financial statements
on Form 10-K.



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##### Table of Contents

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)



|Note 3. | INVESTMENTS IN REAL ESTATE
|------- | --------------------------

Rental properties consist of the
following (in thousands):



|                                 |  |                   |         |   |                  |   |         |  
|-------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                 |  | September 30,2008 |         |   | December 31,2007 |  
|Land                             |  | $                 | 6,944   |   |                  | $ | 6,944   |  
|Land improvements                |  |                   | 1,536   |   |                  |   | 1,536   |  
|Buildings                        |  |                   | 53,244  |   |                  |   | 53,244  |  
|Building and tenant improvements |  |                   | 16,068  |   |                  |   | 15,438  |  
|                                 |  |                   |         |   |                  |   |         |  
|                                 |  |                   | 77,792  |   |                  |   | 77,162  |  
|Less: accumulated depreciation   |  |                   | (22,595 | ) |                  |   | (20,418 | )
|                                 |  |                   |         |   |                  |   |         |  
|Total rental properties, net     |  | $                 | 55,197  |   |                  | $ | 56,744  |  
|                                 |  |                   |         |   |                  |   |         |  

As of September 30, 2008, the Partnerships rental properties included eight office properties and four
retail properties.



|Note 4. | CONSTRUCTION IN PROGRESS AND LAND HELD FOR DEVELOPMENT
|------- | ------------------------------------------------------

Construction in progress consists of the following (in thousands):



|                                                                                                                                             |  |                   |       |                  |   |      
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----- | ---------------- | - | -----
|                                                                                                                                             |  | September 30,2008 |       | December 31,2007
|Three Parkside (includes approximately 0.41 acres of land with a cost basis of $25 as of September 30, 2008 and December 31, 2007)           |  | $                 | 5,362 |                  | $ | 4,257
|East Lake Restaurant Pad (includes approximately 0.5 acres of land with a cost basis of $166 as of September 30, 2008 and
December 31, 2007) |  |                   | 451   |                  |   | 451  
|                                                                                                                                             |  |                   |       |                  |   |      
|Total construction in progress                                                                                                               |  | $                 | 5,813 |                  | $ | 4,708
|                                                                                                                                             |  |                   |       |                  |   |      

During the second quarter of 2007, the Partnership began developing Three Parkside, a two-story multi-tenant
30,322 square-foot office building on an approximate 0.41 acre land parcel. As a result, the land, pre-development costs and construction costs of Three Parkside were reclassified from land held for development to construction in progress. The
building shell was substantially completed in the first quarter of 2008 but the Partnership has remaining improvements to complete so the building has not been placed into service as of September 30, 2008. The total construction cost to date is
$5,362,000.

Land held for development consists of the following (in thousands):



|                                                                                                           |  |                   |       |                  |   |      
|---------------------------------------------------------------------------------------------------------- |  | ----------------- | ----- | ---------------- | - | -----
|                                                                                                           |  | September 30,2008 |       | December 31,2007
|Land held for development (approximately 4.1 acres of land as of September 30, 2008 and December 31, 2007) |  | $                 | 1,043 |                  | $ | 1,043
|                                                                                                           |  |                   |       |                  |   |      



|Note 5. | NOTES PAYABLE
|------- | -------------

Notes payable consists of the following (in
thousands):



|                                                                                                                                                                                                                                                   |  |                   |        |                  |   |       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ---------------- | - | ------
|                                                                                                                                                                                                                                                   |  | September 30,2008 |        | December 31,2007
|Note payable #1 collateralized by first deeds of trust on seven properties. The note has a fixed interest rate of 5.46%, a maturity date of
January 1, 2016 with a 30-year amortization requiring monthly principal and interest payments of $151. |  | $                 | 25,750 |                  | $ | 26,052
|Note payable #2 collateralized by first deeds of trust on four properties. The note has a fixed interest rate of 5.61%, a maturity date of
May 1, 2016 with a 30-year amortization requiring monthly principal and interest payments of $173.      |  |                   | 29,004 |                  |   | 29,328
|                                                                                                                                                                                                                                                   |  |                   |        |                  |   |       
|Total                                                                                                                                                                                                                                              |  | $                 | 54,754 |                  | $ | 55,380
|                                                                                                                                                                                                                                                   |  |                   |        |                  |   |       



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##### Table of Contents

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)



