<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

     For the quarterly period ended June 30, 2006

                                       or

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

     For the transition period from _________ to _________

                         Commission File Number 33-24129

            Historic Preservation Properties 1989 Limited Partnership
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                                    Delaware
         (State or Other Jurisdiction of Incorporation or Organization)

                                   04-3021042
                      (I.R.S. Employer Identification No.)

         21 Custom House Street, Suite 440, Boston, Massachusetts 02110
                    (Address of Principal Executive Offices)

                    Issuer's Telephone Number, (617) 422-5815

       _________________________________________________________________
              (Former name, former address and former fiscal year,
                          if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
    -----    -----

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes       No
    -----    -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: ___________

Transitional Small Business Disclosure Format (Check one):
Yes       No
    -----    -----

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP

                                   FORM 10-QSB

                                  JUNE 30, 2006

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                        <C>
PART  I - FINANCIAL INFORMATION

Item 1. Financial Statements

           Consolidated Balance Sheet                                          3

           Consolidated Statements of Operations                               4

           Consolidated Statements of Partners' Equity (Deficit)               5

           Consolidated Statements of Cash Flows                               6

           Notes to Consolidated Financial Statements                       7-10

Item 2. Management's Discussion and Analysis or Plan of Operation          11-13

Item 3. Controls and Procedures                                               13

PART II - Other Information                                                   14

Signatures                                                                    15
</TABLE>

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2006
                                   (UNAUDITED)

<TABLE>
<S>                                                        <C>
                           ASSETS
CASH AND CASH EQUIVALENTS                                  $7,746,528
DEPOSIT                                                         9,093
                                                           ----------
                                                           $7,755,621
                                                           ==========
              LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
   Accounts payable and accrued expenses                   $  357,107
                                                           ----------
COMMITMENT (Note 4)
PARTNERS' EQUITY
   Limited Partners' Equity - Units of Investor Limited
      Partnership Interest, $1,000 stated value
      per Unit-Issued and outstanding 26,588 units          7,555,864
   General Partner's Deficit                                 (157,350)
                                                           ----------
      Total partners' equity                                7,398,514
                                                           ----------
                                                           $7,755,621
                                                           ==========
</TABLE>

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


                                        3

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                          Three Months              Six Months
                                         Ended June 30,           Ended June 30,
                                     ----------------------   ----------------------
                                        2006         2005        2006         2005
                                     ----------   ---------   ----------   ---------
<S>                                  <C>          <C>         <C>          <C>
REVENUE:
   Interest and other income         $    1,509   $     919   $    2,382   $   1,955
                                     ----------   ---------   ----------   ---------
EXPENSES:
   Operating and administrative          89,268     102,357      203,728     213,412
                                     ----------   ---------   ----------   ---------
OPERATING LOSS FROM CONTINUING
   OPERATIONS                           (87,759)   (101,438)    (201,346)   (211,457)
EQUITY IN INCOME (LOSS) OF
   INVESTEE ENTITY (NOTE 3)                  --       3,913      442,437      (1,917)
                                     ----------   ---------   ----------   ---------
NET INCOME (LOSS) FROM
   CONTINUING OPERATIONS                (87,759)    (97,525)     241,091    (213,374)
INCOME FROM DISCONTINUED
   OPERATIONS (INCLUDING GAIN
   ON SALE OF REAL ESTATE
   OF $6,471,609) (NOTE 3)            6,095,200      35,418    6,143,885      27,003
                                     ----------   ---------   ----------   ---------
NET INCOME (LOSS)                    $6,007,441   $ (62,107)  $6,384,976   $(186,371)
                                     ==========   =========   ==========   =========
NET INCOME (LOSS) ALLOCATED
   TO GENERAL PARTNER                $   60,074   $    (621)  $   63,850   $  (1,864)
                                     ==========   =========   ==========   =========
NET INCOME (LOSS) ALLOCATED
   TO LIMITED PARTNERS               $5,947,367   $ (61,486)  $6,321,126   $(184,507)
                                     ==========   =========   ==========   =========
NET INCOME (LOSS) PER UNIT OF
   INVESTOR LIMITED PARTNERSHIP
   INTEREST, BASED ON 26,588 UNITS
   ISSUED AND OUTSTANDING:
      Continuing operations          $    (3.27)  $   (3.63)  $     8.98   $   (7.95)
                                     ==========   =========   ==========   =========
      Discontinued operations        $   226.95   $    1.32   $   228.77   $    1.01
                                     ==========   =========   ==========   =========
</TABLE>

