<PAGE>   1
                                   UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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


          For the fiscal year ended                         December 31, 1998

          Commission File Number                                 0-24816


              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
             (Exact name of Registrant as Specified in its Charter)

          Delaware                                      23-2610414
(State of other jurisdiction                (IRS Employer Identification No.)
incorporation or organization)


        230 S. Broad Street, Mezzanine, Philadelphia, Pennsylvania 19102
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (215)790-4700

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

<TABLE>
<CAPTION>
              Title of each class to                          Name of exchange on
              be so registered                                which each class
                                                              is to be registered
<S>          <C>                                              <C>
                        None                                          N/A
</TABLE>


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

                      Units of Limited Partnership Interest
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, (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 (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporate by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

Aggregate Market Value of Voting and Non-Voting Common Equity Held by non-
affiliates of the Registrant:   N/A

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                                              Yes  X     No




DOCUMENTS INCORPORATED BY REFERENCE

<TABLE>
<CAPTION>
     Part 1     Part II     Part III     Part IV
<S>             <C>         <C>          <C>
     (None)     (None)      (None)       Exhibits from Form 10
                                         Registration Statement
                                         and from Form 10-K
                                         Annual Report filed
                                         April 1, 1996
                                         No. 0-24816
</TABLE>

                                        i
<PAGE>   2
                                      INDEX
<TABLE>
<CAPTION>
                                                                                                        Page
PART I
<S>                  <C>                                                                               <C>
  Item 1.             Business.............................................................................1
                       I.   Summary........................................................................1
                       II.  MLP Objectives and Policies....................................................2
                       III. Glossary.......................................................................4
  Item 2.             Properties...........................................................................6
  Item 3.             Legal Proceedings....................................................................6
  Item 4.             Submission of Matters to a Vote of
                       Security Holders....................................................................7

PART II

  Item 5.             Market Price for the Registrant's Common
                       Equity and Related Stockholder Matters.............................................18
                       I.   No Trading Market.............................................................18
                       II.  Distributions of Cash Flow From Operations....................................18
                       III. Proceeds of Sales Distributions...............................................18
                       IV.  Certain Income Tax Considerations.............................................18
  Item 6.             Selected Financial Data.............................................................20
  Item 7.             Management's Discussion and Analysis of
                       Financial Condition and Results of Operations......................................21
                       I.   Liquidity and Capital Resources...............................................21
                       II.  Results of Operations.........................................................23
                       III. Year 2000.....................................................................25
                       IV.  Indebtedness Secured by the Properties........................................25
  Item 8.             Financial Statements and Supplementary Data.........................................27
  Item 9.             Changes in and Disagreements with Accountants on
                       Accounting and Financial Disclosure................................................27

PART III

  Item 10.            Directors and Executive Officers of the
                       Registrant.........................................................................28
  Item 11.            Executive Compensation..............................................................28
  Item 12.            Security Ownership of Certain Beneficial Owners
                       and Management.....................................................................28
  Item 13.            Certain Relationships and Related Party Transactions................................28
                       I.   Compensation and Fees.........................................................28
                       II.  Property and Management Affiliate.............................................29
                       III. Conflicts of Interest.........................................................30
                       IV.  Summary of Relationships......................................................30
                       V.   Related Party Transactions....................................................31

PART IV.

  Item 14.            Exhibits, Financial Statement Schedules and
                       Reports on Form 8-K................................................................31
                       I.   Documents Filed as Part of this Report........................................31
                       II.  Reports of Form 8-K...........................................................32
</TABLE>

                                       ii
<PAGE>   3
                                     PART I


ITEM 1.    BUSINESS

                    I.  SUMMARY

         The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in the Annual Report.
Reference is made to the Glossary which appears at the end of this section for
the definition of certain capitalized terms used in the Summary and elsewhere in
this Report.

         A.  THE MASTER LIMITED PARTNERSHIP

         National Property Analysts Master Limited Partnership (the "MLP") was
organized under the Delaware Revised Uniform Limited Partnership Act in January,
1990 as part of a consolidation of the operation of properties owned by certain
limited partnerships (the "Partnerships") previously sponsored by National
Property Analysts, Inc. and its affiliates ("NPA"). The term of the MLP will
continue until December 31, 2015, unless sooner terminated in accordance with
the terms of the limited partnership agreement of the MLP (the "Partnership
Agreement").

         The MLP's principal executive offices are located at 230 South Broad
Street, Mezzanine, Philadelphia, Pennsylvania 19102 (telephone: 215-790-4700).

         B.  THE GENERAL PARTNERS

         The General Partners of the MLP are EBL&S, Inc., an affiliate of NPA
(the "Managing General Partner") and Feldman International, Inc. (the "Equity
General Partner). The Managing General Partner and the Equity General Partner
are collectively referred to as the "General Partners". The Managing General
Partner manages and controls all aspects of the business of the MLP. The
Managing General Partner is owned 100% by E & H Properties, Inc., an affiliate
of NPA and holds no ownership interest in the MLP. The Equity General Partner
holds a 1% general partner interest in the MLP. See "Item 13. Certain
Relationships and Related Party Transactions.

         C.  THE PROPERTIES AND INDEBTEDNESS SECURED BY THE PROPERTIES

         The MLP owns 49 properties as of December 31, 1998 which consist
primarily of shopping centers and free standing, single tenant retail stores
(the "Properties").  The Properties are subject to certain indebtedness which
was incurred in connection with the acquisition of the Properties by the
Partnerships.  See "Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations."

         D.  MLP OBJECTIVES AND POLICIES

         The MLP intends to hold the Properties until such time as it is deemed
prudent to dispose of the Properties. However, the Partnership in accordance
with the terms of the Partnership Agreement will terminate on December 31, 2015.
See "Item 1. Business - MLP Objectives and Policies."

         The Limited Partners are prohibited from transferring their interests
in the MLP except by will, inheritance or operation of law and no additional
Limited Partners may be admitted as partners of the MLP.

         E.  LIMITED PARTNERS' SHARE OF CASH FLOW FROM OPERATIONS

         The Limited Partners will receive, on an annual basis, 99% of the Cash
Flow from Operations as defined in the Partnership Agreement. It is not
anticipated that the MLP will be in a position to distribute Cash Flow from
Operations to its partners in the foreseeable future.

         F.  LIMITED PARTNERS' SHARE OF PROCEEDS OF SALES DISTRIBUTIONS

         Proceeds of Sales of the Properties available to be distributed by the
MLP will be distributed 99% to the Limited Partners and 1% to the Equity General
Partner.