The required principal payments on the Partnerships notes payable for the next five years and thereafter, as of
September 30, 2008, are as follows (in thousands):



|                        |  |   |       
|----------------------- |  | - | ------
|Year Ending December 31 |  |  
|2008                    |  | $ | 215   
|2009                    |  |   | 888   
|2010                    |  |   | 938   
|2011                    |  |   | 992   
|2012                    |  |   | 1,048 
|Thereafter              |  |   | 50,673
|                        |  |   |       
|Total                   |  | $ | 54,754
|                        |  |   |       



|Note 6. | RELATED PARTY TRANSACTIONS
|------- | --------------------------

In May 2006, the Partnership extended
its then current Property Management and Services Agreement with Glenborough Properties L.P. (Glenborough) through December 31, 2008. As indicated in the Property Management and Services Agreement, the contract will be automatically
extended on December 31, 2008 for a one year period at the same terms and conditions. On November 29, 2006, due to the merger of Glenborough and a third party, a new entity, Glenborough LLC was formed and the Partnerships Property
Management and Service Agreement was transferred from Glenborough to Glenborough LLC. All other terms and conditions remained unchanged. The Partnership engaged Glenborough LLC to perform services for the following fees:



|                                                                                                                                                                                                                                                                                                                                                                                               |  |                   |         |                   |   |        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ----------------- | - | -------
|                                                                                                                                                                                                                                                                                                                                                                                               |  | Nine Months Ended
|                                                                                                                                                                                                                                                                                                                                                                                               |  | September 30,2008 |         | September 30,2007
|(i)     property management fees of 3% of gross rental revenue which were included in property operating expenses in
the accompanying consolidated statements of operations                                                                                                                                                                                                                    |  | $                 | 342,000 |                   | $ | 345,000
|(ii)    construction services fees which were capitalized and included in rental properties on the accompanying
consolidated balance sheets                                                                                                                                                                                                                                                    |  |                   | 47,000  |                   |   | 66,000 
|(iii)  an asset and partnership management fee which was included in general and administrative expenses in the accompanying
consolidated statements of operations                                                                                                                                                                                                                             |  |                   | 225,000 |                   |   | 225,000
|(iv)   leasing services fees which were included in deferred costs on the accompanying consolidated balance
sheets                                                                                                                                                                                                                                                                             |  |                   | 279,000 |                   |   | 172,000
|(v)    a development fee equal to 5% of the hard costs of the development project which was included in the construction
in progress and/or rental properties on the accompanying consolidated balance sheets; excluding the cost of the land, the development fee and the general contractors fee shall not exceed 11.5%, in the aggregate, of the hard costs of the
development fee project |  |                   | 24,000  |                   |   | 150,000
|(vi)  data processing fees based on square footage which were included in property operating expenses in the accompanying
consolidated statements of operations                                                                                                                                                                                                                                |  |                   | 59,000  |                   |   | 47,000 
|(vii)  engineering fees based on square footage which were included in property operating expenses in the accompanying consolidated
statements of operations                                                                                                                                                                                                                                   |  |                   | 15,000  |                   |   | 18,000 

As of September 30, 2008, Glenborough Fund XV LLC, an affiliate of Glenborough LLC, held 11,557 or 13.78% of
the limited partnership units purchased from unaffiliated third parties.



|Note 7. | COMMITMENTS AND CONTINGENT LIABILITIES
|------- | --------------------------------------

Environmental Matters

The Partnership follows a policy of monitoring its properties for the presence of hazardous or toxic substances. The Partnership is not aware of
any environmental liability with respect to the properties that would have a material adverse effect on the Partnerships business, assets or results of operations. There can be no assurance that such a material environmental liability does not
exist. The existence of any such material environmental liability could have an adverse effect on the Partnerships consolidated results of operations and cash flows.



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##### Table of Contents

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)



General Uninsured Losses

The Partnership carries property and liability insurance with respect to the properties. This coverage has policy specification and insured limits customarily carried for similar properties. However, certain types of
losses (such as from earthquakes and floods) may be either uninsurable or not economically insurable. Should the properties sustain damage as a result of an earthquake or flood, the Partnership may incur losses due to insurance deductibles,
co-payments on insured losses or uninsured losses. Additionally, the Partnership has elected to obtain insurance coverage for certified acts of terrorism as defined in the Terrorism Risk Insurance Act of 2002; however, our policies of
insurance may not provide coverage for other acts of terrorism. Any losses from such other acts of terrorism might be uninsured. Should an uninsured loss occur, the Partnership could lose some or all of its capital investment, cash flow and
anticipated profits related to the properties.