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


                                        4

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
              CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
                   FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND
                      FOR THE YEAR ENDED DECEMBER 31, 2005

<TABLE>
<CAPTION>
                                       Units of
                                       Investor     Investor
                                       Limited      Limited      General
                                     Partnership    Partners'   Partner's
                                       Interest      Equity      Deficit       Total
                                     -----------   ----------   ---------   ----------
<S>                                  <C>           <C>          <C>         <C>
BALANCE, December 31, 2004              26,588     $1,649,665   $(217,009)  $1,432,656
   Net loss                                 --       (414,927)     (4,191)    (419,118)
                                        ------     ----------   ---------   ----------
BALANCE, December 31, 2005              26,588      1,234,738    (221,200)   1,013,538
   Net income (unaudited)                   --      6,321,126      63,850    6,384,976
                                        ------     ----------   ---------   ----------
BALANCE, June 30, 2006 (unaudited)      26,588     $7,555,864   $(157,350)  $7,398,514
                                        ======     ==========   =========   ==========
</TABLE>

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


                                        5

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   2006         2005
                                                               -----------   ----------
<S>                                                            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                           $ 6,384,976   $ (186,371)
   Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
      Depreciation                                                  38,186      114,647
      Amortization                                                  32,383        4,737
      Gain on sale of real estate                               (6,471,609)          --
      Equity in (income) loss of Investee Entity                  (442,437)       1,917
      Decrease (increase) in other assets                          232,687      (19,143)
      Increase (decrease) in accounts payable and
         accrued expenses                                          244,544      (47,173)
                                                               -----------   ----------
         Net cash provided by (used in) operating activities        18,730     (131,386)
                                                               -----------   ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of real estate                            10,982,800           --
   Distributions from Investee Entity                              752,912
   Capital expenditures - building improvements                    (24,036)          --
   Change in other assets                                               --      (26,849)
                                                               -----------   ----------
         Net cash provided by (used in) investing activities    11,711,676      (26,849)
                                                               -----------   ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments of mortgage principal                                  (71,361)     (65,240)
   Payoff of mortgage note payable                              (4,666,289)          --
                                                               -----------   ----------
         Cash used in financing activities                      (4,737,650)     (65,240)
                                                               -----------   ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS             6,992,756     (223,475)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                     753,772    1,073,055
                                                               -----------   ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                       $ 7,746,528   $  849,580
                                                               ===========   ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid for interest                                      $   246,970   $  217,988
                                                               ===========   ==========
</TABLE>

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


                                        6
<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006
                                   (UNAUDITED)

(1)  ORGANIZATION AND GENERAL PARTNER - BHP

     Historic Preservation Properties 1989 Limited Partnership (the Partnership)
     was formed on September 1, 1988 under the Delaware Revised Uniform Limited
     Partnership Act. The purpose of the Partnership is to invest in a
     diversified portfolio of real properties, or entities investing in real
     properties, for which certain costs of rehabilitation have qualified for
     rehabilitation tax credits (Rehabilitation Tax Credits).

     Boston Historic Partners Limited Partnership (BHP), a Massachusetts limited
     partnership, is the general partner of the Partnership. BHP was formed in
     November 1986 for the purpose of organizing, syndicating and managing
     publicly offered real estate limited partnerships (Public Rehabilitation
     Partnerships). As of June 30, 2006, BHP had established three such
     partnerships, including the Partnership.

     The Amended and Restated Agreement of Limited Partnership (Partnership
     Agreement) of the Partnership generally provides that all net profits, net
     losses, tax credits and cash distributions of the Partnership from normal
     operations be allocated 99% to the Limited Partners and 1% to BHP. Excess
     proceeds from sales or refinancings generally are available to be
     distributed to the Limited Partners until they have received an amount
     equal to their Adjusted Capital Contributions (as defined in the
     Partnership Agreement) plus priority returns and additional incentive
     priority returns for certain Limited Partners admitted to the Partnership
     on or prior to certain specified dates.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The consolidated financial statements should be read in conjunction with
     the consolidated financial statements and notes thereto included in the
     Partnership's Form 10-KSB for the year ended December 31, 2005.