         G.  ALLOCATIONS OF PROFITS AND LOSSES

         Taxable income from MLP operations or from a capital transaction will
be allocated 99% to the Limited Partners and 1% to the Equity General Partner.
Taxable losses from MLP operations or from capital transactions generally will
be allocated 99% to the Limited Partners and 1% to the Equity General Partner.

                                        1
<PAGE>   4
         H.  COMPENSATION TO THE GENERAL PARTNER AND AFFILIATES

         The Managing General Partner will receive certain compensation for its
services including reimbursement of certain of its expenses and the Equity
Partner will receive a portion of Cash Flow from Operations and Proceeds of
Sales of the Properties. An affiliate of the Managing General Partner will
receive a management fee for managing the Properties and a leasing fee for
obtaining or renewing leases. See "Item 13. Certain Relationships and Related
Party Transactions - Compensation and Fees."

         I.  FISCAL YEAR

         The MLP's fiscal year will begin on January 1, and end on December 31
of each year.


                  II. MLP OBJECTIVES AND POLICIES

         A.  MLP OBJECTIVES

         The MLP intends to hold the Properties until such time as it is deemed
prudent to dispose of one or more or all of the Properties. The precise timing
of disposition of Properties is in the discretion of the Managing General
Partner. However, the Partnership in accordance with the terms of the
Partnership Agreement will terminate on December 31, 2015.

         It is anticipated that the forgiveness of Wrap Mortgages and the
process of selling Properties, which are owned by Unaudited Partnerships, and
applying sales proceeds to make payments on the Wrap Mortgages will result in
the Limited Partners having to report substantial taxable income when the
Properties are sold without the corresponding receipt of any cash proceeds
therefrom (unless and until the Threshold Amount has been exceeded). It is
intended, however, that by avoiding a foreclosure of Properties, the
Consolidation and Restructuring may preserve for Limited Partners the potential
for deriving an economic benefit from the future sales of the Properties, while
at the same time possibly deferring the recognition of taxable income for some
Limited Partners.

         The objectives of the MLP are, to attempt to implement, with respect to
the Properties, effective management, leasing, cost control and capital
improvement policies and techniques and thereby to (i) preserve and protect the
MLP's Properties in order to avoid the loss of any Properties to foreclosure;
(ii) enhance the potential appreciation in the value of the MLP's Properties;
and (iii) provide Cash Flow from Operations. It is not anticipated that the MLP
will be in a position to distribute Cash Flow from Operations to its partners in
the foreseeable future.

         The determination of whether a Property should be sold or otherwise
disposed of will be made by the Managing General Partner after consideration of
relevant factors, including performance of the Property, market conditions, the
financial requirements of the MLP and the tax consequences to Limited Partners,
with a view toward achieving the principal investment objectives of the MLP. In
connection with a sale of a Property, a purchase money obligation secured by a
mortgage may be taken as part payment; there are no limitations or restrictions
on the MLP's taking such purchase money obligations. The terms of payment to the
MLP will be affected by custom in the area in which each Property is located and
the then-prevailing economic conditions. To the extent the Partnership receives
notes and other property instead of cash on sales, such proceeds (other than any
interest payable thereon) will not be included in Proceeds of Sales of the
Properties until and to the extent the notes or other property are actually
paid, sold, refinanced or otherwise disposed of; and therefore, the distribution
of such proceeds to the MLP may be delayed until such time.

         The MLP may not acquire additional properties. However, in the Managing
General Partner's discretion, the MLP may, in appropriate circumstances,
exchange Properties for new properties in transactions structured to be
non-taxable events in whole or in substantial part under Section 1031 of the
Internal Revenue Code, and the proceeds or an involuntary conversion may be
invested in property in transactions structured to be non-taxable in whole or in
part under Section 1033 of the Internal Revenue Code.

         B.  COMPETITION FOR TENANTS

         The MLP's Properties consist primarily of shopping centers and free
standing, single tenant retail stores located in 24 states. Of the 49 Properties
owned by the MLP, 29 properties have only 1 or 2 tenants ("Single Tenant
Properties"). The tenants in the Single Tenant Properties are primarily national
retailers or supermarkets ("Anchor Tenants"). The 20 remaining properties are
multi-tenant shopping center properties ("Shopping Center Properties"). The
tenants in the Shopping Center Properties generally

                                       2
<PAGE>   5
include Anchor Tenants and a variety of tenants occupying less substantial
portions of the property ("Local Tenants").

                  1.  ANCHOR TENANTS

         The Anchor Tenant leases are usually for 20 to 25 years. These Anchor
Tenant leases are at various stages of maturity. Upon expiration of the initial
lease term renewal options are usually available to the Anchor Tenants. See
"Item 2. Properties." The high concentration of minimum rent received from
Anchor Tenants under the terms of long term leases provide the MLP with
protection against a significant reduction in rental income; however, this also
restricts the growth opportunity for the MLP.

         As of December 31, 1998, there were eight Properties which had been
vacated by Anchor Tenants, six of which are stores owned or operated by Kmart
Corporation ("Kmart"). The Anchor Tenants continue to make rental payments for
these properties under the terms of their leases. The Anchor Tenants are
attempting to market the space to other users. To date, the MLP has not had to
market vacant Anchor Tenant space, but it has cooperated with the Anchor Tenant
in its effort to market space it has vacated. To the extent that Anchor Tenant
space becomes available at the end of a lease term, the MLP will attempt to
re-lease the Anchor Tenant space in the same manner in which Local Tenant space
is marketed (see below).

         The MLP's primary Anchor Tenant is Kmart and its subsidiaries which in
1998 accounted for approximately 55% of the rental income received by the MLP.
The Managing General Partner has had regularly scheduled meetings with
representatives of Kmart to review and discuss with them their plans for the
various Kmart stores. In the past, in instances where Kmart stores were
determined to be undersized and inadequate to accommodate Kmart's current needs,
expansions of the existing facilities were undertaken wherever possible. In some
cases, Kmart determined to vacate Anchor Tenant space although they continued to
pay the required rental payments.

         Two of the six Kmart stores which are vacant but continuing to make
rental payments are Anchor Tenants in Shopping Center Properties while the other
four are the only tenant in Single Tenant Properties. Kmart has subleased
portions of three of the six properties to other users. Kmart remains obligated
under the terms of its leases at the six property locations for terms ranging
from three to seven years.

