SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549

FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 1997

Commission file number: 0-305

Name of registrant: NATIONAL PROPERTIES CORPORATION
I.R.S. Employer Identification Number: 42-0860581
Address: 4500 Merle Hay Road, Des Moines, Iowa 50310
telephone number: (515) 278-1132

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $1.00 (Title of Class)

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 _____

State the aggregate market value of the voting stock held by non-affiliates
of the Registrant.  The aggregate market value shall be computed by the
reference to the price at which the stock was sold, or the average bid and
asked prices of such stock as of a specified date within 60 days prior to
the date of filing.

$5,612,519 as of March 2, 1998

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

Common Stock, Par Value $1.00 - March 2, 1998 - 424,866 Shares

DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for the 1998 annual meeting of Stockholders See Part III

PART I

Item 1.   Business

(a)   General Development of Business.  The Registrant,
organized under the Iowa Business Corporation Act, is engaged
principally in the development of commercial real estate for
lease to tenants under net lease arrangements.  The Registrant
also derives revenues from its portfolio of investment
securities.

On March 4, 1997, the Registrant executed contracts to purchase and leaseback 
two convenience stores located in the Atlanta, Georgia area at a cost of 
approximately $1,500,000 each.  The closing on one store was October 15, 1997.  
Closing on the second store was completed on February 13, 1998 at a cost of 
$1,480,000 and was financed with funds drawn on the Registrant's credit lines.

On October 10, 1997, the Registrant sold its convenience store property in 
Lincoln, Nebraska for $261,043, net of selling expenses and on October 15, 
1997, a convenience store building located in Gainesville, Georgia (an 
Atlanta, Georgia suburb) was acquired in a qualified IRC Section 1031 Exchange 
for $1,500,000.  The cash balance of $1,238,957 to complete the exchange was 
drawn on the Registrant's long-term line of credit.  

(b)   Financial Information About Industry Segments.  The
      Registrant operates in a single industry segment.

(c)   Narrative Description of Business.


Real Estate Held For Investment

The Registrant seeks to acquire or develop improved real estate properties 
suitable for lease to commercial tenants.  It is the Registrant's policy to 
invest in properties that are fully leased to a single tenant which is 
responsible for payment of real estate taxes, insurance, utilities and 
repairs.  Under such circumstances, the Registrant has limited management 
responsibilities for such properties once they are constructed and leased. In 
most cases properties are constructed by the tenant and conveyed to the 
Registrant under a sale and leaseback arrangement.  It is not the policy of 
the Registrant to invest in multiple tenant office buildings or residential 
facilities.  Primary factors considered by the Registrant in developing a 
property for lease are the use to be made of the property, its location, the 
nature and credit standing of the tenant, the rental income to be derived 
under the lease, and the ability of the Registrant to utilize the property or 
dispose of it upon termination of the lease.  

All of the investment properties now owned by the Registrant are located in 
Arizona, Georgia, Iowa, Kansas, Missouri, Nebraska, Oklahoma, and Texas.  The 
Registrant has placed no limitations, however, on the locations in which it is 
willing to develop properties in the future.

The commercial real estate acquired by the Registrant is normally purchased 
with funds drawn on the Registrants lines of credit.  In most cases, the 
Registrant gives careful consideration to the rate of return which it will 
receive from an investment based on the original cost thereof to the 
Registrant without regard to possible mortgage financing.  While the rate of 
return varies, it has ranged generally from 10% to 13%.

Real estate investments acquired or developed by the Registrant are not held 
for resale, but are held as long-term investments.  The Registrant may, 
however, dispose of properties depending upon the circumstances then existing.

Virtually all of the Registrant's development activity is handled by its 
President, including lease negotiations, site acquisitions, construction 
activities, and financing.

The real estate investment activity engaged in by the Registrant is highly 
competitive, with numerous investors seeking to develop properties for lease 
to qualified tenants.  These competitors include numerous major national 
financial institutions with resources and abilities to attract tenants which 
are far greater than those of the Registrant; as well as many other types of 
full-time and part-time real estate investors.

At December 31, 1997, the Registrant owned 39 leased properties having an 
aggregate cost of $27,426,345.  The rental income for 1997 on these leased 
properties amounted to $3,491,764.  Seven of the properties are leased to two 
restaurant operators and account for 18.5% of rental income; four telephone 
service center buildings and one Goodyear Tire Service Center building account 
for 10.5% of rental income; eighteen QuikTrip Convenience stores and one 
related office building account for 49.8% of rental income; three nurseries 
(garden centers) account for 13.5% and three 7-Eleven Convenience stores, one 
motel land lease and three office buildings account for the balance of 6.2%.  
In addition to the foregoing, other properties, held for future development, 
generated rental income of $54,545 in 1997.  

As of December 31, 1997, the tenants of all 39 leased properties were in 
compliance with the terms of their respective leases.  However, Sunbelt 
Nursery Group, Inc., which operates approximately 60 retail nurseries (Garden 
Centers), including three owned by the Registrant, has incurred substantial 
losses over the last two years and has reported a loss of approximately 
$4,500,000 for the first six months of their current fiscal year ended 
December 28, 1997.  The three stores owned by the Registrant generate annual 
rental income of approximately $455,000 of which $78,000 on one of the nursery 
properties is guaranteed by a third party.  Sunbelt has taken significant 
steps to restore profitability, and has succeeded in narrowing its losses in 
the current year.  However, in the event Sunbelt determines that a Chapter 11 
Reorganization is necessary, the Registrant may incur a substantial reduction 
in future lease rental income.  

Other Investments

The Registrant has a portion of its assets invested in marketable securities 
which had a market value of $2,148,283 as of December 31, 1997.