Other Matters

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the amount of $102,000 at September 30, 2008 for sales that occurred in previous years. The
subordinated real estate commissions are payable only after the limited partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital.
Since the circumstances under which these commissions would be payable are not currently met, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes
payable.



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion should be read in conjunction with our December 31, 2007 audited consolidated financial statements and the notes thereto included in our latest Annual Report on Form 10-K.

Background

In June 1985, our initial acquisition of property
consisted of approximately 76.21 acres of partially developed and unimproved land located in San Bernardino, California. The property is part of a master-planned development of 153 acres known as Tri-City Corporate Centre (Tri-City) and
is zoned for mixed commercial, office, hotel, transportation-related, and light industrial uses and all of the parcels thereof are separately owned by us and Rancon Realty Fund IV (Fund IV), a partnership sponsored by the General
Partner.

Overview

Tri-City Properties

As of September 30, 2008, our rental properties consist of eight office and four retail properties, aggregating approximately 723,000 rentable square
feet, of which 680,000 square feet are office space, and 43,000 square feet are retail space.



|                              |  |                                |  |               
|----------------------------- |  | ------------------------------ |  | --------------
|Property                      |  | Type                           |  | Square Footage
|One Carnegie Plaza            |  | Two two-story office buildings |  | 107,277       
|Two Carnegie Plaza            |  | Two-story office building      |  | 68,956        
|Carnegie Business Center II   |  | Two industrial buildings       |  | 50,867        
|Lakeside Tower                |  | Nine-story office building     |  | 112,716       
|One Parkside                  |  | Four-story office building     |  | 70,068        
|Ballys Health Club (Ballys) |  | Health club facility           |  | 25,000        
|Outback Steakhouse (Outback)  |  | Restaurant                     |  | 6,500         
|Palm Court Retail #3          |  | Retail                         |  | 6,004         
|Two Parkside                  |  | Three-story office building    |  | 82,004        
|Pat & Oscars                  |  | Restaurant                     |  | 5,100         
|Three Carnegie                |  | Two-story office building      |  | 83,661        
|Brier Corporate Center        |  | Three-story office building    |  | 104,348       

As of September 30, 2008, the weighted average occupancy of the twelve properties was 87%.

Land

As of September 30, 2008, we owned approximately
4.1 acres of land, which are part undeveloped and part used as parking lots. Although the current market environment is not conducive to office development, the market will continue to be monitored with the intent to position the land for future
development.



14



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##### Table of Contents

Results of Operations

Comparison of the three and nine months ended September 30, 2008 to the three and nine months ended September 30, 2007.

Revenue

Rental revenue decreased slightly by $142,000, or 4%, and $83,000, or 1%, for the three and nine months ended September 30,
2008 compared to three and nine months ended September 30, 2007, respectively, due to an overall decrease in occupancy.

Tenant reimbursements
increased $98,000, or 33%, for the three months ended September 30, 2008 compared to the three months ended September 30, 2007, respectively, primarily due to an increase in operating expenses including utility costs and real estate taxes
at properties. Tenant reimbursements decreased $178,000, or 15%, for the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007, respectively, primarily due to a decrease in recoveries related to 2007
recovery reconciliations completed in the second quarter of 2008, partially offset by increases in operating expenses.

Expenses

Operating expenses increased $109,000, or 6%, and $73,000, or 1%, for the three and nine months ended September 30, 2008 compared to the three and nine months ended
September 30, 2007, respectively, primarily due to increases in real estate taxes and utilities.

Depreciation and amortization decreased $43,000, or
4%, and increased slightly by $16,000, or 0%, for the three and nine months ended September 30, 2008 compared to the three and nine months ended September 30, 2007, respectively, primarily due to the write off of unamortized tenant
improvements at One Carnegie in the third quarter of 2007.

General and administrative expenses decreased $18,000, or 8%, and $12,000, or 2%, for the three
and nine months ended September 30, 2008 compared to the three and nine months ended September 30, 2007, respectively, primarily due to lower professional fees of $38,000, partially offset by an increase in investor service fees of
$20,000.

Non-operating income / expenses

Interest and
other income decreased $111,000, or 79%, and $327,000, or 71%, for the three and nine months ended September 30, 2008 compared to the three and nine months ended September 30, 2007, respectively, due to lower cash investment balances
during 2008.

