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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)

|                                                 |                                                                                          
|------------------------------------------------ | -----------------------------------------------------------------------------------------
|[X]                                              | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934     
|                                                 |                                                                                          
|                                                 | For the fiscal year ended December 31, 2001OR                                            
|                                                 |                                                                                          
|[   ]                                            | 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 000-24594

WEST COAST REALTY INVESTORS, INC.(Exact name of registrant as specified in its charter)

|                                                                                      |  |                                                             
|------------------------------------------------------------------------------------- |  | ------------------------------------------------------------
|Delaware
        State or other jurisdiction of
        incorporation or organization |  | 95-4246740
        (IRS Employer
        Identification No.)

3000 SAND HILL ROAD BUILDING 3, SUITE 140
MENLO PARK, CALIFORNIA 94025
(Address of principal executive offices) (Zip Code)

(650) 233-7140
Registrants telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: None

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

Common Stock, $.01 par value
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X]

The Registrants Common Stock is not currently traded on an established market.
As a result, there were no market selling prices or bid-and-asked prices for
the Registrants Common Stock during the 60-day period prior to the date of
this filing, and the aggregate market value of the shares of the Registrants
Common Stock held by non-affiliates is not determinable.

As of March 15, 2002, 2,927,967 shares of the Registrants Common Stock were
outstanding.





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TABLE OF CONTENTS



|                                                        |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                                 
|                                                        | ITEM 1. BUSINESS                                                                             
|                                                        | ITEM 2. PROPERTIES                                                                           
|                                                        | ITEM 3. LEGAL PROCEEDINGS                                                                    
|                                                        | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|PART II                                                
|                                                        | ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS            
|                                                        | ITEM 6. SELECTED FINANCIAL DATA                                                              
|                                                        | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                        | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|                                                        | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                          
|                                                        | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
|PART III                                               
|                                                        | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                  
|                                                        | ITEM 11. EXECUTIVE COMPENSATION                                                              
|                                                        | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|                                                        | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|PART IV                                                
|                                                        | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                     
|INDEX TO EXHIBITS                                      
|SIGNATURES                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION
|EXHIBIT 10.12                                          
|EXHIBIT 10.13                                          



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WEST COAST REALTY INVESTORS, INC.

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

TABLE OF CONTENTS

|         |  |                            |  |                                                                                       |  |         
|-------- |  | -------------------------- |  | ------------------------------------------------------------------------------------- |  | --------
|         |  |                            |  |                                                                                       |  | Page No.
|         |  |                            |  |                                                                                       |  |         
|PART I   |  |                            |  |                                                                                       |  |         
|         |  | Forward-Looking Statements |  | 2                                                                                     | 
|         |  | ITEM 1:                    |  | Business                                                                              |  | 3       
|         |  |                            |  | Executive Officers of the Registrant                                                  |  | 5       
|         |  |                            |  | Risk Factors Affecting Future Operating Results                                       |  | 7       
|         |  | ITEM 2:                    |  | Properties                                                                            |  | 21      
|         |  | ITEM 3:                    |  | Legal Proceedings                                                                     |  | 24      
|         |  | ITEM 4:                    |  | Submission of Matters to a Vote of Security Holders                                   |  | 25      
|PART II  |  |                            |  |                                                                                       |  |         
|         |  | ITEM 5:                    |  | Market for Registrants Common Equity and Related Stockholder
Matters                 |  | 26      
|         |  | ITEM 6:                    |  | Selected Financial Data                                                               |  | 28      
|         |  | ITEM 7:                    |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations |  | 28      
|         |  | ITEM 7A:                   |  | Quantitative and Qualitative Disclosures About Market
Risk                            |  | 33      
|         |  | ITEM 8:                    |  | Financial Statements and Supplementary Data                                           |  | 34      
|         |  | ITEM 9:                    |  | Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure  |  | 54      
|PART III |  | ITEM 10:                   |  | Directors and Executive Officers of the Registrant                                    |  | 55      
|         |  | ITEM 11:                   |  | Executive Compensation                                                                |  | 58      
|         |  | ITEM 12:                   |  | Security Ownership of Certain Beneficial Holders and
Management                       |  | 61      
|         |  | ITEM 13:                   |  | Certain Relationships and Related Transactions                                        |  | 62      
|PART IV  |  | ITEM 14:                   |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       |  | 63      
|         |  |                            |  | Exhibit Index                                                                         |  | 64      
|         |  |                            |  | Signatures                                                                            |  | 68      
|         |  |                            |  | Schedule IIIReal Estate and Accumulated Depreciation                                 |  | 69      

As used in this Annual Report on Form 10-K, unless the context otherwise
requires, the terms we, us, or the Company and our refer to West Coast
Realty Investors, Inc., a Delaware corporation.

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DOCUMENTS INCORPORATED BY REFERENCE

None.

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements are
identified by words such as believes, expects, may, will, should,
seeks, approximately, intends, plans, pro forma, estimates, or
anticipates or in their negative form or other variations, or by discussions
of strategy, plans or intentions. Forward-looking statements are based on
assumptions, data or methods that may be incorrect, imprecise or incapable of
being realized. These statements include those concerning the
following: our beliefs and expectations about our financial statements; our beliefs and
expectations regarding the commercial real estate market; our beliefs and
expectations regarding our revenues; our beliefs and expectations regarding our revenue
mix, net operating income and operating results; our beliefs and expectations
regarding our existing cash and cash equivalents, and our cash requirements;
our beliefs and expectations regarding our employees; our beliefs and
expectations regarding competition, our competitors and our ability to compete;
our intentions and expectations regarding our financial and managerial
controls, reporting systems and procedures, and other systems and processes;
our intentions and expectations regarding property values; our beliefs and
expectations regarding any particular tenants intentions or financial
condition, such as its plans to renew or terminate a property lease, or the
likelihood that it will default upon a property lease; our beliefs and
expectations regarding vacancies; our beliefs and expectations with respect to
interest rates; our beliefs and expectations with respect to our operating
costs; our beliefs and expectations with respect to our new board of directors
and management team; our beliefs, intentions and expectations regarding the
termination of our advisory agreement with our outside advisor; our beliefs,
intentions and expectations regarding our ability to convert to a self-managed
and self-advised REIT; our beliefs and expectations regarding depreciation expenses; our
beliefs, intentions and expectations regarding litigation matters and legal
proceedings, our defenses to such matters and our contesting of such matters;
our beliefs and expectations regarding our ability to meet our debt
obligations; our beliefs and expectations regarding the proposed sales of
certain properties; our beliefs, intentions and expectations regarding our ability to
obtain outside financing; our beliefs, intentions and expectations with respect
to identifying, acquiring and successfully integrating new properties; our
beliefs and expectations with respect to our ability to qualify as a real
estate investment trust under the Internal Revenue Code of 1986, as amended;
our beliefs and expectations regarding environmental risks; our beliefs and
expectations regarding natural disasters and other threats to our properties;
our beliefs and expectations regarding the economies of the geographic areas
where our properties are located; our beliefs and expectations regarding
changes in laws that may effect our business, including tax, real property and
environmental laws; our beliefs and expectations regarding our
ability to increase the liquidity of our common stock by listing it
on the Nasdaq SmallCap Market or other market; and our beliefs about
provisions in our charter documents and Delaware law.

These statements are subject to risks and uncertainties that could cause actual
results and events to differ materially. For a detailed discussion of these
risks and uncertainties, see Risk Factors that May Affect Future Operating
Results. We undertake no obligation to update forward-looking statements to
reflect events or circumstances occurring after the date of this Annual Report
on Form 10-K.

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PART I




ITEM 1. BUSINESS

We are a real estate company engaged in acquiring,
owning and managing light
industrial and suburban office properties. We were incorporated in 1989 under
the laws of the State of Delaware. We have elected to be taxed as a real
estate investment trust, or REIT, for federal income tax purposes and
generally will not be subject to federal income tax if we distribute 100% of
our taxable income and comply with a number of organizational and operational
requirements. Since inception, we have been advised by West Coast Realty
Advisors, Inc. and our properties have been managed by West Coast Realty
Management, Inc. (together, the Advisor), each of which is a wholly owned
subsidiary of Associated Financial Group, Inc. The Advisor has notified us that
it intends to terminate its management and advisory relationships with us
effective March 31, 2002. Thereafter, we intend to become self-managed and
self-administered.

At December 31, 2001, we had a real estate portfolio of 15 properties,
including nine light industrial properties totaling 361,584 square feet, four
retail properties totaling 44,248 square feet and two suburban office
properties representing 89,926 square feet, all of which were located in
California. We have classified the above retail properties as held for sale
in our financial statements, as we intend to sell these properties.

Our executive offices are located at 3000 Sand Hill Road Building 3, Suite 140,
Menlo Park, California 94025, and our telephone number is (650) 233-7140.

Business Strategies

Our business objective is to increase stockholders long-term total return
through increases in the dividend and the appreciation in value of our common
stock.

We seek to grow our asset base through (1) the acquisition of industrial and
suburban office properties, (2) acquisition of portfolios of similar
properties, and (3) rehabilitation and repositioning industrial and suburban
office properties. Our strategy is to operate in markets that are experiencing
superior economic growth while restrained by entitlement limitations of similar
properties. We intend to continue to target selected California markets where
assets are currently owned, and may also explore certain markets within
Washington, Oregon, Nevada and Arizona where we believe we could benefit from
our real estate expertise and our access to superior properties through high
quality broker connections. Other specific strategies include:



| |  |  | increase cash flow by internal growth of triple net
leases from our existing properties and leasing vacant space;                                                                                
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | evaluate and refinance debt arrangements with lenders;                                                                                                                                           
|
| |  |  | rehabilitate, reposition and dispose of retail
properties and possibly other properties that are not consistent
with our strategy, and recycling the proceeds from sales into
new properties; and
|
| |  |  | seek out and expand our sources of private and
institutional real estate capital for future acquisition
purposes. In addition, we have applied to list our common stock                          

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| |  |  | on the Nasdaq SmallCap Market, which we believe will facilitate
capital market efficiencies.
| |  |  | --------------------------------------------------------------------------------------------

Events During 2001

During the third quarter of 2001:



| |  |  | Allen Meredith became our first employee and was appointed our new
Chairman of the Board, President and Chief Executive Officer;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In conjunction with the evaluation of our strategic goals, we are
in the process of evaluating all of our properties, including of
disposing of certain properties, primarily properties with retail
operations that are inconsistent with our new investment objectives.
Based on appraisals and holding periods, we determined with
the Advisor, that the total expected future cash flows from operations
and the ultimate disposition of six properties were less than their
carrying value at September 30, 2001. As a result, an impairment loss
of $3,800,000, primarily related to the Riverside, CA and Vacaville, CA
properties, was recorded in that quarter, measured as the amount by
which the carrying amount of the asset exceeded its fair value; and
|
| |  |  | The tenant of our Vacaville, California property exercised its
early termination right and vacated the property. We continue to
search actively for a new tenant for that property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

During the fourth quarter of 2001:



| |  |  | We reorganized our business by electing a new board of directors at
our annual meeting of stockholders, accepting the resignations of all
of our previous directors;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | We listed four of our retail properties for sale because their
operations are not consistent with our business strategy; and                                        
|
| |  |  | We appointed Charles Wingard as our acting Chief Financial Officer
and he became an employee.                                                                       

Events During 2000

In April and June, 2000 we sold the Huntington Beach, CA (OPTO-22) and the
Fremont, CA properties, respectively. The total gain realized from these
properties was $2,154,727.

Events During 1999

In January and May 1999, we acquired the properties in Ontario, CA and Folsom,
CA, respectively. The total purchase price of these properties was
$10,625,919.

Industry Segments

We have one reportable segment real estate. We do not have foreign operations
and our business is not seasonal. We have adopted Statement of Financial
Accounting Standard No. 131 (SFAS 131), which establishes standards for the
way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports

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issued to stockholders. See "Notes to Financial
Statements" which are part of
this Annual Report on Form 10-K, for further discussion.

Competition

The real estate business is highly competitive. Our properties compete
for tenants with similar properties located in the same markets primarily on
the basis of location, rent charged, suitability, services provided and the
design and condition of improvements. Such competition could harm our ability
to lease our properties and could negatively affect the rents we charge. We
also compete with other real estate investors for real estate investment
opportunities. These real estate investors may include other REITs, life
insurance companies, pension trusts, trust funds, partnerships and individual
investors, many of which have greater resources than we do. Such competition
could negatively affect our ability to expand our property portfolio with
desirable properties.

Employees

As of December 31, 2001, we had three employees. None of the employees is
covered by collective bargaining agreements.

Tax Status

We believe we are organized and operate so as to qualify a real estate
investment trust, or REIT, under Sections 856-860 of the Internal Revenue Code
of 1986, as amended. If we qualify as a REIT, we generally will not be subject
to federal income tax to the extent we distribute 100% of our taxable income to
our shareholders. REITs are subject to a number of complex organizational and
operational requirements. If we fail to qualify as a REIT, our taxable income
may be subject to income tax at regular corporate rates.

Investment Properties

See Items 2, 7 and 8 in this Annual Report on Form 10-K for a description of
our individual properties and significant developments during the year with
respect to these properties. See Item 14 (d), Schedule III
(Real Estate and Accumulated Depreciation) for additional information about our properties, including
locations, cost and encumbrances.

Executive Officers of the Registrant

The following persons served as our executive officers as of March 15, 2002:

|                   |  |     |    |             |  |                                                             
|------------------ |  | --- | -- | ----------- |  | ------------------------------------------------------------
|Name               |  | Age |    | Position(s)
|                   |  |     |    |            
|Allen K. Meredith  |  |     | 52 |             |  | Chairman of the Board, President and Chief Executive Officer
|James E. Prock     |  |     | 66 |             |  | Vice
President, Acting Chief Operating Officer              
|Charles P. Wingard |  |     | 44 |             |  | Vice President, Acting Chief Financial Officer              

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Mr. Meredith was appointed to his current positions of Chairman of the Board,
President and Chief Executive Officer in August 2001. Prior to joining our
company, Mr. Meredith had over 23 years of experience in the real estate
business. Since 1994, Mr. Meredith has served as president and chief
executive officer of Meredith Partners, where he specialized in acquiring,
rehabilitating and managing suburban office and industrial commercial
properties in California, including the recent acquisition and rehabilitation
of the one million square-foot former Firestone Tire manufacturing facility in
Los Angeles. From 1991 to 1994, Mr. Meredith was president and chief executive
officer of the Trammell Crow Company, a real estate development company, where
he oversaw property development, acquisition and disposition, facility and
construction management, and leasing and property management for 33.1 million
square feet of high-rise, office, shopping center and industrial properties.
Mr. Meredith has an M.B.A. from Harvard University and a B.A. in Economics from
Stanford University.

Mr. Prock was appointed to his current
position as Vice President and Acting Chief
Operating Officer in August 2001. Mr. Prock is not currently an employee of the Company.
Mr. Prock has served as the president of West Coast Realty Management, Inc.,
the Advisor, from December 1991 to March 2002. From 1981 to 1991, Mr. Prock was president of
Keystate Properties, Inc., a real estate consulting and brokerage firm that
provides acquisition, development and disposition services to owners of
improved and unimproved properties. Mr. Prock has a B.E. in Civil Engineering
and an M.B.A. from the University of Southern California.

Mr. Wingard was appointed to his current
position as Vice President and Acting Chief
Financial Officer of the Company in October 2001. From August 2000 to
September 2001, Mr. Wingard served as senior vice president and chief financial
officer of VelocityHSI, Inc. a publicly traded provider of high-speed Internet
services to the apartment industry that was spun-off from BRE Properties, Inc.
in August 2000. In August 2001, VelocityHSI, Inc. filed for protection under
Chapter 7 of the U.S. Bankruptcy Code. From August 1996 to August 2000, Mr.
Wingard was Vice President and Director of Financial Reporting for BRE
Properties, Inc., a publicly traded real estate investment trust with over $1.5
billion in assets, where he was responsible for securities filings and
compliance, loan administration and financial reporting. Mr. Wingard is a
Certified Public Accountant and holds a B.S. in Accounting and Finance from the
University of California, Berkeley.

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RISK FACTORS AFFECTING FUTURE OPERATING RESULTS

You should carefully consider the risks described below. These risks are not
the only ones we face. Additional risks not presently known to us or that we
currently consider immaterial may also materially impair our business
operations and hinder our ability to make expected distributions to our
stockholders.

Risks Due to Investment in Real Estate

Decreased Yields from an Investment in Real Property Due to Factors Which May
Cause a Decrease in Revenues or Values or an Increase in Operating Expenses

Real property investments are subject to varying degrees of risk. The yields
available from equity investments in real estate depend upon the amount of
revenues generated and expenses incurred. If properties do not generate
revenues sufficient to meet operating expenses, debt service and capital
expenditures, our results of operations and ability to make distributions to
you and to pay amounts due on our debt will be adversely affected. The
performance of the economy in each of the areas in which the properties are
located affects occupancy, market rental rates and expenses. These factors
consequently can have an impact on the revenues from the properties and their
underlying values. The financial results of major local employers may also have
an impact on the revenues and value of certain properties. Other factors may
further adversely affect revenues from and values of our properties. These
factors include the general economic climate, local conditions in the areas in
which properties are located such as an oversupply of properties like ours or a
reduction in the demand for properties like ours, the attractiveness of the
properties to tenants and competition from other properties like ours. Our
revenues would also be adversely affected if tenants were unable to pay rent or
we were unable to rent vacant property on favorable terms. Further, tenants
could file for bankruptcy protection or become insolvent in the future. We
cannot evict a tenant solely because of its bankruptcy. A court might
authorize the tenant to reject and terminate its lease with us. In such case,
our claim against the bankrupt tenant for unpaid, future rent would be subject
to a statutory cap that might be substantially less than the remaining rent
actually owed under the lease, and, even so, our claim for unpaid rent would
likely not be paid in full. In addition, we cannot predict that current
tenants will renew their leases upon the expiration of their terms or that
current tenants will not attempt to terminate their leases prior to the
expiration of their current terms. We are aware that tenants in our Irvine, CA
and Tustin, CA properties are not fully utilizing the properties for their
operations, and thus may be less likely to re-lease the property when the lease
expires or re-lease a smaller space. If we are unable to promptly re-lease or
renew the leases for significant vacant properties, or if the rental rates upon
such renewal or re-leasing were significantly lower than expected rates, then
our ability to make expected distributions to you and to pay amounts due on our
debt may be adversely affected. In addition, in order to lease vacant space,
we may need to pay substantial leasing commissions and renovation costs. We
may acquire properties that are not fully leased and the cash flow from
existing operations may be insufficient to pay the operating expenses and debt
service associated with that property until the property is fully leased. As a
result, our ability to make distributions to our stockholders could be
adversely affected.

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Operating costs, including real estate taxes, insurance and maintenance costs,
and mortgage payments, if any, do not, in general, decline when circumstances
cause a reduction in income from a property from a vacancy or other reason. In
addition, as many of our leases are triple-net, where the tenant is
responsible for property taxes, insurance and maintenance, we would bear such
costs, and not the tenant, once the tenant no longer leases the property for
any reason. We could sustain a loss as a result of foreclosure on the
property, if a property is mortgaged to secure payment of indebtedness and we
were unable to meet our mortgage payments. As a result, our ability to make
distributions to our stockholders could be adversely affected.

Investments in Newly Acquired Properties May Not Perform in Accordance with
Expectations

In the normal course of business, we typically evaluate potential acquisitions,
enter into non-binding letters of intent, and may, at any time, enter into
contracts to acquire and may acquire additional properties. However, no
assurance can be given that we will have the financial resources to make
suitable acquisitions or that properties that satisfy our investment policies
will be available for acquisition. The acquisition of property entails risks
that investments will fail to perform in accordance with expectations. Such
risks may include financing not being available on favorable terms or at all.
Estimates of the costs of improvements to bring an acquired property up to
standards established for the market position intended for that property might
prove inaccurate. In addition, there are general real estate investment risks
associated with any new real estate investment. Although we undertake an
evaluation of the physical condition of each new investment before it is
acquired, certain defects or necessary repairs may not be detected until after
the investment is acquired. This could significantly increase our total
acquisition cost, which could have a material adverse effect on us and our
ability to make distributions to you and pay amounts due on our debt.

The Value of Our Property Interests Depends on Conditions Beyond Our Control

Real property investments are illiquid and subject to varying degrees of risk.
Yields from our real properties depend on their net income and capital
appreciation. General and local economic conditions, neighborhood values,
competitive overbuilding, weather, casualty losses and other factors beyond our
control may adversely affect real property income and capital appreciation.
For example, the U.S. economy is currently experiencing a slowdown, which may
negatively impact property values. In particular, general and local economic
conditions may be adversely affected by the recent terrorist incidents in New
York and Washington D.C. Some analysts have predicted that a further decline
in the economy will result as a result of these or any future terrorist
incidents. Although we do not have properties in these areas, we are unable to
determine the long-term impact, if any, of these incidents or of any acts of
war or terrorism in the United States or worldwide on the U.S. economy, on us
or on the value of our common stock.

Illiquidity of Real Estate and Reinvestment Risk May Reduce Economic Returns to
Investors

Real estate investments are relatively illiquid and, therefore, tend to limit
our ability to adjust our portfolio in response to changes in economic or other
conditions. Additionally, the Internal Revenue Code places certain limits on
the number of properties a REIT may sell without adverse tax consequences. To
effect our current operating strategy, we will seek to raise funds, both

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through outside financing and through the orderly disposition of assets which
no longer meet our investment criteria. Depending upon interest rates, current
acquisition opportunities and other factors, generally we will reinvest the
proceeds in net leased industrial and suburban office properties, although such
funds may be employed in other uses. In the markets we have targeted for future
acquisition of properties, there is considerable buying competition from other
real estate companies, many of whom may have greater resources, experience or
expertise than us. In many cases, this competition for acquisition properties
has resulted in an increase in property prices and a corresponding decrease in
property yields. No assurance can be given that the proceeds realized from the
disposition of assets which no longer meet our investment criteria can be
reinvested to produce economic returns comparable to those being realized from
the properties disposed of, or that we will be able to acquire properties
meeting our investment criteria. To the extent that we are unable to reinvest
proceeds from the assets which no longer meet our investment criteria, or if
properties acquired with such proceeds produce a lower rate of return than the
properties disposed of, such results may have a material adverse effect on us.
In addition, a delay in reinvestment of such proceeds may have a material
adverse effect on us. We may seek to structure future dispositions as tax-free
exchanges, where appropriate, utilizing the non-recognition provisions of
Section 1031 of the Internal Revenue Code to defer income taxation on the
disposition of the exchanged property. For an exchange of such properties to
qualify for tax-free treatment under Section 1031 of the Internal Revenue Code,
certain technical requirements must be met. Given the competition for
properties meeting our investment criteria, it may be difficult for us to
identify suitable properties within the foregoing time frames in order to meet
the requirements of Section 1031. Even if we can structure a suitable
tax-deferred exchange, as noted above, we cannot assure that we will reinvest
the proceeds of any of these dispositions to produce economic returns
comparable to those currently being realized from the properties which were
disposed of.