Employees

The Registrant currently employs 6 persons; 3 full-time employees and
3 part-time employees.

<TABLE>
<CAPTION>
Item 2
Properties (Dec. 31, 1997)                       Land    Bldgs. &   Accumulated     Rental     Lease    Renewal    
Mortgage    Int.
                                                 Cost    Improve.  Depreciation  Income 1997  Expires   Options     
Balance    Rate
                                            ---------  ----------  ------------  -----------  -------  --------  ----
------  ------
<S>                                         <C>        <C>         <C>           <C>          <C>      <C>       <C>         
<C>
A. DAYS INN-LAND LEASE   Newton, Ia.           82,500           -             -       26,048     2006  4-10 Yr.           
-
                                            ---------  ----------  ------------  -----------                     ----
------
B. RESTAURANT PROPERTIES
  Perkins 'Cake & Steak  Des Moines, Ia.      137,000     343,365       289,571       68,316     2001   1-5 Yr            
-
  Perkins 'Cake & Steak  Des Moines, Ia.      140,000     341,602       286,946       73,612     2002   1-5 Yr            
-
  Perkins 'Cake & Steak  Des Moines, Ia.      200,000     373,192       373,192       71,893     2002   2-5 Yr.           
-
  Perkins 'Cake & Steak  Newton, Ia.          112,500     485,181       436,663       84,424     1999   2-5 Yr.           
-
  Perkins 'Cake & Steak  Des Moines, Ia.      243,166     498,675       448,807      105,192     2000   2-5 Yr.           
-
  Carl's Jr. Restaurant  a Chandler, AZ.      168,000     772,000       579,000      114,778     2005   3-5 Yr.           
-
  Carl's Jr. Restaurant  a Tucson, AZ.         90,000     738,000       474,535      128,757     2005   6-5 Yr.           
-
                                            ---------  ----------  ------------  -----------                     ----
------
    Total                                   1,090,666   3,552,015     2,888,714      646,972               -
                                            ---------  ----------  ------------  -----------                     ----
------
C. SERVICE CENTERS
  Northwestern Bell      Decorah,  Ia.         20,000     191,102       131,860       22,966     1999   1-5 Yr.           
-
  Northwestern Bell      Cedar Rapids, Ia.     37,000     397,394       253,156       84,000     2001   1-5 Yr.           
-
  Continental Tel. Co.   Chariton, Ia.          8,364     541,755       386,452       70,641     2000      -  )           
-
  Continental Tel. Co.   Fayette, Ia.           6,322     428,685       305,790       56,190     2000      -  )     
246,194      9.984
  Goodyear Service Ctr.  Wichita, KS.         100,000     978,725       265,420      132,000     2004   4-5 Yr.           
-
                                            ---------  ----------  ------------  -----------                     ----
------
    Total                                     171,686   2,537,661     1,342,683      365,797                        
246,194
                                            ---------  ----------  ------------  -----------                     ----
------

D. CONVENIENCE STORES
  QuikTrip               a Des Moines, Ia.    144,664     691,878       250,524       110,882     2010   2-5 Yr.           
-
  QuikTrip & Off. Bldg.  Des Moines, Ia.      215,000     672,000       486,080       103,680     1999   2-5 Yr.           
-
  QuikTrip               Des Moines, Ia.       50,000     185,000       161,104        47,051     2000   2-5 Yr.           
-
  QuikTrip               Des Moines, Ia.       60,000     200,000       200,000        44,057     2002   1-5 Yr.           
-
  QuikTrip               Des Moines, Ia.       50,240     265,360       234,401        43,305     2004   2-5 Yr.           
-
  QuikTrip               Wichita, KS.          53,500     436,637       107,154        58,081     2009   4-5 Yr.           
-
  QuikTrip               Norcross, Ga.        103,000     765,000       177,587       102,858     2014   4-5 Yr.           
-
  QuikTrip               Wichita, KS.          60,000     514,000       123,072        67,445     2010   4-5 Yr.           
-
  QuikTrip               Tulsa, OK.           155,000   1,340,000       313,761       175,662     2010   4-5 Yr.           
-
  QuikTrip               a Des Moines, Ia.     84,500     557,500       123,524        75,435     2010   4-5 Yr.           
-
  QuikTrip               a Johnston, Ia.       48,502     476,160        82,519        73,574     2012   4-5 Yr.           
-
  QuikTrip               a St. Louis, Mo.     152,000   1,575,433       277,572       231,780     2017   4-5 Yr.           
-
  QuikTrip               a Des Moines, Ia.    183,095     900,000       122,634       108,183     2013   4-5 Yr.           
-
  QuikTrip               Norcross, Ga.         92,500     834,000        79,323        92,650     2009   4-5 Yr.           
-
  QuikTrip               Norcross, Ga.         95,500     858,000        81,604        95,350     2009   4-5 Yr.           
-
  QuikTrip               Clive, Ia.           325,605     393,814        25,673       124,570     2015   4-5 Yr            
-
  QuikTrip               Alpharetta, Ga       148,585   1,324,000        49,654       149,472     2016   4-5 Yr            
-
  QuikTrip               Gainesville, Ga.     122,927   1,227,923         8,527        33,586     2012   4-5 Yr.           
-
  7-Eleven               Des Moines, Ia.       96,455     137,954       128,183        39,674     1999   1-5 Yr.           
-
  7-Eleven               Lincoln, NE.              -           -             -         22,924     1999   1-5 
Yr.Sold10/10/97
  7-Eleven               Omaha, NE.            44,110     128,574       122,682        30,838     1998   1-5 Yr.           
-
                                            ---------  ----------  ------------  -----------                      ---
-------
    Total                                   2,281,741  13,483,233     3,155,578     1,831,057                              
-
                                            ---------  ----------  ------------   -----------                     ---
-------
E. OFFICE BUILDINGS
  Associates Financial
    Serv.                Des Moines, Ia.       61,692      55,812        41,161       14,850     1997    1-3 Yr.           
-
  Corporate Headquarters b Des Moines, Ia.     25,000     418,222       336,428       39,520     1999    2-2 Yr.           
-
  GTech                  Des Moines, Ia.       16,000     174,953       130,559       41,200     2001    1-2 Yr.           
-
                                            ---------  ----------  ------------  -----------                      ---
-------
    Total                                     102,692     648,987       508,148       95,570                               
-
                                            ---------  ----------  ------------  -----------                      ---
-------
F. GARDEN CENTERS
  Wolfe Nursery          a Dallas, TX.        125,000     586,825       537,923       94,791     1999    3-5 Yr.           
-
  Tip-Top Nursery        a Glendale, AZ.       66,144     433,057       148,374      158,484     2002    3-5 Yr.           
-
  Wolfe Nursery          a Arlington, TX.     200,000   1,700,000       254,133      218,500     2010    3-5 Yr.           
-
                                            ---------  ----------  ------------  -----------                      ---
-------
    Total                                     391,144   2,719,882       940,430      471,775                               
-
                                            ---------  ----------  ------------  -----------                      ---
-------
G. OTHER PROPERTIES                           260,386     103,752       100,442       54,545                               
-
                                            ---------  ----------  ------------  -----------                      ---
-------
    Totals                                  4,380,815  23,045,530     8,935,995    3,491,764                         
246,194
                                            =========  ==========  ============  ===========                      
==========
</TABLE>

