FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                For the quarterly period ended September 30, 1996

                                       OR

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

           For the transition period from __________ to ______________


                         Commission File Number: 0-19438


                           RANCON PACIFIC REALTY L.P.
             (Exact name of registrant as specified in its charter)

                  California                                33-0270528
        (State or other jurisdiction of                  (I.R.S. Employer
        incorporation or organization)                  Identification No.)

     400 South El Camino Real, Suite 1100
             San Mateo, California                            94402-1708
   (Address of principal executive offices)                   (Zip Code)

                                 (415) 343-9300
                         (Registrant's telephone number)

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

      Total number of units outstanding as of September 30, 1996: 2,826,917


                                  Page 1 of 12

<PAGE>




Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.
<TABLE>

                           RANCON PACIFIC REALTY L.P.

                           Consolidated Balance Sheets
                    (in thousands, except units outstanding)
                                   (Unaudited)

<CAPTION>

                                                                      September
30,               December 31,
                                                                          1996 
                     1995
<S>                                                                  <C>       
                 <C>
Assets
Rental property:
    Land                                                             $      
14,213              $       14,213
    Buildings and improvements                                              
28,481                      28,443
                                                                    
--------------              --------------
                                                                            
42,694                      42,656
       Less accumulated depreciation                                       
(11,704)                    (11,022)
                                                                    
--------------              --------------
           Net rental property                                              
30,990                      31,634

Cash and cash equivalents                                                    
1,358                       1,331
Accounts receivable, net                                                       
 54                          76
Deferred financing costs, net of
    accumulated amortization of $116
    and $61 at September 30, 1996 and
    December 31, 1995, respectively                                            
516                         571
Other assets                                                                   
224                         123
                                                                    
--------------              --------------

           Total assets                                              $      
33,142              $       33,735
                                                                    
==============              ==============

</TABLE>













                                  - continued -

                                  Page 2 of 12

<PAGE>


<TABLE>
                           RANCON PACIFIC REALTY L.P.

                     Consolidated Balance Sheets - continued
                    (in thousands, except units outstanding)
                                   (Unaudited)
<CAPTION>
                                                                      September
30,               December 31,
                                                                          1996 
                      1995
                                                                     
------------                -------------
<S>                                                                  <C>       
                 <C>
Liabilities and Partners' Equity (Deficit)
Liabilities:
    Accounts payable and accrued expenses                            $         
164              $           57
    Interest payable                                                           
155                         159
    Notes payable                                                           
23,407                      23,589
    Other liabilities                                                          
266                         251
                                                                    
--------------              --------------

       Total liabilities                                                    
23,992                      24,056
                                                                    
--------------              --------------

Commitments and contingent liabilities (see Note 3)

Minority interest                                                              
425                         388
                                                                    
--------------              --------------

Partners' equity (deficit):
    General Partner                                                            
(90)                        (90)
    Limited Partners, 2,826,917 and 2,828,457
       limited partnership units outstanding at
       September 30, 1996 and December 31, 1995,
       respectively                                                          
8,815                       9,381
                                                                    
--------------              --------------

           Total partners' equity                                            
8,725                       9,291
                                                                    
--------------              --------------

              Total liabilities and partners' equity                 $      
33,142              $       33,735
                                                                    
==============              ==============


</TABLE>













                 See accompanying notes to financial statements.

                                  Page 3 of 12

<PAGE>

<TABLE>


                           RANCON PACIFIC REALTY L.P.

                      Consolidated Statements of Operations
                     (in thousands, except per unit amounts)
                                   (Unaudited)
<CAPTION>

                                                                   Three Months
Ended                      Nine Months Ended
                                                                      September
30,                          September 30,
                                                            
-----------------------------             ------------------------
                                                                 1996          
   1995                  1996              1995
                                                             -----------       
----------            ----------        -------
<S>                                                          <C>               
<C>                   <C>               <C>
Revenues:
    Rental income                                            $    1,455        
$    1,391            $    4,272        $    4,036
    Interest and other income                                        17        
        12                    39                30
                                                             ----------        
----------            ----------        ----------

          Total revenues                                          1,472        
     1,403                 4,311             4,066
                                                             ----------        
----------            ----------        ----------

Expenses:
    Operating                                                       636        
       606                 1,885             1,760
    Interest                                                        485        
       524                 1,469             1,549
    Depreciation                                                    228        
       226                   682               676
    General and administrative                                       75        
        66                   254               237
                                                             ----------        
----------            ----------        ----------