     Principles of Consolidation

     The consolidated financial statements as of and for the three and six
     months ended June 30, 2006 and 2005 include the accounts and transactions
     of the Partnership and Portland Lofts Associates Limited Partnership
     (Portland Lofts) after elimination of all inter-company accounts. As
     discussed further in Note 3, Portland Lofts' real property was sold on June
     29, 2006. The transactions of Portland Lofts on the accompanying statements
     of operations for the three and six months ended June 30, 2006 and 2005 are
     classified as income from discontinued operations.

     The Partnership and Portland Lofts are collectively referred to herein as
     HPP'89.

     Investment in Investee Entity

     The Partnership accounted for its investment in 402 Julia Street Associates
     Limited Partnership (Investee Entity) under the equity method. In general,
     under the equity method of accounting for investments, the investment is
     recorded at cost and the current allocable portion of earnings (losses) of
     an investee entity is recorded as income (loss) with a corresponding
     increase (decrease) to the investment account. The allocable portion of
     losses of an investee entity is not recorded after the respective
     investment account is reduced to zero. The allocable portion of earnings of
     an investee entity is not recorded until all previously unrecorded losses
     are absorbed. Distributions received are recorded as reductions to the
     investment account.

     Expenditures attributable to the Partnership's investments (primarily
     evaluation and acquisition fees and interest expense incurred during
     construction periods) are treated as additional investment basis and are
     amortized on a straight-line basis over the estimated life of the investee
     assets (40 years).


                                        7

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2006
                                   (UNAUDITED)

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Use of Estimates

     The preparation of consolidated 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
     amounts of revenue and expenses during the reporting period. Actual results
     could differ from those estimates.

     The consolidated financial statements include all adjustments which, in the
     opinion of management, are necessary in order to make the consolidated
     financial statements not misleading.

     Depreciation

     Depreciation was provided over the estimated economic useful lives of the
     assets using the straight-line method through the date on which such assets
     were classified as held for disposition.

     Acquisition of assets and expenditures incurred that extended the useful
     life of the related assets were capitalized. Expenditures for maintenance
     and repairs, including major repairs and replacements made as part of a
     periodic maintenance program to restore the assets repaired to
     substantially original condition, were expensed as incurred.

     HPP'89 reviewed property and equipment for impairment whenever events or
     changes in circumstances indicated that the carrying value of the asset may
     not be recoverable. An impairment loss was recognized if the sum of the
     expected future cash flows, undiscounted and excluding interest expense,
     from the use of the asset was less than the carrying value of the asset.

     Cash, Cash Equivalents and Concentration of Credit Risk

     HPP'89 considers all highly liquid investments with a maturity of three
     months or less when purchased to be cash equivalents. At June 30, 2006,
     cash equivalents totaled $7,509,369.

     At June 30, 2006, HPP'89 had $7,413,351 of cash and cash equivalents on
     deposit in banks in excess of amounts insured by the Federal Deposit
     Insurance Corporation. Also at June 30, 2006, HPP'89 had $37,657 of
     Massachusetts' municipal money market funds, which are not insured or
     guaranteed.

     Deferred Costs

     Deferred costs relating to Portland Lofts' mortgage note were amortized on
     a straight-line basis over the term of the mortgage note. Costs relating to
     Portland Lofts' special real estate tax assessments were amortized on a
     straight-line basis over their respective terms through the sale of the
     property (see Note 3).

     Revenue Recognition

     Revenue under short-term operating leases and month-to-month arrangements
     was recorded when due. Revenue under non-cancelable commercial leases was
     recorded on a straight-line basis over the term of the lease. Upon sale by
     Portland Lofts of its real property (see Note 3), all rights to and
     interests in leases entered into by and between Portland Lofts and tenants
     were assigned to the Purchaser.

     Income Taxes

     No provision (benefit) for income taxes is reflected in the accompanying
     consolidated financial statements. Partners of the Partnership are required
     to report on their tax returns their allocable share of income, gains,
     losses, deductions and credits determined on a tax basis.