a Mortgaged to Lender - See Note 4 of Notes to Financial Statements.
b 50% Used by  Registrant; 50% Leased


Other Properties

The following unencumbered properties are held for future
development by the Registrant.  

(1)   Real Estate, S. E. Delaware and Oralabor Road, Ankeny, Iowa.

This commercially zoned property is located in Ankeny, Iowa, at the Industrial 
Exit of Interstate 35.  It contains approximately 33 acres. 

(2)   Real Estate, Interstate 80 & Highway 14, Newton, Iowa.

This is a 4-acre undeveloped site adjoining the Perkins Restaurant and Days 
Inn Motel.

(3)   Real Estate, 4745 - 2nd Avenue, Des Moines, Iowa.

This site contains approximately 106,000 square feet of land and a 3,200 
square foot concrete block building. The building is leased as a lounge for 
$2,750 per month, and the lease expires December 31, 1998. Approximately 
82,000 square feet of unused land is available for development. 

(4)   Real Estate, 845 Sixth Avenue, Des Moines, Iowa 

This 6,000 square foot concrete block building situated on a lot of the same 
size was purchased in 1974.  This building is rented for $1,500 per month, and 
the lease expires April 30, 1998.  

Item 3.   Legal Proceedings.

The Registrant is not engaged in any material legal proceedings.


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

NOT APPLICABLE



PART II

Item 5.   Market for the Registrant's Common Stock and Related
          Security Holder Matters

The Common Stock of the Registrant (symbol NAPE) is traded on
the over-the-counter bulletin board; a product of the National
Association of Security Dealers, Inc., sponsored by market
makers.  Quotations are inter-dealer prices, without retail
mark-up, or mark-down, or commission and may not necessarily
represent actual transactions.  The prices shown below are by
calendar quarters for 1997 and 1996.  N/A indicates prices were 
not available.  

<TABLE>
<CAPTION>
                       Bid                 Asked
1997              High     Low         High     Low
<S>               <C>      <C>         <C>      <C>
1st  Quarter      21-3/4   20-1/2      N/A      N/A
2nd  Quarter      24       22          N/A      N/A
3rd  Quarter      28       24          N/A      N/A
4th  Quarter      28-5/8   28          N/A      N/A
<CAPTION>
                       Bid                 Asked
1996	            High     Low         High     Low
<S>               <C>      <C>         <C>      <C>
1st  Quarter      23-3/4   17          N/A      N/A
2nd  Quarter      20       20          N/A      N/A
3rd  Quarter      20       20          N/A      N/A
4th  Quarter      20-1/2   20          N/A      N/A

</TABLE>

A cash dividend of 10 cents per share was paid in 1997.  Future dividend 
declarations will be dependent upon the earnings of the Registrant, its 
financial condition, its capital requirements and general business conditions.

There were approximately 750 stockholders of record as of March 2, 1998.

<TABLE>
<CAPTION>
Item 6.   Selected Financial Data. (In thousands except for per
          share amounts)

                                     Year ended December 31,
                             1997      1996      1995      1994      1993
<S>                        <C>       <C>       <C>       <C>       <C>
Year ended December 31,
  Lease rental income       3,492     3,262     3,140     3,016     2,766
  Interest income               1         -         3         8         2
  Dividend income              72        80        89       107       114
  Gain on sale of
    securities                 24        59       103       104         1
  Net income                1,143     1,039       903       905       792

At December 31,
  Total assets             20,778    20,115    19,118    19,600    17,412
  Long-term debt            5,264     6,031     5,148     6,758     6,220
  Book value-properties &
    equipment              18,495    18,102    17,394    17,682    16,352
  Net Unrealized Gain
    Marketable Securities     917       569       605       462         -
  Stockholders' equity     13,922    12,899    12,070    11,142    10,025

Per Common Share
Net income*                  2.62      2.30      1.97      1.96      1.68
Cash dividends               0.10      0.10      0.00      0.18      0.17
Book value                  32.27     28.71     26.49     24.15     21.38
</TABLE>


*Based on weighted average shares outstanding



Item 7.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations.