         In past years Kmart experienced a downgrading of its credit rating as a
result of its recent financial performance.  Although Kmart's financial
performance has improved, its credit rating has not been upgraded to its prior
level.  As a result, the MLP could have difficulty refinancing the balloon
payments due on the Third Party Underlying Obligations on Properties where
Kmart is the Anchor Tenant.  See "Item 2. Properties."

                  2.  LOCAL TENANTS

         Marketing of Local Tenant space is accomplished through signage, direct
mailing, advertisements and through coordinated listings with local leasing
brokers.

         The MLP Properties' occupancy rate for Local Tenant space is 75%. The
lease terms for Local Tenant space typically range from 3 years to 10 years. The
competitive conditions applicable to Local Tenant space vary from Property to
Property. However, as a general matter, it can be said that the market for Local
Tenant space is highly competitive and, with respect to the MLP Properties, is
typically a function of the MLP's rental rates as compared to the local
market's. However, in instances where a multi-tenant Property has Anchor Tenant
space and the Anchor Tenant space is vacant (currently three Shopping Center
Properties have Anchor Tenant space which is vacant), the vacancy in the Anchor
Tenant space makes the rental of the Local Tenant space more difficult.

         C.  PROHIBITED ACTIVITIES AND INVESTMENTS

         The MLP will not engage in any business not related to the operations
of the Properties. Additionally, the MLP will not (i) sell additional limited
partnership interests in the MLP; (ii) issue limited partnership interests in
exchange for property; (iii) issue senior securities or make loans or
investments in real estate mortgages other than in connection with a
contemplated purchase or sale or disposition of the Properties; (iv) make loans
to the General Partners or its affiliates (v) invest in or underwrite the
securities of other issuers for any purpose, including investing in securities
for the purpose of exercising control; (vi) operate in such a manner as not to
be exempt from classification as an "investment company" for purposes of the
Investment Company Act of 1940; (vii) purchase or lease any property from or
sell or lease any property to the General Partners or its affiliates, except
that with respect to leases, the General Partners and its affiliates may lease
space in the Properties on terms no more favorable than

                                        3
<PAGE>   6
those offered to non-affiliated persons; (viii) invest in junior mortgages or
deeds of trust, except that the acquisition or granting of junior mortgages or
deeds of trust in connection with the sale, purchase, financing or refinancing
of a Property shall not be deemed to be investing in junior mortgages or deeds
of trust; (ix) commingle the funds of the MLP with any other person's; (x)
invest in limited partnership interests; (xi) construct or develop properties;
(xii) enter into joint venture agreements; or (xiii) receive rebates or give-ups
in connection with the MLP.

         D.  INSURANCE ON PROPERTIES

         The Managing General Partner has obtained liability insurance covering
the Properties. The third party liability coverage insures, among others, the
MLP and the General Partners. Property insurance has also been obtained that
insures the MLP for fire and other casualty losses in an amount which covers the
replacement cost of the Properties. In addition, the MLP is covered under
fidelity insurance policies in amounts which the Managing General Partner deems
sufficient. Such insurance coverage is reviewed at least annually and adjusted
to account for variations in value.


                  III.  GLOSSARY.

         "CAPITAL IMPROVEMENT" shall mean any improvement to any Property which
is required to be capitalized or amortized by the MLP, pursuant to generally
accepted accounting principles.

         "CAPITAL IMPROVEMENT DEBT" shall mean indebtedness incurred by the MLP
for Capital Improvements.

         "CASH FLOW FROM OPERATIONS" shall mean, with respect to the MLP,
Operating Revenues less Operating Cash Expenses and Reserves.

         "CONSOLIDATION" shall mean the consolidation of the ownership and
operations of the Properties in the MLP.

         "DEBT SERVICE" shall mean the aggregate principal and interest payments
required on the Third Party Underlying Obligations in calendar year 1990 with
respect to the Properties owned by the MLP.

         "EQUITY GENERAL PARTNER" shall mean Feldman International, Inc., a
Delaware corporation.

         "EXCESS PROCEEDS" shall mean the Proceeds of Sales of the Properties in
excess of the Minimum Payoff Amount and Capital Improvement Debt.

         "GENERAL PARTNERS" shall mean EBL&S, Inc., the Managing General Partner
of the MLP and Feldman International, Inc., the Equity General Partner of the
MLP.

         "INVESTOR NOTE PAYMENTS" shall mean the payment by Investor Note Payors
of amounts becoming due on or after June 1, 1989 on the Investor Notes.

         "INVESTOR NOTE PAYORS" shall mean the Limited Partners of Partnerships
who made payments which became due on or after June 8, 1989 on the Investor
Notes.

         "INVESTOR NOTE RECOVERY" shall mean the Excess Proceeds available for
distribution to the MLP after the first $28 million of Excess Proceeds has been
retained by the MLP, in an amount equal to the lesser of the Investor Note
Payments or $25 million.

         "INVESTOR NOTES" shall mean the promissory notes executed and tendered
by Limited Partners as payments for a portion of the purchase price of their
interest in a Partnership.

         "LIMITED PARTNERS" shall mean all persons who hold limited partnership
interests in the MLP.

         "MANAGEMENT AGREEMENT" shall mean the agreement entered into by and
between the MLP and EBL&S Property Management, Inc. pursuant to which the
Property Manager will manage the Properties in consideration of a property
management fee (equal to five percent (5%) of the MLP's gross operating
revenues) and a leasing fee (equal to the fee customarily charged in the
geographic areas in which the Properties are located).

         "MANAGING GENERAL PARTNER" shall mean EBL&S, Inc, a Delaware
corporation.

         "MINIMUM PAYOFF AMOUNT" shall mean the payment made by the MLP pursuant
to the Restructuring Agreement equal to the sum of (i) the balance of the

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<PAGE>   7
Third Party Underlying Obligations on a Property on January 1, 1990 and (ii) any
prepayment penalties or premiums.

         "MLP" shall mean National Property Analysts Master Limited Partnership,
a Delaware limited partnership.

         "MLPG" shall mean Main Line Pension Group, a Delaware limited
partnership.

         "NPA" shall mean National Property Analysts, Inc. and the corporations
and partnerships now or previously controlled by, related to or affiliated
with, directly or indirectly, National Property Analysts, Inc. and Mr. Edward
Lipkin, including, but not limited to E & H Properties, Inc., National
Property Analysts Management Company, and National Property Management Corp.