Substantial Competition Among Properties and Real Estate Companies May
Adversely Affect Our Rental Revenues and Acquisition Opportunities

All of the properties currently owned by us are located in developed areas.
There are numerous other properties and real estate companies, many of which
have greater financial and other resources than we have, within the market area
of each of our properties which will compete with us for tenants and
acquisition opportunities. The number of competitive properties and real estate
companies in such areas could have a material effect on our ability to rent our
properties and the rents we charge and our acquisition opportunities. The
activities of these competitors could cause us to pay a higher price for a new
property than we otherwise would have paid or may prevent us from purchasing a
desired property at all, which could have a material adverse effect on us and
our ability to make distributions to you and to pay amounts due on our debt.

Potential Effect on Operations Due to Geographic Concentration of Properties
and Economic Conditions; Dependence on California Region

As of December 31, 2001, our portfolio was located entirely in California.
Economic conditions in, and other factors relating to, the California area,
including supply and demand for properties, zoning and other regulatory
conditions and competition from other properties, could adversely affect our
performance. In that regard, the California region in the past experienced
economic recessions and depressed conditions in the local real estate markets.
To the extent general economic or social conditions in any of these areas
deteriorate or any of these areas experiences

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natural disasters, the value of the portfolio, our results of operations and
our ability to make distributions to you and to pay amounts due on our debt
could be materially adversely affected.

Our Business Strategy is Concentrated in Two Types of Commercial Properties

Our primary investment focus is light industrial and suburban office
properties. As a result, we may be exposed to greater risks than if our
investment focus was based on more diversified types of properties.

We are Dependent on Single Tenants in Many of Our Properties

Many of our properties are dependent on a single tenant, and some of these
single tenant properties are individually significant to our total revenue. In
the year ended December 31, 2001, three tenants accounted for 14%, 12% and 9%
of our total revenue. If we are unable to renew any lease we have with the
single tenant at one of these properties, upon expiration of the current lease,
or re-lease the space to another anchor tenant of similar or better quality
upon expiration of the current lease on similar or better terms or the tenant
attempts to terminate the lease prior to its scheduled term, we could
experience material adverse consequences such as higher vacancy, re-leasing on
less favorable economic terms, reduced net income and reduced funds from
operations. Similarly, if one or more of our single tenants goes bankrupt, we
could experience material adverse consequences like those described above.
There can be no assurance that our sole tenants will renew their leases when
they expire or will be willing to renew on similar economic terms.

Construction Risks Could Adversely Affect Our Profitability

We currently are renovating some of our properties and may in the future
renovate or build other properties, including tenant improvements required
under leases. Our renovation and related construction activities may expose us
to certain risks. We may incur renovation costs for a property which exceed
our original estimates due to increased costs for materials or labor or other
costs that are unexpected. We also may be unable to complete renovation of a
property on schedule, which could result in increased debt service expense or
construction costs and loss of rents until the property is ready for occupancy.
Additionally, the time frame required to recoup our renovation and
construction costs and to realize a return on such costs can often be
significant.

Inability to Implement Growth Strategy; Potential Failure to Identify, Acquire
or Integrate New Acquisitions

Our future growth will be dependent upon a number of factors, including our
ability to identify acceptable properties for acquisition, complete
acquisitions on favorable terms, successfully integrate acquired properties and
obtain financing to support expansion. There can be no assurance that we will
be successful in implementing our growth strategy, that growth will indeed
occur at all, or that any expansion will improve operating results. The failure
to identify, acquire and integrate new properties effectively could have a
material adverse affect on us and our ability to make distributions to you and
to pay amounts due on our debt. We intend to acquire properties to the extent
we identify properties that meet our investment criteria. Acquisitions of
properties entail risks that investments will fail to perform in accordance
with expectations.

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Estimates of the costs of improvements to bring an acquired property up to
standards established for the market position intended for that property may
prove inaccurate. In addition, there are general investment risks associated
with any new real estate investment as discussed above.

Uninsured and Underinsured Losses; Limited Insurance Coverage

We carry (or require our tenants to carry) liability, fire, extended coverage
and rental loss insurance with respect to our properties with certain policy
specifications, limits and deductibles. We do not carry flood and earthquake
insurance for our properties. In addition, there may be certain extraordinary
losses (such as those resulting from civil unrest or terrorism) that are not
generally insured (or fully insured against) because they are either
uninsurable or not economically insurable. Following the terrorist activity of
September 11, 2001, and in light of the resulting uncertainty in the insurance
market, many insurance companies have indicated that they will exclude
insurance against acts of terrorism from their policies in the
future. In addition, we do not carry insurance coverage for
environmental liabilities. Should
an uninsured or underinsured loss occur to a property, we could be required to
use our own funds for restoration or lose all or part of our investment in, and
anticipated revenues from, the property and would continue to be obligated on
any mortgage indebtedness on the property. Any such loss could have a material
adverse effect on us and our ability to make distributions to you and pay
amounts due on our debt.

Adverse Changes in Laws May Affect Our Potential Liability Relating to the
Properties and Our Operations

Increases in real estate taxes and income, service and transfer taxes cannot
always be passed through to tenants in the form of higher rents (or charges on
triple-net leases), and may adversely affect our cash available for
distribution and our ability to make distributions to you and to pay amounts
due on our debt. Similarly, changes in laws increasing the potential liability
for environmental conditions existing on properties or increasing the
restrictions on discharges or other conditions, as well as changes in laws
affecting construction and safety requirements, may result in significant
unanticipated expenditures, which could have a material adverse effect on us
and our ability to make distributions to you and pay amounts due on our debt.

Potential Effect on Costs and Investment Strategy from Compliance with Laws
Benefiting Disabled Persons

A number of federal, state and local laws (including the Americans with
Disabilities Act) and regulations exist that may require modifications to
existing buildings or restrict certain renovations by requiring improved access
to such buildings by disabled persons and may require other structural features
which add to the cost of buildings under construction. Legislation or
regulations adopted in the future may impose further burdens or restrictions on
us with respect to improved access by disabled persons. The costs of compliance
with these laws and regulations may be substantial, and limits or restrictions
on construction or completion of certain renovations may limit implementation
of our investment strategy in certain instances or reduce overall returns on
our investments, which could have a material adverse effect on us and our
ability to make distributions to you and to pay amounts due on our debt. We
have reviewed our properties to determine the level of compliance and, if
necessary, take appropriate action to bring such properties into compliance. We
believe, based on property reviews, that the costs of such compliance should
not have a material adverse effect on us. Such conclusions are based upon

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information and data at the time of the review, and no assurance can be given
that further review and analysis of our properties, or future legal
interpretations or legislative changes, will not significantly increase the
costs of compliance.

Potential Liability Under Environmental Laws

Under federal, state and local environmental laws, ordinances and regulations,
we may be required to investigate and clean up the effects of releases of
hazardous or toxic substances or petroleum products at our properties,
regardless of our knowledge or responsibility, simply because of our current or
past ownership or operation of the real estate. Thus, we may have liability
with respect to properties previously sold by us. If unidentified
environmental problems arise, we may have to take extensive measures to
remediate the problems, which could adversely affect our cash flow and our
ability to make distributions to our stockholders because:



| |  |  | We may have to pay for property damage and for investigation and
clean-up costs incurred in connection with the contamination;                                                                       
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The law typically imposes clean-up responsibility and liability
regardless of whether the owner or operator knew of or caused the
contamination;                                                     
|
| |  |  | Even if more than one person may be responsible for the
contamination, each person who shares legal liability under the
environmental laws may be held responsible for all of the clean-up
costs; and
|
| |  |  | Governmental entities or other third parties may sue the owner or
operator of a contaminated site for damages and costs.                                                                             

These costs could be substantial and in extreme cases could exceed the value of
the contaminated property. The presence of hazardous or toxic substances or
petroleum products and the failure to properly remediate such contamination may
materially and adversely affect our ability to borrow against, sell or rent an
affected property. In addition, applicable environmental laws create liens on
contaminated sites in favor of the government for damages and costs it incurs
in connection with a contamination.

Environmental laws also govern the presence, maintenance and removal of
asbestos. Such laws require that owners or operators of buildings containing
asbestos:



| |  |  | Properly manage and maintain the asbestos;                                                                                                        
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Notify and train those who may come into contact with asbestos; and                                                                               
|
| |  |  | Undertake special precautions, including removal or other
abatement, if asbestos would be disturbed during renovation or
demolition of a building.

Such laws may impose fines and penalties on building owners or operators who
fail to comply with these requirements and may allow third parties to seek
recovery from owners or operators for personal injury associated with exposure
to asbestos fibers. Some of our properties are located in urban, industrial and
previously developed areas where fill or current or historic industrial uses of
the areas have caused site contamination.

It is our policy to retain independent environmental consultants to conduct
Phase I environmental site assessments and asbestos surveys with respect to our
acquisition of properties. These assessments generally include a visual
inspection of the properties and the surrounding areas, an

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examination of current and historical uses of the properties and the
surrounding areas and a review of relevant state, federal and historical
documents, but do not involve invasive techniques such as soil and ground water
sampling. Where appropriate, on a property-by-property basis, our practice is
to have these consultants conduct additional testing, including sampling for
asbestos, for lead in drinking water, for soil contamination where underground
storage tanks are or were located or where other past site usages create a
potential environmental problem, and for contamination in groundwater. Even
though these environmental assessments are conducted, there is still the risk
that:



| |  |  | The environmental assessments and updates did not identify all
potential environmental liabilities;                                         
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | A prior owner created a material environmental condition that is
not known to us or the independent consultants preparing the
assessments;  
|
| |  |  | New environmental liabilities have developed since the
environmental assessments were conducted; or                                         
|
| |  |  | Future uses or conditions, such as changes in applicable
environmental laws and regulations, could result in environmental
liability for us.

We May Acquire Properties Subject to Liabilities and Without any Recourse, or
With Only Limited Recourse, with Respect to Unknown Liabilities Such as:



| |  |  | Claims by tenants, vendors or other persons dealing with the former
owners of the properties;                   
| | - |  | ----------------------------------------------------------------------------------------------------------------
|
| |  |  | Liabilities incurred in the ordinary course of business; and                                                    
|
| |  |  | Claims for indemnification by directors, officers and others
indemnified by the former owners of the properties.

We May Change Our Policies Without Obtaining the Approval of Our Stockholders.

Our operating and financial policies, including our policies with respect to
acquisitions, growth, operations, indebtedness, capitalization and dividends,
are determined by our board of directors. Accordingly, as a stockholder, you
will have little direct control over these policies.

Risks Due to Real Estate Financing

We have a significant amount of indebtedness. As of December 31, 2001, we had
total assets of $36,762,611, secured indebtedness of $19,796,510, total
liabilities of $20,422,461 and a debt-to-total assets ratio of 54%.

We anticipate that future acquisitions will be financed, to the extent allowed
by our Bylaws, under a line of credit, other forms of secured or unsecured
financing or through the issuance of additional debt or equity by us. We expect
to review periodically our financing options regarding the appropriate mix of
debt and equity financing. Equity, rather than debt, financing of future
acquisitions could have a dilutive effect on the interests of our existing
stockholders.

We may incur substantial additional indebtedness in the future. On January 15,
2002, our stockholders voted to amend our Bylaws to increase the limit on our
leverage, our borrowings as

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a percentage of the aggregate property value (as defined) from 50% to 65%.
Assuming we find a willing lender, we estimate we could borrow a total of approximately
$26,400,000 based on our current holdings, or approximately $6,600,000 more than
the amount of our indebtedness at December 31, 2001, or possibly
more. Further, the definition of value was changed to allow the
Board to use outside appraisals to determine market value. If future appraisals
were to show an increase in our property values, we would be able to borrow
additional funds against the same assets, assuming we find a willing lender.

Increased Debt and Leverage Can Reduce Cash Available for Distribution and
Cause Losses.

Using debt, whether with recourse to us generally or only with respect to a
particular property, to acquire properties creates an opportunity for increased
net income, but at the same time creates risks. We use debt to fund
investments only when we believe it will enhance our risk-adjusted returns.
However, we cannot be sure that our use of leverage will prove to be
beneficial. Additional leverage may:



| |  |  | increase our vulnerability to general adverse economic and industry
conditions                                                                                                                        
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | limit our flexibility in planning for, or reacting to, changes in
our business and the REIT industry, which may place us at a competitive
disadvantage compared to our competitors that have less debt
|
| |  |  | limit, along with the possible financial and other restrictive
covenants in our indebtedness, among other things, our ability to
borrow additional funds.                                             

Any of the foregoing could have a material adverse effect on us and our ability
to make distributions to you and to pay amounts due on our debt.

Potential Inability to Renew, Repay or Refinance Our Debt Financing

We are subject to the normal risks associated with debt financing, including
the risk that our cash flow will be insufficient to meet required payments of
principal and interest, the risk that indebtedness on our properties, or
unsecured indebtedness, will not be able to be renewed, repaid or refinanced
when due or that the terms of any renewal or refinancing will not be as
favorable as the terms of such indebtedness. In most of the mortgage notes on
our properties, the mortgage payment terms do not fully amortize the loan
balance, and a balloon payment of the balance is due. If we were unable to
refinance our indebtedness on acceptable terms, or at all, we might be forced
to dispose of one or more of the properties on disadvantageous terms, which
might result in losses to us. Such losses could have a material adverse effect
on us and our ability to make distributions to you and pay amounts due on our
debt. Furthermore, if a property is mortgaged to secure payment of indebtedness
and we are unable to meet mortgage payments, the mortgagee could foreclose upon
the property, appoint a receiver and receive an assignment of rents and leases
or pursue other remedies, all with a consequent loss of our revenues and asset
value. Foreclosures could also create taxable income without accompanying cash
proceeds, thereby hindering our ability to meet the REIT distribution
requirements of the Internal Revenue Code.

Increase in Cost of Indebtedness Due to Rising Interest Rates

We have incurred, and expect in the future to incur, indebtedness, which bears
interest at a variable rate. Accordingly, increases in interest rates would
increase our interest costs, which

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could have a material adverse effect on us and our ability to make
distributions to you. In addition, an increase in market interest rates may
lead holders of our common shares to demand a higher yield on their shares from
distributions by us, which could adversely affect the market price of our
common stock.

Potential Incurrence of Additional Debt and Related Debt Service

We intend to fund the acquisition properties partially through borrowings and
from other sources such as sales of properties which no longer meet our
investment criteria or the contribution of property to joint ventures or other
financing methods. Our organizational documents contain limitations on the
amount of indebtedness that we may incur. Subject to limitations on
indebtedness set forth in our Bylaws, we intend to become more highly
leveraged, resulting in an increase in debt service, which could have a
material adverse effect on us and our ability to make distributions to you and
to pay amounts due on our debt and in an increased risk of default on our
obligations.

If We Incur Additional Indebtedness, the Agreement Governing Our Indebtedness
Could Contain Various Covenants that Limit Our Discretion in the Operation of
Our Business

If we incur additional indebtedness, we may have to negotiate an agreement with
our lenders governing the terms of the indebtedness. Typically, these types of
agreements contain various provisions that could limit our discretion in the
operation of our business by restricting our ability to:



| |  |  | incur additional debt and issue preferred stock    
| | - |  | ---------------------------------------------------
|
| |  |  | pay dividends and make other distributions         
|
| |  |  | make investments and other payments                
|
| |  |  | redeem or repurchase our capital stock             
|
| |  |  | consolidate or merge                               
|
| |  |  | create liens                                       
|
| |  |  | sell assets                                        
|
| |  |  | enter into certain transactions with our affiliates

These restrictions on our ability to operate our business in our discretion
could seriously harm our business by, among other things, limiting our ability
to take advantage of financing, merger and acquisition and other corporate
opportunities. In addition, if we were to obtain a credit facility, the terms
of the credit facility may require that we maintain specific financial
maintenance covenants, including covenants establishing a maximum funded
indebtedness to capitalization ratio, a minimum consolidated net worth
requirement and a minimum fixed charge coverage ratio. Events beyond our
control, such as an increase in the interest rates of our variable rate debt,
could affect our ability to meet those financial tests, and we cannot assure
you that we will meet them. If we default under any financing agreements, our
lenders could:



| |  |  | elect to declare all amounts borrowed to be immediately due and
payable, together with accrued and unpaid interest              
| | - |  | --------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | terminate their commitments, if any, to make further extensions of
credit; and become secured to the extent of all of our assets

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In addition, our ability to obtain debt financing in the future secured by
individual properties, or the terms of such financing, may be adversely
affected if lenders generally insist upon insurance against acts of terrorism
and such coverage is not available either at all or on commercially reasonable
terms.

If we are unable to pay our obligations to our secured lenders, they could
proceed against any or all of the collateral securing our indebtedness to them.
In addition, a breach of the restrictions or covenants contained in our loan
documents could cause an acceleration of our indebtedness. We may not have, or
be able to obtain, sufficient funds to repay our indebtedness in full upon
acceleration.

The Market Value of Our Common Stock Could Decrease Based on Our Performance
and Market Perception and Conditions

We are currently not publicly traded. Moreover, sales of our common stock
occur only occasionally, and usually in very small volumes. For example, in
2001, the American Partnership Board reported a total of ten sale transactions
involving our common stock, for an aggregate of approximately 24,000 shares.
Accordingly, it is difficult to estimate the price of our common stock at any
particular moment. Stockholders are cautioned that prior sales data do not
necessary indicate the prices at which our common stock would trade in an
active market. We have applied for listing on the Nasdaq SmallCap
Market, and there can be
no assurance that we will indeed become listed. If we are listed and become publicly traded, there can be no assurance the price of our
common shares will not be lower than our previous estimates. The market value
of our common stock may be based primarily upon the markets perception of our
growth potential and current and future cash dividends, and may be secondarily
based upon the real estate market value of our underlying assets. The market
price of our common stock is influenced by the dividend on our common stock
relative to market interest rates. Rising interest rates may lead potential
buyers of our common stock to expect a higher dividend rate, which would
adversely affect the market price of our common stock. In addition, the value
of our common stock could be adversely affected by general market conditions or
market conditions of real estate companies in general.

We Cannot Assure You that We Will be Able to Make Future Dividends Payments at
any Particular Rate, or at all.

Our Board of Directors currently intends to continue to declare quarterly
dividends on our common stock; however, the declaration and payment of
dividends is subject to the discretion of our Board of Directors. Any
determination as to the payment of dividends, as well as the level of such
dividends, will depend on, among other things, general economic and business
conditions, our strategic plans, our financial results and condition, and
contractual, legal, and regulatory restrictions on our ability to pay
dividends. In the fourth quarter of 2001, the Board of Directors decreased
our quarterly dividend due to a variety of factors, including the vacancy at
our Vacaville, CA property. There can be no assurance that the current
quarterly dividend level will be maintained or that we will pay dividends in
any future period.

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Further Issuances of Equity Securities may be Dilutive to Current Stockholders.

The interests of our existing stockholders could be diluted if additional
equity securities are issued to finance future developments and acquisitions
instead of incurring additional debt. Our ability to execute our business
strategy depends on our access to an appropriate blend of debt
financing, which could include a line of credit and other forms of secured and
unsecured debt, equity financing, including common and preferred equity, or
joint ventures.

Stockholder Approval is Required to Change Certain Policies, Limiting the
Ability of Our Board of Directors to Take Certain Actions in Response to
Changing Conditions.

We cannot change our leverage limits without the approval of stockholders
representing a majority of our shares of common stock entitled to vote. In
addition, the approval of stockholders representing two-thirds of our shares of
common stock entitled to vote is necessary to change our policy of seeking to
maintain qualification as a REIT. As a result, our board of directors could not
change either of these policies without first receiving shareholder approval at
an annual or special meeting, even if the change in policy would be
advantageous to us.

Risks Due to Becoming and Self-administered and Self-managed

Historically, the Advisor had managed our properties, administrated our
business affairs and sold, purchased and refinanced properties, under the
direction of the Board of Directors. The Advisor has notified us that it will
terminate effective March 31, 2002. On January 15,
2002, our stockholders voted to change the Bylaws to allow us to become
self-administrated and self-managed. We intend to become self-administrated
and self-managed after the Advisor terminates on March 31, 2002.

We Will be Exposed to New Risks Previously Assumed by the Advisor

Becoming a self-administered and self-advised REIT will expose us to risks to
which we have not historically been exposed, such as the risks associated with
our own management. In particular, we will be exposed to the risk of
inefficiencies and the need to implement strict cost controls in managing our
day-to-day activities and the risks and costs associated with the attraction
and retention of qualified operating management. We anticipate that becoming a
self-advised and self-administered REIT will likely result in higher expenses
of administration than those currently charged by the Advisor. The following
risks previously associated with the activities of the Advisor will now be
borne by us:



| |  |  | Increased fixed overhead expenses resulting from engagement of
additional personnel and other costs in excess of the fee charged by
the Advisor. Our ability to cover expanded overhead may be impaired if
our expected growth is not realized or is realized at a slower rate and
acquisition activities contract.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | If our employees fail to perform duties properly, our recourse is
limited to these employees, whose liability may be limited by
indemnifications from us. Previously, the Advisor could have been
liable for such failure.                                                                                         
|
| |  |  | We compete for real estate investments with all types of investors,
including domestic and foreign corporations, financial institutions,
other real estate investment trusts and individuals. Many of these
competitors have greater resources than we do. In addition,                                            

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| |   |  | the U.S. economy is currently experiencing a slowdown. We will no longer
have available the resources and experience of the Advisor and its
affiliates to assist us.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Our stock price could be adversely affected due to the termination
of the Advisor, as we will no longer have the Advisors resources and
experience.                

We Will Incur Additional Expenses and May Have Difficulties in Recruiting and
Retaining Additional Management

Our success is, in part, dependent on the support, services and contributions
of Mr. Meredith, Mr. Prock and Mr. Wingard. The loss of the services of the
existing management team through death, disability or otherwise, after becoming
a self-advised and self-administered REIT, could seriously harm our prospects.
In August 2001, we entered into an agreement with Mr. Meredith to serve as our
President and Chief Executive Officer. Mr. Wingard, our acting Chief Financial
Officer, is also an employee. We intend to engage Mr. Prock, a vice president
of the Advisor, as an employee following the termination of the
Advisor. Mr. Prock is expected to serve substantially the same capacities
and fulfill substantially the same roles as he has previously done in his
capacities as an employee of the Advisor. If Mr. Meredith, Mr. Prock or Mr.
Wingard ceases to perform management services for us, or we consider their
performance unsatisfactory, we will be required to secure management services
from other personnel. There can be no assurance in such instance that we would
be able to obtain qualified management or advisory services or that such
services could be obtained on favorable terms. In addition, our
agreement with the Advisor provided for limitations of the costs in connection with our
management. Under self-management, there would be no such limitations. As a
result, the costs of being a self-advised and self-managed REIT could
significantly exceed the fees payable to the Advisor or to a
successor third-party advisor.