          Total expenses                                          1,424        
     1,422                 4,290             4,222
                                                             ----------        
----------            ----------        ----------

Income (loss) before minority interest                               48        
       (19)                   21              (156)

Minority interest in net (income) loss                               (1)       
       ---                     1                10
                                                             ----------        
----------            ----------        ----------

Net income (loss)                                            $       47        
$      (19)           $       22        $     (146)
                                                             ==========        
==========            ==========        ==========

Net income (loss) per limited partnership
    unit                                                     $     0.02        
$    (0.01)           $     0.01        $    (0.05)
                                                             ==========        
==========            ==========        ==========

Distributions per limited partnership unit:
    From net income                                          $      ---        
$      ---            $      ---        $      ---
    Representing return of capital                                 0.06        
       ---                  0.18               ---
                                                             ----------        
----------            ----------        ----------
      Total distributions per limited
          partnership unit                                   $     0.06        
$      ---            $     0.18        $      ---
                                                             ==========        
==========            ==========        ==========

Weighted average number of limited
    partnership units outstanding during
    the period used to compute net
    income(loss) and distributions per
    limited partnership unit                                  2,827,135        
 2,828,457             2,827,892         2,828,457
                                                             ==========        
==========            ==========        ==========

</TABLE>


                 See accompanying notes to financial statements.

                                  Page 4 of 12

<PAGE>

<TABLE>

                           RANCON PACIFIC REALTY L.P.

              Consolidated Statements of Partners' Equity (Deficit)
                                 (in thousands)

              For the nine months ended September 30, 1996 and 1995
                                   (Unaudited)


<CAPTION>


                                                             General           
   Limited
                                                             Partner           
   Partners             Total

<S>                                                       <C>                  
<C>                 <C>         
Balance at December 31, 1995                              $         (90)       
$      9,381        $       9,291

Net income                                                          ---        
          22                   22

Distributions                                                       ---        
        (525)                (525)

Adjustment to minority investment                                   ---        
         (63)                 (63)
                                                          -------------        
------------        -------------

Balance at September 30, 1996                             $         (90)       
$      8,815        $       8,725
                                                          =============        
============        =============



Balance at December 31, 1994                              $         (89)       
$      9,703        $       9,614

Net loss                                                             (1)       
        (145)                (146)
                                                          -------------        
------------        -------------

Balance at September 30, 1995                             $         (90)       
$      9,558        $       9,468
                                                          =============        
============        =============


</TABLE>













                 See accompanying notes to financial statements.

                                  Page 5 of 12

<PAGE>

<TABLE>


                           RANCON PACIFIC REALTY L.P.

              Consolidated Statements of Cash Flows (in thousands)
                                   (Unaudited)
<CAPTION>
                                                                               
          Nine months ended
                                                                               
            September 30,
                                                                               
    ----------------------------
                                                                               
      1996                1995
                                                                               
    ---------           --------
<S>                                                                            
   <C>                <C>
Cash flows from operating activities:
  Net income (loss)                                                            
   $       22         $     (146)
Adjustments to reconcile net income (loss) to net cash
 provided by operating activities:
    Depreciation                                                               
          682                676
    Amortization of loan fees, included in interest expense                    
           55                 29
    Minority interest in net income/loss and distributions                     
          (26)               (10)
Changes in certain assets and liabilities:
    Accounts receivable                                                        
           22                (38)
    Deferred costs                                                             
          ---                 11
    Other assets                                                               
         (101)              (109)
    Accounts payable and accrued expenses                                      
          107                158
    Payable to Sponsor                                                         
          ---                (72)
    Interest payable                                                           
           (4)               156
    Other liabilities                                                          
           15                 (9)
                                                                               
   ----------         ----------

       Net cash provided by operating activities                               
          772                646
                                                                               
   ----------         ----------

Cash flows from investing activities:
    Additions to real estate                                                   
          (38)               (32)
                                                                               
   ----------         ----------

       Net cash used for investing activities                                  
          (38)               (32)
                                                                               
   ----------         ----------

Cash flows from financing activities:
  Proceeds from notes payable                                                  
          ---             13,500
  Payoff of matured note payable                                               
          ---            (13,142)
  Closing costs and loan fees                                                  
          ---               (470)
  Note payable principal payments                                              
         (182)              (139)
  Distributions to partners                                                    
         (525)               ---
                                                                               
   ----------         ----------

       Net cash used for financing activities                                  
         (707)              (251)
                                                                               
   ----------         ----------

Net increase in cash                                                           
           27                363

Cash and cash equivalents at beginning of period                               
        1,331              1,123
                                                                               
   ----------         ----------

Cash and cash equivalents at end of period                                     
   $    1,358         $    1,486
                                                                               
   ==========         ==========

Supplemental disclosure of cash flow information:
  Cash paid for interest                                                       
   $    1,418         $    1,353
                                                                               
   ==========         ==========
</TABLE>
                 See accompanying notes to financial statements.

