##### Table of Contents



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 June 30, 2003

OR

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | 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
(State or other jurisdiction of
incorporation or organization)                            |  | 33-0098488
(I.R.S. Employer
Identification No.)
|                                                                                                    
|400 South El Camino Real, Suite 1100
San Mateo, California

(Address of principal
executive offices) |  | 94402-1708
(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 |  | o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes  o   No  x

Total number of units outstanding as of August 12, 2003: 89,758





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TABLE OF CONTENTS



|                              |                                                                                               |                                            |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements                                                                 
|                              |                                                                                               | Consolidated Balance Sheets               
|                              |                                                                                               | Consolidated Statements of Operations     
|                              |                                                                                               | Consolidated Statement of Partners Equity
|                              |                                                                                               | Consolidated Statements of Cash Flows     
|                              |                                                                                               | Notes to Consolidated Financial Statements
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Qualitative and Quantitative Information About Market Risk                           
|                              | Item 4. Controls and procedures                                                              
|Part II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                   
|EXHIBIT INDEX                
|EXHIBIT 31.1                 
|EXHIBIT 32.1                 



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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 at June 30, 2003 and December 31, 2002                          |  |  | 3     |         
|           |  | Consolidated
Statements of Income for the three and six months ended June 30, 2003 and 2002 |  |  | 4     |         
|           |  | Consolidated
Statement of Partners Equity for the six months ended June 30, 2003           |  |  | 5     |         
|           |  | Consolidated
Statements of Cash Flows for the six months ended June 30, 2003 and 2002       |  |  | 6     |         
|           |  | Notes to Consolidated Financial Statements                                                  |  |  | 7-12  |         
|Item 2     |  | Managements
Discussion and Analysis of Financial Condition and Results of Operations       |  |  | 13-16 |         
|Item 3     |  | Qualitative and Quantitative Information About Market Risk                                  |  |  | 16    |         
|Item 4     |  | Controls and Procedures                                                                     |  |  | 16    |         
|PART II    |  | OTHER INFORMATION                                                                           |  |  |       |         
|Item 1     |  | Legal Proceedings                                                                           |  |  | 18    |         
|Item 4     |  | Submission of Matters to a Vote of Security Holders                                         |  |  | 18    |         
|Item 6     |  | Exhibits and Reports on Form 8-K                                                            |  |  | 18    |         
|SIGNATURES |  |                                                                                             |  |  |       |          | 19 | 

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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 unit amounts)
(Unaudited)

|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |              |         |   |        | 
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------- | ----- | -------------------------------------- | ------- | -------- | ------ | ------------ | ------- | - | ------ | 
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         | June 30, |        | December 31,
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         | 2003     |        | 2002        
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|ASSETS                                                                                                                                             |  |                                                                                                                               |       |                                        |         |          |        |             
|Investments in real estate:                                                                                                                        |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  | Rental properties, gross                                                                                                      |       | $                                      | 57,279  |          |        | $            | 48,611  |  
|                                                                                                                                                   |  | Accumulated depreciation                                                                                                      |       |                                        | (22,231 | )        |        |              | (21,306 | )
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  | Rental properties, net                                                                                                        |       |                                        | 35,048  |          |        |              | 27,305  |  
|                                                                                                                                                   |  | Construction in progress                                                                                                      |       |                                        |       |          |        |              | 3,678   |  
|                                                                                                                                                   |  | Land held for development                                                                                                     |       |                                        | 2,077   |          |        |              | 2,073   |  
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  |                                                                                                                               |       | Total investments in real estate       |         |          | 37,125 |              |         |   | 33,056 | 
|Cash and cash equivalents                                                                                                                          |  |                                                                                                                               | 708   |                                        |         |          | 3,588  |             
|Accounts receivable                                                                                                                                |  |                                                                                                                               | 1,040 |                                        |         |          | 1,288  |             
|Deferred financing costs and other fees, net of accumulated
amortization of $3,112 and $2,948 at June 30, 2003 and
December 31, 2002, respectively |  |                                                                                                                               | 1,279 |                                        |         |          | 927    |             
|Prepaid expenses and other assets                                                                                                                  |  |                                                                                                                               | 754   |                                        |         |          | 766    |             
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  |                                                                                                                               |       | Total assets                           |         | $        | 40,906 |              |         | $ | 39,625 | 
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|LIABILITIES AND PARTNERS EQUITY                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|Liabilities:                                                                                                                                       |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  | Secured loans payable                                                                                                         |       | $                                      | 10,222  |          |        | $            | 8,742   |  
|                                                                                                                                                   |  | Accounts payable and other liabilities                                                                                        |       |                                        | 626     |          |        |              | 370     |  
|                                                                                                                                                   |  | Construction costs payable                                                                                                    |       |                                        | 400     |          |        |              | 1,028   |  
|                                                                                                                                                   |  | Prepaid rent                                                                                                                  |       |                                        | 145     |          |        |              |       |  
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  |                                                                                                                               |       | Total liabilities                      |         |          | 11,393 |              |         |   | 10,140 | 
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|Commitments and contingent liabilities (Note 5)                                                                                                    |  |                                                                                                                               |       |                                        |         |          |        |             
|Partners Equity:                                                                                                                                  |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  | General partners                                                                                                              |       |                                        | (338    | )        |        |              | (375    | )
|                                                                                                                                                   |  | Limited partners 90,002 and 90,917 limited partnership units
outstanding at June 30, 2003 and December 31, 2002,
respectively |       |                                        | 29,851  |          |        |              | 29,860  |  
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  |                                                                                                                               |       | Total partners equity                 |         |          | 29,513 |              |         |   | 29,485 | 
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             
|                                                                                                                                                   |  |                                                                                                                               |       | Total liabilities and partners equity |         | $        | 40,906 |              |         | $ | 39,625 | 
|                                                                                                                                                   |  |                                                                                                                               |       |                                        |         |          |        |             