After the Termination of the Advisory Agreements, Our Operations May be
Disrupted

After the termination of the Advisor, we may experience the loss or
displacement of personnel currently providing services to us. In addition, our
operations are currently located in office space leased by the Advisor. If, in
connection with the termination of the Advisor, we are required to
change office facilities, we may experience delays in timing, the occurrence of
any of which could cause disruption in our affairs and increase our costs.

Becoming a Self-advised and Self-administered REIT Will Increase the Influence
of Our Current Management Over the Our Affairs

Under Mr. Merediths employment agreement, we have agreed to grant Mr. Meredith
options to purchase 200,000 shares of our common stock at a strike price equal
to fair market value at grant.

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These options would vest over a period of two (2) years. To date, no options have
been granted to Mr. Meredith and he does not own any shares of our common
stock. However, once the options are granted and vested, Mr. Meredith would
beneficially own approximately 6.4% of our issued and outstanding common stock
upon exercise of these options. Additionally, Mr. Merediths employment
agreement provides for severance benefits to Mr.
Meredith following a change of control, which would include certain changes in
the composition of the Board. If enough current Board members resign for any
reason, or if the conversion to a self-advised and self-administered REIT were
otherwise construed to be a change of control, we may be obligated to pay these
benefits to Mr. Meredith. In addition, Mr. Meredith has, in the past,
expressed his interest in purchasing an additional ownership interest. Under
our Bylaws, no stockholder may hold more than 9.9% of our outstanding shares,
unless the Board amends such restriction. By assuming the services previously
performed by the Advisor, and if Mr. Meredith acquires an ownership interest in
us, Mr. Meredith and our management would be in a position to exercise greater
control or significant influence over our affairs.

Provisions Which Could Limit a Change in Control or Deter a Takeover

Restrictions in Tax Law and Our Organizational Documents

In order to maintain our qualification as a REIT, not more than 50% in value of
our outstanding capital stock may be owned, actually or constructively, by five
or fewer individuals (as defined in the Internal Revenue Code to include
certain entities). In order to protect us against risk of losing our status as
a REIT due to a concentration of ownership among our stockholders, our Bylaws
provide, among other things, that if the Board of Directors determines, in good
faith, that direct or indirect ownership of our common stock has or may become
concentrated to an extent that would prevent us from qualifying as a REIT, the
Board of Directors may prevent the transfer of our common stock. These
limitations may have the effect of precluding acquisition of control of us by a
third-party without consent of the Board of Directors. In addition, certain
other provisions contained in our Articles of Incorporation and Bylaws may have
the effect of discouraging a third-party from making an acquisition proposal
for us and may thereby inhibit a change in control. For example, such
provisions may deter tender offers for our common stock which offers may be
attractive to the stockholders, or deter purchases of large blocks of our
common stock, thereby limiting the opportunity for stockholders to receive a
premium for their shares of our common stock over then-prevailing market
prices.

Change of Control Agreements Could Deter a Change of Control

We have entered into a change of control agreement with Allen K. Meredith, our
President and Chief Executive Officer, providing for the payment of money to
him upon the occurrence of a change of control, as defined in these agreements.
If, within one year following a change of control, Mr. Meredith resigns or is
terminated, we will make a severance payment equal to a portion of the
executives base salary, his average bonus over last three years and medical
and other benefits. Based upon his current salary and benefit levels, this
provision would result in payments totaling at least $200,000 to Mr. Meredith.
In addition, we may enter into other such agreements with other executives. The
agreement with Mr. Meredith and possibly other agreements should they be executed, may
deter changes of control because of the increased cost for a third

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party to acquire control of us, thus limiting the opportunity for stockholders
to receive a premium for our common stock over then-prevailing market
prices.

Tax Risks

Although we believe we are organized and are operating so as to qualify as a
REIT under the Internal Revenue Code, no assurance can be given that we have in
fact operated or will be able to continue to operate in a manner so as to
qualify or remain so qualified.

Tax Liabilities as a Consequence of Failure to Qualify as a REIT

Qualification as a REIT involves the application of highly technical and
complex Internal Revenue Code provisions for which there are only limited
judicial or administrative interpretations and the determination of various
factual matters and circumstances not entirely within our control. For example,
in order to qualify as a REIT in 2001, at least 95% of our taxable gross income
in any year must be derived from qualifying sources and we must make
distributions to stockholders aggregating annually at least 90% of our REIT
taxable income (excluding net capital gains). Thus, to the extent revenues from
non- qualifying sources represents more than 5% of our gross income in any
taxable year, we will not satisfy the 95% income test and may fail to qualify
as a REIT, unless certain relief provisions apply, and, even if those relief
provisions apply, a tax would be imposed with respect to excess net income, any
of which could have a material adverse effect on us and our ability to make
distributions to you and to pay amounts due on our debt. No assurance can be
given that new legislation, new regulations, administrative interpretations or
court decisions will not change the tax laws with respect to qualification as a
REIT or the federal income tax consequences of such qualification. If we fail
to qualify as a REIT, we will be subject to federal income tax (including any
applicable alternative minimum tax) on our taxable income at corporate rates,
which would likely have a material adverse effect on us and our ability to make
distributions to you and to pay amounts due on our debt. In addition, unless
entitled to relief under certain statutory provisions, we would also be
disqualified from treatment as a REIT for the four taxable years following the
year during which REIT qualification is lost. This treatment would reduce funds
available for investment or distributions to you because of the additional tax
liability to us for the year or years involved. In addition, we would no longer
be required to make, and indeed may not make, distributions to you. To the
extent that distributions to you would have been made in anticipation of
qualifying as a REIT, we might be required to borrow funds or to liquidate
certain investments to pay the applicable tax. Further, in order to maintain
our real estate investment trust status, we may borrow funds on a short-term
basis to meet the real estate investment trust distribution requirements, even
if the then-prevailing market conditions are not favorable for these
borrowings.

Gain on Disposition of Assets Deemed Held for Sale in the Ordinary Course is
Subject to 100% Tax

We currently are attempting to sell certain properties. If we sell any of our
properties, the Internal Revenue Service may determine that the sale is a
disposition of an asset held primarily for sale to customers in the ordinary
course of a trade or business. Gain from this kind of sale generally will be
subject to a 100% tax. Whether an asset is held primarily for sale to
customers in the ordinary course of a trade or business depends on the
particular facts and circumstances of

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the sale. Although we will attempt to comply with the terms of safe-harbor
provisions in the Internal Revenue Code prescribing when asset sales will not
be so characterized, we cannot assure you that we will be able to do so.




ITEM 2. PROPERTIES

GENERAL

In addition to the information in this Item 2, additional information on our
properties is contained in our financial statements under Item 8, Item 3 and in
Schedule III under Item 14(d) Schedule III (financial statement schedule),
specifically as to encumbrances on our properties in this Annual Report on Form
10-K.

As of December 31, 2001, all of our properties were located in California.
During the three-year period ended December 31, 2001, the Advisor managed all
of our properties. After March 31, 2002, we will become a self-advised and
self-managed REIT.

In conjunction with the evaluation of our strategic goals, we are in the
process of evaluating all of our properties, including of disposing of certain
properties, primarily properties with retail operations that are inconsistent
with our new investment objectives. Based on appraisals and
holding periods, we determined with the Advisor, that the total expected future
cash flows from operations and the ultimate disposition of six properties were
less than their carrying value at September 30, 2001. As a result, an
impairment loss of $3,800,000, primarily related to the Riverside, CA and
Vacaville, CA properties, was recorded in that quarter, measured as the amount
by which the carrying amount of the asset exceeded its fair value. Further, in
the fourth quarter of 2000, we also recorded an impairment loss on our Fresno,
CA property of $300,000.

In the fourth quarter of 2001, we determined that continued ownership of four
properties was not consistent with our strategic plan, as they involved retail
operations, and have been listed for sale. Accordingly, depreciation expense
was no longer recorded for these properties upon listing them for sale.

We carry liability, fire and extended coverage and rental loss insurance on our
properties, with certain policy specifications, limits and deductibles. We
believe we are adequately covered by such insurance. We do not carry insurance
for earthquakes, as we do not believe such coverage is currently cost
effective. In addition we cannot predict whether we will be able to obtain and
maintain insurance protection against acts of terrorism in the future.

Property taxes on our properties are assessed on asset values based on the
valuation method and tax rate used by the respective jurisdiction. During
2001, the rates were approximately 1.1%, and in many cases, such taxes were
paid directly by the tenant, pursuant to the lease.

A summary of our properties follows:

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West Coast Realty Investors, Inc.
Summary of Properties Owned
December 31, 2001

|                                                  |  |             |        |               |  |                 |  |                |  |                                                    |  |            |      |            |  |                      
|------------------------------------------------- |  | ----------- | ------ | ------------- |  | --------------- |  | -------------- |  | -------------------------------------------------- |  | ---------- | ---- | ---------- |  | ---------------------
|                                                  |  | Rentable    |        |               |  | Lease           |  |                |  |                                                    |  |            |      | Next lease
|Property                                          |  | square feet |        | Property type |  | type*           |  | Primary Tenant |  | Occupancy                                          |  | expiration
|                                                  |  |             |        |               |  |                 |  |                |  |                                                    |  |           
|Huntington Beach, CA**                            |  |             | 5,200  |               |  | Retail          |  | NNN            |  | Blockbuster, Inc.                                  |  |            | 100% |            |  | 12/31/05             
|Fresno, CA**                                      |  |             | 8,915  |               |  | Retail          |  | Gross          |  | Wherehouse Entertainment,
Inc.                     |  |            | 67%  |            |  | 1/31/03              
|Riverside, CA**                                   |  |             | 25,000 |               |  | Retail          |  | NNN            |  | Sanborn Theaters, Inc.                             |  |            | 100% |            |  | 9/30/05              
|Tustin, CA                                        |  |             | 37,740 |               |  | Suburban
Office |  | NNN            |  | Safegard Business
Systems, Inc.                    |  |            | 100% |            |  | 9/30/05              
|Sacramento, CA (Java City -
717 W. Del Paso Road) |  |             | 11,200 |               |  | Lt. Industrial  |  | NNN            |  | Cucina Holdings, Inc.                              |  |            | 100% |            |  | 7/31/03              
|Sacramento, CA (Java City-
721 W. Del Paso Road)  |  |             | 8,600  |               |  | Lt. Industrial  |  | NNN            |  | Cucina Holdings, Inc.                              |  |            | 100% |            |  | 7/31/03              
|Irvine, CA                                        |  |             | 63,549 |               |  | Lt. Industrial  |  | NNN            |  | Tycom Corporation                                  |  |            | 100% |            |  | 12/31/07             
|Roseville, CA**                                   |  |             | 5,133  |               |  | Retail          |  | NNN            |  | Knox & Associates, Inc.                            |  |            | 100% |            |  | 9/30/17              
|Corona, CA                                        |  |             | 37,330 |               |  | Lt. Industrial  |  | NNN            |  | American National
Manufacturing, Inc.              |  |            | 100% |            |  | 5/31/02              
|Sacramento, CA(Horn Road)                         |  |             | 48,000 |               |  | Lt. Industrial  |  | NNN            |  | Laufen International, Inc.                         |  |            | 100% |            |  | 7/31/03              
|Chino, CA                                         |  |             | 38,554 |               |  | Lt. Industrial  |  | NNN            |  | Daedo American Corporation                         |  |            | 100% |            |  | 4/8/03               
|Vacaville, CA                                     |  |             | 66,000 |               |  | Lt. Industrial  |  | NNN            |  | Cameron Environmental, Inc.                        |  |            | 18%  |            |  | Month  to
month     
|Cerritos, CA                                      |  |             | 48,351 |               |  | Lt. Industrial  |  | NNN            |  | Casco Group, Inc.                                  |  |            | 100% |            |  | 6/30/08              
|Ontario, CA                                       |  |             | 40,000 |               |  | Lt. Industrial  |  | NNN            |  | Adelphia Communication
Corp.                       |  |            | 100% |            |  | 8/14/13              
|Folsom, CA                                        |  |             | 52,186 |               |  | Suburban
Office |  | Gross          |  | California Independent
System Operator Corporation |  |            | 100% |            |  | Various; largely
2006



|*  |  | NNN represents a triple net lease where the tenant is responsible for
taxes, insurance and maintenance; Gross represents a lease where
we are responsible for paying for such items, although we may be reimbursed,
subject to limitations, by the tenant.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|** |  | Listed for sale.                                                                                                                                                                                                                                              

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A discussion of circumstances in specific properties follows:

Riverside, CA

On September 7, 2001, we amended the existing lease for, among other items,
accelerate the lease expiration to September 30, 2005, and reduced the monthly
payment to $25,000 plus usage payments of $2,300 per month. Further, we agreed
to take title to certain of the tenants assets in satisfaction of unpaid rent
and late charges totaling approximately $287,000.

Corona, CA

We have been notified by the tenant that the tenant will not exercise its
option to extend its lease and will vacate in May 2002.

Vacaville, CA

Mindscape, Inc. leased 53,850 of 66,000 total square feet of the property.
Pursuant to the lease terms, Mindscape, Inc. exercised its early termination
option on August 31, 2001 by the payment of approximately $150,000. The 53,850
square feet it occupied is vacant as of December 31, 2001, and we are actively
attempting to secure a new tenant.

SIGNIFICANT TENANTS

Tenants representing 10% or more of our total rental revenue for the year ended
December 31, 2001 are as follows:

| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | Safeguard (Tustin, CA) accounted for 14% of our total rental revenue
Tycom (Irvine, CA) accounted for 12% of our total rental revenue

Tenants representing 10% or more of our total rental revenue for the year ended
December 31, 2000 are as follows:

| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | Safeguard (Tustin, CA) accounted for 13% of our total rental revenue
Tycom (Irvine, CA) accounted for 11% of our total rental revenue

Tenants representing 10% or more of our total rental revenue for the year ended
December 31, 1999 are as follows:

| |                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Safeguard (Tustin, CA) accounted for 13% of our total rental revenue
Tycom (Irvine, CA) accounted for 10% of our total rental revenue
CMS Welding & Machinery (Fremont, CA, sold in 2000) accounted for 10 of
our total rental revenue

Headquarters

We lease our headquarters at 3000 Sand Hill Road, Building 3, Suite 140, Menlo
Park, California, 94025 under a sublease arrangement dated October 19, 2001
with Sand Hill Advisors, Inc. on a month-to-month basis for $2,000 per month.
In addition, during the three years ended December

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31, 2001, the Advisor provided us office space and other office services at
5933 West Century Blvd., Suite 900, Los Angeles, California, 90045 for $2,000
per month. We may continue to use this office space after the Advisor
terminates its agreement with us.




ITEM 3. LEGAL PROCEEDINGS

We are a defendant in a lawsuit entitled John Lonberg; Ruthee Goldkorn v.
Sanborn Theaters, Inc. and So-Cal Cinema, Inc.; Salts, Troutman and Kaneshiro,
Inc.; West Coast Realty Investors, Inc., in the U.S. District Court for the
Central District of California (Case #CV-97-6598AHM(JGx)). We were added as a
defendant in the plaintiffs First Amended Complaint filed May 7, 1998.

The plaintiffs alleged violations of the federal Americans with Disabilities
Act and the California Unruh Civil Rights Act with respect to their movie-going
experiences, including inadequate physical accommodations for individuals with
disabilities and insensitive theater personnel. Sanborn Theaters, Inc
(Sanborn) is the tenant and theater operator. Salts, Troutman and Kaneshiro,
Inc. is the architect who designed the theater and its interiors.

The plaintiffs seek actual damages of $1,000 for each violation of law; three
times actual damages; and attorneys fees, expenses and costs. The plaintiffs
also seek mandatory injunctive relief requiring the defendants to reconfigure
the theater.

The plaintiffs have agreed to dismiss their claims under the Unruh Civil Rights
Act.

The U.S. Department of Justice, Civil Rights Division (DOJ) filed a Motion to
Intervene in the case on March 1, 1999. DOJ has sued Sanborn only and
preliminary discussions have been held between the DOJ and Sanborn. Sanborn
intends to vigorously defend against the DOJ.

We cannot determine the likelihood of an unfavorable outcome or range of
potential loss, if any. We believe we have complied with all applicable
provisions of law and intend to vigorously defend the allegations contained in
the lawsuit. We believe that the lawsuit will not have a material impact on
our continuing operations or overall financial condition.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the 2001 Annual Stockholders Meeting on October 2, 2001, our stockholders
considered the following actions, with the following results:

|                                                                                                                                                                                         |  |        |           |           |  |             |    |          |  |        |    |        |  |  |        |  |  |  |         |  |  |        |   | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | --------- | --------- |  | ----------- | -- | -------- |  | ------ | -- | ------ |  |  | ------ |  |  |  | ------- |  |  | ------ | - | 
|                                                                                                                                                                                         |  |        |           |           |  |             |    |          |  |        |    |        |  |  |        |  |  |  |         |  |  | Broker
|                                                                                                                                                                                         |  | For    |           | Against   |  | Withheld    |    | non-vote
|                                                                                                                                                                                         |  |        |           |           |  |             |    |         
|                                                                                                                                                                                         |  |        |           |           |  | % of        |    |          |  |        |    |        |  |  |        |  |  |  |         |  |  |       
|                                                                                                                                                                                         |  |        |           |           |  | shares      |    |          |  |        |    |        |  |  |        |  |  |  |         |  |  |       
|                                                                                                                                                                                         |  | No. of |           | voted for |  | % of        |    | No. of   |  | No. of |    | No. of
|                                                                                                                                                                                         |  | Shares |           | this item |  | outstanding |    | Shares   |  | Shares |    | Shares
|                                                                                                                                                                                         |  |        |           |           |  |             |    |          |  |        |    |       
|Proposal
No. 1Election of directors                                                                                                                                                     |  |        |           |           |  |             |    |          |  |        |    |        |  |  |        |  |  |  |         |  |  |        |   | 
|Allen K. Meredith                                                                                                                                                                        |  |        | 1,428,343 |           |  |             | 88 | %        |  |        | 49 | %      |  |  | 57,608 |  |  |  | 128,086 |  |  |        |  | 
|Neal E. Nakagiri                                                                                                                                                                         |  |        | 1,428,343 |           |  |             | 88 | %        |  |        | 49 | %      |  |  | 57,608 |  |  |  | 128,086 |  |  |        |  | 
|Patricia F. Meidell                                                                                                                                                                      |  |        | 1,428,343 |           |  |             | 88 | %        |  |        | 49 | %      |  |  | 57,608 |  |  |  | 128,086 |  |  |        |  | 
|James P. Moore                                                                                                                                                                           |  |        | 1,428,343 |           |  |             | 88 | %        |  |        | 49 | %      |  |  | 57,608 |  |  |  | 128,086 |  |  |        |  | 
|John H. Redmond                                                                                                                                                                          |  |        | 1,428,343 |           |  |             | 88 | %        |  |        | 49 | %      |  |  | 57,608 |  |  |  | 128,086 |  |  |        |  | 
|Proposal
No. 2Ratification of appointment independent accountants                                                                                                                       |  |        | 1,440,086 |           |  |             | 89 | %        |  |        | 49 | %      |  |  | 77,901 |  |  |  | 96,050  |  |  |        |  | 
|Proposal No. 3Ratification of
Advisory Agreement                                                                                                                                        |  |        | 1,431,540 |           |  |             | 89 | %        |  |        | 49 | %      |  |  | 74,620 |  |  |  | 107,877 |  |  |        |  | 
|Proposal
No. 4Amendment of Bylaws to provide that the number of
directors may be increased or decreased by the Board of Directors or
stockholders, by between three and seven directors |  |        | 1,419,092 |           |  |             | 88 | %        |  |        | 48 | %      |  |  | 93,084 |  |  |  | 101,861 |  |  |        |  | 

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PART II




ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is not traded on any stock exchange or over-the-counter
market. Our stock trades from time to time on the American Partnership Board,
an auction-based resale system on the Internet that facilitates trading of
illiquid securities (the APB). As of March 15, 2002, there were 2,927,967
shares of our common stock outstanding and 1,194 stockholders of record. We
have applied for listing on the Nasdaq SmallCap Market and may apply
to other markets. There can be no
assurance that we will indeed be listed on the Nasdaq Small Cap
Market or other markets. The
stock price data in the table below was prepared from data provided by the APB.
Stockholders are cautioned that prior sales data should not be used to
determine the value of our common stock nor should it be used to anticipate the
prices at which our common stock might trade in an active market.

|               |  |                          |      |             |  |      |      |     |  |   |      |  |  |   |      | 
|-------------- |  | ------------------------ | ---- | ----------- |  | ---- | ---- | --- |  | - | ---- |  |  | - | ---- | 
|               |  | Years ended December 31,
|               |  |                         
|               |  | 2001                     |      | 2000       
|               |  |                          |      |            
|               |  | Stock Price              |      | Stock Price
|               |  |                          |      |            
|               |  | High                     |      | Low         |  | High |      | Low
|               |  |                          |      |             |  |      |      |    
|First quarter  |  | $                        | 6.31 |             |  | $    | 6.31 |     |  | $ | 7.04 |  |  | $ | 6.65 | 
|Second quarter |  | $                        | 6.62 |             |  | $    | 6.35 |     |  | $ | 6.85 |  |  | $ | 6.59 | 
|Third quarter  |  | $                        | 6.39 |             |  | $    | 6.39 |     |  | $ | 6.37 |  |  | $ | 5.23 | 
|Fourth quarter |  | $                        | 6.30 |             |  | $    | 5.85 |     |  | $ | 6.01 |  |  | $ | 5.70 | 

Dividends totaling $1,610,381, $6,617,206 and $1,874,666 were declared in 2001,
2000 and 1999, respectively are summarized below:

During 2001 our Board of Directors declared and paid the following dividends:

|                   |  |             |           |           |  |          |       |  |  |   |           | 
|------------------ |  | ----------- | --------- | --------- |  | -------- | ----- |  |  | - | --------- | 
|                   |  | Outstanding |           | Amount    |  | Total   
|Record Date        |  | Shares      |           | Per Share |  | Dividend
|                   |  |             |           |           |  |         
|March 31, 2001     |  |             | 2,927,967 |           |  | $        | 0.150 |  |  | $ | 439,195   | 
|June 30, 2001      |  |             | 2,927,967 |           |  | $        | 0.150 |  |  |   | 439,195   | 
|September 30, 2001 |  |             | 2,927,967 |           |  | $        | 0.150 |  |  |   | 439,195   | 
|December 19, 2001  |  |             | 2,927,967 |           |  | $        | 0.100 |  |  |   | 292,796   | 
|                   |  |             |           |           |  |          |       |  |  |   |           | 
|Total              |  |             |           |           |  |          |       |  |  | $ | 1,610,381 | 
|                   |  |             |           |           |  |          |       |  |  |   |           | 

During 2000 our Board of Directors declared and paid the following dividends:

|                   |  |             |           |           |  |          |       |  |  |   |           | 
|------------------ |  | ----------- | --------- | --------- |  | -------- | ----- |  |  | - | --------- | 
|                   |  | Outstanding |           | Amount    |  | Total   
|Record Date        |  | Shares      |           | Per Share |  | Dividend
|                   |  |             |           |           |  |         
|December 31, 1999* |  |             | 2,927,967 |           |  | $        | 0.060 |  |  | $ | 175,678   | 
|March 31, 2000     |  |             | 2,927,967 |           |  | $        | 0.175 |  |  |   | 512,394   | 
|May 23, 2000       |  |             | 2,927,967 |           |  | $        | 0.650 |  |  |   | 1,903,179 | 
|June 30, 2000      |  |             | 2,927,967 |           |  | $        | 1.075 |  |  |   | 3,147,565 | 
|October 1, 2000    |  |             | 2,927,967 |           |  | $        | 0.150 |  |  |   | 439,195   | 
|December 28, 2000  |  |             | 2,927,967 |           |  | $        | 0.150 |  |  |   | 439,195   | 
|                   |  |             |           |           |  |          |       |  |  |   |           | 
|Total              |  |             |           |           |  |          |       |  |  | $ | 6,617,206 | 
|                   |  |             |           |           |  |          |       |  |  |   |           | 

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During 1999, our Board of Directors declared and paid the following dividends:

|                  |  |             |           |           |  |          |       |  |  |   |           | 
|----------------- |  | ----------- | --------- | --------- |  | -------- | ----- |  |  | - | --------- | 
|                  |  | Outstanding |           | Amount    |  | Total   
|Record Date       |  | Shares      |           | Per Share |  | Dividend
|                  |  |             |           |           |  |         
|March 1, 1999     |  |             | 2,932,762 |           |  | $        | 0.160 |  |  | $ | 469,241   | 
|June 1, 1999      |  |             | 2,927,967 |           |  | $        | 0.160 |  |  |   | 468,475   | 
|September 1, 1999 |  |             | 2,927,967 |           |  | $        | 0.160 |  |  |   | 468,475   | 
|December 1, 1999  |  |             | 2,927,967 |           |  | $        | 0.160 |  |  |   | 468,475   | 
|                  |  |             |           |           |  |          |       |  |  |   |           | 
|Total             |  |             |           |           |  |          |       |  |  | $ | 1,874,666 | 
|                  |  |             |           |           |  |          |       |  |  |   |           | 



|* |  | Represents a spill-over dividend declared and issued on March 15,
2000.
|- |  | -------------------------------------------------------------------------

Our Board of Directors has the authority to pay dividends based on such
considerations as the Board of Directors may deem necessary. Even if we
determine to pay a dividend on or make a distribution in respect of the capital
stock of the Company, there can be no assurance that we will generate
sufficient cash flow to pay such a dividend, or that we will maintain the
current dividend payment levels.