Liquidity and Capital Resources

At December 31, 1997, the Registrant's primary source of
liquidity was $79,545 in cash; marketable securities with a
market value of approximately $2,148,000; and a $6,075,000
remaining loan balance available on three lines of credit with
two local banks. (See Note 4 of the Notes to Financial
Statements).  In addition, the Registrant owns unencumbered real
estate having an aggregate depreciated cost of approximately $8,000,000.  
Management
believes that its cash flow from operations and other potential
sources of cash, will be sufficient to finance current and
projected operations.

Each year for many years the Registrant has reacquired a limited
amount of its common stock.  During the three years ended
December 31, 1997, 29,857 shares were repurchased in the open
market and negotiated transactions.  The total cost of the
reacquired shares amounted to $671,433; an average per share
cost of $22.49.

Results of Operations 1997 Compared to 1996

As detailed on the Income Statement total income for the year 1997 was 
approximately $185,000 more than in 1996.  The increase in rental income of 
approximately $230,000 was due to property acquisitions in 1996 and 1997 that 
produced additional rental income of approximately $175,000.  ($187,000 in 
1997 versus $12,000 in 1996).  In addition rent increases on nine properties 
totaled approximately $46,000 in 1997, which was offset by a decrease of 
approximately $6,700 in rental income due to a sale of one property in 1997. 
Contingent rentals based on sales overages increased approximately $15,000 in 
1997.  

Total expenses increased approximately $36,000 in 1997 primarily due to 
increases in professional fees, payroll costs and depreciation aggregating 
$49,000 offset by a decrease in interest costs of $13,000.  

The effective income tax rate was 36.1% in 1997 as compared to 36.6% in 1996.

Results of Operations 1996 Compared to 1995

As detailed on the Income Statement total income for the year 1996 was 
approximately $69,000 more than in 1995.  The increase in rental income of 
approximately $122,000 was due to property acquisitions in 1996 and 1995 that 
produced additional rental income of approximately $95,000.  ($368,000 in 1996 
versus $273,000 in 1995).  In addition rent increases on seven properties 
aggregated approximately $33,000 in 1996, which was offset by a decrease of 
approximately $7,500 due to a sale of a rental property in 1995.  

Total expenses decreased approximately $150,000 primarily due to decrease in 
interest, professional fees, and payroll costs aggregating approximately 
$171,000 offset by an increase in depreciation and maintenance costs 
aggregating approximately $24,000.   

The effective income tax rate was 36.6% in 1996 as compared to 36.4% in 1995.

Item 8.  Financial Statements and Supplementary Data.

  Financial statements filed herewith:

    Balance Sheets as of December 31, 1997 and December 31, 1996.

    Statements of Income and Stockholders' Equity for the years ended 
      December 31, 1997, December 31, 1996 and December 31, 1995.

    Statements of Cash Flows for the years ended December 31, 1997,
      December 31, 1996 and December 31, 1995.

    Notes to Financial Statements.

    Accountant's Report.


Item 9.  Disagreements on Accounting and Financial Disclosures.

                              NONE


PART III

In answer to Items 10, 11, 12 and 13 of Part III, the Registrant 
incorporates by reference the required information which is
contained in its definitive Proxy Statement.  The Proxy
Statement is for the 1998 annual meeting of stockholders and
will be filed with the Commission not later than 120 days after
December 31, 1997.

PART IV

Item 14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
     (a)    List the following documents filed as part of this report.
            1.   All financial statements.
                   See Item 8 of Part II.
            2.   Financial statement schedules.
                   Schedule III as of December 31, 1997.
                   Note to schedule III as of December 31, 1997, 1996 and 
1995.  
                   All other Schedules are omitted 
because they are inapplicable or not required.
    (b)    No report on Form 8-K was filed during the last quarter of 1997.


SIGNATURES


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


___NATIONAL PROPERTIES CORPORATION___ (Registrant)


Date  __3/20/98__          By _____/S/__Raymond_Di_Paglia_________
                               Raymond Di Paglia, President and Chief
                               Executive Officer


Date  __3/20/98__          By _____/S/__Kristine_M._Fasano__________
                                Kristine M. Fasano, Secretary


Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.


DIRECTORS OF THE REGISTRANT

Date  __3/20/98__          By _____/S/__William_D._Buzard________
                               William D. Buzard

Date  __3/20/98__          By _____/S/__Raymond_Di_Paglia________
                               Raymond Di Paglia

Date  __3/20/98__          By _____/S/__Kristine_M._Fasano_______
                               Kristine M. Fasano

Date  __3/20/98__          By _____/S/__Robert_H._Jamerson_______
                               Robert H. Jamerson


NORTHUP, HAINES, KADUCE, SCHMID, MACKLIN, P.C. 
Certified Public Accountants

Board of Directors and Stockholders
National Properties Corporation


INDEPENDENT AUDITOR'S REPORT 


We have audited the accompanying balance sheets of National Properties 
Corporation as of December 31, 1997 and 1996 and the related statements of 
income, stockholders' equity and cash flows for each of the three years in the 
period ended December 31, 1997.  These financial statements and the schedules 
referred to below are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements and 
schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatements.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements.  
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation.  We believe that our audits provide a 
reasonable basis for our opinion.  

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of National Properties 
Corporation as of December 31, 1997 and 1996, and the results of its 
operations and its cash flows for each of the three years in the period ended 
December 31, 1997, in conformity with generally accepted accounting 
principles.