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 |       | Six months ended
|                                                                                    |                                           |                                |                                                  |     | June 30,           |       | June 30,        
|                                                                                    |                                           |                                |                                                  |     |                    |       |                 
|                                                                                    |                                           |                                |                                                  |     | 2003               |       | 2002             |     | 2003 |       | 2002  
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |       
|REVENUE                                                                             |                                           | $                              | 2,024                                            |     |                    | $     | 1,856            |     |      | $     | 3,953  |       |   | $     | 3,639  |      
|Rental income                                                                       |                                           | $                              | 2,024                                            |     |                    | $     | 1,856            |     |      | $     | 3,953  |       |   | $     | 3,639  |      
|                                                                                    | Interest and other income                 |                                |                                                  | 25  |                    |       |                  | 67  |      |       |        | 63    |   |       |        | 136   |  
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|                                                                                    |                                           |                                | Total revenues                                   |     |                    | 2,049 |                  |     |      | 1,923 |        |       |   | 4,016 |        |       |   | 3,775 | 
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|EXPENSES                                                                            |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|                                                                                    | Operating                                 |                                |                                                  | 844 |                    |       |                  | 807 |      |       |        | 1,677 |   |       |        | 1,554 |  
|                                                                                    | Interest expense                          |                                |                                                  | 80  |                    |       |                  | 215 |      |       |        | 170   |   |       |        | 431   |  
|                                                                                    | Depreciation and amortization             |                                |                                                  | 551 |                    |       |                  | 449 |      |       |        | 1,075 |   |       |        | 876   |  
|                                                                                    | Expenses associated with undeveloped land |                                |                                                  | 79  |                    |       |                  | 99  |      |       |        | 157   |   |       |        | 198   |  
|                                                                                    | General and administrative                |                                |                                                  | 288 |                    |       |                  | 299 |      |       |        | 566   |   |       |        | 565   |  
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|                                                                                    |                                           |                                | Total expenses                                   |     |                    | 1,842 |                  |     |      | 1,869 |        |       |   | 3,645 |        |       |   | 3,624 | 
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|Net income                                                                          |                                           | $                              | 207                                              |     |                    | $     | 54               |     |      | $     | 371    |       |   | $     | 151    |      
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|Basic and diluted net income per limited
partnership
unit                           |                                           | $                              | 2.06                                             |     |                    | $     | 0.52             |     |      | $     | 3.69   |       |   | $     | 1.45   |      
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|Distributions per limited partnership unit:                                         |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|                                                                                    |                                           | From net income                |                                                  | $   |                   |       |                  | $   |     |       |        | $     |  |       |        | $     |  |      
|                                                                                    |                                           | Representing return of capital |                                                  |     |                   |       |                  |     |     |       |        |       |  |       |        |       |  |      
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|                                                                                    |                                           |                                | Total distributions per limited
partnership unit |     | $                  |      |                  |     | $    |      |        |       | $ |      |        |       | $ |      | 
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      
|Weighted average number of limited
partnership units outstanding during each
period |                                           |                                | 90,348                                           |     |                    |       | 93,540           |     |      |       | 90,546 |       |   |       | 93,645 |      
|                                                                                    |                                           |                                |                                                  |     |                    |       |                  |     |      |       |        |       |   |       |        |      

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 six months ended June 30, 2003
(in thousands)
(Unaudited)

|                                        |  |          |      |          |  |       |        |   |  |   |        |  
|--------------------------------------- |  | -------- | ---- | -------- |  | ----- | ------ | - |  | - | ------ | -
|                                        |  | General  |      | Limited  |  |       |        |  
|                                        |  | Partners |      | Partners |  | Total
|                                        |  |          |      |          |  |      
|Balance at December 31, 2002            |  | $        | (375 | )        |  | $     | 29,860 |   |  | $ | 29,485 |  
|Retirement of limited partnership units |  |          |     |          |  |       | (343   | ) |  |   | (343   | )
|Net income                              |  |          | 37   |          |  |       | 334    |   |  |   | 371    |  
|                                        |  |          |      |          |  |       |        |   |  |   |        |  
|Balance at June 30, 2003                |  | $        | (338 | )        |  | $     | 29,851 |   |  | $ | 29,513 |  
|                                        |  |          |      |          |  |       |        |   |  |   |        |  

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)