                                        8

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2006
                                   (UNAUDITED)

(3)  INVESTMENTS IN REAL ESTATE AND INVESTEE ENTITY, AND DISCONTINUED OPERATIONS

     The Investee Entity's agreement, in general, provided for a sharing of
     management duties and decisions among the Partnership and the local general
     partner. Significant Investee Entity decisions required the approval of
     both the Partnership and the local general partner. In addition, the
     Investee Entity had entered into various agreements with its local general
     partner (or its affiliates), to provide development, management and other
     services, for which the local general partner (or its affiliates), were
     paid fees by 402 Julia Street Associates Limited Partnership.

     Following is a summary of information regarding the Real Estate investment
     and the Investee Entity investment.

     PORTLAND LOFTS ASSOCIATES LIMITED PARTNERSHIP (Portland Lofts) is a
     Delaware limited partnership formed on August 8, 1989 to acquire,
     construct, rehabilitate, operate and manage three buildings containing 89
     residential units and 29,250 square feet of ground floor commercial space,
     located at 555 Northwest Park Avenue in Portland, Oregon. Profits and
     losses are allocated, and cash distributions are made, to the partners in
     accordance with Portland Lofts' Partnership Agreement.

     On June 29, 2006, Portland Lofts sold its real property to SP/Honeyman,
     LLC, a Delaware Limited Liability Company, for $11,000,000. The sale
     resulted in a gain on sale of real estate of approximately $6,472,000.

     Included in the discontinued operations for the three months ended June 30,
     2006 is rental and other income of $297,424, gain on the sale of real
     estate of $6,471,609 and net income of $6,134,306 (excluding expense of
     $39,106 related to discontinued operations paid by the Partnership) from
     Portland Lofts. Included in the discontinued operations for the six months
     ended June 30, 2006 is rental and other income of $666,985, gain on the
     sale of real estate of $6,471,609 and net income of $6,195,491 (excluding
     expense of $51,606 related to discontinued operations paid by the
     Partnership) from Portland Lofts. Included in the discontinued operations
     for the three months ended June 30, 2005 is rental and other income of
     $354,149 and net income of $35,418 from Portland Lofts. Included in the
     discontinued operations for the six months ended June 30, 2005 is rental
     and other income of $702,305 and net income of $27,003 from Portland Lofts.

     402 JULIA STREET ASSOCIATES LIMITED PARTNERSHIP (402 Julia) was a Delaware
     limited partnership formed on July 25, 1989 to acquire, construct,
     rehabilitate, operate and manage a building containing 24 residential units
     and approximately 3,900 net rentable square feet of commercial space
     located at 402 Julia Street, New Orleans, Louisiana.

     On February 23, 2006, 402 Julia sold its real property to an affiliate of
     the local general partner of 402 Julia in accordance with the terms of the
     402 Julia Partnership Agreement for $1,800,000. The sale resulted in a gain
     of approximately $597,500.

     As of March 31, 2006, 402 Julia concluded its business operations.

     Under the equity method of accounting the Partnership recorded from 402
     Julia an operating loss of $29,565, a gain on sale of real estate of
     $390,342 and received cash distributions of $752,912 in the first quarter
     of 2006. Also in the first quarter of 2006, the Partnership recorded a
     change in estimate of $81,660 to reduce a previously recognized impairment
     loss on its investment in 402 Julia. The Partnership recorded a loss from
     402 Julia of $291and amortization expense of $1,626 on its investment in
     402 Julia, for the six months ended June 30, 2005.

     On September 16, 1993, the Partnership sold one-third of its general
     partnership interest in 402 Julia to the developer general partner for
     $185,000. The Partnership's percentage of interest in 402 Julia was thereby
     reduced from 98% to 65%. The terms of the sale require annual payments of
     $3,500 through 2016 and a final payment of $4,500 in 2017. The remaining
     uncollected payments, totaling $46,500 and which were secured by the
     interest sold to the developer general partner, were collected in March
     2006.