         "NPAEP" shall mean National Property Analysts Employee Partnership, a
Delaware limited partnership.

         "OPERATING CASH EXPENSES" shall mean the amount of cash paid by the MLP
for costs and expenses incurred in the ordinary course of its business
including, without limitation, (i) Debt Service, (ii) debt service payments on
Capital Improvement Debt, (iii) fees to be paid to the Property Manager and (iv)
repairs and maintenance, utilities, taxes and certain Tenant Improvements,
employee salaries, travel on MLP business, advertising and promotion, supplies,
legal, accounting, statistical or bookkeeping services, and printing and mailing
of reports and communications.

         "OPERATING REVENUES" shall mean the cash receipts of the MLP, other
than (i) the Proceeds of Sales of the Properties and (ii) proceeds of borrowings
of the MLP, received in cash during the MLP's fiscal year.

         "PARTNERSHIP AGREEMENT" shall mean the limited partnership agreement
entered into between the General Partners and the Limited Partners of the MLP.

         "PARTNERSHIPS" shall mean certain limited partnerships previously
sponsored by NPA.

         "PENSION GROUPS" shall mean the limited partnerships comprised of
various pension and profit sharing trusts which sold the Properties to the
Partnerships, and includes Main Line Pension Group (the "MLPG"), a Delaware
limited partnership which acquired the ownership of the Wrap Mortgages from the
original holders and National Property Analysts Employee Partnership ("NPAEP")
and Penn Valley Pension Group ("PVPG"), both Delaware limited partnerships which
subsequently acquired ownership of certain Wrap Mortgages from MLPG.

         "PROCEEDS OF SALES DISTRIBUTIONS" shall mean the distributions made by
the MLP from the proceeds of sales of the Properties as defined in the
Partnership Agreement.

         "PROCEEDS OF SALES OF THE PROPERTIES" shall mean, for purposes of the
Restructuring Agreement and as of and at the time of the calculation thereof,
(A) the gross sales proceeds (including the then-outstanding principal amount of
indebtedness for borrowed money assumed or taken subject to) from the sale of
any Property or Properties occurring and after the date the Properties were
transferred to the MLP, minus (B) all reasonable costs and expenses incurred by
a Partnership or a successor to a Partnership (including the MLP), in connection
with any such sale, including without limitation, brokerage commissions to
independent third parties, legal fees and costs, transfer taxes, mortgage taxes,
prepayment penalties payable to independent third parties, title insurance and
all other customary closing costs and expenses.

         "PROPERTY" OR "PROPERTIES" shall mean one, some or all of the parcels
of real property owned by the MLP.

         "PVPG" shall mean Penn Valley Pension Group, a Delaware limited
partnership.

         "PROPERTY MANAGER" shall mean EBL&S Property Management, Inc.

         "REFINANCING" shall mean either (i) a restructuring of indebtedness of
the MLP or the Partnerships which only changes the terms thereof without
increasing the indebtedness being restructured or (ii) refinancing indebtedness
of the MLP or the Partnerships for the purpose of making a Capital Improvement.

         "RESERVES" shall mean the amount determined by the Managing General
Partner, in its sole discretion, to be set aside for future requirements of the
MLP. At the end of each year, any unexpended reserves not continued as Reserves
will be treated as Cash Flow from Operations.

                                        5
<PAGE>   8
         "RESTRUCTURING" shall mean the restructuring of the Wrap Mortgages and
the Second Mortgages.

         "RESTRUCTURING AGREEMENT" shall mean the agreement entered into by and
between the MLP, the Pension Groups and certain NPA affiliates to restructure
the Wrap Mortgages and the Second Mortgages.

         "RESTRUCTURED WRAP MORTGAGES" shall mean the Wrap Mortgages as modified
by the Restructuring Agreement.

         "SECOND MORTGAGE" shall mean any purchase money mortgage or deed of
trust created by a Pension Group upon its purchase of a Property that is a
subordinate lien against the Property in favor of an NPA affiliate and evidenced
by a promissory note.

         "TENANT IMPROVEMENTS" shall mean construction to the Properties
completed for the benefit of the tenants' use of the Property.

         "THIRD PARTY DEBT SERVICE" shall mean payments of principal and
interest on Third Party Underlying Obligations.

         "THIRD PARTY UNDERLYING OBLIGATIONS" shall mean those obligations
secured by the Property underlying the Wrap Mortgages held by persons or
entities other than NPA, or its affiliates.

         "THRESHOLD AMOUNT" shall mean payments on the Wrap Mortgages generated
by Proceeds of Sales of the Properties in an amount equal to $45,000,000 in
excess of the Third Party Underlying Obligations as of January 1, 1990 secured
by such Properties. As of December 31, 1998, approximately $36,422,000 had been
applied in reduction of the Threshold Amount.

         "UNAUDITED PARTNERSHIPS" shall mean the Partnerships included in the
MLP which were not audited by the Internal Revenue Service.

         "UNITS" shall mean units of limited partnership interest in the MLP.

         "WRAP MORTGAGES" shall mean the mortgages securing the Wrap Notes which
were delivered to the Pension Groups by the Partnerships at the time of the
acquisition of the Property.

         "WRAP NOTES" shall mean the promissory notes secured by the Wrap
Mortgages.

ITEM 2.  PROPERTIES.

         The MLP's Properties consist primarily of shopping centers and free
standing, single tenant retail stores. As of December 31, 1998, the MLP owned
and operated 49 Properties located in 24 states. Approximately 59% of the
Properties are Single Tenant Properties and 41% are Shopping Center
Properties.

         Set forth below are schedules providing information with respect to the
Properties and the indebtedness secured by the Properties. Schedule 1 provides a
description of the Properties and certain tenant information. Schedule 2
provides certain information regarding tenant lease expirations. Schedule 3
provides information regarding the Third Party Underlying Obligations secured by
the Properties.

         Under applicable law, in certain circumstances, the owner or operator
of real property has an obligation to clean up hazardous and toxic substances on
the property. This obligation is often imposed without regard to the timing,
cause or person responsible for such substances on the property. The presence of
such substances on a Property would have an adverse impact on the operating
costs and sale or refinancing of such Property. None of the Properties are
presently the subject of any environmental enforcement actions under any such
statutes, and the General Partners do not have any information or knowledge
about the presence of such substances on any of the Properties. If it is claimed
or determined that such substances do exist on any of such Properties, the MLP
could be subject to such cleanup obligations. The presence of such substances
may make a Property unmarketable or substantially decrease its value. Any
environmental cleanup expenses incurred in connection with a sale would directly
reduce proceeds derived from the sale of the Property.