|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |      |        |     |      |  
|------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------------------------------- | ------ | ---------------- | ----- | ---- | ------ | --- | ---- | -
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        | Six months ended
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        | June 30,        
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                 
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        | 2003             |       | 2002
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|CASH FLOWS FROM OPERATING ACTIVITIES:             |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|                                                  | Net income                                                                        |                                                                      | $                                                       | 371                                                  |        |                  | $     | 151  |       
|                                                  | Adjustments to reconcile net income
to net cash provided
by operating activities: |                                                                      |                                                         |                                                      |        |                  |       |      |       
|                                                  |                                                                                   |                                                                      | Depreciation and amortization                           |                                                      |        | 1,075            |       |      |        | 876 |     
|                                                  |                                                                                   |                                                                      | Amortization of loan fees, included in
interest expense |                                                      |        | 14               |       |      |        | 14  |     
|                                                  |                                                                                   |                                                                      | Changes in certain assets and liabilities:              |                                                      |        |                  |       |      |        |     |     
|                                                  |                                                                                   |                                                                      |                                                         | Accounts receivable                                  |        |                  | 248   |      |        |     | 8    |  
|                                                  |                                                                                   |                                                                      |                                                         | Deferred financing costs and other fees              |        |                  | (516  | )    |        |     | (107 | )
|                                                  |                                                                                   |                                                                      |                                                         | Prepaid expenses and other assets                    |        |                  | 12    |      |        |     | (14  | )
|                                                  |                                                                                   |                                                                      |                                                         | Accounts payable and other liabilities               |        |                  | (372  | )    |        |     | 7    |  
|                                                  |                                                                                   |                                                                      |                                                         | Prepaid rent                                         |        |                  | 145   |      |        |     |     |  
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|                                                  |                                                                                   |                                                                      |                                                         | Net cash provided by operating activities            |        |                  | 977   |      |        |     | 935  |  
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|                                                  |                                                                                   | Additions to investments in real estate                              |                                                         |                                                      | (4,994 | )                |       |      | (1,187 | )  
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|                                                  | Line of credit draws                                                              |                                                                      |                                                         | 1,570                                                |        |                  |       |    |       
|                                                  | Notes payable principal payments                                                  |                                                                      |                                                         | (90                                                  | )      |                  |       | (82  | )     
|                                                  | Redemption of limited partnership units                                           |                                                                      |                                                         | (343                                                 | )      |                  |       | (114 | )     
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|                                                  |                                                                                   |                                                                      |                                                         | Net cash provided by (used for) financing activities |        |                  | 1,137 |      |        |     | (196 | )
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|Net decrease in cash and cash equivalents         |                                                                                   |                                                                      | (2,880                                                  | )                                                    |        |                  | (448  | )   
|Cash and cash equivalents at beginning of period  |                                                                                   |                                                                      | 3,588                                                   |                                                      |        |                  | 8,424 |     
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|Cash and cash equivalents at end of period        |                                                                                   | $                                                                    | 708                                                     |                                                      |        | $                | 7,976 |     
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|Supplemental disclosure of cash flow information: |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     
|                                                  |                                                                                   | Cash paid for interest (net of capitalized interest of $265 in 2003) |                                                         | $                                                    | 415    |                  |       | $    | 417    |    
|                                                  |                                                                                   |                                                                      |                                                         |                                                      |        |                  |       |     

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

June 30, 2003
(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 general partners of the Partnership are Daniel
L. Stephenson and Rancon Financial Corporation (RFC), hereinafter
collectively referred to as the Sponsor or the General Partner. RFC is wholly
owned by Daniel L. Stephenson. The Partnership reached final funding in
February 1989.

During the six months ended June 30, 2003, a total of 915 Units were redeemed
at an average price of $375. As of June 30, 2003, there were 90,002 Units
outstanding.

In the opinion of RFC, the General Partner and Glenborough Realty Trust
Incorporated (Glenborough), the Partnerships asset and property manager, 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 June 30, 2003 and
December 31, 2002, and the related consolidated statements of operations for
the three and six months ended June 30, 2003 and 2002, partners equity for the
six months ended June 30, 2003, and cash flows for the six months ended June
30, 2003 and 2002.

Allocation of Net Income and Net Loss

Allocations of net income and net losses are 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 partners;
however, if the limited partners and the general partners 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 partners in
excess of the positive balance until the balances of the limited partners and
general partners 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 partners 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 Unitholder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
partners into the ratio of 4 to 1; and (iv) the balance, if any, 80% to the
limited partners and 20% to the general partners. In no event shall the
general partners be allocated less than 1% of the net income other than net
income from operations for any period.

Net losses other than net losses from operations are allocated 99% to the
limited partners and 1% to the general partners. 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 deficit 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.

General Partner and Management Agreement

Effective January 1, 1995, Glenborough Corporation (GC) entered into an
agreement with the Partnership and other related Partnerships (collectively,
the Rancon Partnerships) to perform or contract on the Partnerships behalf for
financial, accounting, data processing, marketing, legal, investor relations,
asset and development management and consulting services for a period of ten
years or until the liquidation of the Partnership, whichever comes first.
Effective January 1, 1998, the agreement was amended to eliminate GCs
responsibilities for providing investor relation services. Preferred
Partnership Services, Inc., a California corporation unaffiliated with the
Partnership, contracted to assume the investor relation services. In October
2000, GC merged into Glenborough.

The Partnership will pay Glenborough for its services as follows: (i) a
specified asset administration fee ($326,000 and $322,000 as of June 30, 2003
and 2002, respectively); (ii) sales fees of 2% for improved properties and 4%
for land; (iii) a refinancing fee of 1%

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RANCON REALTY FUND V
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

June 30, 2003
(Unaudited)

and (iv) a management fee of 5% of gross rental receipts. As part of this
agreement, Glenborough will perform certain duties for the General Partner of
the Rancon Partnerships. RFC agreed to cooperate with Glenborough, should
Glenborough attempt to obtain a majority vote of the limited partners to
substitute itself as the Sponsor for the Rancon Partnerships. Glenborough is
not an affiliate of RFC or the Partnership.

Risks and Uncertainties

The Partnerships ability to (i) achieve positive cash flow from operations,
(ii) meet its debt obligations, (iii) provide distributions either from
operations or the ultimate disposition of the Partnerships properties or (iv)
continue as a going concern may be impacted by changes in interest rates,
property values, local and regional economic conditions, or the entry of other
competitors into the market. The accompanying consolidated financial
statements do not provide for adjustments with regard to these uncertainties.

Note 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis
of accounting in accordance with accounting principles generally accepted in
the United States. They include the accounts of certain wholly owned
subsidiaries. All significant intercompany transactions and balances have been
eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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.