                                  Page 6 of 12

<PAGE>


                           RANCON PACIFIC REALTY L.P.

                   Notes to Consolidated Financial Statements

                               September 30, 1996
                                   (Unaudited)

Note 1.           ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

In the opinion of Rancon Financial  Corporation  (RFC) and Daniel Lee Stephenson
(the  Sponsors) and  Glenborough  Inland Realty  Corporation,  the  accompanying
unaudited  financial  statements  contain all  adjustments  (consisting  of only
normal accruals) necessary to present fairly the consolidated financial position
of Rancon Pacific  Realty,  L.P. (the  Partnership) as of September 30, 1996 and
December 31, 1995, and the related consolidated statements of operations for the
three and nine  months  ended  September  30,  1996 and  1995,  and  changes  in
partners' equity and cash flows for the nine months ended September 30, 1996 and
1995.

In December,  1994, RFC entered into an agreement with Glenborough Inland Realty
Corporation  (Glenborough)  whereby  RFC sold to  Glenborough  the  contract  to
perform  the  rights  and  responsibilities   under  RFC's  agreement  with  the
Partnership   and  other   related   Partnerships   (collectively,   the  Rancon
Partnerships) to perform or contract on the Partnership's  behalf for financial,
accounting,  data processing,  marketing,  legal, investor relations,  asset and
development  management and consulting services for the Partnership for a period
of ten years or until the liquidation of the Partnership, whichever comes first.
According to the contract, the Partnership will pay Glenborough for its services
as follows: (i) a specified asset administration fee of $215,000 per year, which
is fixed for five years and subject to reduction in the year  following the sale
of assets;  (ii) sales fees of 2% for improved  properties;  (iii) a refinancing
fee of 1% and (iv) a management fee of 5% of gross rental  receipts.  As part of
this  agreement,  Glenborough  will  perform  certain  responsibilities  for the
General  Partner of the Rancon  Partnerships  and RFC agreed to  cooperate  with
Glenborough, should Glenborough attempt to obtain a majority vote of the limited
partners to substitute itself as the Sponsor for the Rancon  Partnerships.  This
agreement was effective January 1, 1995. Glenborough is not an affiliate of RFC.

As a result of this agreement,  RFC terminated  several of its employees between
December 31, 1994 and February  28,  1995.  Also as a result of this  agreement,
certain of the officers of RFC resigned from their  positions as of February 28,
1995, March 31, 1995 and July 1, 1995.

During the quarters ended June 30, 1996 and September 30, 1996, a total of 1,540
units were  abandoned  as a result of  partners  desiring  to no longer  receive
Partnership  K-1's and to give them the  ability  to write off  investments  for
income tax purposes.  The equity  (deficit)  balance of the abandoned  units was
allocated to the remaining  outstanding units. As of September 30, 1996, limited
partnership units issued and outstanding were 2,826,917.

Consolidation - The accompanying  financial statements of Rancon Pacific Realty,
Inc. include the accounts of Rancon Pacific Realty,  Inc. and its majority owned
partnership Villa La Jolla Partners.  All significant  intercompany balances and
transactions have been eliminated in the consolidation.


                                  Page 7 of 12

<PAGE>


                           RANCON PACIFIC REALTY L.P.

                   Notes to Consolidated Financial Statements

                               September 30, 1996
                                   (Unaudited)

Reclassification  - Certain 1995 balances have been  reclassified  to conform to
the current year presentation.

Note 2.           REFERENCE TO 1995 AUDITED FINANCIAL STATEMENTS

These  unaudited  financial  statements  should be read in conjunction  with the
Notes to Financial Statements included in the 1995 audited financial statements.