ITEM 3.  LEGAL PROCEEDINGS.

         The MLP is involved in various claims and legal actions arising in the
ordinary course of property operations. In the opinion of the General Partners,
the ultimate disposition of these matters will not have a material adverse
effect on the MLP's financial position, results of operations or liquidity.

                                        6
<PAGE>   9
         Thirteen of the Partnerships combined in the MLP filed for protection
under the provisions of Chapter 11 of the U.S. Bankruptcy Code during the period
from 1989 through 1998 following the filing of actions by secured creditors
seeking foreclosure. All of these bankruptcies have been dismissed at the
Partnership's motion or the Partnership's bankruptcy plan was confirmed and the
case closed.

         During 1998 Cahokia Associates ("Cahokia") filed for protection under
the provisions of the U.S. Bankruptcy Code. Cahokia owns and operates the
property located in Cahokia, Illinois. See "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources." Cahokia had been operating as a Debtor-In-Possession since
the filing date. Prior to December 31, 1998, the bankruptcy was dismissed
pursuant to a settlement agreement between Cahokia and the holder of the Third
Party Underlying Mortgage. The agreement was effective January 11, 1999 and
provided for the transfer of the majority of the Cahokia property to the holder
of the Third Party Underlying Mortgage and an option for the mortgage holder to
purchase a portion of the property retained by Cahokia.


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

         Not Applicable.

                                        7
<PAGE>   10
SCHEDULE 1

DESCRIPTION OF PROPERTY AND TENANT INFORMATION

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                                                               Total            Average
           Property                       Total                          Occupancy            Minimum            Rent
           Location                       GLA                               Rate                Rent              PSF
-----------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                             <C>                 <C>                <C>
Ardmore, OK                              216,890                            86.9%             $717,564           $3.81
Borger, TX                                31,750                           100.0%               29,100            0.92
Bowling Green, OH                        135,187                            96.3%              404,877            3.11
Cahokia, IL                              241,327                            87.8%              504,113            2.38
Chesapeake, VA                           162,020                           100.0%              402,725            2.49
Clackamas, OR                             58,543                           100.0%              227,808            3.89
Cottage Grove, MN                        167,114                            90.6%            1,005,942            6.64
Crescent City, CA                         33,000                           100.0%              220,000            6.67
Dunmore, PA                               26,475                           100.0%               78,696            2.97
East Haven, CT                           153,096                            80.6%              556,300            4.51
Escanaba, MI                              40,175                           100.0%              114,715            2.86
Fairborn, OH                             136,555                            94.5%              479,945            3.72
Fairfield, IA                             33,000                           100.0%               37,286            1.13
Federal Way,  WA                          37,560                           100.0%              147,900            3.94
Fond du Lac, WI                          195,027                            96.7%              755,593            4.01
Fort Wayne, IN                           778,500                           100.0%              607,726            0.78
Huntington, WV                           142,055                            93.6%              386,281            2.90
Huntsville, AL                           104,000                           100.0%              244,400            2.35
Huron, SD                                 38,400                           100.0%               48,310            1.26
Hutchinson, MN                            60,842                           100.0%              229,800            3.78
Independence, MO                         134,634                            98.0%              379,734            2.88
International Falls, MN                   60,842                           100.0%              237,000            3.90
Kalamazoo, MI                            120,958                           100.0%              393,362            3.25
Lake Mary, FL                            107,400                           100.0%              923,640            8.60
Lockport, IL                             100,838                            95.2%              326,943            3.40
Marquette, MI                            254,756                            94.5%            1,238,189            5.15
Maryville, MO                             34,955                           100.0%              122,081            3.49
Menominee, MI                             64,588                           100.0%              197,848            3.06
Minot, ND                                 72,897                           100.0%              356,580            4.89
Newberry, SC                              55,552                           100.0%              194,083            3.49
New Hope, MN                             115,492                           100.0%              319,462            2.77
North Augusta, SC                        109,134                            95.3%              257,292            2.47
North Sarasota, FL                       134,805                           100.0%              532,486            3.95
Oak Lawn, IL                             163,143                           100.0%              861,912            5.28
Ocala, FL                                103,964                           100.0%              226,310            2.18
O' Fallon, MO                             91,061                           100.0%              351,365            3.86
Philadelphia, PA                         128,006                           100.0%              556,500            4.35
San Mateo, CA                             84,704                           100.0%              476,546            5.63
Sault Ste. Marie, MI                      92,650                           100.0%              234,049            2.53
Seven Hills, OH                          121,677                           100.0%              318,595            2.62
Sparks, NV                             1,579,000                           100.0%            1,696,878            1.07
Steger, IL                                87,678                           100.0%              261,013            2.98
Taylorville, IL                           43,127                           100.0%              362,955            8.42
Urbana, IL                                55,531                           100.0%              435,378            7.84
Waverly, OH                               55,102                           100.0%              273,678            4.97
Wahpeton, ND                              49,320                           100.0%               38,801            0.79
Washington, IA                            35,600                           100.0%               34,775            0.98
Wheelersburg, OH                         125,958                            71.7%              149,478            1.65
Yazoo City,  MS                           79,996                           100.0%              192,122            2.40
</TABLE>