New Accounting Pronouncements

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately
to variable interest entities (VIEs) created after January 31, 2003, and to
VIEs in which an enterprise obtains an interest after that date. It applies in
the first fiscal year or interim period beginning after June 15, 2003, to VIEs
in which an enterprise holds a variable interest that it acquired before
February 1, 2003. FIN 46 may be applied prospectively with a cumulative-effect
adjustment as of the date on which it is first applied or by restating
previously issued financial statements for one or more years with a
cumulative-effect adjustment as of the beginning of the first year restated.
The disclosure requirements of FIN 46 are effective for all financial
statements initially issued after January 31, 2003. The adoption of FIN 46 will
not have a material impact on the financial statements of the Partnership.

Consolidation

In May 1996, the Partnership formed Rancon Realty Fund V Tri-City Limited
Partnership, a Delaware limited partnership (RRF V Tri-City). The limited
partner of RRF V Tri-City is the Partnership and the general partner is Rancon
Realty Fund V, Inc. (RRF V, Inc.), a corporation wholly owned by the
Partnership. Since the Partnership owns 100% of RRF V, Inc. and indirectly owns
100% of RRF V Tri-City, the financial statements of RRF V, Inc. and RRF V
Tri-City have been consolidated with those of the Partnership. All
intercompany balances and transactions have been eliminated in consolidation.

Rental Properties

Rental properties, including the related land, are stated at cost unless events
or circumstances indicate that cost 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 multiplied by annualized
rental 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
8Table of Contents

RANCON REALTY FUND V
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

June 30, 2003
(Unaudited)

reasonably possible that the actual results of operating and disposing of the
Partnerships properties could be materially different than current
expectations.

Depreciation is provided using the straight-line method over the five to forty
year useful lives of the respective assets.

Land Held for Development

Land held for development is 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; (ii) is computed
using estimated sales price, based upon market values for comparable
properties, and (iii) 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.

Cash and Cash Equivalents

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

Deferred Financing Costs and Other Fees

Deferred financing costs are amortized on a straight-line basis over the life
of the related loan and deferred lease commissions are amortized over the
initial fixed term of the related lease agreement.

Revenues

All leases are classified as operating leases. Rental revenue is recognized as
earned over the terms of the related leases.

Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenses are incurred. Differences between estimated and actual amounts are
recognized in the subsequent year.

The Partnerships portfolio of leases turns over continuously, with the number
and value of expiring leases varying from year to year. The Partnerships
ability to re-lease the space to existing or new tenants at rates equal to or
greater than those realized historically is impacted by, among other things,
the economic conditions of the market in which a property is located, the
availability of competing space, and the level of improvements which may be
required at the property. No assurance can be given that the rental rates that
the Partnership will obtain in the future will be equal to or greater than
those obtained under existing contractual commitments.

Sales of Real Estate

The Partnership recognizes sales of real estate when a contract is in place, a
closing has taken place, the buyers investment is adequate to demonstrate a
commitment to pay for the property and the Partnership does not have a
substantial continuing involvement in the property. Each property is
considered a separately identifiable component of the Partnership and is
reported in discontinued operations when the operations and cash flows of the
Property have been (or will be) eliminated from the ongoing operations of the
Partnership as a result of the disposal transaction and the Property will not
have any significant continuing involvement in the operations of the
Partnership after the disposal transaction.

Net Income (Loss) Per Limited Partnership Unit

Net income (loss) per limited partnership unit is calculated using the weighted
average number of limited partnership units outstanding during the period and
the Limited Partners allocable share of the net income (loss).

Income Taxes

No provision for income taxes is included in the accompanying consolidated
financial statement, 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 for financial reporting purposes will differ
from the Partnerships income tax return because of different accounting
methods used for
9Table of ContentsRANCON REALTY FUND V
A CALIFORNIA LIMITED PARTNERSHIPNotes to Consolidated Financial StatementsJune 30, 2003
(Unaudited)certain items, including depreciation expense, capitalization of development
period interest, income recognition and provisions for impairment of
investments in real estate.Concentration riskNo single tenant or affiliated group of tenants occupied more than 10 percent
of total rentable square feet or represented more than 10 percent of rental
income for the six months ended June 30, 2003, and 2002, respectively.Reference to 2002 audited consolidated financial statementsThese unaudited consolidated financial statements should be read in conjunction
with the notes to audited consolidated financial statements included in the
December 31, 2002 audited consolidated financial statements on Form 10-K.Note 3. INVESTMENTS IN REAL ESTATERental properties consisted of the following at June 30, 2003 and December 31,
2002 (in thousands):

|                                 |  |      |         |      |  |   |         |  
|-------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                 |  | 2003 |         | 2002
|                                 |  |      |         |     
|Land                             |  | $    | 7,426   |      |  | $ | 5,197   |  
|Buildings                        |  |      | 32,823  |      |  |   | 27,046  |  
|Leasehold and other improvements |  |      | 17,030  |      |  |   | 16,368  |  
|                                 |  |      |         |      |  |   |         |  
|                                 |  |      | 57,279  |      |  |   | 48,611  |  
|Less: accumulated depreciation   |  |      | (22,231 | )    |  |   | (21,306 | )
|                                 |  |      |         |      |  |   |         |  
|Total rental properties, net     |  | $    | 35,048  |      |  | $ | 27,305  |  
|                                 |  |      |         |      |  |   |         |  

At June 30, 2003, the Partnerships rental properties included six office and
four retail projects, aggregating approximately 542,000 rentable square feet,
at the Tri-City Corporate Centre in San Bernardino, California.