Note 3.           RELATED PARTY TRANSACTIONS

In consideration for organizational and transitional  management  services,  the
Sponsor is to receive a fee of up to 6% of the aggregate  appraised value of the
property interests conveyed to the Partnership or $2,092,000.  One-sixth of this
fee, or  approximately  $350,000,  was due upon the exchange of the property for
Partnership  Units.  The remaining  five-sixths of the fee was due in 60 monthly
installments of $29,000.  Ten monthly installments were paid for the period from
March 1, 1988 through December 31, 1988. The next 48 monthly  payments  relating
to the period from January 1, 1989 to December 31, 1992 were deferred until such
time as (i) a specified amount of cash distributions were made to the holders of
the preferred  units during  certain  calendar years or, (ii) the holders of the
preferred  units have received a return of the full amount of their  investment.
No  monthly  installments  were paid  during  those 48 months.  The two  monthly
installments  of $29,000  related to January and February  1993 were paid during
1993.  Payment of the balance of the fee of approximately  $1,395,000 related to
the 48 monthly  installments  will continue to be deferred  until one of the two
criteria set forth above is met.

Note 4.           ADJUSTMENT TO MINORITY INVESTMENT

During 1995, it was  discovered  that pervious  years  allocations of losses and
cash  distributions  were incorrectly  allocated  between  Transamerica La Jolla
Partners (TLJP) and the Partnership due to additional cash contributions made by
the Partnership to the joint venture,  owner of the Villa La Jolla Condominiums.
The  cumulative  effect of the  misallocation  of losses and  distributions  was
$63,000  and  $12,000,  respectively.  This  misallocation  of  losses  has been
properly  stated in 1996 and accounts for the adjustment to minority  investment
included  in  the  Partnership's  Consolidated  Statement  of  Partners'  Equity
(Deficit).


                                  Page 8 of 12

<PAGE>



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

GENERAL

Rancon Pacific Realty L.P. (the  Partnership) was formed in September,  1987 for
the purpose of acquiring the real  properties and certain other assets,  subject
to secured  indebtedness  and certain  other  liabilities  (net assets) of three
public  limited  partnerships:  Shadow Hill  Partners  (SHP),  Eastgate  Village
Partners  (EVP)  and  Brichard-La  Jolla  Partners  (BLJP)  (the   Participating
Partnerships).  The Participating  Partnerships  contributed their net assets to
the  Partnership  on  February  29,  1988,  and  the  Partnership   issued  each
Participating  Partnership  the number of Exchange  Units equal to the  exchange
value assigned to the net assets contributed by that  Participating  Partnership
along with rights to  purchase  three  Preferred  Units for each  Exchange  Unit
issued.  A total of 707,500  Exchange Units and 2,122,500  Preferred  Units were
issued.

The Partnership  immediately  transferred the exchange property it acquired from
BLJP to  Villa La Jolla  Partners  (VLJP),  a then  newly-formed  joint  venture
between the Partnership and Transamerica  Realty Investment  Corporation  (TRIC)
(which owned approximately 26.2% of the outstanding interests of BLJP). In turn,
the Partnership  received a majority  interest  (73.8%) in VLJP; TRIC thereafter
transferred  its  interest in VLJP to  Transamerica  La Jolla  Partners  (TLJP).
TLJP's interest in VLJP  subsequently was reduced to 8.41% and the Partnership's
interest was increased to 91.59%, as a result of capital  contributions  made by
the  Partnership  to VLJP.  During 1995 it was  discovered  that previous  years
allocations of losses and cash distributions were incorrectly  allocated between
TLJP and the Partnership.  The cumulative  effect of the misallocation of losses
and distributions was $63,000 and $12,000, respectively.

In order to satisfy certain lender  requirements for the  Partnership's new loan
secured by the Villa La Jolla Condominiums  (discussed  below), VLJ Partners,  a
California limited partnership (VLJ LP) was formed as of September 1, 1995. VLJP
contributed the property and all of its related assets and liabilities to VLJ LP
in exchange for a 99% limited partnership interest.  The general partner is VLJ,
Inc., a California corporation,  whose sole shareholders are the owners of VLJP,
thereby having no affect on the Partnership's investment in the property.

LIQUIDITY AND CAPITAL RESOURCES

As of June 23,  1989,  the  Partnership  was fully  funded  from the sale of all
Preferred  Units in the amount of  $14,857,500.  As of September  30, 1996,  the
Partnership had cash of $1,358,000.  The remainder of the  Partnership's  assets
consist  primarily of its  investments in three  residential  properties,  which
totaled approximately $30,990,000 at September 30, 1996.