Interest expense remained relatively flat with an increase of $22,000 or 3% and unchanged for the three and nine months ended
September 30, 2008 compared to the three and nine months ended September 30, 2007, respectively. The increase in the third quarter of 2008 was primarily due to the cessation of interest capitalization on the Three Parkside development
project.

Liquidity and Capital Resources

As of
September 30, 2008, we had cash and cash equivalents of $7,277,000.

As of September 30, 2008, our liabilities include two notes payable with
total borrowing of $54,754,000. These notes are collateralized by properties with an aggregate net carrying value of approximately $45,589,000. Note payable #1 matures in January 2016, requires monthly principal and interest payments of $151,000 and
bears interest at a fixed rate of 5.46% and is collateralized by Ballys Health Club, Carnegie Business Center II, Lakeside Tower, Outback Steakhouse, Pat & Oscars, Palm Court Retail #3 and One Carnegie Plaza. Note payable #2 matures
in May 2016, requires monthly principal and interest payments of $173,000 and bears interest at a fixed rate of 5.61% and is collateralized by Brier Corporate Center, One Parkside, Two Parkside and Two Carnegie Plaza.

We are contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $102,000 at September 30, 2008 for
sales that transpired in previous years. The subordinated real estate commissions are payable only after the limited partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of
12% per annum on their adjusted invested capital. Since the conditions under which these commissions would be payable are not currently met, the liability has not been recognized in the accompanying consolidated financial statements; however,
the amount will be recorded when and if it becomes payable.

Cash flows

For the nine months ended September 30, 2008, cash provided by operating activities was $3,985,000, as compared to cash provided by operating activities of $3,646,000 for the same period in 2007. The change was
primarily due to an increase in accounts payable and other liabilities. For the nine months ended September 30, 2008, cash used for investing activities was $2,811,000, as compared to cash used for investing activities of $4,863,000 for the
same period in 2007. The change was due to lower construction spending in 2008 combined with the absence of any purchases of short term investments. For the nine months ended September 30, 2008, cash used for financing activities was
$2,153,000, as compared to cash used for financing activities of $1,332,000 for the same period in 2007. The change was primarily due to an increase in distributions to limited partners and the General Partner, offset by the lack of advance from
affiliate.



15



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##### Table of Contents

Our expectation is that cash and cash equivalents as of September 30, 2008, together with cash from operations,
sales and financing, will be adequate to meet our operating requirements and development plans on a short-term basis and for the reasonably foreseeable future. There can be no assurance that our results of operations will not fluctuate in the future
and at times affect our ability to meet operating requirements.

Operationally, our primary source of funds consists of cash provided by rental activities.
Other sources of funds may include permanent financing, property sales and interest income on money market funds. Cash generated from property sales is generally added to our cash reserves, pending use in the development of properties or
distribution to the partners.

Contractual Obligations

As of September 30, 2008, our contractual obligations are as follows (in thousands):



|                              |  |                 |     |             |   |             |  |                  |       |       |   |        |  |   |       
|----------------------------- |  | --------------- | --- | ----------- | - | ----------- |  | ---------------- | ----- | ----- | - | ------ |  | - | ------
|                              |  | Less than 1year |     | 1 to 3years |   | 3 to 5years |  | More than 5years |       | Total
|Collateralized mortgage loans |  | $               | 215 |             | $ | 1,826       |  | $                | 2,040 |       | $ | 50,673 |  | $ | 54,754
|Interest on indebtedness      |  |                 | 758 |             |   | 5,947       |  |                  | 5,734 |       |   | 8,612  |  |   | 21,051
|                              |  |                 |     |             |   |             |  |                  |       |       |   |        |  |   |       
|Total                         |  | $               | 973 |             | $ | 7,773       |  | $                | 7,774 |       | $ | 59,285 |  | $ | 75,805
|                              |  |                 |     |             |   |             |  |                  |       |       |   |        |  |   |       

We are unaware of any demands, commitments, events or uncertainties, which might affect capital resources in any
material respect. In addition, we are not subject to any covenants pursuant to our collateralized debt that would constrain our ability to obtain additional capital.

Critical Accounting Policies

In the preparation of financial statements, we utilize certain critical
accounting policies. There has been no change to our significant accounting policies included in the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2007.