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ITEM 6. SELECTED FINANCIAL DATA

The selected financial data should be read in conjunction with the financial
statements and related notes and Item 7. Managements Discussion and Analysis
of Financial Condition and Results of Operations in this Annual Report on Form
10-K. Certain reclassifications have been made to the prior years amounts to
conform to the presentation of the current years financial statements.

|                                               |                                                                |  |      |            |      |  |      |             |      |  |      |             |   |  |   |             |   |  |   |            |  
|---------------------------------------------- | -------------------------------------------------------------- |  | ---- | ---------- | ---- |  | ---- | ----------- | ---- |  | ---- | ----------- | - |  | - | ----------- | - |  | - | ---------- | -
|                                               |                                                                |  | 2001 |            | 2000 |  | 1999 |             | 1998 |  | 1997
|                                               |                                                                |  |      |            |      |  |      |             |      |  |     
|Operating results:                             |                                                                |  |      |            |      |  |      |             |      |  |      |             |   |  |   |             |   |  |   |           
|                                               | Revenues                                                       |  | $    | 4,622,746  |      |  | $    | 4,977,909   |      |  | $    | 5,397,663   |   |  | $ | 3,803,884   |   |  | $ | 2,955,324  |  
|                                               | Net gain of sale of rental real estate                         |  |      |           |      |  |      | 2,154,727   |      |  |      |            |   |  |   |            |   |  |   | 262,168    |  
|                                               | Net (loss) income                                              |  |      | (2,522,159 | )    |  |      | 3,207,619   |      |  |      | 1,070,670   |   |  |   | 763,608     |   |  |   | 978,978    |  
|                                               | Net cash flows from operating activities                       |  |      | 2,141,748  |      |  |      | 2,344,837   |      |  |      | 1,942,803   |   |  |   | 1,189,314   |   |  |   | 1,832,483  |  
|                                               | Net cash flows (used in) provided by
investing activities      |  |      | (178,368   | )    |  |      | 7,999,102   |      |  |      | (10,625,918 | ) |  |   | (9,186,901  | ) |  |   | (6,405,754 | )
|                                               | Net cash flows (used in) provided by
financing activities      |  |      | (2,087,888 | )    |  |      | (10,970,484 | )    |  |      | 5,963,408   |   |  |   | (10,492,317 | ) |  |   | 4,655,934  |  
|                                               | Dividends                                                      |  |      | 1,610,381  |      |  |      | 6,617,206   |      |  |      | 1,874,666   |   |  |   | 1,772,037   |   |  |   | 1,791,710  |  
|                                               | Weighted average shares outstanding                            |  |      | 2,927,967  |      |  |      | 2,927,967   |      |  |      | 2,929,442   |   |  |   | 2,640,041   |   |  |   | 1,839,018  |  
|Per share data - basic and assuming
dilution: |                                                                |  |      |            |      |  |      |             |      |  |      |             |   |  |   |             |   |  |   |           
|                                               | Net (loss) income excluding gain on
sale of rental real estate |  |      | (0.86      | )    |  |      | 0.36        |      |  |      | .37         |   |  |   | .29         |   |  |   | .39        |  
|                                               | Gain on sale of rental real estate                             |  |      |           |      |  |      | 0.74        |      |  |      |            |   |  |   |            |   |  |   | .14        |  
|                                               |                                                                |  |      |            |      |  |      |             |      |  |      |             |   |  |   |             |   |  |   |           
|                                               | Net (loss) income                                              |  |      | (0.86      | )    |  |      | 1.10        |      |  |      | .37         |   |  |   | .29         |   |  |   | .53        |  
|                                               | Dividends                                                      |  |      | .55        |      |  |      | 2.26        |      |  |      | .64         |   |  |   | .67         |   |  |   | .78        |  
|Financial position at December 31              |                                                                |  |      |            |      |  |      |             |      |  |      |             |   |  |   |             |   |  |   |           
|                                               | Total assets                                                   |  | $    | 36,762,611 |      |  | $    | 41,229,750  |      |  | $    | 48,864,500  |   |  | $ | 41,255,672  |   |  | $ | 29,839,091 |  
|                                               | Notes payable                                                  |  |      | 19,796,510 |      |  |      | 20,263,273  |      |  |      | 24,616,551  |   |  |   | 16,686,668  |   |  |   | 11,194,832 |  
|                                               | Stockholders equity                                           |  |      | 16,340,150 |      |  |      | 20,302,288  |      |  |      | 23,473,468  |   |  |   | 24,034,280  |   |  |   | 17,852,962 |  




ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

The preparation of 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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. We evaluate our estimates and assumptions on an ongoing
basis based on a combination of historical information and various other
assumptions that we believe are to be reasonable under the particular
circumstances. Actual results may differ from these estimates based on
different assumptions or conditions. We believe the critical accounting
policies that most impact our consolidated financial statements are described
below.

Revenue Recognition  We recognize minimum rents on the straight-line method
over the terms of the leases, as required under Statement of Financial
Accounting Standard No. 13. Certain of

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the leases also provide for additional revenue based on contingent percentage
income which is recorded on an accrual basis once the specified target that
triggers this type of income is achieved. The leases also typically provide for
tenant recoveries of common area maintenance, real estate taxes and other
operating expenses. These recoveries are recognized as revenue in the period
the applicable costs are incurred.

Real Estate  We record real estate assets at the lower of cost or fair value
if impaired. Costs incurred to unaffiliated third parties for the acquisition
of properties are capitalized.

We evaluate the recoverability of our investment in real estate whenever events
or changes in circumstances indicate that the carrying amount of an asset may
be impaired. Our assessment of recoverability of our real estate assets
includes, but is not limited to recent operating results, expected cash flows
and our plans for future operations.

Properties classified as held for sale are segregated from rental real estate
in our financial statement presentation. We stop recording depreciation on a
property once it is classified as held for sale.

Use of Estimates  The preparation of 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 differ materially from those estimates.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity to fund
distributions, principal payment on
notes payable and minor capital expenditures is our cash flows from operating
activities. In order to qualify as a REIT for federal income tax purposes, we
must distribute annually at least 90% of our REIT taxable income (excluding
capital gains). Accordingly, we currently intend to continue to make, but have
not contractually bound ourselves to make, regular quarterly distributions to
holders of our common stock. As a policy, we keep cash balances on hand for
reserves for unexpected cash requirements. Our primary source for liquidity to
fund asset acquisitions, major capital expenditures and balloon payments on
notes payable includes refinancing selected existing notes payable and the
proceeds from asset sales. Further, we may attempt to obtain funding by
issuing additional equity either in the form of common stock or through joint
ventures.

During the fourth quarter of 2001, we lowered our dividend rate, due to the
following:



| |  |  | Possible increases in our general and administrative expenses as a
percentage of revenues, as a result of our conversion to a
self-administered and self-managed REIT;                                         
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Increased number of tenants who are subleasing (or attempting to
sublease) a portion of their property, which may indicate a lack of
intent to re-lease the property upon the expiration of the lease term;
and
|
| |  |  | A vacancy in our Vacaville, CA property and the anticipated vacancy
upon the lease expiration in our Corona, CA property, including loss of
rental income and cost of capital improvements;                    

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The following table presents our contractual cash obligations as of December
31, 2001:

|                                   |  |                        |            |                    |  |                    |           |                     |  |                 |           |  |  |  |           |  |  |  |           | 
|---------------------------------- |  | ---------------------- | ---------- | ------------------ |  | ------------------ | --------- | ------------------- |  | --------------- | --------- |  |  |  | --------- |  |  |  | --------- | 
|                                   |  | Payments Due by Period
|                                   |  |                       
|Contractual Obligations            |  | Total                  |            | Less Than One year |  | One to Three Years |           | Three to Five Years |  | Over Five Years
|                                   |  |                        |            |                    |  |                    |           |                     |  |                
|Long-Term Debt                     |  |                        | 19,796,510 |                    |  |                    | 4,396,416 |                     |  |                 | 5,712,157 |  |  |  | 1,667,038 |  |  |  | 8,020,899 | 
|                                   |  |                        |            |                    |  |                    |           |                     |  |                 |           |  |  |  |           |  |  |  |           | 
|Total Contractual Cash Obligations |  |                        | 19,796,510 |                    |  |                    | 4,396,416 |                     |  |                 | 5,712,157 |  |  |  | 1,667,038 |  |  |  | 8,020,899 | 
|                                   |  |                        |            |                    |  |                    |           |                     |  |                 |           |  |  |  |           |  |  |  |           | 

At December 31, 2001, our net real estate investments totaled $34,861,159, for
the 15 properties we own. Depending upon the availability and cost of external
capital, we anticipate making additional investments in light industrial and
suburban office properties. We intend to fund new investments from existing
cash balances (subject to maintaining reasonable cash reserves), refinancing of
selected existing mortgage debt to higher balances and the proceeds from asset
sales. We may consider other sources of possible funding, including joint
ventures. To increase our financial flexibility, we may obtain a revolving
line of credit, although there can be no assurance we will be successful.

We believe our liquidity and various sources of capital are sufficient to fund
operations including capital expenditures and leasing commissions, meet debt
service and dividend requirements under the Internal Revenue Code for REIT
status and finance future investments. We believe our properties are in good
condition without significant deferred maintenance obligations and are leased
under triple-net leases, which reduce our risk pertaining to excessive
maintenance and operating costs. However, we anticipate we will continue to
require outside sources of financing to meet our long-term liquidity needs
beyond 2001, such as scheduled debt repayments (including balloon payments on
our debt) and property acquisitions.

On January 15, 2002, our stockholders voted to amend our Bylaws to increase the
limit on our leverage, our borrowings as a percentage of the aggregate property
value (as defined) from 50% to 65%. In addition, the definition of value was
changed to allow the Board to use outside appraisals to determine market value.
If future appraisals were to show an increase in our property values, we would
be able to borrow additional funds against the same assets, assuming we find a
willing lender.

CASH FLOWS IN 2001

Our cash resources decreased $124,508 during the year ended December 31, 2001.
During 2001, cash provided by operating activities was $2,141,748 primarily
from net income adjusted for non-cash items as depreciation and impairment
loss. Investing activities in 2001 resulted in a $178,368 use of cash resources
primarily for various capital expenditures at our Cerritos, CA and Corona, CA
properties. For the year ended December 31, 2001 financing activities used
$2,087,888, due largely to dividends totaling $1,610,381 and principal payments
on notes payable of $466,763.

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CASH FLOWS IN 2000

Our cash resources decreased $626,545 during the year ended December 31, 2000.
Cash provided by operating activities in 2000 was $2,344,837, primarily from
$3,207,619 in net income, less the non-operating gain on sale of rental real
estate totaling $2,154,727 from the Huntington Beach (OPTO-22) and Fremont
properties, plus non-cash charges. Investing activities resulted in a
$7,999,102 increase in cash resources for the year 2000 due to cash proceeds
from the sale of these two properties. For the year ended December 31, 2000
financing activities used $10,970,484 due to distributions of dividends
totaling $6,617,206 (largely in order to meet REIT distribution requirements
from the taxable income related to the property sales) and repayments on notes
payable of $4,353,278, also primarily from the property sales.

CASH FLOWS IN 1999

Our cash resources decreased $2,719,707 during the year ended December 31,
1999. Cash provided by operating activities increased by $1,942,803 in 1999
largely due to in net income adjusted for non-cash items. Investing activities
used $10,625,918 for the purchase of the Ontario, CA and Folsom, CA
properties. For the year ended December 31, 1999, financing activities
provided $5,963,408 primarily from notes payable obtained for the above
purchases, and was offset in part by dividends totaling $1,874,666.

RESULTS OF OPERATIONS

2001 Compared to 2000

Operations for the years ended December 31, 2001 and 2000 represented full
years of rental operations for all of our properties except for the Huntington
Beach, CA (OPTO-22) property, which was sold on April 12, 2000, and the
Fremont, CA property, which was sold on June 30, 2000. No properties were sold
in 2001.

Rental revenue decreased by $305,016 (6%) for the year ended December 31, 2001,
as compared to the year ended December 31, 2000, primarily due to the loss of
rents in 2001 from the sale of the OPTO-22 and Fremont properties in 2000.

Interest income decreased by $50,147 (49%) for the year ended December 31,
2001, as compared to the year ended December 31, 2000, due to lower average
balances maintained in interest earning assets and lower interest rates.

Interest expense decreased by $266,591 (15%) for the year ended December 31,
2001, as compared to the year ended December 31, 2000, due to the partial year
of interest on debt associated with the sales of the OPTO-22 and Fremont
properties and significantly lower interest rates on our variable rate debt.

General and administrative costs increased by $212,756 (43%) principally due to
the our conversion to a self-advised and self-managed REIT, including the
hiring of three employees, legal expenses related to two proxy statements and
other general legal issues.

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Depreciation expense decreased by $86,520 (11%) for the year ended December 31,
2001, as compared to the year ended December 31, 2000, primarily due to the
sales of the OPTO-22 and Fremont properties, and the re-characterization of
four properties as held for sale in the fourth quarter of 2001, which meant
that depreciation expense was not charged to those four properties in the
fourth quarter of 2001, as it had been during the same quarter in 2000.

Operating expenses increased by $25,295 (4%), primarily due to parking lot
repairs at the Cerritos, California and Corona, California properties, and was
offset in part by the fact that there were no operating costs during 2001 for
the OPTO-22 and Fremont properties, which were sold in 2000.

During the quarter ended September 30, 2001, we determined with the Advisor,
that the total expected future cash flows from operations and ultimate
disposition of six properties was less than the carrying value of the
properties and recorded a loss of $3,800,000 to reduce the properties to their
fair value, based on recent appraisals.

In March 2001, we received $165,053 from Bankers Standard Insurance Company
(Bankers Standard) in partial settlement of a lawsuit regarding Bankers
Standards responsibility to defend the Company in the Market Place Cinema
lawsuit. See Item 3. Bankers Standard is also required to pay the subsequent
legal costs of defending this action. We had previously expensed these legal costs, and as a
result the proceeds of the settlement were taken into income in March 2001.
There was no such item in 2000.

Net gain on sale of real estate investments was $2,154,727 in 2000 from the
sales of the OPTO-22 and Fremont properties; there were no property sales in
2001.

Net (loss) income for the year ended December 31, 2001 was ($2,522,159),
compared to net income of $3,207,617 in year ended December 31, 2000. This
decrease was primarily due to the gain on sale of the OPTO-22 and Fremont
properties in 2000 and the impairment loss recorded in 2001.

The weighted average number of shares outstanding for the year ended December
31, 2001 was 2,927,967, the same as the prior year. Net (loss) income per share
decreased from $1.10 in 2000 to ($0.86) in 2001 primarily as a result of the
gain on sales of properties during 2000 and the impairment loss recorded in
2001.

2000 Compared to 1999

Operations for the year ended December 31, 2000 represented full years of
rental operations for all of our properties except for the Huntington Beach, CA
(OPTO-22) property, which was sold on April 12, 2000, and the Fremont, CA
property, which was sold on June 30, 2000 and the Ontario, CA and Folsom, CA
properties which were purchased in January and May 1999, respectively. No
properties were sold in 1999.

Rental revenue decreased $414,595 (8%) in the year ended December 31, 2000
compared to the year ended December 31, 1999, primarily due to the loss of
rents from the sale of the OPTO-22 property in April 2000 and the sale of the
Fremont property in June 2000, partially offset by the ownership of the Folsom
property for a full twelve months in 2000 (compared to eight months

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during 1999). Interest income decreased $5,159 (5%) for the year ended December
31, 2000 due to lower average balances maintained in interest earning assets.

Interest expense decreased $33,890 (2%) due to the pay-off of debt associated
with the sales of the OPTO-22 and Fremont properties and the pay-off of the
Sacramento, CA (Java City at 717 West Del Paso Road) property loan on June 30,
2000 and offset by interest on the loan on the Folsom property for a full
twelve months in 2000. Depreciation expense increased $76,373 (11%) and
operating expenses, increased $28,425 (5%) primarily due to the ownership of
the Folsom property for a full twelve months in 2000. General and
administrative costs decreased $772,884 (61%) principally because we did not
incur acquisition and financing fees in 2000 (we incurred $682,414 of such fees
in 1999). During the quarter ended December 31, 2000, we determined with the
Advisor that the total expected future cash flows from operations and ultimate
disposition of the Fresno property was less than the carrying value of the
property, due to overbuilding of commercial properties in the Fresno area.
Therefore the property was deemed to be impaired. As a result, an impairment
loss of $300,000 was recorded, measured as the amount by which the carrying
amount of the asset exceeded its fair value. Fair value was determined based on
a recent appraisal.

On April 12, 2000 the tenant of the OPTO-22 property executed its right to
purchase the property. The property sold for $3,675,000 resulting in a gain of
$999,150. On June 30, 2000 the Fremont property was sold to an unaffiliated
buyer for $4,850,000 resulting in a gain of $1,155,578. No properties were
sold in 1999.

Net income for the year ended December 31, 2000 was $3,207,619, $2,136,949
greater than the year ended December 31, 1999. This increase was primarily due
to the gain on sale of the OPTO-22 and Fremont properties.

The weighted average number of shares outstanding for the year ended December
31, 2000 was 2,927,967 compared to 2,929,442 for 1999. Net income per share
increased from $.37 in 1999 to $1.10 in 2000 primarily as a result of the gain
on sales of properties during 2000.

Inflation and changing prices have not had a material effect on our operations.

NEW ACCOUNTING PRONOUNCEMENTS

Information on new accounting pronouncements is contained in our financial
statements under Item 8 in this Annual Report on Form 10-K.




ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks from our operations result primarily from changes in short-term
LIBOR interest rates. We do not have any direct foreign exchange or other
significant market risk.

Our exposure to market risk for changes in interest rates relates primarily to
two mortgage loans totaling $6,093,034 at December 31, 2001. We generally enter
into fixed and variable rate debt obligations to support general corporate
purposes, including acquisitions, capital expenditures and

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working capital needs. We periodically evaluate the level of variable rate debt
with respect to total debt and other factors, including our assessment of the
current and future economic environment. We did not have any derivative
financial instruments at December 31, 2001 or 2000.

The fair values of our financial instruments (including such items in the
financial statement captions as cash, other assets and liabilities other than
notes payable) approximate their carrying or contract values based on their
nature, terms and interest rates that approximate current market rates. The
fair value of notes discounted cash flow analyses with an interest rate similar
to that of current market borrowing arrangements. The fair value of our notes
payable exceeds their carrying value by approximately $1,800,000 at December
31, 2001. The fair value of our notes payable approximates their carrying
value at December 31, 2000.

We had $6,093,034 and $6,212,725 in variable rate debt outstanding at December
31, 2001 and 2000, respectively. A hypothetical 10% adverse change in interest
rates would have had an annualized unfavorable impact of approximately $30,000
and $50,000, respectively, on the years ended December 31, 2001 and 2000 on our
earnings and cash flows based on these debt levels. We cannot predict the
effect of adverse changes in interest rates on its variable rate debt and,
therefore, our exposure to market risk, nor can there be any assurance that
fixed rate, long-term debt will be available to us at advantageous pricing.
Consequently, our future results may differ materially from the estimated adverse
changes discussed above.