The  Southern  California  regional  economy  in  general,  and the real  estate
industry in particular, are considered to be in a recessionary cycle. All of the
Partnership's  assets  are  located  in  the  Southern  California  region.  The
operations of the Partnership  continue to be affected by the economic  strength
or weakness of the real estate industry in Southern California.

As a result of substantial  disbursements made in 1990,  primarily for principal
reductions of notes payable,  building improvements and distributions to holders
of Preferred  Units,  the  Partnership's  cash  management from 1991 to 1994 was
focused on rebuilding cash balances rather than making

                                  Page 9 of 12

<PAGE>



distributions.  As  efforts  to  rebuild  cash  balances  were  successful,  the
Partnership was able to make a distribution of $210,000 to the limited  partners
during  1994.  As a result of the 1995  refinancing  of the debt  secured by the
Villa La Jolla  condominiums,  management  feels the  Partnership is in a secure
cash position and has reinstated  periodic  distributions to the partners of the
net cash generated by the operations of the  Partnership.  Distributions  to the
partners of $175,000 have been paid in each quarter of 1996.

Management believes that the Partnership's  current cash, together with the cash
flow  to be  generated  from  operations,  will be  sufficient  to  finance  the
properties'  continued  operations,  make regular periodic  distributions to the
partners and meet future debt  commitments,  other than payments due on maturity
in 2002 and 2018.

Although no assurance can be given,  the  Partnership  does not  anticipate  any
major  expenditures  for  improvements  to its properties in the near future and
hopes to  increase  cash flow from  operations  by  maintaining  and  eventually
increasing  rental  rates while  maintaining  operating  expenses at or near the
current level.

The increase in other assets of $101,000,  or 82%, is due to a $28,000  increase
in prepaid  insurance from December 31, 1995 to September 30, 1996 combined with
an increase in impound accounts required by the lender of $73,000.

RESULTS OF OPERATIONS

Rental  income for the nine months ended  September 30, 1996 as compared to 1995
increased 6% or $236,000  primarily due to an increase in rental rates at all of
the Partnership's properties. Occupancy rates as of September 30, 1996 were 97%,
99% and  98% for  Pacific  Bay  Club,  La  Jolla  Canyon  and  Villa  La  Jolla,
respectively, compared to 99%, 99% and 98%, respectively, for the same period in
1995.

The $9,000,  or 30%,  increase in interest  and other income for the nine months
ended  September  30,  1996 as  compared  to 1995 is due to the  increase in the
Partnership's  cash  balance as a result of the  additional  funds  provided  by
operating activities.

Operating  expenses  increased  $125,000,  or 7%,  for  the  nine  months  ended
September 30, 1996 compared to the same period in 1995, primarily as a result of
an increase in repair and  maintenance  expenses at the Villa La Jolla  property
due to aging of the building.

General and  administrative  costs  increased  $17,000 or 7% for the nine months
ended  September 30, 1996 compared to 1995.  The increase is primarily due to an
increase in general legal fees of $6,000,  $5,000 in fees incurred in connection
with  valuations  of the  limited  partnership  interests  and  $4,000  in  loan
administration fees as a result of the Villa La Jolla Condominium refinancing in
September, 1995.




                                  Page 10 of 12

<PAGE>



Part II. OTHER INFORMATION


Item 1.           Legal Proceedings

                  None.

Item 2.  Changes in Securities

                  Not applicable.

Item 3.  Defaults Upon Senior Securities

                  Not applicable.

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

                  None.

Item 5.  Other Information

                  None.

Item 6.  Exhibits and Reports on Form 8-K

                  (a) Exhibits:

                  #27 - Financial Data Schedule.

                  (b) Reports on Form 8-K:

                  None.

                                  Page 11 of 12

<PAGE>


                                   SIGNATURES



Pursuant  to the  requirements  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.


                                            RANCON PACIFIC REALTY, L.P.
                                            A CALIFORNIA LIMITED PARTNERSHIP
                                            (Registrant)


                                            By: RC PACIFIC REALTY PARTNERS, L.P.
                                                General Partner


Date: November 13, 1996                     By: /s/ Daniel L. Stephenson
                                                Daniel L. Stephenson
                                                Director, President,
                                                Chief Executive Officer and
                                                Chief Financial Officer of
                                                RC Pacific Realty, Inc.,
                                                General Partner of
                                                RC Pacific Realty Partners, L.P.


                                  Page 12 of 12