Inflation

Leases at the office properties typically provide
for rent adjustment and pass-through of certain operating expenses during the term of the lease. We anticipate that these provisions may permit us to increase rental rates or other charges to tenants in response to rising prices and therefore, serve
to reduce our exposure to the adverse effects of inflation.

Forward Looking Statements; Factors That May Affect Operating Results

This Report on Form 10-Q contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including statements regarding our expectations, hopes, intentions, beliefs and strategies regarding the future. These forward looking statements include statements relating to:



| |  |  | Our expectation of making distributions to our partners;
| | - |  | --------------------------------------------------------



| |  |  | Our belief that cash and cash generated by operations, sales and financing will be sufficient to meet our operating requirements in both the short and the
long-term;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our expectation that changes in market interest rates will not have a material impact on the performance or the fair value of our portfolio;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our belief that certain claims and lawsuits which have arisen against us in the normal course of business will not have a material adverse effect on our financial
position, cash flow or results of operations;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our belief that properties are competitive within our market;
| | - |  | -------------------------------------------------------------



| |  |  | Our expectation to achieve certain occupancy levels;
| | - |  | ----------------------------------------------------



| |  |  | Our estimation of market strength;
| | - |  | ----------------------------------



| |  |  | Our knowledge of any material environmental matters; and
| | - |  | --------------------------------------------------------



| |  |  | Our expectation that lease provisions may permit us to increase rental rates or other charges to tenants in response to rising prices, and therefore serve to reduce
exposure to the adverse effects of inflation.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

All forward-looking statements included in this document are based on information available to us on the date hereof.
Because these forward looking statements involve risk and uncertainty, there are important factors that could cause our actual results to differ materially from those stated or implied in the forward-looking statements. Those important factors
include:



| |  |  | prolonged unfavorable general economic conditions and significant volatility in the credit and financial markets could have a negative effect on our financial
condition, results of operations and liquidity;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | market fluctuations in rental rates and occupancy;
| | - |  | --------------------------------------------------



| |  |  | reduced demand for rental space;
| | - |  | --------------------------------



| |  |  | availability and creditworthiness of prospective tenants;
| | - |  | ---------------------------------------------------------



| |  |  | defaults or non-renewal of leases by customers;
| | - |  | -----------------------------------------------



| |  |  | differing interpretations of lease provisions regarding recovery of expenses;
| | - |  | -----------------------------------------------------------------------------



| |  |  | increased operating costs;
| | - |  | --------------------------



| |  |  | construction delays beyond the owners control, such as weather delays, material shortages and labor strife;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | changes in interest rates and availability of financing that may render the sale or financing of a property difficult or unattractive;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | failure to obtain necessary outside financing;
| | - |  | ----------------------------------------------



| |  |  | risks and uncertainties affecting property development and construction (including construction delays, cost overruns, our inability to obtain necessary permits and
public opposition to these activities); and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the unpredictability of both the frequency and final outcome of litigation.
| | - |  | ---------------------------------------------------------------------------

The forward-looking statements in this Quarterly Report on Form 10-Q are subject to additional risks and uncertainties further discussed under Item 1A. Risk Factors of our Annual Report on Form 10-K for
the year ended December 31, 2007. We assume no obligation to update or supplement any forward looking-statement.

Risks of Litigation

Certain claims and lawsuits have arisen against us in our normal course of business. We believe that such claims and lawsuits will not have a material
adverse effect on our financial position, cash flow or results of operations.



|Item 3. | Qualitative and Quantitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Interest Rates

We are exposed to changes in interest rates obtainable on our borrowings. Our expectation is that changes in market interest
rates will not have a material impact on the performance or fair value of our portfolio.

For debt obligations, the table below presents required principal
payments and interest rates by expected maturity dates.



|                               |  |                        |      |   |      |   |      |      |  |   |      |   |  |      |      |   |            |   |       |       |  |   |        |   |  |   |        |  
|------------------------------ |  | ---------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | - |  | ---- | ---- | - | ---------- | - | ----- | ----- |  | - | ------ | - |  | - | ------ | -
|                               |  | Expected Maturity Date |      |   |      |  
|                               |  | 2008                   |      |   | 2009 |   |      | 2010 |  |   | 2011 |   |  | 2012 |      |   | Thereafter |   |       | Total | 
|                               |  | (in thousands)         |      |   |      |  
|Collateralized fixed rate debt |  | $                      | 215  |   |      | $ | 888  |      |  | $ | 938  |   |  | $    | 992  |   |            | $ | 1,048 |       |  | $ | 50,673 |   |  | $ | 54,754 |  
|Average interest rate          |  |                        | 5.54 | % |      |   | 5.54 | %    |  |   | 5.54 | % |  |      | 5.54 | % |            |   | 5.54  | %     |  |   | 5.54   | % |  |   | 5.54   | %