                                        9

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2006
                                   (UNAUDITED)

     Summary statements of operations of the Investee Entity for the period from
     January 1, 2006 through February 23, 2006 and for the six months ended June
     30, 2005, are as follows:

                        SUMMARY STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                  2006       2005
                                                --------   --------
<S>                                             <C>        <C>
Revenue:
   Rental revenue                               $ 29,311   $131,935
   Interest and other income                      18,345      6,265
                                                --------   --------
      Total revenue                               47,656    138,200
                                                --------   --------
Expenses:
   Operating expenses                             29,588     83,129
   Depreciation and amortization                  11,089     21,916
   Interest expense and prepayment penalty        52,234     33,599
                                                --------   --------
      Total expenses                              92,911    138,644
                                                --------   --------
Net loss from operations                         (45,255)      (444)
                                                --------   --------
Gain on sale of property                         597,493         --
                                                --------   --------
Net income (loss)                               $552,238   $   (444)
                                                ========   ========
Net income (loss) allocated to HPP'89           $360,777   $   (291)
                                                ========   ========
Net income (loss) allocated to other partners   $191,461   $   (153)
                                                ========   ========
</TABLE>

(4)  COMMITMENT

     The Partnership engages Gunn Financial, Incorporated (GFI), an unaffiliated
     Massachusetts corporation, to provide accounting, asset management and
     investor services. GFI provides such services for an annual management fee
     plus reimbursement of all its costs of providing these services. Through
     June 30, 2005, the annual fee was $54,000, however, effective July 1, 2005
     the annual fee was reduced to $36,000. The agreement originally expired on
     June 30, 2006 or liquidation of the Partnership, as defined. On June 8,
     2006, the termination date was extended to June 30, 2007. All other terms
     and conditions remain in full force and effect. For the six months ended
     June 30, 2006 and 2005, GFI was reimbursed $148,363 and $124,798,
     respectively, for operating costs.

(5)  SUBSEQUENT EVENT

     On July 27, 2006, the General Partner committed to a plan of liquidation
     and anticipates the Partnership will liquidate and dissolve before December
     31, 2006. Effective July 27, 2006, HPP'89 will adopt the liquidation basis
     of accounting.

(6)  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying amounts of cash and cash equivalents, deposit, accounts
     payable and accrued expenses at June 30, 2006 approximate their fair values
     due to their short maturities. All financial instruments are held for
     non-trading purposes.


                                       10

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                                  JUNE 30, 2006

Item 2. Management's Discussion and Analysis or Plan of Operation.

Special Note Regarding Forward-Looking Statements. Certain statements in this
report may constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Words "believes," "seeks,"
"estimates," and "should," and variations of these words and similar
expressions, are intended to identify these forward-looking statements. The
Partnership's actual results could differ materially from those anticipated in
these forward-looking statements. Limited Partners, potential investors and
other readers are urged to consider that factor and are cautioned not to place
undue reliance on such forward-looking statements. The forward-looking
statements included herein are made as of the date of this report, and the
Partnership undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.

Critical Accounting Policies. The SEC defines critical accounting policies as
those that require application of management's most difficult, subjective or
complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent
periods.

The Company's significant accounting policies are disclosed in the footnotes to
the Partnership's consolidated financial statements. Management believes the
following significant accounting policies also are considered critical
accounting policies:

     The Partnership capitalizes as investment in real estate the initial
     acquisition of property and equipment and those expenditures incurred that
     extend the useful life of the related assets. Expenditures for maintenance
     and repairs, including major repairs and replacements made as part of a
     periodic maintenance program to restore the assets repaired to
     substantially original condition, are expensed as incurred. During the six
     months ended June 30, 2006, the Partnership did not record any expenses of
     major repairs and maintenance costs incurred as part of a periodic
     maintenance program rather than capitalizing such expenditures.

     The Partnership reviewed its long-lived assets, including investment in
     real estate and its investment in investee entity, for impairment whenever
     events or changes in circumstances indicated that the carrying value of the
     asset may not be recoverable. An impairment loss is required to be
     recognized if the sum of the expected future cash flows, undiscounted and
     excluding interest expense, from the use and/or disposition of the asset is
     less than the carrying value of the asset. For the six months ended June
     30, 2006, the Partnership did not recognize an impairment loss.

Plan of Operation. The Partnership terminated its offering of Units on December
29, 1989, at which time Limited Partners had purchased 26,588 Units,
representing gross contributions of $26,588,000. Such amounts originally
contributed represent 100% of the Limited Partners' capital contributions after
deduction of selling commissions, organizational and sales costs, acquisition
fees and reserves. The Partnership invested cash flow from the property in
normal repairs and maintenance.

On February 23, 2006, 402 Julia sold its real property to an affiliate of the
local general partner of 402 Julia for $1,800,000, as further discussed below.
The Partnership received distributions from 402 Julia of $752,912 for the three
months ended March 31, 2006. As of March 31, 2006, 402 Julia concluded its
business operations.