Land and building costs increased primarily due to the transfer of two
projects, Two Parkside and Harriman Plaza, from construction in progress to
land and building. Both projects were completed in June 2003. At Harriman
Plaza, a new tenant is occupying the whole site as a restaurant and started
paying ground lease rent in June 2003. Construction for the core and shell of
a three-story building at Two Parkside was completed in June as well. A new
tenant is expected to move in by September 2003 and occupy two stories of the
three-story property (approximately 65% of the rentable area).

Construction in progress consisted of the following at June 30, 2003 and December 31, 2002 (in thousands):

|                                                                        |  |      |   |      |  |   |       | 
|----------------------------------------------------------------------- |  | ---- | - | ---- |  | - | ----- | 
|                                                                        |  | 2003 |   | 2002
|                                                                        |  |      |   |     
|Tri-City Corporate Centre, San Bernardino, CA
(approximately 6.5 acres) |  | $    |  |      |  | $ | 3,678 | 
|                                                                        |  |      |   |      |  |   |       | 

Construction in progress decreased primarily due to the transfer of Two
Parkside and Harriman Plaza from construction in progress to land and building
upon their completion in June 2003.

Land held for development consisted of the following at June 30, 2003 and
December 31, 2002 (in thousands):

|                                                                        |  |      |       |      |  |   |       | 
|----------------------------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                                                                        |  | 2003 |       | 2002
|                                                                        |  |      |       |     
|Tri-City Corporate Centre, San Bernardino, CA
(approximately 7.5 acres) |  | $    | 2,077 |      |  | $ | 2,073 | 
|                                                                        |  |      |       |      |  |   |       | 

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RANCON REALTY FUND V
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

June 30, 2003
(Unaudited)

Note 4. NOTE PAYABLE

Note payable as of June 30, 2003 and December 31, 2002, were as follows (in
thousands):

|                                                                                                                                                                                                                                                                                                                                                                                     |  |      |        |      |  |   |       | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------ | ---- |  | - | ----- | 
|                                                                                                                                                                                                                                                                                                                                                                                     |  | 2003 |        | 2002
|                                                                                                                                                                                                                                                                                                                                                                                     |  |      |        |     
|Note payable, secured by first deed of trust
on Lakeside Tower, One Parkside and Two
Carnegie Plaza. The loan, which matures
August 1, 2006, is a 10-year, 9.39% fixed
rate loan with a 25-year amortization
requiring monthly principal and interest
payments of $83                                                                                                                |  | $    | 8,652  |      |  | $ | 8,742 | 
|Line of credit with a total availability of
$6 million secured by first deeds of trust
on One Carnegie Plaza and Carnegie Business
Center II with a variable interest rate of
lenders Prime Rate plus 0.75% points with
the floor set at 5.5% (5.5% as of June 20,
2003), monthly interest-only payments, and
a maturity date of March 5, 2005. See below
for further discussion. |  |      | 1,570  |      |  |   |     | 
|                                                                                                                                                                                                                                                                                                                                                                                     |  |      |        |      |  |   |       | 
|                                                                                                                                                                                                                                                                                                                                                                                     |  | $    | 10,222 |      |  | $ | 8,742 | 
|                                                                                                                                                                                                                                                                                                                                                                                     |  |      |        |      |  |   |       | 

In March 2003, the Partnership obtained a $6,000,000 line of credit secured by
One Carnegie Plaza and Carnegie Business Center II. This line of credit will be
used primarily to fund the remaining construction costs and tenant improvements
at Two Parkside and Harriman Plaza. See above for terms of this line of credit.

The annual maturities on the Partnerships note payable and line of credit for
the next five years and thereafter, as of June 30, 2003, are as follows (in
thousands):

|             |  |   |        | 
|------------ |  | - | ------ | 
|Year ended   |  |   |        | 
|December 31, |  |   |        | 
|             |  |   |        | 
|2003         |  | $ | 94     | 
|2004         |  |   | 203    | 
|2005         |  |   | 1,792  | 
|2006         |  |   | 8,133  | 
|2007         |  |   |       | 
|Thereafter   |  |   |       | 
|             |  |   |        | 
|Total        |  | $ | 10,222 | 
|             |  |   |        | 

Note 5. 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 results of
operations and cash flows.

General Uninsured Losses

The Partnership carries comprehensive liability, fire, flood, extended coverage
and rental loss insurance with policy specifications, limits and deductibles
customarily carried for similar properties. There are, however, certain types
of extraordinary losses, which may be either uninsurable, or not economically
insurable. Further, certain of the properties are located in areas that are
subject to earthquake activity. Should a property sustain damage as a result
of an earthquake, the Partnership may incur losses due to insurance
deductibles, co-payments on insured losses or uninsured losses. Should an
uninsured loss occur, the Partnership could lose its investment in, and
anticipated profits and cash flows from, a property.