                                        8
<PAGE>   11
SCHEDULE 1, CONTINUED

DESCRIPTION OF PROPERTY AND TENANT INFORMATION

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                      MAJOR TENANT INFORMATION
   Property                                                                          Annual              Lease
   Location                      Name                                 GLA             Rent             Expiration       Options
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                               <C>               <C>               <C>           <C>
Ardmore, OK                     Kmart*                              83,552          $185,604          28-Feb-2005    10/5 YR
                                Beall                               25,632            83,304          30-Apr-2000     4/5 YR
                                Staples                             22,720           124,900          28-Feb-2009     4/5 YR
Borger, TX                      Safeway                             31,750            95,642          31-Aug-2003     6/5 YR
Bowling Green, OH               Kmart                               87,543           224,000          30-Nov-2012    10/5 YR
Cahokia, IL                     Kmart*                             102,433           179,257          30-Nov-2001     8/5 YR
                                Schnuck Markets*                    32,000           153,942          30-Jun-1999     6/5 YR
                                Goodyear Service Center             26,000            24,133          28-Feb-2004
                                Taco Bell                           32,000            25,990          31-Jan-2000     3/3 YR
Chesapeake, VA                  Kmart                              162,020           402,725          31-Oct-2005    6/10 YR
Clackamas, OR                   Safeway (regional office)           58,543           227,808          14-Jun-2003     6/5 YR
Cottage Grove, MN               Rainbow Foods                       70,130           606,624          11-Jul-2016     6/5 YR
                                National Tea*                       25,397            76,200          28-Feb-1999     3/5 YR
Crescent City, CA               Safeway                             33,000           220,000          31-May-1999     7/5 YR
Dunmore, PA                     Price Chopper                       26,475            78,696          30-Nov-2000     4/5 YR
East Haven, CT                  V F Factory Outlet                  78,000           230,100          31-May-2002     2/5 YR
Escanaba, MI                    Kmart                               40,175           114,715          30-Sep-2001    10/5 YR
Fairborn, OH                    Kmart                               84,180           268,000          31-Jul-2000    10/5 YR
                                Kroger                              30,975           106,120          31-Mar-2001     4/5 YR
Fairfield, IA                   Pamida                              33,000            37,286          30-Jun-2004     3/5 YR
Federal Way,  WA                Safeway                             37,560           147,900          31-Oct-2003     6/5 YR
Fond du Lac, WI                 Kmart                               93,800           267,806          31-Oct-2011    10/5 YR
                                Roundy's                            54,213           153,659          31-Oct-1999     4/5 YR
Fort Wayne, IN                  Kmart  (distribution center)*      778,500           607,726          15-Nov-2003     6/5 YR
Huntington, WV                  Hill's                              85,817           184,000          31-Jul-2003     5/5 YR
                                Office Depot                        25,900            98,420          28-Feb-2005     4/5 YR
Huntsville, AL                  Kmart                              104,000           244,400          30-Nov-2010     4/5 YR
Huron, SD                       Pamida                              38,400            48,310          30-Jun-1999     4/5 YR
Hutchinson, MN                  Kmart                               60,842           229,800          30-Sep-2006    10/5 YR
Independence, MO                Kmart                              116,799           308,634          31-Mar-2010     8/5 YR
International Falls, MN         Kmart                               60,842           237,000          31-Jul-2006    10/5 YR
Kalamazoo, MI                   Kmart                               84,180           248,770          29-Feb-2000    10/5 YR
                                Ace Hardware                        30,650           101,829          26-Jul-2000     3/5 YR
Lake Mary, FL                   Builder's Square*                  107,400           923,640          31-Dec-2017    10/5 YR
Lockport, IL                    Kmart                               54,000           133,684          30-Jun-2004    10/5 YR
                                Sterk's Super Foods, Inc.           35,170           121,603          31-May-2006     3/5 YR
Marquette, MI                   Kmart                               85,480           218,657          30-Nov-1999    10/5 YR
                                Younker's                           44,068            92,543          01-Oct-2001    1/10 YR
                                J.C. Penney                         33,996           118,286          31-Aug-2009     4/5 YR
Maryville, MO                   J.C. Penney                         22,060            65,502          31-Oct-2001     3/5 YR
Menominee, MI                   Kmart                               64,588           197,848          30-Apr-2010     8/5 YR
Minot, ND                       Kmart*                              72,897           356,580          30-Oct-2005    10/5 YR
Newberry, SC                    Kmart*                              55,552           194,083          30-Jun-2005    10/5 YR
New Hope, MN                    Kmart                              115,492           319,462          30-Jun-2010     9/5 YR
North Augusta, SC               CVS                                 84,000           197,400          31-Oct-1999     2/3 YR
North Sarasota, FL              Kmart                               84,180           280,440          30-Nov-2003    10/5 YR
                                Uptons                              40,000           141,040          20-Nov-2003     5/5 YR
Oak Lawn, IL                    Kmart                              104,568           447,150          31-May-2003    10/5 YR
                                Jewel Foods                         58,575           414,762          03-Jan-2004     3/5 YR
Ocala, FL                       Kmart                              103,964           226,310          30-Jun-2002     9/5 YR
O' Fallon, MO                   Kmart                               83,061           279,415          30-Nov-2005    10/5 YR
Philadelphia, PA                Kmart                               91,033           388,500          31-Mar-2005    10/5 YR
                                Acme                                36,973           168,000          30-Jun-2000     7/5 YR
</TABLE>

         * Tenant is vacant and continues to pay rent under the terms of its
lease.

                                        9
<PAGE>   12
SCHEDULE 1, CONTINUED

DESCRIPTION OF PROPERTY AND TENANT INFORMATION

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                  MAJOR TENANT INFORMATION
   Property                                                                             Annual              Lease
   Location                       Name                                 GLA               Rent             Expiration    Options
---------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                               <C>               <C>                   <C>          <C>
San Mateo, CA                   Kmart                                 84,704          $476,546            31-Jan-2005    1/10 YR
Sault Ste. Marie, MI            Kmart                                 92,650           234,049            30-Sep-2016    10/5 YR
Seven Hills, OH                 Kmart                                121,677           318,595            31-Aug-2002     9/5 YR
Sparks, NV                      Kmart (distribution center)        1,579,000         1,696,878            12-Dec-2006     7/5 YR
Steger, IL                      Kmart                                 87,678           261,013            30-Oct-2010    10/5 YR
Taylorville, IL                 Kroger                                27,958           237,761            31-Mar-2007     5/5 YR
                                CVS                                   10,069            81,319            31-Mar-2007     5/5 YR
Urbana, IL                      Jerry's IGA                           43,667           370,648            31-Mar-2007     5/5 YR
Waverly, OH                     Kroger                                28,199           115,504            30-Nov-1999     5/5 YR
                                CVS                                   10,069            47,828            30-Nov-1999     4/5 YR
Wahpeton, ND                    Pamida                                49,320            38,801            30-Jun-2004     3/5 YR
Washington, IA                  Pamida                                35,600            34,775            30-Jun-2004     3/5 YR
Wheelersburg, OH                Quality Farm & Fleet                  53,844            53,844            28-Feb-2000     3/5 YR
                                Kroger                                25,168            69,212            31-Jul-1999     4/5 YR
Yazoo City,  MS                 Miss. Baptist Medical Ctr.            20,116            47,273            31-May-2000     2/5 YR
</TABLE>

         * Tenant is vacant and continues to pay rent under the terms of its
lease.