Our audits were made for the purpose of forming an opinion on the basic 
financial statements taken as a whole.  The schedules listed in Item 14(a)(2) 
are presented for purposes of complying with the Securities and Exchange 
Commission's rules and are not part of the basic financial statements.  These 
schedules have been subjected to the auditing procedures applied in our audits 
of the basic financial statements and, in our opinion, fairly state in all 
material respects the financial data required to be set forth therein in 
relation to the basic financial statements taken as a whole.  

/S/ NORTHUP, HAINES, KADUCE, SCHMID, MACKLIN, P.C. 
NORTHUP, HAINES, KADUCE, SCHMID, MACKLIN, P.C. 

February 10, 1998
West Des Moines, Iowa

1025 Ashworth Road. Suite 500, West Des Moines, IA 50265-3500, Phone (515) 
223-0221    Fax: (515) 223- 1030


<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION BALANCE SHEETS

                                                               December 31,
                                                             1997        1996
<S>                                                    <C>         <C>
ASSETS

CURRENT ASSETS
  Cash                                                     79,545     120,784
  Mortgage loans receivable                                    -          718
  Accounts receivable                                      12,451      15,576
  Prepaid income taxes                                         -      244,467
  Other                                                     6,711       6,724
                                                       ----------  ----------
    Total current assets                                   98,707     388,269
                                                       ----------  ----------

PROPERTY AND EQUIPMENT, AT COST - Notes 1 and 5
  Land                                                  4,380,815   4,402,210
  Buildings and improvements                           23,045,530  21,896,495
  Furniture and equipment                                  63,677      62,816
                                                       ----------  ----------
                                                       27,490,022  26,361,521
  Less-accumulated depreciation                         8,995,091   8,259,087
                                                       ----------  ----------
    Property and equipment-net                         18,494,931  18,102,434
                                                       ----------  ----------

OTHER ASSETS
  Marketable securities, at market value-Note 3         2,148,283   1,581,725
  Deferred charges and other assets                        35,596      42,723
                                                       ----------  ----------
    Total other assets                                  2,183,879   1,624,448
                                                       ----------  ----------
                                                       20,777,517  20,115,151
                                                       ==========  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                          3,830       5,699
  Notes payable - Note 4                                        -     225,000
  Accrued liabilities                                     287,266     264,653
  Current maturities of long-term debt                    407,062      96,929
  Federal and state income taxes                           27,298          - 
                                                       ----------  ----------
    Total current liabilities                             725,456     592,281
                                                       ----------  ----------
LONG-TERM DEBT - Notes 4 & 5                            5,264,132   6,030,779
                                                       ----------  ----------
DEFERRED INCOME TAXES                                     865,733     592,638
                                                       ----------  ----------
STOCKHOLDERS' EQUITY
  Common stock - $1 par value
    Authorized - 5,000,000 shares
    Issued - (1997-431,456 shares; 1996-449,245 shares)   431,456     449,245
  Retained earnings                                    12,573,294  11,881,556
  Net unrealized gain on marketable securities            917,446     568,652
                                                       ----------  ----------
    Total stockholders' equity                         13,922,196  12,899,453
                                                       ----------  ----------
                                                       20,777,517  20,115,151
                                                       ==========  ==========
</TABLE>


<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
STATEMENTS OF INCOME AND STOCKHOLDERS' EQUITY
For the years ended December 31, 1997, 1996 and 1995

STATEMENTS OF INCOME                              1997        1996        1995
<S>                                         <C>         <C>         <C>
REVENUES
  Lease rental income                        3,491,764   3,262,200   3,139,978
  Interest income                                  703         235       2,975
  Dividend income                               71,985      79,870      89,168
  Gain on sale of assets                        24,336      61,819     102,823
                                            ----------  ----------  ----------
    Total revenues                           3,588,788   3,404,124   3,334,944
                                            ----------  ----------  ----------


EXPENSES
  Salaries and wages                           251,440     245,874     269,964
  Depreciation                                 807,989     776,699     767,455
  Property, payroll and misc. taxes             60,958      56,776      57,586
  Interest                                     484,119     497,161     638,821
  Other                                        196,605     188,560     181,603
                                            ----------  ----------  ----------
    Total expenses                           1,801,111   1,765,070   1,915,429
                                            ----------  ----------  ----------
    Income before income taxes               1,787,677   1,639,054   1,419,515

INCOME TAXES-Note 2                            644,595     599,951     516,822
                                            ----------  ----------  ----------
    Net income                               1,143,082   1,039,103     902,693
                                            ==========  ==========  ==========

Net income per share                              2.62        2.30        1.97
Weighted average common shares outstanding     435,761     451,876     457,720
</TABLE>

<TABLE>
<CAPTION>
STATEMENTS OF STOCKHOLDERS' EQUITY                      
                                                                     Net
                                                                     
Unrealized
                                                                     gain on 
                                                Common   Retained    
marketable
                                                 Stock   Earnings    
securities
                                            ----------  ----------  ----------
<S>                                        <C>        <C>         <C>
  Balances December 31, 1994                   461,313  10,219,318     461,579
    Net income - 1995                               -      902,693          - 
    Purchase and retirement of common stock     (5,658)   (112,229)         - 
    Change in unrealized gains, net of tax           -           -     143,427
                                            ----------  ----------  ----------
  Balances December 31, 1995                   455,655  11,009,782     605,006
    Net income - 1996                                -   1,039,103          - 
    Purchase and retirement of common stock     (6,410)   (121,950)         - 
    Cash dividend - 10 cents per share               -     (45,379)         - 
    Change in unrealized gains, net of tax           -          -      
(36,354)
                                            ----------  ----------  ----------
  Balances December 31, 1996                   449,245  11,881,556     568,652
    Net income - 1997                                -   1,143,082          - 
    Purchase and retirement of common stock    (17,789)   (407,397)         - 
    Cash dividend - 10 cents per share               -     (43,947)         - 
    Change in unrealized gains, net of tax           -          -      348,794
                                            ----------  ----------  ----------
  Balances December 31, 1997                   431,456  12,573,294     917,446
                                            ==========  ==========  ==========
</TABLE>