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

|                                                                                        |  |      |    | 
|--------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                        |  | Page
|                                                                                        |  |     
|Report of Independent Certified Public Accountants                                      |  |      | 35 | 
|Balance Sheets  December 31, 2001 and 2000                                             |  |      | 36 | 
|Statements of Income for the years ended December 31, 2001, 2000 and 1999               |  |      | 37 | 
|Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999           |  |      | 38 | 
|Statements
of Stockholders Equity for the years ended December 31, 2001, 2000 and 1999 |  |      | 39 | 
|Summary of Accounting Policies                                                          |  |      | 40 | 
|Notes to Financial Statements                                                           |  |      | 45 | 
|Financial Statement Schedules Schedule III  Real Estate and Accumulated Depreciation   |  |      | 69 | 

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Report of Independent Certified Public Accountants

West Coast Realty Investors, Inc.
Menlo Park, California

We have audited the accompanying balance sheets of West Coast Realty Investors,
Inc., as of December 31, 2001 and 2000 and the related statements of income,
stockholders equity and cash flows for each of the three years in the period
ended December 31, 2001. We have also audited the schedule listed in the
accompanying index. These financial statements and schedule 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and schedules are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and schedules. 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 West Coast Realty Investors,
Inc., at December 31, 2001 and 2000 and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2001,
in conformity with accounting principles generally accepted in the United
States of America.

Also, in our opinion, the Schedule III presents fairly, in all material
respects, the information set forth therein.



| | /s/ BDO SEIDMAN, LLP
| | --------------------

Los Angeles, California
February 8, 2002

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WEST COAST REALTY INVESTORS, INC.
BALANCE SHEETS

|                                           |                                                                                                                                    |      |            |             |   |   |            |            |  
|------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------- | ---- | ---------- | ----------- | - | - | ---------- | ---------- | -
|December 31,                               |                                                                                                                                    | 2001 |            | 2000       
|                                           |                                                                                                                                    |      |            |            
|Assets                                     |                                                                                                                                    |      |            |             |   |   |            |           
|                                           | Rental real estate, less accumulated depreciation (Notes 1 and 2)                                                                  |      | $          | 29,458,317  |   |   | $          | 38,871,691 |  
|                                           | Cash and cash equivalents                                                                                                          |      |            | 1,123,827   |   |   |            | 1,248,335  |  
|                                           | Deferred rent                                                                                                                      |      |            | 545,030     |   |   |            | 596,254    |  
|                                           | Accounts receivable                                                                                                                |      |            | 14,184      |   |   |            | 307,176    |  
|                                           | Loan origination fees, net of accumulated amortization of
$144,483 and $134,343 in 2001 and 2000                                   |      |            | 167,389     |   |   |            | 198,054    |  
|                                           | Rental real estate held for sale, net                                                                                              |      |            | 5,402,842   |   |   |            |           |  
|                                           | Other assets                                                                                                                       |      |            | 51,022      |   |   |            | 8,240      |  
|                                           |                                                                                                                                    |      |            |             |   |   |            |           
|Total assets                               |                                                                                                                                    | $    | 36,762,611 |             |   | $ | 41,229,750 |           
|                                           |                                                                                                                                    |      |            |             |   |   |            |           
|Liabilities and Stockholders Equity       |                                                                                                                                    |      |            |             |   |   |            |           
|Liabilities                                |                                                                                                                                    |      |            |             |   |   |            |           
|                                           | Accounts payable                                                                                                                   |      | $          | 9,958       |   |   | $          | 5,028      |  
|                                           | Due to related party (Note 3)                                                                                                      |      |            | 37,477      |   |   |            | 72,267     |  
|                                           | Security deposits and prepaid rent                                                                                                 |      |            | 303,852     |   |   |            | 319,861    |  
|                                           | Other liabilities                                                                                                                  |      |            | 274,664     |   |   |            | 267,033    |  
|                                           | Notes payable (Note 4)                                                                                                             |      |            | 19,796,510  |   |   |            | 20,263,273 |  
|                                           |                                                                                                                                    |      |            |             |   |   |            |           
|Total liabilities                          |                                                                                                                                    |      | 20,422,461 |             |   |   | 20,927,462 |           
|Commitments and contingencies(Note 9)      |                                                                                                                                    |      |            |             |   |   |            |           
|Stockholders equity                       |                                                                                                                                    |      |            |             |   |   |            |           
|                                           | Common stock $.01 par value; 5,000,000 shares authorized;
2,927,967 shares issued and outstanding as of
December 31, 2001 and 2000 |      |            | 29,280      |   |   |            | 29,280     |  
|                                           | Additional paid-in capital                                                                                                         |      |            | 27,147,772  |   |   |            | 26,977,370 |  
|                                           | Dividends in excess of retained earnings                                                                                           |      |            | (10,836,902 | ) |   |            | (6,704,362 | )
|                                           |                                                                                                                                    |      |            |             |   |   |            |           
|Total stockholders equity                 |                                                                                                                                    |      | 16,340,150 |             |   |   | 20,302,288 |           
|                                           |                                                                                                                                    |      |            |             |   |   |            |           
|Total liabilities and stockholders equity |                                                                                                                                    | $    | 36,762,611 |             |   | $ | 41,229,750 |           
|                                           |                                                                                                                                    |      |            |             |   |   |            |           

See accompanying summary of accounting policies and notes to financial statements.

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WEST COAST REALTY INVESTORS, INC.
STATEMENTS OF INCOME

|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |           |      | 
|------------------------------------------------------------------- | -------------------------- | ----------------------------------------------------------- | ---------- | --------- | ----- | ---- | --------- | --------- | ---- | - | --------- | --------- | ---- | 
|Years ended December 31,                                            |                            | 2001                                                        |            | 2000      |       | 1999
|                                                                    |                            |                                                             |            |           |       |     
|Revenues                                                            |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|                                                                    | Rental (Notes 1 and 2)     |                                                             | $          | 4,569,683 |       |      | $         | 4,874,699 |      |   | $         | 5,289,294 |     
|                                                                    | Interest                   |                                                             |            | 53,063    |       |      |           | 103,210   |      |   |           | 108,369   |     
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|                                                                    |                            |                                                             | 4,622,746  |           |       |      | 4,977,909 |           |      |   | 5,397,663 |          
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|Cost and expenses                                                   |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|                                                                    | Interest expense           |                                                             |            | 1,530,480 |       |      |           | 1,797,071 |      |   |           | 1,798,544 |     
|                                                                    | General and administrative |                                                             |            | 705,265   |       |      |           | 492,509   |      |   |           | 1,265,393 |     
|                                                                    | Depreciation               |                                                             |            | 675,935   |       |      |           | 762,455   |      |   |           | 718,499   |     
|                                                                    | Operating                  |                                                             |            | 598,278   |       |      |           | 572,982   |      |   |           | 544,557   |     
|                                                                    | Impairment loss (Note 1)   |                                                             |            | 3,800,000 |       |      |           | 300,000   |      |   |           |          |     
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|                                                                    |                            |                                                             | 7,309,958  |           |       |      | 3,925,017 |           |      |   | 4,326,993 |          
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|Net (loss) income from operations                                   |                            |                                                             | (2,687,212 | )         |       |      | 1,052,892 |           |      |   | 1,070,670 |          
|Insurance recovery from lawsuit (Note 8)                            |                            |                                                             | 165,053    |           |       |      |          |           |      |   |          |          
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|Net (loss) income before gain on sale of
rental real estate         |                            |                                                             | (2,522,159 | )         |       |      | 1,052,892 |           |      |   | 1,070,670 |          
|Gain on sale of rental real estate (Note 1)                         |                            |                                                             |           |           |       |      | 2,154,727 |           |      |   |          |          
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|Net (loss) income                                                   |                            | $                                                           | (2,522,159 | )         |       | $    | 3,207,619 |           |      | $ | 1,070,670 |          
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|Net (loss) income per share  basic and
assuming dilution (Note 5): |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|                                                                    |                            | Net (loss) income before gain on sale
of rental
real estate |            | $         | (0.86 | )    |           | $         | 0.36 |   |           | $         | 0.37 | 
|                                                                    |                            | Gain on sale of rental real estate                          |            | $         |      |      |           | $         | 0.74 |   |           | $         |     | 
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          
|Net (loss) income per share                                         |                            | $                                                           | (0.86      | )         |       | $    | 1.10      |           |      | $ | 0.37      |          
|                                                                    |                            |                                                             |            |           |       |      |           |           |      |   |           |          

See accompanying summary of accounting policies and notes to financial statements.

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WEST COAST REALTY INVESTORS, INC.
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents

|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |           |             |   |          |  
|--------------------------------------------------- | ---------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ---------------------------------- | ---------- | ---- | ----------- | --------- | ---------- | - | ----------- | --------- | ----------- | - | -------- | -
|Years ended December 31,                            |                                                                                          | 2001                                                             |                                                                                     | 2000                               |            | 1999
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |     
|Cash flows from operating activities                |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|                                                    | Net (loss) income                                                                        |                                                                  | $                                                                                   | (2,522,159                         | )          |      | $           | 3,207,619 |            |   | $           | 1,070,670 |            
|                                                    | Adjustments to reconcile net (loss) income to net cash
provided by operating activities: |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |           |            
|                                                    |                                                                                          | Depreciation expense                                             |                                                                                     |                                    | 675,935    |      |             |           | 762,455    |   |             |           | 718,499     |  
|                                                    |                                                                                          | Interest expense due to amortization of loan origination fees    |                                                                                     |                                    | 41,410     |      |             |           | 32,417     |   |             |           | 30,842      |  
|                                                    |                                                                                          | Impairment loss                                                  |                                                                                     |                                    | 3,800,000  |      |             |           | 300,000    |   |             |           |            |  
|                                                    |                                                                                          | Gain on sale of rental real estate                               |                                                                                     |                                    |           |      |             |           | (2,154,727 | ) |             |           |            |  
|                                                    |                                                                                          | Equity contribution by Affiliates through expense
reimbursements |                                                                                     |                                    | 170,402    |      |             |           | 238,407    |   |             |           | 290,996     |  
|                                                    |                                                                                          |                                                                  | Increase (decrease) in cash flows from changes in
operating assets and liabilities: |                                    |            |      |             |           |            |   |             |           |             |   |         
|                                                    |                                                                                          |                                                                  |                                                                                     | Deferred rent                      |            |      | 51,224      |           |            |   | (47,712     | )         |             |   | (142,564 | )
|                                                    |                                                                                          |                                                                  |                                                                                     | Accounts receivable                |            |      | 5,956       |           |            |   | 55,538      |           |             |   | (362,714 | )
|                                                    |                                                                                          |                                                                  |                                                                                     | Other assets                       |            |      | (42,782     | )         |            |   | 10,132      |           |             |   | 97,317   |  
|                                                    |                                                                                          |                                                                  |                                                                                     | Accounts payable                   |            |      | 4,930       |           |            |   | 4,300       |           |             |   | (33,814  | )
|                                                    |                                                                                          |                                                                  |                                                                                     | Due to related party               |            |      | (34,790     | )         |            |   | (14,899     | )         |             |   | 30,817   |  
|                                                    |                                                                                          |                                                                  |                                                                                     | Security deposits and prepaid rent |            |      | (16,009     | )         |            |   | (113,993    | )         |             |   | 160,813  |  
|                                                    |                                                                                          |                                                                  |                                                                                     | Other liabilities                  |            |      | 7,631       |           |            |   | 65,300      |           |             |   | 81,941   |  
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|Net cash provided by operating activities           |                                                                                          |                                                                  | 2,141,748                                                                           |                                    |            |      | 2,344,837   |           |            |   | 1,942,803   |          
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|Cash flows from investing activities                |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|                                                    |                                                                                          | Capital expenditures                                             |                                                                                     |                                    | (178,368   | )    |             |           |           |   |             |           |            |  
|                                                    |                                                                                          | Purchases of rental real estate                                  |                                                                                     |                                    |           |      |             |           |           |   |             |           | (10,625,918 | )
|                                                    |                                                                                          | Proceeds from sale of rental real estate                         |                                                                                     |                                    |           |      |             |           | 7,999,102  |   |             |           |            |  
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|Net cash (used in) provided by investing activities |                                                                                          |                                                                  | (178,368                                                                            | )                                  |            |      | 7,999,102   |           |            |   | (10,625,918 | )        
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|Cash flows from financing activities                |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|                                                    |                                                                                          | Repurchase of treasury stock                                     |                                                                                     |                                    |           |      |             |           |           |   |             |           | (47,812     | )
|                                                    |                                                                                          | Dividends                                                        |                                                                                     |                                    | (1,610,381 | )    |             |           | (6,617,206 | ) |             |           | (1,874,666  | )
|                                                    |                                                                                          | Proceeds from notes payable                                      |                                                                                     |                                    |           |      |             |           |           |   |             |           | 8,339,590   |  
|                                                    |                                                                                          | Payments on notes payable                                        |                                                                                     |                                    | (466,763   | )    |             |           | (4,353,278 | ) |             |           | (409,707    | )
|                                                    |                                                                                          | (Increase) in loan origination fees                              |                                                                                     |                                    | (10,744    | )    |             |           |           |   |             |           | (43,997     | )
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|Net cash (used in) provided by financing activities |                                                                                          |                                                                  | (2,087,888                                                                          | )                                  |            |      | (10,970,484 | )         |            |   | 5,963,408   |          
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|Net (decrease) in cash and cash equivalents         |                                                                                          |                                                                  | (124,508                                                                            | )                                  |            |      | (626,545    | )         |            |   | (2,719,707  | )        
|Cash and cash equivalents,beginning of year         |                                                                                          |                                                                  | 1,248,335                                                                           |                                    |            |      | 1,874,880   |           |            |   | 4,594,587   |          
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          
|Cash and cash equivalents,end of year               |                                                                                          | $                                                                | 1,123,827                                                                           |                                    |            | $    | 1,248,335   |           |            | $ | 1,874,880   |          
|                                                    |                                                                                          |                                                                  |                                                                                     |                                    |            |      |             |           |            |   |             |          

See accompanying summary of accounting policies and notes to financial statements.

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WEST COAST REALTY INVESTORS, INC.
STATEMENTS OF STOCKHOLDERS EQUITY
Years Ended December 31, 2001, 2000 and 1999

|                          |                                                                           |  |              |        |            |   |              |     |          |   |            |         |   |   |             |            |   |   |            |            |  
|------------------------- | ------------------------------------------------------------------------- |  | ------------ | ------ | ---------- | - | ------------ | --- | -------- | - | ---------- | ------- | - | - | ----------- | ---------- | - | - | ---------- | ---------- | -
|                          |                                                                           |  |              |        |            |   |              |     |          |   |            |         |   |   | Dividends   |            |   |   |           
|                          |                                                                           |  | Common Stock |        | Additional |   | in Excess of |     |          |   |           
|                          |                                                                           |  |              |        | Paid-In    |   | Retained     |     |          |   |           
|                          |                                                                           |  | Shares       |        | Amount     |   | Capital      |     | Earnings |   | Total     
|                          |                                                                           |  |              |        |            |   |              |     |          |   |           
|Balance,December 31, 1998 |                                                                           |  | 2,932,762    |        |            | $ | 29,328       |     |          | $ | 26,495,731 |         |   | $ | (2,490,779  | )          |   | $ | 24,034,280 |           
|                          | Treasury stock                                                            |  |              | (4,795 | )          |   |              | (48 | )        |   |            | (47,764 | ) |   |             |           |   |   |            | (47,812    | )
|                          | Net income for the year                                                   |  |              |       |            |   |              |    |          |   |            |        |   |   |             | 1,070,670  |   |   |            | 1,070,670  |  
|                          | Equity contribution by affiliates
through expense reimbursements
(Note 3) |  |              |       |            |   |              |    |          |   |            | 290,996 |   |   |             |           |   |   |            | 290,996    |  
|                          | Dividends declared ($.64 per share)
(Note 5)                              |  |              |       |            |   |              |    |          |   |            |        |   |   |             | (1,874,666 | ) |   |            | (1,874,666 | )
|                          |                                                                           |  |              |        |            |   |              |     |          |   |            |         |   |   |             |            |   |   |            |           
|Balance,December 31, 1999 |                                                                           |  | 2,927,967    |        |            |   | 29,280       |     |          |   | 26,738,963 |         |   |   | (3,294,775  | )          |   |   | 23,473,468 |           
|                          | Net income for the year                                                   |  |              |       |            |   |              |    |          |   |            |        |   |   |             | 3,207,619  |   |   |            | 3,207,619  |  
|                          | Equity contribution by affiliates
through expense reimbursements
(Note 3) |  |              |       |            |   |              |    |          |   |            | 238,407 |   |   |             |           |   |   |            | 238,407    |  
|                          | Dividends declared ($2.26 per share)
(Note 5)                             |  |              |       |            |   |              |    |          |   |            |        |   |   |             | (6,617,206 | ) |   |            | (6,617,206 | )
|                          |                                                                           |  |              |        |            |   |              |     |          |   |            |         |   |   |             |            |   |   |            |           
|Balance,December 31, 2000 |                                                                           |  | 2,927,967    |        |            |   | 29,280       |     |          |   | 26,977,370 |         |   |   | (6,704,362  | )          |   |   | 20,302,288 |           
|                          | Net (loss) for the year                                                   |  |              |       |            |   |              |    |          |   |            |        |   |   |             | (2,522,159 | ) |   |            | (2,522,159 | )
|                          | Equity contribution by affiliates
through expense reimbursements
(Note 3) |  |              |       |            |   |              |    |          |   |            | 170,402 |   |   |             |           |   |   |            | 170,402    |  
|                          | Dividends declared ($0.55 per share)
(Note 5)                             |  |              |       |            |   |              |    |          |   |            |        |   |   |             | (1,610,381 | ) |   |            | (1,610,381 | )
|                          |                                                                           |  |              |        |            |   |              |     |          |   |            |         |   |   |             |            |   |   |            |           
|Balance,December 31, 2001 |                                                                           |  | 2,927,967    |        |            | $ | 29,280       |     |          | $ | 27,147,772 |         |   | $ | (10,836,902 | )          |   | $ | 16,340,150 |           
|                          |                                                                           |  |              |        |            |   |              |     |          |   |            |         |   |   |             |            |   |   |            |           

See accompanying summary of accounting policies and notes to financial statements.

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WEST COAST REALTY INVESTORS, INC.
SUMMARY OF ACCOUNTING POLICIES

Business

West Coast Realty Investors, Inc. was organized in October 1989 under the laws
of the State of Delaware. We have elected tax status as a Real Estate
Investment Trust (REIT) for federal and state income tax purposes since 1991.
Through the year ended December 31, 2001, we were advised by West Coast Realty
Advisors, Inc. (WCRA) and our properties were managed by West Coast Realty
Management (WCRM) (collectively, the Advisor), each of which is a
wholly-owned subsidiary of Associated Financial Group, Inc. The Advisor
manages and oversees our investments, subject to the direction of the Board of
Directors. The Advisor has notified us that it will terminate as advisor
effective March 31, 2002, and thereafter we intend to become self-managed and
self-administered. On January 15, 2002, our stockholders voted to amend our
Bylaws to allow us to become self-managed upon the Advisors termination and we
intend to become self-managed and self-administered upon the Advisors
termination.

We are organized for the purpose of investing in, holding and managing
income-producing residential, industrial, retail and commercial properties. As
of December 31, 2001, all of our properties were located in California, and we
did not own any residential properties. Most of our leases are triple-net
leases where the tenant is responsible for maintenance, taxes and insurance.

We have acquired properties for cash or on a leveraged basis with aggregate
mortgage indebtedness at or below 50% percent of the purchase price of all
properties on a combined basis, or 80% percent for an individual property. The
debt limitation of 50% of the aggregate purchase prices of all properties was
amended by a stockholder vote on January 15, 2002 to allow for leverage to 65%
of the value of the property, as defined.

Rental Real Estate and Depreciation

Assets are stated at lower of cost or net realizable value. Depreciation is
computed using the straight-line method over their estimated useful lives of
31.5 to 39 years for financial reporting purposes.

In the event that facts and circumstances indicate that the cost of an asset
may be impaired, an evaluation of recoverability would be performed. If an
evaluation is required, the estimated future undiscounted cash flows associated
with the asset would be compared to the carrying amount to determine if a
write-down to market value is required.

Real estate classified as "held for sale" is stated at the lower of its carrying
amount or estimated fair value less disposal costs. Depreciation is not
recorded on assets classified as held for sale.

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WEST COAST REALTY INVESTORS, INC.
SUMMARY OF ACCOUNTING POLICIES

In the normal course of business, we may receive offers for sale of our
properties, either solicited or unsolicited. For those offers that are
accepted, the prospective buyer will usually require a due diligence period
before consummation of the transaction. It is not unusual for matters to arise
that result in the withdrawal or rejection of the offer during this process.
As a result, real estate is not classified as held for sale until it is
likely, in the opinion of management, that a property will be disposed of in
the near term, even if sales negotiations for such property are currently under
way. Properties classified as held for sale are segregated from rental real
estate in our financial statement presentation. As of December 31, 2001, there
were four properties classified as held for sale, as they
were listed for sale
with real estate brokers and we believed there was a high likelihood of sale in
the near term. There can be no assurance that the properties held for sale
will be sold in the near term, at prices we consider acceptable, or at all.
There were no properties classified as held for sale as of December 31, 2000.

Rental Income, Operating Expense and Capitalized Costs

Rental revenue is recognized on a straight-line basis to the extent that rental
revenue is deemed collectible. Percentage rents in the three years ended
December 31, 2001 were immaterial, and recognized when received. Improvements
and betterments that increase the value of the property or extend its useful
life are capitalized.

Acquisition Costs

We expense internal acquisition costs, including acquisition costs paid the to
the Advisor, in accordance with Emerging Issues Task Force 97-11, Accounting for
Internal Costs Relating to Real Estate Property Acquisitions.

Loan Origination Fees

Loan origination fees are capitalized and amortized over the life of the loan
and included in interest expense.

Cash and Cash Equivalents

We consider cash in the bank, liquid money market funds and all highly liquid
certificates of deposit, with original maturities of three months of less, to
be cash and cash equivalents. We place funds in creditworthy, high-quality
financial institutions. Cash and cash equivalent balances are held with
various financial institutions and at times may exceed the Federal Deposit
Insurance Corporation limit of $100,000.

Consolidation

We own all of our assets directly and have no subsidiaries.

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WEST COAST REALTY INVESTORS, INC.
SUMMARY OF ACCOUNTING POLICIES

Use of Estimates

The preparation of 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 differ materially from those estimates.

Net Income Per Share

We calculate net income per share by dividing the net income by the weighted
average number of shares outstanding for the period. We did not have any
potentially dilutive securities in any of the three years ended December 31,
2001.

Comprehensive Income

Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income, (SFAS 130) establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. Comprehensive income is comprised of net income and all
changes to stockholders equity except those due to investments by owners and
distribution to owners. We do not have any components of comprehensive income
in any of the years ended December 31, 2001, 2000 and 1999.