Other Matters

The Partnership is contingently liable for subordinated real estate commissions
payable to the General Partner in the amount of $102,000 at June 30, 2003 for
sales that occurred in previous years. The subordinated real estate
commissions are payable only after

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RANCON REALTY FUND V
A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

June 30, 2003
(Unaudited)

the Limited Partners have received distributions equal to their original
invested capital plus a cumulative non-compounded return of six percent per
annum on their adjusted invested capital. Since the circumstances under which
these commissions would be payable are limited, 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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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Occupancy rates at the Partnerships Tri-City properties (excluding Two
Parkside which was in lease up) were as follows:

|                                 |  |          |     |      |  |  |     |  
|-------------------------------- |  | -------- | --- | ---- |  |  | --- | -
|                                 |  | June 30,
|                                 |  |         
|                                 |  | 2003     |     | 2002
|                                 |  |          |     |     
|One Carnegie Plaza               |  |          | 97  | %    |  |  | 88  | %
|Two Carnegie Plaza               |  |          | 98  | %    |  |  | 91  | %
|Carnegie Business Center II      |  |          | 91  | %    |  |  | 92  | %
|Lakeside Tower                   |  |          | 93  | %    |  |  | 97  | %
|One Parkside                     |  |          | 100 | %    |  |  | 100 | %
|Ballys Health Club              |  |          | 100 | %    |  |  | 100 | %
|Outback Steakhouse               |  |          | 100 | %    |  |  | 100 | %
|Palm Court Retail #3             |  |          | 100 | %    |  |  | 100 | %
|Chuck E. Cheese (Harriman Plaza) |  |          | 100 | %    |  |  | 100 | %
|Weighted average occupancy       |  |          | 96  | %    |  |  | 94  | %

As of June 30, 2003, tenants at Tri-City Corporate Centre occupying substantial
portions of leased rental space included: (i) Chicago Title with a lease
through February 2004; (ii) New York Life Insurance with a lease through May
2004; (iii) Paychex with a lease through July 2004; (iv) Computer Associates
with a lease through November 2005; (v) Holiday Spa Health Club with a lease
through December 2010; and (vi) Lewis, Damato & Brisbois et al with a lease
through November 2012. These six tenants, in the aggregate, occupy
approximately 136,000 square feet of the 542,000 total rentable square feet at
Tri-City and account for approximately 32% of the rental income generated at
Tri-City for the Partnership.

The 9% increase in occupancy from June 30, 2002 to June 30, 2003 at One
Carnegie Plaza was due to leasing 6,216 square feet to a new tenant, and
expansion of two existing tenants into approximately 3,432 square feet of
previously vacant space.

The 7% increase in occupancy from June 30, 2002 to June 30, 2003 at Two
Carnegie Plaza was due to leasing 3,336 square feet to two new tenants, and
expansion of one existing tenant into approximately 1,670 square feet of
previously vacant space.

The 4% decrease in occupancy from June 30, 2002 to June 30, 2003 at Lakeside
Tower was due to two tenants moving out of approximately 5,000 square feet upon
their lease expirations.

Site improvement at Harriman Plaza was completed, and costs were transferred
from construction in progress to land in June 2003. A new tenant is occupying
the whole site as a restaurant and started paying ground lease rent in June
2003.

Construction for the core and shell of a three-story building at Two Parkside
was completed in June and costs were transferred from construction in progress
to land and building. An anchor tenant is expected to occupy two stories of
the three-story property (approximately 65% of the rentable space) by September
2003.

Comparison of the six months ended June 30, 2003 to the six months ended June 30, 2002

Revenue

Rental income for the six months ended June 30, 2003 increased $314,000, or 9%,
compared to the six months ended June 30, 2002, primarily due to an increase in
occupancy at One and Two Carnegie Plaza and an increase in rental rates,
partially offset by a decrease in occupancy at Lakeside Tower.

Interest and other income decreased $73,000, or 54%, for the six months ended
June 30, 2003, compared to the six months ended June 30, 2002, primarily due to
a lower invested cash balance resulting from payment of the construction costs
at Two Parkside and Harriman Plaza.

Expenses

Operating expenses increased $123,000, or 8%, for the six months ended June 30,
2003, compared to the six months ended June 30, 2002 primarily due to an
increase in occupancy at One and Two Carnegie Plaza and an increase in utility
and janitorial costs, partially offset by a decrease in occupancy at Lakeside
Tower.

Interest expense decreased $261,000, or 61%, during the six months ended June
30, 2003, compared to the six months ended June 30, 2002, primarily due to
interest capitalized during construction at Two Parkside and Harriman Plaza.

Depreciation and amortization increased $199,000, or 23%, for the six months
ended June 30, 2003, compared to the six months ended June 30, 2002, primarily
due to depreciation of capital and tenant improvements.

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Expenses associated with undeveloped land decreased $41,000, or 21%, for the
six months ended June 30, 2003, compared to the six months ended June 30, 2002,
primarily due to capitalization of property taxes and insurance at Two Parkside
and Harriman Plaza during the construction period.

Comparison of the three months ended June 30, 2003 to the three months ended June 30, 2002

Revenue

Rental income for the three months ended June 30, 2003 increased $168,000, or
9%, compared to the three months ended June 30, 2002, primarily due to an
increase in occupancy at One Carnegie Plaza and Two Carnegie Plaza and an
increase in rental rates, partially offset by a decrease in occupancy at
Lakeside Tower.

Interest and other income decreased $42,000, or 63%, for the three months ended
June 30, 2003, compared to the three months ended June 30, 2002, primarily due
to a lower invested cash balance resulting from payment of the construction
costs at Two Parkside and Harriman Plaza.

Expenses

Operating expenses increased $37,000, or 5%, for the three months ended June
30, 2003, compared to the three months ended June 30, 2002 primarily due to an
increase in occupancy at One Carnegie Plaza and Two Carnegie Plaza.

Interest expense decreased $135,000, or 63%, during the three months ended June
30, 2003, compared to the three months ended June 30, 2002, primarily due to
interest capitalized during construction at Two Parkside and Harriman Plaza.

Depreciation and amortization increased $102,000, or 23%, for the three months
ended June 30, 2003, compared to the three months ended June 30, 2002,
primarily due to depreciation of capital and tenant improvements.

Expenses associated with undeveloped land decreased $20,000, or 20%, for the
three months ended June 30, 2003, compared to the three months ended June 30,
2002, primarily due to capitalization of property taxes and insurance at Two
Parkside and Harriman Plaza during the construction period.