                                       10
<PAGE>   13
SCHEDULE 2

TENANT LEASE EXPIRATIONS

<TABLE>
<CAPTION>
                                                                         1999                                  2000
                                                Total      Number                             Number
    Property                       Total       Minimum       of        Minimum                  of           Minimum
    Location                        GLA          Rent      Tenants       Rent        S.F.     Tenants          Rent         S.F.
    --------                        ---          ----      -------       ----        ----     -------          ----         ----
<S>                             <C>           <C>          <C>         <C>         <C>        <C>           <C>           <C>
Ardmore, OK                       216,890      $717,564       9        $112,563     18,932       8           $164,018      54,208
Borger, TX                         31,750        29,100
Bowling Green, OH                 135,187       404,877       3         180,877     42,644
Cahokia, IL                       241,327       504,113       3         164,442     34,700       3             59,175      37,000
Chesapeake, VA                    162,020       402,725
Clackamas, OR                      58,543       227,808
Cottage Grove, MN                 167,114     1,005,942       4         117,436     28,222       3            165,317      20,223
Crescent City, CA                  33,000       220,000       1         220,000     33,000
Dunmore, PA                        26,475        78,696                                          1             78,696      26,475
East Haven, CT                    153,096       556,300       1          34,260      6,850       1             27,000       4,500
Escanaba, MI                       40,175       114,715
Fairborn, OH                      136,555       479,945       1          43,125      7,500       2            331,825      91,080
Fairfield, IA                      33,000        37,286
Federal Way,  WA                   37,560       147,900
Fond du Lac, WI                   195,027       755,593       4         216,984     59,788       2             54,960       4,850
Fort Wayne, IN                    778,500       607,726
Huntington, WV                    142,055       386,281       3          36,278      8,228       2             13,740       2,160
Huntsville, AL                    104,000       244,400
Huron, SD                          38,400        48,310       1          48,310     38,400
Hutchinson, MN                     60,842       229,800
Independence, MO                  134,634       379,734       2          24,600      4,995
International Falls, MN            60,842       237,000
Kalamazoo, MI                     120,958       393,362       1          13,195      1,904       3            380,167     119,054
Lake Mary, FL                     107,400       923,640
Lockport, IL                      100,838       326,943                                          1             28,651       3,755
Marquette, MI                     254,756     1,238,189       7         337,689     94,086       11           255,777      19,055
Maryville, MO                      34,955       122,081                                          2             18,550       4,200
Menominee, MI                      64,588       197,848
Minot, ND                          72,897       356,580
New Hope, MN                      115,492       319,462
Newberry, SC                       55,552       194,083
North Augusta, SC                 109,134       257,292       1         197,400     84,000
North Sarasota, FL                134,805       532,486       1          37,890      5,000
O' Fallon, MO                      91,061       348,065                                          1             19,000       2,000
Oak Lawn, IL                      163,143       856,567
Ocala, FL                         103,964       226,310
Philadelphia, PA                  128,006       556,500                                          1            168,000      36,973
San Mateo, CA                      84,704       476,546
Sault Ste. Marie, MI               92,650       234,049
Seven Hills, OH                   121,677       318,595
Sparks, NV                      1,579,000     1,696,878
Steger, IL                         87,678       261,013
Taylorville, IL                    43,127       362,955                                          1             18,375       2,100
Urbana, IL                         55,531       435,378       1           5,250      1,750       1              6,678       1,050
Wahpeton, ND                       49,320        38,801
Washington, IA                     35,600        34,775
Waverly, OH                        55,102       273,678       5         198,442     43,468       2             63,236       9,634
Wheelersburg, OH                  125,958       149,478       2          79,512     27,228       2             60,772      55,444
Yazoo City,  MS                    79,996       192,122                                          3             95,873      40,116
----------------------------------------------------------------------------------------------------------------------------------
TOTALS                          7,054,884    19,139,491      50       2,068,255    540,695       50         2,009,808     533,877
----------------------------------------------------------------------------------------------------------------------------------
ANNUAL % TO TOTAL                  100.0%        100.0%                   10.8%       7.7%                      10.5%        7.6%
----------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE %                                                              10.8%       7.7%                      21.3%       15.2%
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       11
<PAGE>   14
SCHEDULE 2, CONTINUED

TENANT LEASE EXPIRATIONS

<TABLE>
<CAPTION>
                                                                           2001                                 2002
                                                 Total        Number                              Number
   Property                      Total          Minimum        of       Minimum                     of        Minimum
   Location                       GLA             Rent       Tenants      Rent           S.F.     Tenants       Rent         S.F.
   --------                       ---             ----       -------      ----           ----     -------       ----         ----
<S>                            <C>             <C>           <C>       <C>            <C>         <C>        <C>          <C>
Ardmore, OK                     216,890         $717,564       5        $112,166        13,554       4        $76,130      10,048
Borger, TX                       31,750           29,100
Bowling Green, OH               135,187          404,877
Cahokia, IL                     241,327          504,113       2         190,057       104,233       2         21,806       2,744
Chesapeake, VA                  162,020          402,725
Clackamas, OR                    58,543          227,808
Cottage Grove, MN               167,114        1,005,942       2         225,074        94,756       3         28,400       7,900
Crescent City, CA                33,000          220,000
Dunmore, PA                      26,475           78,696
East Haven, CT                  153,096          556,300       1          23,750         2,500       1        230,100      78,000
Escanaba, MI                     40,175          114,715       1         114,715        40,175
Fairborn, OH                    136,555          479,945       2         148,120        37,975
Fairfield, IA                    33,000           37,286
Federal Way,  WA                 37,560          147,900
Fond du Lac, WI                 195,027          755,593       1          24,831         3,375       1         51,000       6,000
Fort Wayne, IN                  778,500          607,726
Huntington, WV                  142,055          386,281                                             1          3,675         735
Huntsville, AL                  104,000          244,400
Huron, SD                        38,400           48,310
Hutchinson, MN                   60,842          229,800
Independence, MO                134,634          379,734       3          45,000         9,600
International Falls, MN          60,842          237,000
Kalamazoo, MI                   120,958          393,362
Lake Mary, FL                   107,400          923,640
Lockport, IL                    100,838          326,943
Marquette, MI                   254,756        1,238,189       7         176,285        58,879       6        146,939      13,188
Maryville, MO                    34,955          122,081       3          89,531        29,355       1         14,000       1,400
Menominee, MI                    64,588          197,848
Minot, ND                        72,897          356,580
New Hope, MN                    115,492          319,462
Newberry, SC                     55,552          194,083
North Augusta, SC               109,134          257,292                                             1         63,600      19,964
North Sarasota, FL              134,805          532,486       3          50,841         3,600
O' Fallon, MO                    91,061          348,065       1          27,000         3,000       1         25,950       3,000
Oak Lawn, IL                    163,143          856,567
Ocala, FL                       103,964          226,310                                             1        226,310     103,964
Philadelphia, PA                128,006          556,500
San Mateo, CA                    84,704          476,546
Sault Ste. Marie, MI             92,650          234,049
Seven Hills, OH                 121,677          318,595                                             1        318,595     121,677
Sparks, NV                    1,579,000        1,696,878
Steger, IL                       87,678          261,013
Taylorville, IL                  43,127          362,955                                             1         25,500       3,000
Urbana, IL                       55,531          435,378       1           8,960         1,400       2         44,220       7,664
Wahpeton, ND                     49,320           38,801
Washington, IA                   35,600           34,775
Waverly, OH                      55,102          273,678       1          12,000         2,000
Wheelersburg, OH                125,958          149,478
Yazoo City,  MS                  79,996          192,122       1          25,728         9,600       2         19,240       3,400
----------------------------------------------------------------------------------------------------------------------------------
TOTALS                        7,054,884       19,139,491      34       1,274,058       414,002       28     1,295,465     382,684
----------------------------------------------------------------------------------------------------------------------------------
ANNUAL % TO TOTAL                100.0%           100.0%                    6.7%          5.9%                   6.8%        5.4%
----------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE %                                                               28.0%         21.1%                  34.7%       26.5%
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       12
<PAGE>   15
SCHEDULE 2, CONTINUED