Reclassifications

Certain reclassifications have been made to the prior years financial
statements to conform to the presentation of the current years financial
statements.

Descriptive Information About Reportable Segments

Financial Accounting Standards Board Statement No. 131, Disclosures about
Segments of an Enterprise and Related Information (Statement 131) requires
certain descriptive information to be provided about an enterprises reportable
segments. We have determined that we have one operating and reportable segment,
rental real estate, which comprised 97% of our total assets at both December
31, 2001 and 2000 and approximately 99%, 97% and 97% of our total revenues for
the years ended December 31, 2001, 2000 and 1999, respectively. All the rental
real estate we own is located in California. As most of our leases are to
single tenants under long-term leases, on a triple net basis, we do not use
reporting by geographic region.

Our business focus is the ownership and operation of suburban office properties
and light industrial buildings; we evaluate performance and allocate resources
primarily based on the

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WEST COAST REALTY INVESTORS, INC.
SUMMARY OF ACCOUNTING POLICIES

opportunity for growth of net operating income (NOI). We define NOI (and
generally the real estate industry) as the excess of all revenue generated by
the property (primarily rental revenue) less direct operating expenses
(primarily, but not limited to, property taxes, insurance, property management
and maintenance expense, to the extent not paid by the tenant). NOI excludes
depreciation, capitalized expenditures and interest expense. In addition to NOI
growth prospects, we evaluate properties for planned capital expenditures and
various risks such as non-payment of rent by tenant, term of the lease and
other factors. NOI from our properties totaled $3,971,405, $4,301,707 and
$4,744,737 for the years ended December 31, 2001, 2000 and 1999, respectively.
All other segment measurements are presently disclosed in the accompanying
consolidated balance sheets and Notes to Financial Statements.

All revenues are from external customers and there are no revenues from
transactions with other segments. See Note 1 for tenants that contributed 10%
or more of our total revenues for the years ended December 31, 2001, 2000 and
1999. Interest income is not separately reported, as it is immaterial. Interest
expense on debt is not allocated to individual properties, even if such debt is
secured. There is no provision for federal or state income taxes as we are
organized as a REIT and as such, there is no tax due; see Note 6.

New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board finalized Statements No.
141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other
Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase method
of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that we recognize acquired intangible assets apart from goodwill
if the acquired intangible assets meet certain criteria. SFAS 141 applies to
all business combinations initiated after June 30, 2001 and for purchase
business combinations completed on or after July 1, 2001. It also requires,
upon adoption of SFAS 142 that we reclassify the carrying amounts of intangible
assets and goodwill based on the criteria in SFAS 141.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that we identify reporting units for the purposes
of assessing potential future impairments of goodwill, reassess the useful
lives of other existing recognized intangible assets, and cease amortization of
intangible assets with an indefinite useful life. An intangible asset with an
indefinite useful life should be tested for impairment in accordance with the
guidance in SFAS 142. SFAS 142 is required to be applied in fiscal years
beginning after December 15, 2001 to all goodwill and other intangible assets
recognized at that date, regardless of when those assets were initially
recognized. SFAS 142 requires us to complete a transitional goodwill impairment
test six months from the date of adoption. We are also required to reassess the
useful lives of other intangible assets within the first interim quarter after
adoption of SFAS 142.

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WEST COAST REALTY INVESTORS, INC.
SUMMARY OF ACCOUNTING POLICIES

We had no previous transactions that resulted in the recognition of goodwill.
The adoption of SFAS 141 and SFAS 142 is not expected to have any material
affect on ours financial statements.

Statement of Financial Accounting Standard 143 (SFAS 143), Accounting for Asset
Retirement Obligations, was issued in June 2001 and is effective for fiscal
years beginning after June 15, 2002. SFAS 143 requires that any legal
obligation related to the retirement of long-lived assets be quantified and
recorded as a liability with the associated asset retirement cost capitalized
on the balance sheet in the period it is incurred when a reasonable estimate of
the fair value of the liability can be made. We do not believe adoption of
this Statement will not have a material affect on our financial statements.

Statement of Financial Accounting Standard 144 (SFAS 144), Accounting for the
Impairment or Disposal of Long-Lived Assets, was issued in August 2001 and is
effective for fiscal years beginning after December 15, 2001. SFAS 144 provides
a single, comprehensive accounting model for impairment and disposal of
long-lived assets and discontinued operations. We are assessing but have not
yet determined how the adoption of SFAS 144 will impact our financial
statements.

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - RENTAL REAL ESTATE

Our major categories of rental real estate are:

|                              |  |      |            |      |  |   |            |  
|----------------------------- |  | ---- | ---------- | ---- |  | - | ---------- | -
|December 31,                  |  | 2001 |            | 2000
|                              |  |      |            |     
|Land                          |  | $    | 10,672,326 |      |  | $ | 13,658,414 |  
|Buildings and improvements    |  |      | 21,141,666 |      |  |   | 27,943,494 |  
|                              |  |      |            |      |  |   |            |  
|                              |  |      | 31,813,992 |      |  |   | 41,601,908 |  
|Less accumulated depreciation |  |      | (2,355,675 | )    |  |   | (2,730,217 | )
|                              |  |      |            |      |  |   |            |  
|Net rental properties         |  | $    | 29,458,317 |      |  | $ | 38,871,691 |  
|                              |  |      |            |      |  |   |            |  

Our major categories of rental real estate held for sale are:

|                              |  |      |            |      |  |   |   | 
|----------------------------- |  | ---- | ---------- | ---- |  | - | - | 
|December 31,                  |  | 2001 |            | 2000
|                              |  |      |            |     
|Land                          |  | $    | 2,476,319  |      |  | $ |  | 
|Buildings and improvements    |  |      | 3,977,000  |      |  |   |  | 
|                              |  |      |            |      |  |  
|                              |  |      | 6,453,319  |      |  |   |  | 
|Less accumulated depreciation |  |      | (1,050,477 | )    |  |   |  | 
|                              |  |      |            |      |  |  
|Net rental properties         |  | $    | 5,402,842  |      |  | $ |  | 
|                              |  |      |            |      |  |  

Once a property is classified as held for sale, we stop charging depreciation
expense.

A portion of our rental revenue was earned from tenants whose individual rents
represented more than 10% of our total rental revenue. Specifically:

| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | Two tenants accounted for 14% and 12% in 2001. Further, one
tenant accounted for over 9%
| | Two tenants accounted for 13% and 11% in 2000.                                          
| | Three tenants accounted for 13%, 10% and 10% in 1999.                                   

In conjunction with the implementation of our new business plan, we are in the
process of evaluating all of our properties, including disposing of certain
properties, primarily properties with retail operations that are inconsistent
with our new investment objectives. Based on appraisals, estimated disposal
costs and holding periods, we determined, with the Advisor, that the total
expected future cash flows and the ultimate disposition of certain properties
were less than their carrying value at September 30, 2001. As a result, an
impairment loss of $3,800,000,

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

primarily related to the Riverside, CA and Vacaville, CA properties, was
recorded in that quarter, measured as the amount by which the carrying amount
of the asset exceeded its fair value.

During the quarter ended December 31, 2000, we determined that the total
expected future cash flows from operations and ultimate disposition of the
Fresno, CA property was less than the carrying value of the property, due to
overbuilding of commercial properties in the Fresno area. Therefore the
property was deemed to be impaired. As a result, an impairment loss of $300,000
was recorded, measured as the amount by which the carrying amount of the asset
exceeded its fair value. Fair value was determined based on a recent appraisal,
net of estimated disposal costs.

On April 12, 2000 the tenant of the Huntington Beach, CA (OPTO-22) property
executed its right to purchase the property. The property sold for $3,675,000
resulting in a gain of $999,150. Proceeds from the sale were distributed on May
31, 2000 to stockholders of record as of May 23, 2000. On June 30, 2000 the
Fremont, CA property was sold to an unaffiliated buyer for $4,850,000 resulting
in a gain of $1,155,578. Proceeds from the sale were included in the regular
quarterly dividend distributed on July 14, 2000 to stockholders of record as of
June 30, 2000.

NOTE 2 - FUTURE MINIMUM RENTAL INCOME

As of December 31, 2001, future minimum rental income under the existing leases
that have remaining noncancelable terms in excess of one year are as follows:

|                          |       |        |           |            | 
|------------------------- | ----- | ------ | --------- | ---------- | 
|Years ending December 31, |       | Amount
|                          |       |       
|2002                      |       | $      | 4,044,569 |           
|2003                      |       |        | 3,490,279 |           
|2004                      |       |        | 3,205,200 |           
|2005                      |       |        | 3,008,521 |           
|2006                      |       |        | 2,083,670 |           
|Thereafter                |       |        | 7,036,673 |           
|                          |       |        |           |           
|                          | Total |        | $         | 22,868,912 | 
|                          |       |        |           |           

Future minimum rental income does not include lease renewals or new leases that
may result after a noncancelable-lease expires.

NOTE 3 - RELATED PARTY TRANSACTIONS

We have two agreements with the Advisor to provide advice on investments and to
administer our the day-to-day operations including property management  the
Amended and Restated Advisory Agreement dated July 1, 2001 and the Amended and
Restated Property Management Agreement dated July 1, 1998. The Advisor has
informed us they will no longer provide

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

advisory services after March 31, 2002, pursuant to the terms of the above
agreements. We intend to become fully self-administered and self-managed at
that time.

At December 31, 2001, the Advisor owned 22,556 of our shares, less than 1% of
our outstanding shares. Certain of our officers and directors are also
officers and directors of the Advisor and its affiliates.

The following related party transactions are included in the statements of
income:

|                                                                                                                      |  |      |         |      |  |      |         |  |  |   |         | 
|--------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|Years ending December 31,                                                                                             |  | 2001 |         | 2000 |  | 1999
|                                                                                                                      |  |      |         |      |  |     
|Overhead expenses reimbursed to the Advisor                                                                           |  | $    | 24,000  |      |  | $    | 24,000  |  |  | $ | 24,000  | 
|                                                                                                                      |  |      |         |      |  |      |         |  |  |   |         | 
|Fees related to the purchase, sale or
refinancing of real estate                                                      |  | $    | 0       |      |  | $    | 255,750 |  |  | $ | 682,414 | 
|                                                                                                                      |  |      |         |      |  |      |         |  |  |   |         | 
|Property management fees earned by WCRM                                                                               |  | $    | 182,342 |      |  | $    | 185,722 |  |  | $ | 200,702 | 
|                                                                                                                      |  |      |         |      |  |      |         |  |  |   |         | 
|Advisory fees earned by WCRA, which waived
collection of these fees, which are included
in additional paid-in capital |  | $    | 170,402 |      |  | $    | 238,407 |  |  | $ | 290,996 | 
|                                                                                                                      |  |      |         |      |  |      |         |  |  |   |         | 

In addition, we had related party accounts payable as follows:

|                                   |  |      |        |      |  |   |        | 
|---------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|December 31,                       |  | 2001 |        | 2000
|                                   |  |      |        |     
|Associated Securities Corporation  |  | $    | 22,000 |      |  | $ | 22,500 | 
|West Coast Realty Management, Inc. |  |      | 13,477 |      |  |   | 43,767 | 
|West Coast Realty Advisors, Inc.   |  |      | 2,000  |      |  |   | 6,000  | 
|                                   |  |      |        |      |  |   |        | 
|                                   |  | $    | 37,477 |      |  | $ | 72,267 | 
|                                   |  |      |        |      |  |   |        | 

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 4 - NOTES PAYABLE

Notes payable consist of the following:

|                                                                                                                                                                                                                                                                                                  |  |      |           |      |  |   |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- |  | - | --------- | 
|December 31,                                                                                                                                                                                                                                                                                      |  | 2001 |           | 2000
|                                                                                                                                                                                                                                                                                                  |  |      |           |     
|8.250% promissory note secured by a Deed of Trust on
the Huntington Beach, CA property, monthly principal
and interest payments are $4,934, due February 1, 2004                                                                                                                                  |  | $    | 493,605   |      |  | $ | 511,291   | 
|8.250% promissory note secured by a Deed of Trust on
the Fresno, CA property, monthly principal and interest
payments are $5,244 due August 1, 2003                                                                                                                                               |  |      | 565,136   |      |  |   | 579,083   | 
|8.250% promissory note secured by a Deed of Trust on
the Riverside, CA property, monthly principal and
interest payments are $9,116, due November 8, 2004                                                                                                                                         |  |      | 1,113,865 |      |  |   | 1,129,406 | 
|9.625% promissory note secured by a Deed of Trust on
the Tustin, CA property, monthly principal and interest
payments are $24,190, due February 1, 2005                                                                                                                                           |  |      | 1,626,410 |      |  |   | 1,753,440 | 
|8.000% promissory note secured by a Deed of Trust on
the Sacramento, CA property (Java City 721 West Del
Paso Road), monthly principal and interest payments are
$3,126, due June 1, 2018                                                                                                         |  |      | 340,187   |      |  |   | 350,053   | 
|Variable rate promissory note secured by a Deed of
Trust on the Irvine, CA property, interest rate margin
is 1.90% over the 3 month LIBOR with right of
conversion after the first year (4.500% at December 31,
2001), monthly payments of principal and interest are
$16,693, due August 1, 2007 |  |      | 2,140,535 |      |  |   | 2,189,455 | 
|8.330% promissory note secured by a Deed of Trust on
the Roseville, CA property, monthly principal and
interest payments are $11,510 due July 1, 2008                                                                                                                                             |  |      | 1,383,654 |      |  |   | 1,405,518 | 

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 4 - NOTES PAYABLE  continued

|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |      |           |      |  |  |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- |  |  | --------- | 
|December 31,                                                                                                                                                                                                                                                                                                                                                                                                        |  | 2001 |           | 2000
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |      |           |     
|7.375% promissory note secured by a Deed of Trust on
the Corona, CA property, monthly principal and interest
payments are $7,309 due June 1, 2011 (rate is
adjustable on the fourth and eighth anniversary years
of the loan, to the weekly average of the five-year
Treasury Note yield for the seventh week prior to the
Adjustment Date plus 195 basis points, but no less than
the existing rate)               |  |      | 944,456   |      |  |  | 961,809   | 
|7.375% promissory note secured by a Deed of Trust on
the Sacramento, property (Horn Road), monthly principal
and interest payments are $7,309, due June 1, 2011
(rate is adjustable on the fourth and eighth
anniversary years of the loan, to the weekly average of
the five-year Treasury Note yield for the seventh week
prior to the Adjustment Date plus 195 basis points, but
no less than the existing rate) |  |      | 944,456   |      |  |  | 961,810   | 
|7.500% promissory note secured by a Deed of Trust on
the Chino, CA property, monthly principal and interest
payments are $6,836, due October 1, 2010 (rate is
adjustable on the fourth and eighth anniversary years
of the loan, to the weekly average of the five-year
Treasury Note yield for the seventh week prior to the
Adjustment Date plus 200 basis points, but no less than
the existing rate)            |  |      | 879,918   |      |  |  | 895,323   | 
|7.500% promissory note secured by a Deed of Trust on
the Vacaville, CA property, monthly principal and
interest payments are $10,346, due October 1, 2010
(rate is adjustable on the fourth and eighth
anniversary years of the loan, to the weekly average of
the five-year Treasury Note yield for the seventh week
prior to the Adjustment Date plus 200 basis points, but
no less than the existing rate)       |  |      | 1,331,784 |      |  |  | 1,355,094 | 
|7.500% promissory note secured by a deed of trust on
the Cerritos, CA property, monthly principal and
interest payments are $9,238, due April 1, 2011 (rate
is adjustable on the fourth and eighth anniversary
years of the loan, to the weekly average of the five
year Treasury Note yield for the seventh week prior to
the Adjustment Date plus 275 basis points, but no less
than the existing rate)           |  |      | 1,199,676 |      |  |  | 1,219,732 | 

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 4 - NOTES PAYABLE  continued

|                                                                                                                                                                                                                                                                                           |  |      |            |      |  |   |            | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ---------- | ---- |  | - | ---------- | 
|December 31,                                                                                                                                                                                                                                                                               |  | 2001 |            | 2000
|                                                                                                                                                                                                                                                                                           |  |      |            |     
|7.500% promissory note secured by a deed
of trust on the Ontario, CA property,
monthly principal and interest payments
are $22,390, due March 1, 2004                                                                                                                                      |  |      | 2,880,329  |      |  |   | 2,927,989  | 
|Variable rate promissory note secured by a
Deed of Trust on the Folsom, CA property,
interest rate margin is 1.75% over the 3
month LIBOR (4.320% at December 31, 2001),
monthly payments of principal of $6,199
and interest calculated on the outstanding
balance, due September 1, 2002 |  |      | 3,952,499  |      |  |   | 4,023,270  | 
|                                                                                                                                                                                                                                                                                           |  |      |            |      |  |   |            | 
|                                                                                                                                                                                                                                                                                           |  | $    | 19,796,510 |      |  | $ | 20,263,273 | 
|                                                                                                                                                                                                                                                                                           |  |      |            |      |  |   |            | 

The aggregate fair value of the notes is approximately $21,585,522 and
$20,011,919 for 2001 and 2000 respectively, based on current lending rates,
which are the approximate industry lending rates on these types of properties
and these locations.

The aggregate annual future maturities at December 31, 2001 are as follows:

|                          |       |        |           |            | 
|------------------------- | ----- | ------ | --------- | ---------- | 
|Years ending December 31, |       | Amount
|                          |       |       
|2002                      |       | $      | 4,396,416 |           
|2003                      |       |        | 1,009,520 |           
|2004                      |       |        | 4,702,637 |           
|2005                      |       |        | 1,406,777 |           
|2006                      |       |        | 260,261   |           
|Thereafter                |       |        | 8,020,899 |           
|                          |       |        |           |           
|                          | Total |        | $         | 19,796,510 | 
|                          |       |        |           |           

NOTE 5 - NET INCOME AND DIVIDENDS PER SHARE

Dividends are declared by the Board of Directors and based on a variety of
factors, including the previous quarters net (loss) income from operations
before depreciation and amortization, cash requirements to meet REIT
distribution tests, other cash requirements and other factors as the Board
deems appropriate.

Net Income Per Share was computed using the weighted average number of
outstanding shares of 2,927,967, 2,927,967 and 2,929,442 for the years ended
December 31, 2001, 2000 and 1999.

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

The tax status of dividends per share for the years ended December 31, 2001,
2000 and 1999 follows:

|                        |  |      |      |      |  |      |      |  |  |   |      | 
|----------------------- |  | ---- | ---- | ---- |  | ---- | ---- |  |  | - | ---- | 
|December 31,            |  | 2001 |      | 2000 |  | 1999
|                        |  |      |      |      |  |     
|Taxable ordinary income |  | $    | 0.40 |      |  | $    | 0.52 |  |  | $ | 0.37 | 
|Taxable capital gains   |  |      |     |      |  |      | 0.74 |  |  |   |     | 
|Return of capital       |  |      | 0.15 |      |  |      | 1.00 |  |  |   | 0.27 | 
|                        |  |      |      |      |  |      |      |  |  |   |      | 
|                        |  | $    | 0.55 |      |  | $    | 2.26 |  |  | $ | 0.64 | 
|                        |  |      |      |      |  |      |      |  |  |   |      | 

NOTE 6 - TAXES ON INCOME

We have elected to be taxed as a REIT under Sections 856-860 of the Internal
Revenue Code of 1986, as amended (the Code). As a result, we will not be
subject to federal taxation at the corporate level to the extent we
distribute, annually, at least 90% of our REIT taxable income, as defined by
the Code, to our stockholders and satisfy certain other requirements. In
addition, California, the state in which in which we own and operate real
estate properties has provisions equivalent to the federal REIT provisions.
Accordingly, no provision has been made for federal or state income taxes in
the accompanying financial statements.

As of December 31, 2001, the basis in our assets for financial reporting
purposes was approximately $4,400,000 lower than our basis for federal income
tax (unaudited).

NOTE 7 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

A supplemental disclosure of cash flow information follows:

|                                                          |                                                                         |      |           |         |  |      |           |         |  |   |           |         | 
|--------------------------------------------------------- | ----------------------------------------------------------------------- | ---- | --------- | ------- |  | ---- | --------- | ------- |  | - | --------- | ------- | 
|Years ended December 31,                                  |                                                                         | 2001 |           | 2000    |  | 1999
|                                                          |                                                                         |      |           |         |  |     
|Cash paid during the period for interest                  |                                                                         | $    | 1,513,085 |         |  | $    | 1,792,237 |         |  | $ | 1,748,271 |        
|                                                          |                                                                         |      |           |         |  |      |           |         |  |   |           |        
|Supplemental disclosure of non-cash financing
activities: |                                                                         |      |           |         |  |      |           |         |  |   |           |        
|                                                          | Equity contributed by an affiliate through
expense reimbursement        |      | $         | 170,402 |  |      | $         | 228,407 |  |   | $         | 290,996 | 
|                                                          |                                                                         |      |           |         |  |      |           |         |  |   |           |        
|Supplemental disclosure of non-cash investing
activities: |                                                                         |      |           |         |  |      |           |         |  |   |           |        
|                                                          | Transfer of lessees assets to us in
satisfaction of account receivable |      | $         | 287,036 |  |      |           |        |  |   |           |        | 
|                                                          |                                                                         |      |           |         |  |      |           |         |  |   |           |        

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 8 - INSURANCE RECOVERY

In March 2001, we received $165,053 from Bankers Standard Insurance Company
(Bankers Standard) in partial settlement of a lawsuit regarding Bankers
Standards responsibility to defend us in a lawsuit related to the Riverside,
CA property. See Note 9, below. Bankers Standard is also required to pay the
subsequent costs of this action. We had previously expensed these legal costs,
and as a result, the proceeds of the settlement were taken into income in March
2001.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

During the quarter ended September 30, 2001, we entered into an employment
agreement with the President and Chief Executive Officer where he would be
issued options to purchase 200,000 shares of our common stock at an exercise price equal
to the fair market value at the date of grant. These options would vest over a
period of two years. As of December 31, 2001, no options have been issued and
there is therefore no dilutive impact for these options. Further, we would be
obligated to make severance payments to our President and Chief Executive
Officer, upon his termination or resignation for certain reasons, of one years
salary plus bonus, if any.