<TABLE>
<CAPTION>
NATIONAL PROPERTIES CORPORATION
STATEMENTS OF CASH FLOWS
For the years ended December 31, 1997, 1996 and 1995

                                                   Increase(Decrease) in Cash
                                                  1997        1996        1995
                                            ----------  ----------  ----------
<S>                                         <C>         <C>         <C>
CASH FLOW FROM OPERATING ACTIVITIES
  Net income                                 1,143,082   1,039,103     902,693
  Adjustments to reconcile net income to
   net cash provided by operating
   activities:
    Depreciation and amortization              815,116     782,712     774,075
    Deferred income taxes                       73,471     267,183          - 
    Gain on sale of assets                     (24,336)    (61,819)   
(102,823)
    Changes in assets and liabilities:
      Accounts receivable                        3,125       2,158         161
      Prepaid expenses and deferred charges         13     (14,532)        
(20)
      Accounts payable and accrued expenses     20,745      75,266    
(141,275)
      Federal and state income taxes           271,765    (247,800)    
(65,729)
                                            ----------  ----------  ----------
  Net cash provided by operations            2,302,981   1,842,271   1,367,082
                                            ----------  ----------  ----------

CASH FLOW FROM INVESTING ACTIVITIES
  Additions to property and equipment       (1,200,486) (1,484,811)   
(479,928)
  Payments received on mortgage notes              718       2,586       8,713
  Purchase of securities                       (37,368)   (148,736)   
(128,962)
  Proceeds - sale of assets                     43,563     119,501     518,793
                                            ----------  ----------  ----------
  Net cash used in
   investing activities	                    (1,193,573) (1,511,460)    
(81,384)
                                             ----------  ----------  ---------
-

CASH FLOW FROM FINANCING ACTIVITIES
  Borrowings on credit lines                 3,000,000   2,679,664   1,297,303
  Repayments of credit line borrowings      (3,584,585) (2,275,079) 
(2,317,302)
  Principal payments on mortgage Notes         (96,929)   (564,704)   
(262,640)
  Dividends paid                               (43,947)    (45,379)         - 
  Purchase of treasury stock                  (425,186)   (128,360)   
(117,887)
                                            ----------  ----------  ----------
  Net cash provided by (used) in
   financing activities                     (1,150,647)   (333,858) 
(1,400,527)
                                            ----------  ----------  ----------
Net increase (decrease) in cash                (41,239)     (3,047)   
(114,829)
Cash at beginning of year                      120,784     123,831     238,660
                                            ----------  ----------  ----------
Cash at the end of year                         79,545     120,784     123,831
                                            ==========  ==========  ==========

SUPPLEMENTAL CASH FLOW INFORMATION
  Cash paid during the year for:
    Interest expense                           523,320     503,527     657,366
    Income tax payments                        372,830     580,568     582,551

NON-CASH INVESTING TRANSACTIONS
  Exchange of like kind real restate:
  Basis of property received                 1,350,850          -      535,247
  Less cash paid                             1,238,957          -      335,247
                                            ----------  ----------   ---------
  Basis of property given up                   111,893          -      200,000
                                            ==========  ==========   =========


</TABLE>


NOTES TO FINANCIAL STATEMENTS
SUMMARY OF ACCOUNTING POLICIES


Marketable Securities:  Marketable securities are classified as available-for 
-sale and reported at fair market value in accordance with the Statement of 
Financial Accounting Standards (SFAS) No. 115.  The Registrant's investments 
are held for an indefinite period.  

Property and Equipment:  Property and equipment are recorded at
cost and depreciated on a straight-line basis over the estimated
useful lives of 15 to 39 years for buildings and 5 to 7 years
for equipment.

Long-Lived Assets:  On January 1, 1996, the Registrant adopted SFAS 121 (SFAS 
121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived 
Assets to be Disposed of".  SFAS 121 requires that long-lived assets and 
certain indentifiable intangible assets to be held and used, or disposed of, 
be reviewed for impairment whenever events or changes in circumstances 
indicate that the carrying amount of an asset may not be recoverable.  During 
1997 and 1996, the Company determined that none of its long-lived assets had 
been impaired, and therefore the Company did not adjust the carrying amounts 
of such assets.  

Net Earnings Per Common Share:  Net earnings per share are based
on the weighted average number of shares outstanding 435,761 in
1997; 451,876 in 1996 and 457,720 in 1995.

Profit-Sharing Plan:  The Registrant has a profit sharing plan adopted in 
1965, for eligible employees, under which it contributes a portion of its 
annual earnings.  The plan and all of its amendments have been approved by the 
Internal Revenue Service.  The Registrant's contribution to the plan was 
$35,662 in 1997; $36,166 in 1996 and $39,142 in 1995.  

Lease Rentals - Commercial Real Estate:  Lease rentals received on commercial 
real estate are accounted for under the operating method; rentals are included 
in income as earned over the term of the lease.

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

Fair Value of Financial Instruments:  The Registrant's financial instruments 
are valued at their carrying amounts which are reasonable estimates of fair 
value.  

Recent Accounting Pronouncement:  In June 1997, the FASB issued a Statement of 
Financial Accounting Standard No. 130, "Reporting Comprehensive Income."  This 
statement is effective for fiscal years commencing after December 15, 1997.  
The Company will be required to comply with the provisions of this statement 
in 1998.  The Company has not assessed the effect that this new standard will 
have on its financial statements and/or disclosures.  