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##### Table of Contents

|Item 4. | Controls and Procedures
|------- | -----------------------

The principal executive officer and
principal financial officer of the General Partner have evaluated the disclosure controls and procedures of the Partnership as of the end of the period covered by this quarterly report. As used herein, the term disclosure controls and
procedures has the meaning given to the term by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (Exchange Act), and includes the controls and other procedures of the Partnership that are designed to ensure that
information required to be disclosed by the Partnership in the reports that it files with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. Based upon
his evaluation, the principal executive officer and principal financial officer of the General Partner has concluded that the Partnerships disclosure controls and procedures were effective such that the information required to be disclosed by
the Partnership in this quarterly report is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms applicable to the preparation of this report and is accumulated and communicated to the
General Partners management, including the General Partners principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

There have not been any changes in the Partnerships internal control over financial reporting that occurred during the Partnerships fiscal quarter ended
September 30, 2008 that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Certain claims and lawsuits have
arisen against the Partnership in its normal course of business. The Partnership believes that such claims and lawsuits will not have a material adverse effect on the Partnerships financial position, cash flow or results of operations.



|Item 1A. | Risk Factors
|-------- | ------------

The risk factors discussed under the
heading Risk Factors and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2007, and any amendments thereto continue to apply to our business. If the current economic crisis intensifies or continues
indefinitely, the disruption to the capital and credit markets may adversely affect our business, results of operations, cash flows and financial condition in a number of ways. These economic conditions could impact:



| |  |  | our access to financing, including our ability to refinance notes payable or lines of credit and the related interest cost on our debt
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to dispose of our assets at favorable prices or at an optimal time as any purchasers of our properties may have difficulty in obtaining attractive
financing at reasonable rates of interest
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to retain tenants and to increase rents
| | - |  | ---------------------------------------------------



| |  |  | our ability to continue to collect rent and reimbursable expenses from our tenants
| | - |  | ----------------------------------------------------------------------------------



| |  |  | the availability and creditworthiness of prospective tenants
| | - |  | ------------------------------------------------------------



| |  |  | our ability to maintain occupancy
| | - |  | ---------------------------------



| |  |  | the amount of time required to release vacant space
| | - |  | ---------------------------------------------------



| |  |  | any decisions to construct additional assets on our remaining land and the timing of that potential construction; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | the ability to maintain current dividend levels to our limited partners.
| | - |  | ------------------------------------------------------------------------



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



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

None.



|Item 5. | Other information
|------- | -----------------

None.



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31 |  | Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership Pursuant to Rule 13a-14(a) of the Exchange Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | 
|32 |  | Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as required by Section 906, is not to be deemed
filed with the Commission or subject to the rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of said Act.



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##### Table of Contents

SIGNATURES

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



|                        |  |  |  |                                                        |  |                                                                           
|----------------------- |  |  |  | ------------------------------------------------------ |  | --------------------------------------------------------------------------
|                        |  |  |  | RANCON REALTY FUND V, a California limited
partnership
|                        |  |  | 
|                        |  |  |  | By:                                                    |  | Rancon Financial Corporation a California corporation, its General Partner
|                        |  |  | 
|Date: November 12, 2008 |  |  |  | By:                                                    |  | /s/ Daniel L. Stephenson                                                  
|                        |  |  |  |                                                        |  | Daniel L. Stephenson, President                                           
|                        |  |  | 
|Date: November 12, 2008 |  |  |  | By:                                                    |  | /s/ Daniel L. Stephenson                                                  
|                        |  |  |  |                                                        |  | Daniel L. Stephenson, General Partner                                     



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##### Table of Contents

EXHIBIT INDEX

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP



|           |  |                                                                                                                      
|---------- |  | ---------------------------------------------------------------------------------------------------------------------
|Exhibit 31 |  | Certification of Chief Executive Officer and Chief Financial Officer                                                 
|           | 
|Exhibit 32 |  | Certification Pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



21