On June 29, 2006, Portland Lofts sold its real property to SP/Honeyman, LLC, a
Delaware Limited Liability Company for $11,000,000, as further discussed below.
The Partnership received distributions from Portland Lofts of $78,000 for each
of the six month periods ended June 30, 2006 and 2005.

As of June 30, 2006, cash and cash equivalents total $7,746,528. The
Partnership's cash is used primarily to fund general and administrative expenses
of managing the public fund.

On July 27, 2006, the General Partner committed to a plan of liquidation and
anticipates the Partnership will liquidate and dissolve before December 31,
2006.


                                       11

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                                  JUNE 30, 2006
                                   (CONTINUED)

Cash flows from discontinued operations reported in the Statement of Cash Flows
for the six months ended June 30, 2006 consist of net cash provided by operating
activities of $171,367, net cash provided by investing activities of
$10,958,764, cash used in financing activities of $4,737,650 and an increase in
cash and cash equivalents of $6,392,481. Cash flows from discontinued operations
reported in the Statement of Cash Flows for the six months ended June 30, 2005
consist of net cash provided by operating activities of $55,539, cash used in
investing activities of $26,849, cash used in financing activities of $65,240
and a decrease in cash and cash equivalents of $36,550.

Management's Discussion and Analysis of Financial Condition and Results of
Operations. The Partnership accounted for its investment in 402 Julia using the
equity method of accounting. The consolidated financial statements as of and for
the three and six months ended June 30, 2006 and 2005 include the accounts and
transactions of the Partnership and Portland Lofts Associates Limited
Partnership after elimination of all inter-company accounts. The transactions of
Portland Lofts on the Consolidated Statements of Operations for the three and
six months ended June 30, 2006 and 2005 are classified as income from
discontinued operations.

In general, under the equity method of accounting for investments, the
investment is recorded at cost and the current allocable portion of earnings
(losses) of an Investee Entity is recorded as income (loss) with a corresponding
increase (decrease) to the investment account. The allocable portion of losses
of an Investee Entity is not recorded after the respective investment account is
reduced to zero. The allocable portion of earnings of an Investee Entity is not
recorded until all previously unrecorded losses are absorbed. Distributions
received are recorded as reductions to the investment account. Distributions
received from an Investee Entity whose respective investment account has been
reduced to zero are recorded as income.

The Partnership's allocable share of operating income and/or losses in 402 Julia
was 65.33%. For the six months ended June 30, 2005, 402 Julia recorded an
economic occupancy of 90% for its residential units and an economic occupancy of
100% for its commercial space for a combined economic occupancy of 92%.

In November 2005 an unaffiliated third party made an offer to purchase the
property for $1,800,000 ("the Offer"). The purchase price was confirmed by an
independent property appraisal. Under the 402 Julia partnership agreement, the
Partnership exercised its right to cause to sell the property and gave notice to
the local general partner of 402 Julia of its intentions to sell the land and
building. The local general partner exercised his right, under the 402 Julia
partnership agreement, to purchase the property at the same price and terms as
set forth in "the Offer". On February 23, 2006, 402 Julia sold its real property
to an affiliate of the local general partner of 402 Julia for $1,800,000. As of
March 31, 2006, 402 Julia concluded its business operations. For the three
months ended March 31, 2006 (the date of 402 Julia's dissolution), 402 Julia
recorded net income of approximately $552,200, inclusive of a gain on sale of
property of approximately $597,500 and amortization of approximately $11,100.
For the six months ended June 30, 2005, 402 Julia recorded a net loss of
approximately $400 which included depreciation and amortization of approximately
$21,900.

On April 14, 2006, Portland Lofts entered into a Purchase and Sale Agreement to
sell its real property. The purchase price was confirmed by an independent
property appraisal. On June 29, 2006, Portland Lofts' real property was sold to
SP/Honeyman, LLC, a Delaware Limited Liability Company, for $11,000,000.