Liquidity and Capital Resources

The following discussion should be read in conjunction with the Partnerships
December 31, 2002 audited consolidated financial statements and the notes
thereto.

As of June 30, 2003, the Partnership had cash and cash equivalents of $708,000.
The remainder of the Partnerships assets consisted primarily of its net
investments in real estate, totaling approximately $37,125,000, including
$35,048,000 in rental properties and $2,077,000 of land held for development
within the Tri-City area.

Rental properties increased primarily due to the transfer from construction in
progress to land and building of Harriman Plaza and Two Parkside. Both projects
were completed in June 2003. At Harriman Plaza, a new tenant is occupying the
whole site as a restaurant and started paying ground lease rent in June 2003.
Construction of the core and shell of a three-story building at Two Parkside
was completed in June 2003. A new tenant is expected to occupy two stories of
the three-story property (approximately 65% of the rentable area) by September
2003.

The Partnerships liabilities at June 30, 2003, included a note payable and a
line of credit totaling approximately $10,222,000 and encumbering properties
with an aggregate net book value of approximately $22,850,000. The note
requires monthly principal and interest payments of $83,000, bears a fixed
interest rate of 9.39%, and has a maturity date of August 1, 2006. The line of
credit has a total availability of $6,000,000, requires monthly interest-only
payments, bears an interest rate of prime plus 0.75% points, with a floor set
at 5.5% (5.5% as of June 30, 2003), and has a maturity date of March 5, 2005.

The Partnership is contingently liable for subordinated real estate commissions
payable to the General Partner in the amount of $102,000 at June 30, 2003 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 six percent per annum on their adjusted invested
capital. Since the circumstances under which these commissions would be
payable are limited, the liability has not been recognized in the accompanying
consolidated financial statements; however, the amount will be recorded when
and if it becomes payable.

Operationally, the Partnerships primary source of funds consists of cash
provided by its rental activities. Other sources of funds may include
permanent financing, property sales, interest income on certificates of deposit
and other deposits of funds invested temporarily. Cash generated from property
sales is generally added to the Partnerships cash reserves, pending use in
development of other properties or distribution to the partners.

Management believes that the Partnerships cash and cash equivalents at June
30, 2003, together with cash from operations, sales and financings will be
sufficient to finance the Partnerships and the properties continued
operations and development plans on

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a short-term basis and for the reasonably foreseeable future. There can be no
assurance that the Partnerships results of operations will not fluctuate in
the future and at times affect its ability to meet its operating requirements.

The Partnership knows of no demands, commitments, events or uncertainties,
which might affect its capital resources in any material respect. In addition,
the Partnership is not subject to any covenants pursuant to its secured debt
that would constrain its ability to obtain additional capital.

Operating Activities

For the six months ended June 30, 2003, the Partnerships cash provided by
operating activities totaled $977,000.

The $248,000 decrease in accounts receivable at June 30, 2003, compared to
December 31, 2002, was primarily due to the collection of tenant improvement
receivables and the reimbursement of tenant improvements from the reserve
impound account.

The $516,000 increase in deferred financing costs and other fees at June 30,
2003, compared to December 31, 2002, was primarily due to lease commissions
paid for two new leases totaling approximately 59,000 square feet at One
Carnegie Plaza and Two Parkside.

The $12,000 decrease in prepaid expenses and other assets at June 30, 2003,
compared to December 31, 2002, was primarily due to amortization of prepaid
insurance.

The $372,000 decrease in accounts payable and other liabilities at June 30,
2003, compared to December 31, 2002, was primarily due to payment of
construction costs, partially offset by accruals of building operating
expenses.

The $145,000 increase in prepaid rents at June 30, 2003, compared to December
31, 2002, was due to payments of July 2003 rents received in June 2003.

Investing Activities

During the three months ended June 30, 2003, the Partnerships cash used for
investing activities totaled $4,994,000, which consisted of $3,948,000 for core
and shell at Two Parkside, $380,000 for site improvement at Harriman Plaza,
$146,000 for building improvements at Lakeside, and $520,000 for tenant
improvements at Lakeside and Two Parkside.

Financing Activities

During the three months ended June 30, 2003, the Partnerships cash provided by
financing activities totaled $1,137,000, which consisted of a $1,570,000 draw
on the line of credit (as discussed above), offset by $90,000 in principal
payments on the note payable, and $343,000 paid to redeem 915 limited
partnership Units.

Critical Accounting Policies

Revenue recognized on a straight-line basis

The Partnership recognizes rental revenue on a straight-line basis at amounts
that it believes it will collect on a tenant-by-tenant basis. The estimation
process may result in higher or lower levels from period to period as the
Partnerships collection experience and the credit quality of the Partnerships
tenants changes. Actual amounts collected could be lower 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.

Carrying value of rental properties and land held for development

The Partnerships rental properties, including the related land, are stated at
cost unless events or circumstances indicate that cost cannot be recovered, in
which case, the carrying value of the property is reduced to its estimated fair
value. Estimated fair value is based upon (i) 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 multiplied by annualized
rental 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.

Land held for development is 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; (ii) is computed
using estimated sales price, based upon market values for comparable
properties; and (iii) 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.

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The actual value of the Partnerships portfolio of properties and land held for
development could be significantly higher or lower than their carrying amounts.

Provision for income taxes

No provision for income taxes is included in the 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, provisions for
impairment of investments in real estate, capitalization of development period
interest, and rental income and loss recognition.