NOTE 1 - PROPERTIES UNDER LEASE

The Registrant is the lessor of commercial real estate under noncancelable 
operating leases requiring fixed and contingent rentals through the year 2017.  
Contingent rentals based on sales overages amounted to $71,663 in 1997; 
$56,294 in 1996 and $54,701 in 1995.  The following is a schedule of future 
minimum rentals at December 31, 1997, not including renewal options and 
contingent rentals.

<TABLE>
<CAPTION>
     Year ended December 31,                        Amount
            <S>                                  <C>
            1998                                   3,525,911
            1999                                   3,405,554
            2000                                   2,967,760
            2001                                   2,857,889
            2002                                   2,552,564
            Subsequent years                      20,355,564
                                                  ----------
            Aggregate future minimum rentals      35,665,242
                                                  ==========

</TABLE>


NOTE 2 - INCOME TAXES

<TABLE>
Income tax expense for the years ended December 31, 1997, 1996 and 1995 is 
comprised of the following:

<CAPTION>
<S>                                         <C>         <C>         <C>
                                                1997        1996        1995
                                            ----------  ----------  ----------
Current
  Federal                                     498,071     273,807     433,406
  State                                        73,053      58,961      83,416
                                            ----------  ----------  ----------
    Total current                             571,124     332,768     516,822
Deferred                                       73,471     267,183          - 
                                            ----------  ----------  ----------
                                              644,595     599,951     516,822
                                            ==========  ==========  ==========

A reconciliation of the statutory federal income tax rate of 34 percent in 
1997, 1996 and 1995 to the effective tax rate is as follows:

                                                 1997        1996        1995
                                            ----------  ----------  ----------

Statutory federal income tax rate                34.0%       34.0%       34.0%
State taxes, net of federal tax benefit           3.1         3.8         3.5
Tax savings on dividends                         (1.0)       (1.2)       (1.1)
                                            ----------  ----------  ----------
  Total tax provision                            36.1       36.6         36.4
                                            ==========  ==========  ==========

Temporary differences which give rise to deferred tax liabilities in 1997 and 
1996 are as follows:

                                                  1997       1996
                                            ----------  ---------
Excess of tax over book depreciation           340,654    267,183
Unrealized gain on marketable securities       525,079    325,455
                                            ----------  ---------
  Total tax provision                          865,733    592,638
                                            ==========  =========


</TABLE>


Deferred income taxes result from the temporary differences in the recognition 
of income and expenses for tax and financial statement purposes.  The source 
of the temporary difference was due to a change in depreciation for income tax 
reporting in 1996.  The Small Business Job Protection Act of 1996 (The Act) 
amended the Internal Revenue Code regarding depreciation of motor fuel retail 
outlets permitting the Registrant to depreciate its qualifying convenience 
stores over a life of 20 years.  The Act further provided that this change 
could be applied retroactively to all such properties placed in service after 
1986.  The retroactive change decreased the Registrant's federal and state 
income taxes for 1996 by $267,183.  This amount was recorded as a deferred tax 
liability as of December 31, 1996.  For financial statement purposes the 
Registrant depreciates its convenience stores over an average useful life of 
30 years.  


NOTE 3 - MARKETABLE SECURITIES

The Company's marketable securities consist of equity securities and were 
carried at fair market value.  At December 31, 1997, marketable Securities 
available-for-sale had an aggregate market value of $2,148,283 and a cost of 
$705,758 resulting in a gross unrealized gain of $1,442,525.  At December 31, 
1996, marketable securities had an aggregate market value of $1,581,725 and a 
cost of $687,617 for a gross unrealized gain of $894,108.  The difference 
between the cost and fair market value of the securities, net of the tax 
effect, is shown as a separate component of shareholder's equity.  

The Company had gross realized gains of $24,336 and $59,144 on the sale of 
marketable securities during 1997 and 1996 and no realized losses.  During 
1995 the Company had gross realized gains of $124,730 and gross realized 
losses of $21,907.  Gain or loss on sales was based on the cost of the 
securities using the specific indentification method.  

NOTE 4 - NOTES PAYABLE - BANKS

As of December 31, 1997, the registrant had a $4,000,000 unsecured working 
capital line of credit with Norwest Bank Iowa, N.A.  The credit line which has 
been in effect for the past several years was created to facilitate the 
Registrant's real estate acquisitions. Borrowings will bear interest at the 
bank's base (Prime) rate floating.  No compensating balance is required but a 
non-usage fee of 1/8 of 1% is payable quarterly to the bank on the unused 
portion of the line.  As of December 31, 1997, there was no outstanding 
balance on this loan as compared to $225,000 as of December 31, 1996.  

As of December 31, 1997, the Registrant had a $6,000,000 10-year, revolving 
credit line with Norwest Bank Iowa, N.A. The $6,000,000 loan commitment 
reduces $600,000 beginning December 31, 1997, and each year thereafter until 
final maturity on December 31, 2006.  Borrowings secured by first mortgages on 
various properties, bear interest at the bank's base (Prime) rate floating, 
and no compensating balance is required.  As of December 31, 1997, the 
outstanding balance on this loan was $3,325,000 as compared to $4,322,585 as 
of December 31, 1996.  

In November, 1994, the Registrant established a $3,000,000 10-year revolving 
loan with Brenton Bank, N.A., Des Moines, Iowa.  The credit line reduces 
$300,000 beginning December 31, 1995, and each year thereafter until final 
maturity on December 31, 2004.  Borrowings secured by first mortgages on 
properties, bear interest at the bank's base (Prime) rate floating.  At 
December 31, 1997, the outstanding balance on this loan was $2,100,000 
compared to $1,462,000 as of December 31, 1996.  