For the period January 1, 2006 through June 29, 2006 (the sale date of the
property), Portland Lofts recorded an economic occupancy of 91% for its
residential units and an economic occupancy of 98% for its commercial space for
a combined economic occupancy of 93%. For the six months ended June 30, 2005,
Portland Lofts recorded an economic occupancy of 86% for its residential units
and an economic occupancy of 86% for its commercial space for a combined
economic occupancy of 86%. For the six months ended June 30, 2006, Portland
Lofts recorded a gain on the sale of real estate of approximately $6,471,600 and
operating net loss of approximately $276,100 (excluding expenses of
approximately $51,600 related to discontinued operations paid by the
Partnership) which included depreciation and amortization of approximately
$70,600. For the six months ended June 30, 2005, Portland Lofts recorded a net
loss of approximately $27,000 which included depreciation and amortization of
approximately $119,400.


                                       12

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                                  JUNE 30, 2006
                                   (CONTINUED)

The Partnership recorded consolidated net income of approximately $6,007,400 for
the three months ended June 30, 2006, as compared to consolidated net loss of
approximately $62,100 for the three months ended June 30, 2005. The Partnership
recorded consolidated net income of approximately $6,385,000 for the six months
ended June 30, 2006, as compared to consolidated net loss of approximately
$186,400 for the six months ended June 30, 2005. These increases were primarily
caused by the income from discontinued operations for both the three and six
months ended June 30, 2006 and an increase in equity in income of Investee
Entity for the six months ended June 30, 2006 as compared to the same periods in
2005. The increase in income from discontinued operations is primarily due to
the sale of Portland Lofts' real property in the second quarter of 2006, as
discussed above. As a result of the sale of Portland Lofts' real property, the
Partnership recorded a gain on the sale of approximately $6,471,600 and incurred
a business tax in the City of Portland, based on the taxable gain on the sale,
of approximately $330,000. Equity in income of Investee Entity increased as a
result of the sale of 402 Julia's real property on February 23, 2006, as
discussed above. As a result of the sale of 402 Julia's real property, the
Partnership, under the equity method of accounting, recorded a gain on sale of
approximately $390,300 in the first quarter of 2006.

Item 3. Controls and Procedures.

The General Partner (performing similar functions of Chief Executive Officer and
Chief Financial Officer) and Robert Gunn (President of GFI, performing similar
functions of Financial Officer) have evaluated the effectiveness of the
Partnership's disclosure controls and procedures as of June 30, 2006, and have
determined there are sufficient internal controls in place for the Partnership,
Portland Lofts and 402 Julia (through March 31, 2006) to effectively report all
adjustments necessary in order to make the consolidated financial statements and
footnotes not misleading. Management has not made any changes to the internal
controls or in other factors that could significantly affect internal controls,
subsequent to the date of our most recent evaluation.


                                       13

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP
                           PART II - OTHER INFORMATION
                                  JUNE 30, 2006

Item 1. Legal Proceedings

        The Partnership is not a party to, to the best knowledge of the General
        Partner, any material pending legal proceedings.

        To the best knowledge of the General Partner, Portland Lofts Associates
        L.P. and 402 Julia Street Associates L.P. are not currently subject to
        any material pending legal proceedings.

Item 2. Changes in Securities and Use of Proceeds - Not applicable.

Item 3. Defaults Upon Senior Securities - Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders - Not applicable.

Item 5. Other Information - Not applicable.

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibit 31.1 - General Partner's Certification pursuant to 18 U.S.C.
          Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002.

     (b)  Exhibit 31.2 - Asset Manager's Certification pursuant to 18 U.S.C.
          Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002

     (c)  Exhibit 32.1 - General Partner's Certification pursuant to 18 U.S.C.
          Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

     (d)  Exhibit 32.2 - Asset Manager's Certification pursuant to 18 U.S.C.
          Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

     (e)  Reports on Form 8-K - Sale of Portland Lofts Associates Limited
          Partnership's real property dated June 29, 2006 and filed with the
          Commission on July 6, 2006.


                                       14

<PAGE>

            HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        HISTORIC PRESERVATION PROPERTIES 1989
                                        LIMITED PARTNERSHIP

                                        By: Boston Historic Partners Limited
                                            Partnership, General Partner

                                        By: Portfolio Advisory Services,
                                            Inc., General Partner


Date: August 10, 2006                   By: /s/ Terrence P. Sullivan
                                            ------------------------------------
                                            Terrence P. Sullivan,
                                            President

                                        and


Date: August 10, 2006                   By: /s/ Terrence P. Sullivan
                                            ------------------------------------
                                            Terrence P. Sullivan,
                                            General Partner


                                       15