We are a defendant in a lawsuit entitled John Lonberg & Ruthee Goldkorn v.
Sanborn Theaters, Inc., a California Corporation Doing Business as Marketplace
Cinema and So-Cal Cinema, Inc., a California Corporation; and
Salts-Troutman-Kaneshiro, Inc., West Coast Realty Investors, Inc., USDC Central
District of California, Eastern Division Case No. CV-97-6598AHM (JGx). This is
an Americans with Disabilities Act claim brought against the Market Place
Cinema, our property located in Riverside, CA. We own the theater and have
leased it to Sanborn Theaters, Inc., who operates it. Plaintiffs allege
certain features of the theater discriminated against them and violated state
and federal disabled access laws. Plaintiffs demand statutory damages, damages
for emotional distress, a lodestar multiplier, attorneys fees and punitive
damages. Plaintiffs have not quantified their damages, however, it is expected
that Plaintiffs claims will exceed $300,000. The United States Department of
Justice has intervened in this suit. This case has now been stayed pending the
outcome of a similar case filed against AMC Theaters. We cannot determine the
likelihood of an unfavorable outcome or range of potential loss, if any. We
believe we have complied with all applicable provisions of law and intend to
vigorously defend the allegations contained in the lawsuit. We believe that
the lawsuit will not have a material impact on our continuing operations or
overall financial condition.

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WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 10  QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly summary financial information follows:

For the year ending December 31, 2001:

|                          |  |             |           |             |  |             |           |             |  |   |            |   |  |   |           | 
|------------------------- |  | ----------- | --------- | ----------- |  | ----------- | --------- | ----------- |  | - | ---------- | - |  | - | --------- | 
|                          |  | 1st Quarter |           | 2nd Quarter |  | 3rd Quarter |           | 4th Quarter
|                          |  |             |           |             |  |             |           |            
|Total revenue             |  | $           | 1,189,055 |             |  | $           | 1,130,245 |             |  | $ | 1,220,099  |   |  | $ | 1,083,347 | 
|Net income (loss)         |  |             | 478,471   |             |  |             | 311,973   |             |  |   | (3,454,975 | ) |  |   | 142,372   | 
|Earnings (loss) per
share |  | $           | .11       |             |  | $           | .16       |             |  | $ | (1.18      | ) |  | $ | .05       | 

For the year ending December 31, 2000:

|                          |  |             |           |             |  |             |           |             |  |   |           |  |  |   |           |  
|------------------------- |  | ----------- | --------- | ----------- |  | ----------- | --------- | ----------- |  | - | --------- |  |  | - | --------- | -
|                          |  | 1st Quarter |           | 2nd Quarter |  | 3rd Quarter |           | 4th Quarter
|                          |  |             |           |             |  |             |           |            
|Total revenue             |  | $           | 1,387,596 |             |  | $           | 1,323,001 |             |  | $ | 1,110,736 |  |  | $ | 1,156,576 |  
|Net income (loss)         |  |             | 292,709   |             |  |             | 2,576,760 |             |  |   | 366,325   |  |  |   | (28,175   | )
|Earnings (loss) per
share |  | $           | 0.10      |             |  | $           | 0.88      |             |  | $ | 0.13      |  |  | $ | (0.01     | )

NOTE 11 - SUBSEQUENT EVENTS

On January 15, 2002, at a Special Meeting of Stockholders, our stockholders
approved two proposals amending our Bylaws. The first proposal allowed for us
to become self-administered and self-managed due to the Advisors notice of
termination of its advisory relationship with us. The second proposal allowed
for increasing the maximum aggregate indebtedness from 50% to 65% as
a percentage of the value (as defined) of our properties.

On March 21, 2002 the Board of Directors declared a dividend of $0.10 per
common share to holders of record on March 28, 2002, payable on April 12, 2002.

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|ITEM 9. |  | CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- |  | ------------------------------------------------------------------------------------

None.

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PART III




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A summary of the directors and executive officers, their ages and their
principal business occupation for the last five years follows:

|                  |  |     |    |      |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|----------------- |  | --- | -- | ---- |  | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name              |  | Age |    | Term |  | Position and
Experience
|                  |  |     |    |      |  |                        
|Allen K. Meredith |  |     | 52 |      |  | August 2001  Present   |  | Mr. Meredith was
appointed to his current
positions of Chairman of
the Board, President and
Chief Executive Officer
in August 2001. Prior
to joining our company,
Mr. Meredith had over 23
years of experience in
the real estate
business. Since 1994,
Mr. Meredith has served
as president and chief
executive officer of
Meredith Partners, where
he specialized in
acquiring,
rehabilitating and
managing suburban office
and industrial
commercial properties in
California, including
the recent acquisition
and rehabilitation of
the one million
square-foot former
Firestone Tire
manufacturing facility
in Los Angeles. From
1991 to 1994, Mr.
Meredith was president
and chief executive
officer of the Trammell
Crow Company, a real
estate development
company, where he
oversaw property
development, acquisition
and disposition,
facility and
construction management,
and leasing and property
management for 33.1
million square feet of
high-rise, office,
shopping center and
industrial properties.
Mr. Meredith has an
M.B.A. from Harvard
University and a B.A. in
Economics from Stanford
University.
|                 
|David C. Harrison |  |     | 43 |      |  | December 2001  Present |  | Director. Mr. Harrison
has over 20 years of
entrepreneurial
experience in the fields
of commercial real
estate development,
investment, and finance.
He is the co-founder
and Managing Partner of
the Patson Companies, a
diversified real estate
development, investment
and management company
which has been based in
San Francisco since its
establishment in 1984.
Mr. Harrison received
his B.S. in Biology from
Stanford University.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT  continued

|                    |  |     |    |      |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------------------- |  | --- | -- | ---- |  | ----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name                |  | Age |    | Term |  | Position and
Experience
|                    |  |     |    |      |  |                        
|Patricia F. Meidell |  |     | 61 |      |  | August 2001  Present   |  | Director. Ms. Meidell is the
President of American
Retirement Planners since
1996. She is a Certified
Financial Planner and NASD
Registered Principal with
Associated Securities Corp.
and a Director of Associated Financial Group, Inc. She
earned her first securities
license in 1972 and has owned
a financial services business
since 1982. She received her
B.S. from Idaho State
University, an M.S. from the
University of Arizona, and
has done post-graduate work
in counseling.                                                                                                                                                                                                                                                                                                                                        
|                   
|James P. Moore      |  |     | 46 |      |  | August 2001  Present   |  | Director. Mr. Moore has been
an officer of Banc One
Capital Markets, Inc.
(previously First Chicago)
for 17 years. His most
recent responsibilities are
as Senior Vice President and
Regional Manager, running the
Western Division of the
National  Large Corporate
Department. As head of the
office, his responsibilities
included managing the team
responsible for all banking
and investment banking
products, advice and services
for large corporations
headquartered in the 11
Western states. Mr. Moore
has spent a total of 13 years
of his career in real estate
financial services, including
five years as the head of the
Western Division of the Real
Estate Department for First
Chicago. Mr. Moore holds a
B.S. in Business
Administration (Finance and
Real Estate) from the
University of Southern
California.

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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT  continued

|                       |  |     |    |      |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---------------------- |  | --- | -- | ---- |  | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name                   |  | Age |    | Term |  | Position and
Experience
|                       |  |     |    |      |  |                        
|Neal E. Nakagiri       |  |     | 47 |      |  | August 2001  Present   |  | Director. Mr.
Nakagiri was appointed
President and Chief
Executive Officer of
Associated Financial
Group, Inc. (AFG) in
January 2000. Mr.
Nakagiri is also a
director of AFG. He
is President of two
wholly owned
subsidiaries of
AFG  Associated
Securities Corp.
(ASC), a general
securities
broker-dealer and SEC
registered investment
advisor, and
Associated Planners
Investment Advisory,
Inc., an
SEC-registered
investment advisor.
In addition, Mr.
Nakagiri is an officer
and director of West
Coast Realty Advisors,
Inc. and West Coast
Realty Management,
Inc. He is a
member of the State
Bar of California and
the Compliance and
Legal Division of the
Securities Industry
Association (SIA). He
is registered as a
general securities,
financial, options and
municipal securities
principal. Mr.
Nakagiri is also a
member of the NASD
District #2 (Los
Angeles) committee and
serves on the SIA
Independent Firms
committee as Chairman.
Mr. Nakagiri has a
B.A. degree in
Economics from the
University of
California at Los
Angeles and a J.D.
from Loyola Law School
of Los Angeles.
|                      
|John H. Redmond        |  |     | 60 |      |  | August 2001  Present   |  | Director. Mr. Redmond
has been active as a
real state advisor for
over 30 years. From
1995 to the present,
Mr. Redmond has served
as President of John
H. Redmond, Real
Property Advisors, a
real estate consulting
firm in San Francisco.
Prior to 1995, Mr.
Redmond was associated
with Coldwell Banker &
Company, Grubb & Ellis
Real Estate Services
and was a founder of
The Rubicon Group. Mr.
Redmond has a B.A.
from the University of
Scranton and an M.S.
from Boston
University.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                      
|Eric P. Von der Porten |  |     | 44 |      |  | December 2001  Present |  | Director. Since
February 1997, Mr. Von
der Porten has been
the investment manager
for Leeward Capital,
L.P., a private
investment partnership
focusing on small cap
value stocks and other
securities. For the
prior six years, he
was a partner in the
investment banking
firm of Leveraged
Equity Management,
Inc. Mr. Von der
Porten holds an M.B.A.
from the Stanford
Graduate School of
Business and an A.B.
from the University of
Chicago.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

There are no family relationships among our directors or executive officers.
All of our directors terms will expire at the 2002 Annual
Meeting of Stockholders, or upon their resignation or removal, if
earlier.

57



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Section 16 Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who own more than ten percent of a registered
class of our equity securities, to file initial reports of ownership and
reports of changes in ownership of common stock and our other equity securities
with the SEC and to provide us with copies of these filings. To our knowledge,
based solely on a review of the copies of such reports furnished to us and
written representations that no other reports were required during the year
ended December 31, 2001, each of our officers, directors and greater than ten
percent beneficial owners who are obligated to file certain reports under
Section 16(a) of the 1934 Act complied with the applicable filing requirements.




ITEM 11. EXECUTIVE COMPENSATION

We have no annuity, pension or retirement plans, or existing plan or
arrangement pursuant to which compensatory payments are proposed to be made in
the future to directors or officers. In addition, we have not made any
equity-based grants, such as options or SARs, since our inception.

Our independent directors receive $500 for each meeting they attend in person
and $200 for each telephonic meeting. During 2001, a total of $4,600 was
paid to our independent directors, exclusive of reimbursements for expenses.

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##### Table of Contents



Summary Compensation Table

The following table summarizes the compensation
paid to our Chief Executive Officer and our sole officer other than
our Chief Executive Officer whose salary and bonus exceeded $100,000 or would exceed
$100,000 on an annualized basis. We refer to the executive officers listed
below as the Named Executive Officers.

|                                                                             |  |         |      |              |  |                     |        |        |  |         |   |         |  |         |   |            |  |                        |   |         |  |         |   |           |  |  |   |  |  |  |   | 
|---------------------------------------------------------------------------- |  | ------- | ---- | ------------ |  | ------------------- | ------ | ------ |  | ------- | - | ------- |  | ------- | - | ---------- |  | ---------------------- | - | ------- |  | ------- | - | --------- |  |  | - |  |  |  | - | 
|                                                                             |  |         |      |              |  |                     |        |        |  |         |   |         |  |         |   |            |  | Long Term Compensation |   |         |  |        
|                                                                             |  |         |      |              |  |                     |        |        |  |         |   |         |  |         |   |            |  |                        |   |         |  |        
|                                                                             |  |         |      |              |  | Annual Compensation |        | Awards |  | Payouts |   |         |  |        
|                                                                             |  |         |      |              |  |                     |        |        |  |         |   |         |  |        
|                                                                             |  |         |      |              |  |                     |        |        |  |         |   |         |  | Other   |   |            |  |                        |   |         |  |         |   |           |  |  |   |  |  | 
|                                                                             |  |         |      |              |  |                     |        |        |  |         |   |         |  | Annual  |   | Restricted |  | Securities             |   |         |  |         |   | All Other
|                                                                             |  |         |      |              |  |                     |        |        |  |         |   |         |  | Compen- |   | Stock      |  | Underlying             |   | LTIP    |  | Compen-
|Name and Principal                                                           |  |         |      |              |  |                     |        |        |  |         |   |         |  | sation  |   | Award(s)   |  | Options/               |   | Payouts |  | sation 
|Position(1)                                                                  |  | Year(2) |      | Salary($)(3) |  | Bonus($)            |        | ($)    |  | ($)     |   | SARs(#) |  | ($)     |   | ($)       
|                                                                             |  |         |      |              |  |                     |        |        |  |         |   |         |  |         |   |           
|Allen K. MeredithPresident and Chief
Executive Officer                       |  |         | 2001 |              |  | $                   | 88,204 |        |  |         |  |         |  |         |  |            |  |                        |  |         |  |         |  |           |  |  |  |  |  |  |  | 
|Charles P. Wingard
        Vice President and Acting Chief Financial Officer |  |         | 2001 |              |  | $                   | 20,821 |        |  |         |  |         |  |         |  |            |  |                        |  |         |  |         |  |           |  |  |  |  |  |  |  | 



---

|(1) |  | During the three years ended December 31, 2001, Mr. Prock, our
Vice President and Acting Chief Operating Officer, was an employee of WCRM therefore no
compensation is included in this table.                                                                                                    
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | During 2000 and 1999 we did not pay any direct or indirect
compensation to our officers and therefore these periods are not
included.                                                                                                                                                             
|   
|   
|   
|   
|(3) |  | Represents salary from August 2001 for Mr. Meredith and October
2001 for Mr. Wingard. Also, for Mr. Meredith, includes $25,000 in
consulting fees paid in 2002 for consulting work prior to becoming an
employee and for Mr. Wingard, includes $1,350 of income from
consulting.                  
|   
|   
|   
|   
|(4) |  | As part of Mr. Merediths employment agreement, we have agreed to
grant him options to purchase 200,000 shares of our common stock at an
exercise price equal to the fair market value at the grant date with
vesting over two years. As of the date of this report, no options
have been granted.

Employment Contracts and Termination of Employment and Change in Control Arrangements

Mr. Allen K. Meredith

Effective August 22, 2002, and amended and restated on March 21, 2002 we
entered into an employment agreement with Allen K. Meredith to serve as our
Chairman of the Board of Directors, President and Chief Executive Officer for
an initial term of one year, with automatic renewal on a year-to-year basis
thereafter unless terminated in accordance with its terms. Certain material
terms of this agreement follows:

59



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##### Table of Contents



Base Salary. Mr. Meredith currently receives a base salary of $200,000. The
base salary will be subject to negotiation yearly.

Annual Cash Bonus. Mr. Meredith shall be eligible to receive an annual cash
bonus in an amount, if any, to be determined in the sole discretion of the
Board of Directors.

Stock Options.Mr. Meredith shall be granted an option to purchase 200,000
shares of our common stock at an exercise price equal to the fair market value
per share on the date of grant. After one year of service, 100,000 of the
shares subject to his option shall vest in full and the remaining 100,000
shares shall vest at a rate of 25% per quarter thereafter, provided Mr.
Meredith continues to provide services to us.

Certain Severance Benefits.If, at any time during any automatic one-year
renewal period, the employment of Mr. Meredith is terminated, he shall be
entitled to receive the benefits described below.

Termination Other Than In Connection with a Change in Control:

| |                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Termination by us Without Cause or by Mr. Meredith for Good Reason. If
Mr. Meredith is terminated Without Cause or Mr. Meredith terminates
for Good Reason, he will a receive a lump sum payment equal to his
then-annual base salary plus an amount equal to the average of his
annual bonus over the most recent three years, if any
| |                                                                                                                                                                                                                                                                                                                                       
| | Termination Due to Death or Disability. Upon termination due to death or
disability, the executive or his estate will receive all salary
accrued but unpaid to the date of termination                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                       
| | Voluntary Termination or Termination for Cause. Mr. Meredith may resign
at any time upon 30 days written notice. Upon voluntary termination
without Good Reason or if we terminate Mr. Meredith for Cause, no
further compensation will be payable to Mr. Meredith                                                                    

Termination Following a Change in Control:

| |                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If Mr. Meredith is terminated or resigns within one year from a
Change in Control, he will receive a lump sum payment equal to his
then base salary plus an amount equal to the average of his annual
bonus over the most recent three years, if any.

Compensation Committee Interlocks and Insider Participation in Compensation Decisions

During 2001, we did not have a compensation
committee. None of our directors served on the Compensation Committee
of another board of directors.

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##### Table of Contents






ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 15, 2002, information regarding the
shares of our common stock beneficially owned by each person who is known
by us to own beneficially more than 5% of the common stock, by each
director, by each Named Executive Officer and by all directors and executive
officers as a group. The amounts shown are based on information provided by the
individuals named.

|                                        |  |                   |     |              |  |  |   | 
|--------------------------------------- |  | ----------------- | --- | ------------ |  |  | - | 
|                                        |  | Amount and Nature |     | Percentage  
|                                        |  | of Beneficial     |     | Beneficially
|Name and Address of Beneficial Owner(1) |  | Ownership(2)      |     | Owned(2)    
|                                        |  |                   |     |             
|Allen K. Meredith                       |  |                   | 0   |              |  |  | * | 
|David C. Harrison                       |  |                   | 0   |              |  |  | * | 
|Patricia F. Meidell                     |  |                   | 0   |              |  |  | * | 
|James P. Moore                          |  |                   | 0   |              |  |  | * | 
|Neal E. Nakagiri                        |  |                   | 0   |              |  |  | * | 
|John H. Redmond                         |  |                   | 0   |              |  |  | * | 
|Eric P. Von der Porten                  |  |                   | 0   |              |  |  | * | 
|James E. Prock                          |  |                   | 300 |              |  |  | * | 
|Charles P. Wingard                      |  |                   | 0   |              |  |  | * | 
|Directors and officers as a group       |  |                   | 300 |              |  |  | * | 



|*   |  | Less than 1%                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | The business address for each
of these individuals is c/o West Coast Realty Investors Inc., 3000 Sand Hill Road,
Building 3, Suite 140, Menlo Park, CA 94025.                                                                                                                                                                                                                                                
|   
|   
|   
|   
|(2) |  | To our knowledge, the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them, subject to community property laws where applicable. Share amount and
percentage figures are rounded to the nearest whole number. Percentage figures
are based upon 2,927,967 shares of common stock outstanding as of March 15,
2002.

Board Meetings

During the fiscal year ended December 31, 2001 there were five meetings of the
Board of Directors. Each of our directors or former directors attended in
person or was present for a telephonic conference call, for each of the Board
meetings.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the year ended December 31, 2001, we were advised by West Coast Realty
Advisors, Inc. (WCRA) and our properties were managed by West Coast Realty
Management, Inc. (WCRM) (collectively, the
Advisor), each of which is a
wholly-owned subsidiary of Associated Financial Group, Inc. The Advisor has
notified us that it will terminate as advisor effective March 31, 2002, and we
intend to become self-managed and self-administered. Certain of our directors
and Named Executive Officers are directors or officers of the Advisor.

Since inception, we have been advised and our properties
have been managed by the Advisor. The Advisor has notified us that
it intends to terminate its management and advisory relationships with us
effective March 31, 2002. Thereafter, we intend to become self-managed and
self-administered.

Other transactions involving the Registrant, the Advisor and its affiliates are
summarized below:



| |  |  | As compensation for advisory services, we incurred $170,401 in
advisory fees to WCRA during the year ended December 31, 2001. WCRA
waived collection of these fees                                                              
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | As reimbursement for overhead cost, we paid or incurred $2,000 per
month to WCRA                                                                                                                                                
|
| |  |  | For property management services, we engaged West Coast Realty
Management, Inc. (WCRM), an affiliate of the Advisor. During the
year ended December 31, 2001, we paid or incurred $182,343 of property
management fees to WCRM
|
| |  |  | Pursuant to a monitoring fee arrangement, we accrued $22,000 to
Associated Securities Corporation, a wholly owned subsidiary of
Associated Financial Group, Inc.                                                              

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PART IV




ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | 
|(a) |                                                                                                                                                        | 1.                            |  | FINANCIAL
          STATEMENTS                                                                                                                             |      | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | The following
          financial statements of West Coast Realty Investors, Inc, are included
          in Part II, Item 8:                               |     
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            | Page | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | Report
          of Independent Certified Public Accountants                                                                                               | 35   | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | Balance
          Sheets  December 31, 2001 and 2000                                                                                                      | 36   | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | Statements
          of Income for the years ended December 31, 2001, 2000 and 1999                                                                        | 37   | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | Statements
          of Cash Flows for the years ended December 31, 2001, 2000 and 1999                                                                    | 38   | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | Statements
          of Stockholders Equity for the years ended December 31, 2001,
          2000 and 1999                                                | 39   | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | Summary
          of Accounting Policies                                                                                                                   | 40   | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | Notes
          to Financial Statements                                                                                                                    | 45   | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        | 2.                            |  | FINANCIAL
          STATEMENT SCHEDULES                                                                                                                    |      | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | Schedule III
           Real Estate and Accumulated Depreciation                                                                                          | 69   | 
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    |                                                                                                                                                        |                               |  | All other schedules
        have been omitted because they are either not required, not applicable
        or the information has been otherwise supplied. |     
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|(b) |                                                                                                                                                        | REPORTS
          ON FORM 8-K |  |                                                                                                                                                           
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|    | On December 27,
        2001, we filed a report on from 8-K under Item 9 Regulation FD
        Disclosure. There were no financial statements filed. |                              
|    |                                                                                                                                                        |                               |  |                                                                                                                                                            |      | 
|(c) |                                                                                                                                                        | EXHIBITS                      |  |                                                                                                                                                           

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INDEX TO EXHIBITS

|        |  |                                                                                                                                                                                                                                                                        
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                        
|Number  |  | Description of Exhibit                                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                        
|3.1     |  | Certificate of Incorporation (incorporated by reference to the our
Registration Statement on Form S-11, File No. 33-32466).(1)                                                                                                                                         
|3.1.1   |  | Amendment to Certificate of Incorporation (incorporated by reference
to our Registration Statement on Form S-11, File No. 33-45802).(1)                                                                                                                                
|3.2     |  | Bylaws (incorporated by reference to our Registration Statement on
Form S-11, File No. 33-32466).(1)                                                                                                                                                                   
|3.2.1   |  | Amendment to Bylaws (incorporated by reference to our Registration
Statement on Form S-11, File No. 33-45802).(1)                                                                                                                                                      
|3.2.2   |  | Amended and Restated Bylaws (incorporated by reference to our
Registration Statement on Form S-11, File No. 33-45802).(1)                                                                                                                                              
|3.2.3   |  | Amended and Restated Bylaws (incorporated by reference to our proxy
statement dated December 6, 2001).(1)                                                                                                                                                              
|4.1     |  | Form of Share Certificate (incorporated by reference to our
Registration Statement on Form S-11, File No. 33-32466).(1)                                                                                                                                                
|10.1.1  |  | Agreement to Purchase Property (6491 Edinger Avenue, Huntington
Beach, California) incorporated by reference to our registration
Statement on Form S-11, File No. 33-32466).(1)                                                                                        
|10.1.2  |  | Lease Re: Property (6491 Edinger Avenue, Huntington Beach,
California) incorporated by reference to our Registration Statement
on Form S-11, File No. 33-32466).(1)                                                                                                    
|10.1.3  |  | Internal Revenue Service Ruling (6491 Edinger Avenue, Huntington
Beach, California) incorporated by reference to our Registration
Statement on Form S-11, File No. 33-32466).(1)                                                                                       
|10.2.1  |  | Agreement of Purchase and Sale and Joint Escrow Instructions By and
Between Shaw-Nelson San Clemente No. 7 (Seller) and Associated
Planners Realty Investors, Inc. (Buyer) (incorporated by reference
to our Current Report on Form 8-K dated January 17, 1992).(1)
|10.2.2  |  | Standard Form Lease Between Shaw/Nelson San Clemente No. 7, a
California Limited Partnership and Societe Endo Technic, a California
Corporation, dba Endo Technic Corporation incorporated by reference
to our Current Report on Form 8-K dated January 17, 1992).(1)  
|10.3    |  | Lease and Assignment thereof regarding the OPTO-22 Property.
(Incorporated by reference to our Registration Statement on
Form S-11, File No. 33-45802).(1)                                                                                                             