NOTE 5 - LONG-TERM DEBT
<TABLE>
Long-term debt consists of the following:
<CAPTION>
                                                                December 31,
                                            Rate              1997        1996
                                         ----------     ----------  ----------
<S>                                   <C>               <C>         <C>
Real estate mortgage notes
  Due 1997-2000                              10%           246,194     343,123

Norwest Bank Iowa, N.A.
  Due 2006 - See Note 4                     8.5%         3,325,000   4,322,585

Brenton Bank, N.A.
  Due 2004 - See Note 4                     8.5%         2,100,000   1,462,000
                                                        ----------  ----------
                                                         5,671,194   6,127,708

Less-Current principal maturities                          407,062      96,929
                                                        ----------  ----------
                                                         5,264,132   6,030,779
                                                        ==========  ==========

</TABLE>

<TABLE>
Annual principal maturities over the next five years are as follows:
<CAPTION>
                         1998        1999        2000        2001        2002
                       -------     -------     -------     -------     -------
<S>                    <C>        <C>         <C>         <C>         <C>
Mortgage Note          107,062     118,254      20,878          -            -
Norwest Bank                 -           -           -     325,000     600,000
Brenton Bank           300,000     300,000     300,000     300,000     300,000
</TABLE>


NOTE 6 - REVENUE FROM MAJOR TENANTS

Lease rental income from three major tenants were $2,612,833, $2,426,281 and 
$2,327,594 for the years ended December 31, 1997, 1996 and 1995 respectively, 
representing 74% of total rental income for these years.  Rents from these 
major tenants were as follows: 

<TABLE>
<CAPTION>

                           1997               1996               1995
                           ----               ----               ----

<S>                   <C>       <C>      <C>       <C>      <C>       <C>
Industry                Revenue   %        Revenue   %        Revenue    %

Convenience stores     1,737,621 49.8     1,560,986 47.9     1,455,467 46.3
Garden centers           471,775 13.5       469,260 14.4       473,815 15.1
Restaurants              403,437 11.5       396,035 12.1       398,312 12.7
                       --------- ----     --------- ----     --------- ----
                       2,612,833 74.8     2,426,281 74.4     2,327,594 74.1
                       ========= ====     ========= ====     ========= ====

</TABLE>


<TABLE>
<CAPTION>

NOTE 7 - QUARTERLY OPERATING DATA (UNAUDITED)

The following is a summary of unaudited quarterly results of operations:

                                                  Quarter
                              First        Second         Third        Fourth
                         ----------    ----------    ----------    ----------
<S>                      <C>           <C>           <C>           <C>

1997
  Revenues                  928,414       894,570       864,620       901,184
  Net Income                293,631       280,895       276,107       292,449
  Per share                66 cents      63 cents      63 cents      67 cents

1996
  Revenues                  855,170       846,519       849,167       853,268
  Net Income                259,543       236,485       271,173       271,902
  Per share                57 cents      52 cents      60 cents      60 cents

</TABLE>


<TABLE>
<CAPTION>

NATIONAL PROPERTIES CORPORATION

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

Description         Encum-       Initial costs   Cost capi-     Gross          
Accumulated     Date ac-    Life on 
                    brances      to company      talized        amount at      
depreciation    quired      which de-
                                                 subsequent     which car-                                 
preciation 
                                                 to acquis-     ried at                                    
in latest in-
                                                 tion           close of pe-                               
come state-
                                                                iod                                        
ments is 
                                                                                                           
computed
<S>               <C>           <C>              <C>           <C>           
<>c>               <C>        <C>
QuikTrip Stores
  Tulsa, OK        $       -0-   $ 1,340,000      $      -0-    $ 1,340,000   
$  313,761         08/22/90   31 1/2
  St. Louis, MO      1,381,946     1,454,000         121,433      1,575,433      
271,215         1992/1995  31 1/2
  Alpharetta, GA          -0-      1,324,000             -0-      1,324,000       
49,654         12/03/96   30
  Gainesville, GA         -0-      1,227,923             -0-      1,227,923        
8,527         10/15/97    30

Garden Center
  Wolfe Nursery
    Arlington, TX    1,520,000     1,700,000             -0-      1,700,000      
254,133          04/01/93   31 1/2
Miscellaneous 
   investments       2,769,248    15,006,539         871,636     15,878,175    
8,038,705         1976/1995  15/39
                    ----------   -----------      ----------     ----------   
----------
    Totals          $5,671,194   $22,052,426      $  993,069    $23,045,531   
$8,935,995
                    ==========   ===========      ==========    ===========   
==========

<captions>

NOTE TO SCHEDULE III
                                                 Real  Estate
                                     1997            1996            1995
<S>                             <C>             <C>             <C>
Balance, Beginning of period     $21,896,495     $20,572,495     $20,105,570
  additions                        1,227,923       1,324,000         515,247
                                 -----------     -----------     -----------
                                  23,124,418      21,896,495      20,620,817
  Reductions                          78,887             -0-          48,322
                                 -----------     -----------     -----------
Balance, End of period           $23,045,531     $21,896,495     $20,572,495
                                 ===========     ===========     ===========


                                               Accumulated Depreciation
                                                 Real  Estate
                                     1997            1996            1995
<S>                             <C>             <C>             <C>
Balance, Beginning of period     $ 8,202,683     $ 7,432,040     $ 6,713,694
  additions                          805,296         770,643         763,668
                                 -----------     -----------     -----------
                                   9,007,979       8,202,683       7,477,362
  Reductions                          71,984             -0-          45,322
                                 -----------     -----------     -----------
Balance, End of period           $ 8,935,995     $ 8,202,683     $ 7,432,040
                                 ===========     ===========     ===========
</TABLE>