The Partnerships tax returns, the qualification of the Partnership as a
partnership for federal income tax purposes, and the amount of income or loss
are subject to examination by federal and state taxing authorities. If such
examinations result in changes to the Partnerships taxable income or loss, the
tax liability of the partners could change accordingly.

New Accounting Pronouncements

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately
to variable interest entities (VIEs) created after January 31, 2003, and to
VIEs in which an enterprise obtains an interest after that date. It applies in
the first fiscal year or interim period beginning after June 15, 2003, to VIEs
in which an enterprise holds a variable interest that it acquired before
February 1, 2003. FIN 46 may be applied prospectively with a cumulative-effect
adjustment as of the date on which it is first applied or by restating
previously issued financial statements for one or more years with a
cumulative-effect adjustment as of the beginning of the first year restated.
The disclosure requirements of FIN 46 are effective for all financial
statements initially issued after January 31, 2003. The adoption of FIN 46 will
not have a material impact on the financial statements of the Partnership.




Item 3. Qualitative and Quantitative Information About Market Risk

Interest Rates

The Partnerships primary market risk exposure is to changes in interest rates
obtainable on its secured borrowings. The Partnership does not believe that
changes in market interest rates will have a material impact on the performance
or fair value of its portfolio.

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

|                      |  |                        |      |      |  |      |      |      |  |                |       |       |  |            |       |   |  |  |     |  |  |   |       |   |  |   |       | 
|--------------------- |  | ---------------------- | ---- | ---- |  | ---- | ---- | ---- |  | -------------- | ----- | ----- |  | ---------- | ----- | - |  |  | --- |  |  | - | ----- | - |  | - | ----- | 
|                      |  | Expected Maturity Date |      |      |  |      |      |      |  |                |       |       | 
|                      |  |                        |      |      |  |      |      |      |  |                |       |       |  |            |       |   |  | 
|                      |  | 2003                   |      | 2004 |  | 2005 |      | 2006 |  | Thereafter     |       | Total |  | Fair Value
|                      |  |                        |      |      |  |      |      |      |  |                |       |       |  |           
|                      |  |                        |      |      |  |      |      |      |  | (in thousands) |       |       |  |            |       |   |  |  |     |  |  |  
|Secured Fixed         |  | $                      | 94   |      |  | $    | 203  |      |  | $              | 222   |       |  | $          | 8,133 |   |  |  | N/A |  |  | $ | 8,652 |   |  | $ | 8,652 | 
|Average interest rate |  |                        | 9.39 | %    |  |      | 9.39 | %    |  |                | 9.39  | %     |  |            | 9.39  | % |  |  | N/A |  |  |   | 9.39  | % |  |   |       | 
|Secured variable      |  | $                      |    |      |  | $    |    |      |  | $              | 1,570 |       |  |            | N/A   |   |  |  | N/A |  |  | $ | 1,570 |   |  | $ | 1,570 | 
|Average interest rate |  |                        |     |      |  |      |    |      |  |                | 5.5   | %     |  |            | N/A   |   |  |  | N/A |  |  |   | 5.5   | % |  |   |       | 

The Partnership believes that the interest rates given in the table for fixed
rate borrowings approximate the rates the Partnership could currently obtain
for instruments of similar terms and maturities and that the fair values of
such instruments approximate carrying value at June 30, 2003.

A change of 1/8% in the index rate to which the Partnerships variable rate
debt is tied would not have a material impact on the annual interest incurred
by the Partnership, based upon the balances outstanding on variable rate
instruments at June 30, 2003.

As of June 30, 2003, the Partnership had no investments in interest-bearing
certificates of deposit. The Partnership does not own any derivative
instruments.




Item 4. Controls and procedures

(a)  Evaluation of disclosure controls and procedures.

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The General Partners chief executive officer and chief financial officer,
after evaluating the effectiveness of the Partnerships disclosure controls
and procedures (as defined in the Securities Exchange Act of 1934 Rules
13a-14(c) and 15-d-14(c)) as of a date (the Evaluation Date) within 90 days
before the filing date of this quarterly report, has concluded that as of the
Evaluation Date, the Partnerships disclosure controls and procedures were
effective and designed to ensure that material information relating to the
Partnership and its consolidated subsidiaries would be made known to him by
others within those entities.

(b)  Changes in internal controls.

There were no significant changes in the Partnerships internal controls or in
other factors that could significantly affect those controls subsequent to the
Evaluation Date.

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




|        |  |                  
|------- |  | -----------------
|Item 1. |  | Legal Proceedings
|        |  | None.            




|        |  |                                                    
|------- |  | ---------------------------------------------------
|Item 4. |  | Submission of Matters to a Vote of Security Holders
|        |  | None.                                              




|        |  |                                 
|------- |  | --------------------------------
|Item 6. |  | Exhibits and Reports on Form 8-K
|       
|        |  | (a) Exhibits:                   

|     |  |                                                                                                                   
|---- |  | ------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Daniel L.
Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership.
|    
|32.1 |  | Certification of Daniel L.
Stephenson, Chief Executive Officer and Chief Financial Officer of General Partnership.



| |  | (b) Reports on Form 8-K (incorporated herein by reference):
| |  | -----------------------------------------------------------
|
| |  | None.                                                      

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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: |  | August 14, 2003 | By:        /s/  DANIEL L. STEPHENSON
                Daniel L. Stephenson, President                                  | 
|     
|Date: |  | August 14, 2003 | By:        /s/  DANIEL L. STEPHENSON
                Daniel L. Stephenson, General Partner                            | 

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EXHIBIT INDEX

|     |  |                                                                                                                               
|---- |  | ------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Section 302 Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial
Officer of General Partnership.
|    
|32.1 |  | Section 906 Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial
Officer of General Partnership.

20