64



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                      
|Number  |  | Description of Exhibit                                                                                                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                      
|10.4.1  |  | Real Estate Purchase Agreement between K & I Associates and West
Coast Realty Investors, Inc. dated March 1, 1993. (Incorporated by
reference to Exhibit 10.13 to our Current Report on Form 8-K dated
May 5, 1994).(1)                                                                              
|10.4.2  |  | Leases re: Fresno Property. (Incorporated by reference to Exhibit
10.13.1 to our Current Report on Form 8-K dated May 5, 1994).(1)                                                                                                                                                                   
|10.5.1  |  | Agreement of Purchase and Sale of Real Property and Escrow
Instructions Between Birtcher Riverside Market Place Properties, Ltd.
and West Coast Realty Investors, Inc. (Incorporated by reference to
Exhibit 10.14 to our Current Report on Form 8-K dated November 29,
1994).(1)                    
|10.5.2  |  | Riverside Market Place Lease and Assignment thereof (Incorporated by
reference to Exhibit 10.14.1 to our Current Report on Form 8-K dated
November 29, 1994).(1)                                                                                                                                     
|10.5.3  |  | Exhibits to Agreement of Purchase and Sale of Real Property and
Escrow Instructions Between Birtcher Riverside Market Place
Properties and West Coast Realty Investors, Inc. (Incorporated by
reference to Exhibit 10.14.2 to our Current Report on Form 8-K dated
November 29, 1994, as amended).(1)
|10.5.4  |  | Appraisal for Riverside Market Place Property. (Incorporated by
reference to Exhibit 10.14.2 to Registrants Current Report on Form
8-K dated November 29, 1994, as amended).(1)                                                                                                                     
|10.6.1  |  | Purchase and Sale Contract between BRS-Tustin Safeguard Associates
and West Coast Realty Investors, Inc. (Incorporated by reference to
Exhibit 10.15 to Registrants Current Report on Form 8-K dated May
22, 1995).(1)                                                                              
|10.6.2  |  | Standard Industrial Lease  Net between BRS-Tustin Safeguard
Associates and Safeguard Business Systems, Inc. (Incorporated by
reference to Exhibit 10.15.1 to Registrants Current Report on Form
8-K dated May 22, 1995).(1)                                                                        
|10.6.3  |  | Loan Assignment and Assumption Agreement between BRS-Tustin Safeguard
Associates, West Coast Realty Investors, Inc. and Businessmens
Assurance Company of America (Incorporated by reference to Exhibit
10.15.2 to Registrants Current Report on Form 8-K dated May 22,
1995).(1)                  
|10.6.4  |  | Appraisal of Safeguard Business Systems Property (Incorporated by
reference to Exhibit 10.15.3 to Registrants Current Report on Form 8-K dated May 22, 1995).(1)                                                                                                                                    

65



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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                  
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                  
|Number  |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                  
|10.7.1  |  | Purchase and Sale Agreement Dated August 28, 1995 between 26
Technology Partnership, L.P. (co-owner), Jack M. Langston (President
of the General Partner of 26 Technology Partnership, L.P. and
co-owner), and West Coast Realty Investors, Inc. (Incorporated by
reference to Exhibit 1 to Registrants Current Report on Form 8-K
dated September 21, 1995).(1)
|10.7.2  |  | Appraisal Report for An Industrial Building 4400-4415 Technology
Drive, Fremont, California. (Incorporated by reference to Exhibit 2
to Registrants Current Report on Form 8-K dated September 21, 1995).(1)                                                                                                                                                    
|10.7.3  |  | Standard Industrial Lease between CMS Welding & Machining and 26
Technology Partnership, L.P. dated November 2, 1993. (Incorporated
by reference to Exhibit 3 to Registrants Current Report on Form 8-K
dated September 21, 1995).(1)                                                                                                                           
|10.7.4  |  | Promissory note secured by deed of trust dated July 1, 1995,
including assignment of leases, environmental indemnity agreement,
and other supporting documents. (Incorporated by reference to
Exhibit 4 to Registrants Current Report on Form 8-K dated September
21, 1995).(1)                                                                                 
|10.7.5  |  | Environmental Site Assessment for 4415 and 4425 Technology Drive
dated February 24, 1995. (Incorporated by reference to Registrants
Current Report on Form 8-K dated September 21, 1995).(1)                                                                                                                                                                    
|10.8.1  |  | Agreement of Purchase and Sale and Joint Escrow Instructions for 717
and 721 West Del Paso Road (with exhibits) (Incorporated by reference
to Exhibit 1 to Registrants Current Report on Post-effective
Amendment No. 1 dated October 1, 1996).(1)                                                                                                              
|10.8.2  |  | Standard Industrial Lease-Net dated April 10, 1989 (as amended) on
717 West Del Paso Road.(1)                                                                                                                                                                                                                                                                    
|10.8.3  |  | Guarantee of a portion of the Rent on 717 West Del Paso Road
(Incorporated by reference to Exhibit 2 to Registrants Current
Report on Post-effective Amendment No. 1 dated October 1, 1996).(1)                                                                                                                                                                 
|10.8.4  |  | An Appraisal of An Office/Industrial Facility at 717 and 721 West Del
Paso Road, Sacramento, California, dated June 5, 1996 (Incorporated
by reference to Exhibit 3 to Registrants Current Report on
Post-effective Amendment No. 1 dated October 1, 1996).(1)                                                                                                  

66



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|        |  |                                                                                                                                                                                                                                                                                       
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                       
|Number  |  | Description of Exhibit                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                       
|10.9.1  |  | Purchase and Sale Contract dated November 18, 1996 between West Coast
Realty Investors and Shidler West Investment Corporation
(Incorporated by reference to Exhibit 1 to Registrants Current
Report on Form 8-K dated January 17, 1997).(1)                                         
|10.9.2  |  | Appraisal Report for an Office/Industrial Facility at 17862 Fitch
Street, Irvine, California. (Incorporated by reference to Exhibit 2
to Registrants Current Report on Form 8-K dated January 17,
1997).(1)                                                                          
|10.9.3  |  | Commercial lease between Tycom Corporation and Shidler West
Investment Corporation dated December 18, 1996. (Incorporated by
reference to Exhibit 3 to Registrants Current Report on Form 8-K
dated January 17, 1997).(1)                                                            
|10.9.4  |  | Promissory note secured by deed of trust dated January 9, 1997,
including Rider to Promissory Note, secured by deed of trust on
property at 17862 Fitch Street, Irvine. (Incorporated by reference to
Exhibit 4 to Registrants Current Report on Form 8-K dated January
17, 1997).(1)
|10.10   |  | Amended and Restated Advisory Agreement dated July 1, 2001
(incorporated by reference to our proxy statement dated September 11,
2001).(1)                                                                                                                                            
|10.11   |  | Employment Agreement dated August 22, 2001 between the Company and
Allen K. Meredith (Incorporated by reference to Exhibit 10.1 to
Registrants Report on Form 10-Q dated September 30,
2001).(1)(2)                                                                                  
|10.12   |  | Sublease Agreement dated October 19, 2001 between the Company and
Sand Hill Advisors, Inc.                                                                                                                                                                                            
|10.13   |  | Employment Agreement dated August 22, 2001 as revised March 21, 2002
between the Company and Allen K. Meredith.(2)                                                                                                                                                                    



|(1) |  | Previously filed.        
|--- |  | -------------------------
|(2) |  | Compensation arrangement.

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SIGNATURES

Pursuant to the requirements of the 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.

WEST COAST REALTY INVESTORS, INC.

/s/ Allen K. Meredith

---

ALLEN K. MEREDITH(Chairman of the Board of Directors,
President and Chief Executive Officer)


/s/ Charles P. Wingard

---

CHARLES P. WINGARD(Vice President/Acting Treasurer,
Principal Financial Officer and
Principal Accounting Officer)


/s/ David C. Harrison

---

DAVID C. HARRISON(Director)


/s/ Patricia F. Meidell

---

PATRICIA F. MEIDELL(Director)


/s/ James P. Moore

---

JAMES P. MOORE(Director)


/s/ Neal E. Nakagiri

---

NEAL E. NAKAGIRI(Director)


/s/ John H Redmond

---

JOHN H. REDMOND(Director)


/s/ Eric P. Von der Porten

---

ERIC P. VON DER PORTEN(Director)


Date: March 29, 2002

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WEST COAST REALTY INVESTORS, INC.




|                                                        |  |                  
|------------------------------------------------------- |  | -----------------
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION |  | DECEMBER 31, 2001

|                                                                        |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 
|----------------------------------------------------------------------- |  | ------------ | ---------- | ---- |  | ------------ | ---------- | ----------- |  | -------- | ---------- | ------------------------ |  | ---------- | ------- | ---- |  | --------------------- | ---------- | -------- |  | ----------- | ---------- | --------- |  | ------- | ---------- | ---- |  | ------------ | --------- |  |  | ------------ | ---- |  |  |  | ----- |  |  |  | ---- | 
|                                                                        |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  | Gross Amount at which |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  | 
|                                                                        |  |              |            |      |  | Initial Cost |            |             |  |          |            | carried at end of period |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           | 
|                                                                        |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           | 
|                                                                        |  |              |            |      |  |              |            |             |  | Building |            | Cost                     |  |            |         |      |  | Building              |            |          |  |             |            | Accumu-   |  |         |            |      |  |              |           |  |  | Life (years)
|                                                                        |  |              |            |      |  |              |            |             |  | and      |            | capitalized              |  |            |         |      |  | and                   |            |          |  |             |            | lated     |  |         |            |      |  |              |           |  |  | on which    
|                                                                        |  |              |            |      |  |              |            |             |  | Improve- |            | subsequent to            |  |            |         |      |  | Improve-              |            |          |  |             |            | Deprecia- |  | Date of |            | Date |  | depreciation
|Description                                                             |  | Encumbrances |            | Land |  | ments        |            | acquisition |  | Land     |            | ments                    |  | Total Cost |         | tion |  | Construction          |            | Acquired |  | is computed
|                                                                        |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |            
|Rental real estate:                                                     |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 
|Office Building,
Tustin, CA                                             |  | $            | 1,626,410  |      |  | $            | 1,089,796  |             |  | $        | 3,772,298  |                          |  |            |         |      |  | $                     | 1,089,796  |          |  | $           | 3,772,298  |           |  | $       | 4,862,094  |      |  | $            | 636,755   |  |  |              | 1986 |  |  |  | 5/95  |  |  |  | 39.0 | 
|Light Industrial
Bldg., (Java City
717 W. Del Paso
Road) Sacramento, CA |  |              |           |      |  |              | 489,182    |             |  |          | 609,397    |                          |  |            |         |      |  |                       | 489,182    |          |  |             | 609,397    |           |  |         | 1,098,579  |      |  |              | 83,993    |  |  |              | 1988 |  |  |  | 8/96  |  |  |  | 39.0 | 
|Light Industrial
Bldg., (Java City
721 W. Del Paso
Road) Sacramento, CA |  |              | 340,187    |      |  |              | 325,024    |             |  |          | 404,897    |                          |  |            |         |      |  |                       | 325,024    |          |  |             | 404,897    |           |  |         | 729,921    |      |  |              | 55,804    |  |  |              | 1988 |  |  |  | 8/96  |  |  |  | 39.0 | 
|Light Industrial
Bldg., Irvine, CA                                      |  |              | 2,140,535  |      |  |              | 1,570,000  |             |  |          | 3,337,441  |                          |  |            |         |      |  |                       | 1,570,000  |          |  |             | 3,337,441  |           |  |         | 4,907,441  |      |  |              | 522,190   |  |  |              | 1978 |  |  |  | 1/97  |  |  |  | 39.0 | 
|Light Industrial
Bldg., Corona, CA *                                    |  |              | 944,456    |      |  |              | 703,142    |             |  |          | 1,201,310  |                          |  | $          | 61,179  |      |  |                       | 648,150    |          |  |             | 1,168,537  |           |  |         | 1,816,687  |      |  |              | 122,542   |  |  |              | 1988 |  |  |  | 12/97 |  |  |  | 39.0 | 
|Light Industrial
Bldg.,
(Horn Road)
Sacramento, CA *                    |  |              | 944,456    |      |  |              | 1,068,000  |             |  |          | 1,073,200  |                          |  |            |         |      |  |                       | 882,565    |          |  |             | 886,862    |           |  |         | 1,769,427  |      |  |              | 94,985    |  |  |              | 1976 |  |  |  | 1/98  |  |  |  | 39.0 | 
|Light Industrial
Bldg.,
Chino, CA                                       |  |              | 879,918    |      |  |              | 714,245    |             |  |          | 1,145,093  |                          |  |            |         |      |  |                       | 714,245    |          |  |             | 1,145,093  |           |  |         | 1,859,338  |      |  |              | 102,763   |  |  |              | 1989 |  |  |  | 4/98  |  |  |  | 39.0 | 
|Light Industrial
Bldg.,
Vacaville, CA *                                 |  |              | 1,331,784  |      |  |              | 330,000    |             |  |          | 2,405,308  |                          |  |            |         |      |  |                       | 206,644    |          |  |             | 1,506,184  |           |  |         | 1,712,828  |      |  |              | 209,553   |  |  |              | 1996 |  |  |  | 5/98  |  |  |  | 39.0 | 
|Light Industrial
Bldg.,
Cerritos, CA                                    |  |              | 1,199,676  |      |  |              | 1,004,015  |             |  |          | 1,310,554  |                          |  |            | 117,189 |      |  |                       | 1,004,015  |          |  |             | 1,427,743  |           |  |         | 2,431,758  |      |  |              | 85,876    |  |  |              | 1980 |  |  |  | 12/98 |  |  |  | 39.0 | 
|Light Industrial
Bldg.,
Ontario, CA                                     |  |              | 2,880,329  |      |  |              | 2,636,728  |             |  |          | 1,978,236  |                          |  |            |         |      |  |                       | 2,636,728  |          |  |             | 1,978,236  |           |  |         | 4,614,964  |      |  |              | 126,805   |  |  |              | 1997 |  |  |  | 1/99  |  |  |  | 39.0 | 
|Light Industrial
Bldg.,
Folsom, CA                                      |  |              | 3,952,499  |      |  |              | 1,105,977  |             |  |          | 4,904,978  |                          |  |            |         |      |  |                       | 1,105,977  |          |  |             | 4,904,978  |           |  |         | 6,010,955  |      |  |              | 314,409   |  |  |              | 1984 |  |  |  | 5/99  |  |  |  | 39.0 | 
|                                                                        |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 
|Subtotal-Rental
real estate                                             |  |              | 16,240,250 |      |  |              | 11,036,109 |             |  |          | 22,142,712 |                          |  |            | 178,368 |      |  |                       | 10,672,326 |          |  |             | 21,141,666 |           |  |         | 31,813,992 |      |  |              | 2,355,675 |  |  |              |      |  |  |  |       |  |  |  |      | 
|                                                                        |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 

69



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WEST COAST REALTY INVESTORS, INC.

|                                                                    |  |                  
|------------------------------------------------------------------- |  | -----------------
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued) |  | DECEMBER 31, 2001

|                                            |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 
|------------------------------------------- |  | ------------ | ---------- | ---- |  | ------------ | ---------- | ----------- |  | -------- | ---------- | ------------------------ |  | ---------- | ------- | ---- |  | --------------------- | ---------- | -------- |  | ----------- | ---------- | --------- |  | ------- | ---------- | ---- |  | ------------ | --------- |  |  | ------------ | ---- |  |  |  | ----- |  |  |  | ---- | 
|                                            |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  | Gross Amount at which |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  | 
|                                            |  |              |            |      |  | Initial Cost |            |             |  |          |            | carried at end of period |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           | 
|                                            |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           | 
|                                            |  |              |            |      |  |              |            |             |  | Building |            | Cost                     |  |            |         |      |  | Building              |            |          |  |             |            | Accumu-   |  |         |            |      |  |              |           |  |  | Life (years)
|                                            |  |              |            |      |  |              |            |             |  | and      |            | capitalized              |  |            |         |      |  | and                   |            |          |  |             |            | lated     |  |         |            |      |  |              |           |  |  | on which    
|                                            |  |              |            |      |  |              |            |             |  | Improve- |            | subsequent to            |  |            |         |      |  | Improve-              |            |          |  |             |            | Deprecia- |  | Date of |            | Date |  | depreciation
|Description                                 |  | Encumbrances |            | Land |  | ments        |            | acquisition |  | Land     |            | ments                    |  | Total Cost |         | tion |  | Construction          |            | Acquired |  | is computed
|                                            |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |            
|Rental real estate
held for sale:           |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 
|Retail Building,
Huntington Beach, CA *     |  | $            | 493,605    |      |  | $            | 1,005,965  |             |  | $        | 670,245    |                          |  |            |         |      |  | $                     | 948,696    |          |  | $           | 427,389    |           |  | $       | 1,376,085  |      |  | $            | 226,084   |  |  |              | 1991 |  |  |  | 2/91  |  |  |  | 31.5 | 
|Retail Bldg.,
Shopping Center,
Fresno, CA * |  |              | 565,136    |      |  |              | 553,648    |             |  |          | 861,245    |                          |  |            |         |      |  |                       | 164,931    |          |  |             | 560,014    |           |  |         | 724,945    |      |  |              | 184,945   |  |  |              | 1993 |  |  |  | 5/93  |  |  |  | 39.0 | 
|Entertainment
Center, Riverside, CA*        |  |              | 1,113,865  |      |  |              | 768,667    |             |  |          | 2,886,833  |                          |  | $          | 287,036 |      |  |                       | 768,667    |          |  |             | 1,607,138  |           |  |         | 2,375,805  |      |  |              | 505,805   |  |  |              | 1994 |  |  |  | 11/94 |  |  |  | 39.0 | 
|Restaurant
Facility,
Roseville, CA          |  |              | 1,383,654  |      |  |              | 594,025    |             |  |          | 1,382,459  |                          |  |            |         |      |  |                       | 594,025    |          |  |             | 1,382,459  |           |  |         | 1,976,484  |      |  |              | 133,643   |  |  |              | 1997 |  |  |  | 10/97 |  |  |  | 39.0 | 
|                                            |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 
|Subtotal  Rental
real estate held
for sale |  |              | 3,556,260  |      |  |              | 2,922,305  |             |  |          | 5,800,782  |                          |  |            | 287,036 |      |  |                       | 2,476,319  |          |  |             | 3,977,000  |           |  |         | 6,453,319  |      |  |              | 1,050,477 |  |  |              |      |  |  |  |       |  |  |  |      | 
|                                            |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 
|Grand Total                                 |  | $            | 19,796,510 |      |  | $            | 13,958,414 |             |  | $        | 27,943,494 |                          |  | $          | 465,404 |      |  | $                     | 13,148,645 |          |  | $           | 25,118,666 |           |  | $       | 38,267,311 | **   |  | $            | 3,406,152 |  |  |              |      |  |  |  |       |  |  |  |      | 
|                                            |  |              |            |      |  |              |            |             |  |          |            |                          |  |            |         |      |  |                       |            |          |  |             |            |           |  |         |            |      |  |              |           |  |  |              |      |  |  |  |       |  |  |  |      | 



|*  |  | Amount shown is net of write-downs totaling $4,100,000 on these assets in
total. The write-downs were based on recent appraisals and allocated prorata
to land and improvements absent other indication of value.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|  
|  
|  
|** |  | The federal income tax basis totals approximately $43,000,000 before
accumulated depreciation.                                                                                                                   

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WEST COAST REALTY INVESTORS, INC.

SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

The activity in rental real estate and related depreciation for the three years
ended December 31, 2001 is as follows:

A reconciliation of rental real estate for the years ending December 31, 1999,
2000 and 2001 follows:

|                                                  |  |   |            |  
|------------------------------------------------- |  | - | ---------- | -
|Balance at December 31, 1998                      |  |   | 37,652,583 |  
|1999 Additions                                    |  |   | 10,625,921 |  
|                                                  |  |   |            |  
|Balance at December 31, 1999                      |  |   | 48,278,504 |  
|2000 Dispositions                                 |  |   | (6,376,596 | )
|2000 Impairment loss                              |  |   | (300,000   | )
|                                                  |  |   |            |  
|Balance at December 31, 2000                      |  |   | 41,601,908 |  
|2001 Additions                                    |  |   | 465,403    |  
|2001 transfer to rental
real estate held for sale |  |   | (6,453,319 | )
|2001 Impairment loss                              |  |   | (3,800,000 | )
|                                                  |  |   |            |  
|Balance at December 31, 2001                      |  | $ | 31,813,992 |  
|                                                  |  |   |            |  

A reconciliation of
accumulated depreciation
for the years ending
December 31, 1999, 2000 and
2001 follows:

|                                                  |  |   |            |  
|------------------------------------------------- |  | - | ---------- | -
|Balance at December 31, 1998                      |  |   | 1,781,599  |  
|1999 Depreciation expense                         |  |   | 718,502    |  
|                                                  |  |   |            |  
|Balance at December 31, 1999                      |  |   | 2,500,101  |  
|2000 Depreciation expense                         |  |   | 762,452    |  
|2000 Dispositions                                 |  |   | (532,336   | )
|                                                  |  |   |            |  
|Balance at December 31, 2000                      |  |   | 2,730,217  |  
|2001 Depreciation expense                         |  |   | 675,935    |  
|2001 transfer to rental
real estate held for sale |  |   | (1,050,477 | )
|                                                  |  |   |            |  
|Balance at December 31, 2001                      |  | $ | 2,355,675  |  
|                                                  |  |   |            |  

71