TENANT LEASE EXPIRATIONS

<TABLE>
<CAPTION>
                                                                                    2003
                                                         Total      Number
   Property                              Total          Minimum       of           Minimum
   Location                               GLA             Rent      Tenants          Rent          S.F.
   --------                               ---             ----      -------          ----          ----
<S>                                   <C>             <C>           <C>           <C>           <C>
Ardmore, OK                             216,890         $717,564       1           $39,825         4,425
Borger, TX                               31,750           29,100       1            29,100        31,750
Bowling Green, OH                       135,187          404,877
Cahokia, IL                             241,327          504,113
Chesapeake, VA                          162,020          402,725
Clackamas, OR                            58,543          227,808       1           227,808        58,543
Cottage Grove, MN                       167,114        1,005,942
Crescent City, CA                        33,000          220,000
Dunmore, PA                              26,475           78,696
East Haven, CT                          153,096          556,300
Escanaba, MI                             40,175          114,715
Fairborn, OH                            136,555          479,945
Fairfield, IA                            33,000           37,286
Federal Way,  WA                         37,560          147,900       1           147,900        37,560
Fond du Lac, WI                         195,027          755,593
Fort Wayne, IN                          778,500          607,726       1           607,726       778,500
Huntington, WV                          142,055          386,281       4           225,093        94,352
Huntsville, AL                          104,000          244,400
Huron, SD                                38,400           48,310
Hutchinson, MN                           60,842          229,800
Independence, MO                        134,634          379,734
International Falls, MN                  60,842          237,000
Kalamazoo, MI                           120,958          393,362
Lake Mary, FL                           107,400          923,640
Lockport, IL                            100,838          326,943       1            27,156         5,153
Marquette, MI                           254,756        1,238,189       1            64,858         4,041
Maryville, MO                            34,955          122,081
Menominee, MI                            64,588          197,848
Minot, ND                                72,897          356,580
New Hope, MN                            115,492          319,462
Newberry, SC                             55,552          194,083
North Augusta, SC                       109,134          257,292
North Sarasota, FL                      134,805          532,486       2           421,480       124,180
O' Fallon, MO                            91,061          348,065
Oak Lawn, IL                            163,143          856,567       1           447,150       104,568
Ocala, FL                               103,964          226,310
Philadelphia, PA                        128,006          556,500
San Mateo, CA                            84,704          476,546
Sault Ste. Marie, MI                     92,650          234,049
Seven Hills, OH                         121,677          318,595
Sparks, NV                            1,579,000        1,696,878
Steger, IL                               87,678          261,013
Taylorville, IL                          43,127          362,955
Urbana, IL                               55,531          435,378
Wahpeton, ND                             49,320           38,801
Washington, IA                           35,600           34,775
Waverly, OH                              55,102          273,678
Wheelersburg, OH                        125,958          149,478       1             9,194         7,662
Yazoo City,  MS                          79,996          192,122
---------------------------------------------------------------------------------------------------------
TOTALS                                7,054,884       19,139,491      15         2,247,290     1,250,734
---------------------------------------------------------------------------------------------------------
ANNUAL % TO TOTAL                        100.0%           100.0%                     11.7%         17.7%
---------------------------------------------------------------------------------------------------------
CUMULATIVE %                                                                         46.5%         44.3%
---------------------------------------------------------------------------------------------------------
</TABLE>

                                       13
<PAGE>   16
SCHEDULE 3

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
THIRD PARTY UNDERLYING OBLIGATIONS
                                                                                                                       PRINCIPAL
   PROPERTY                                                             MORTGAGE     INTEREST                          BALANCE AT
   LOCATION                             MORTGAGEE (S)                     TYPE         RATE            DUE DATE        31-DEC-98
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                                     <C>         <C>                <C>             <C>
Ardmore, OK                     Pacific Life Insurance Company             1st         9.50%           01-Aug-2010     $5,292,388
Borger, TX                      First Oxford Corporation                   1st        10.00%           01-Oct-1998        225,770
Bowling Green, OH               Credit Suisse First Boston (b)             1st         7.05%           31-Jul-2008      2,560,982
Cahokia, IL                     Equitable Life Assurance Society           1st         8.63%           01-Dec-2006        237,687
                                Equitable Life Assurance Society           1st         8.63%           01-Dec-2006      1,546,169
                                Equitable Life Assurance Society           1st         9.25%           01-Dec-2004        375,130
                                GE Capital Asset Management                1st        12.00%           01-Feb-2000          6,308
Chesapeake, VA                  John Hancock Real Estate Finance           1st         8.00%           01-Jan-2004      1,379,351
                                Lawrence Kadish                            2nd         9.00%           01-Jan-2006        492,849
Clackamas, OR                   First Oxford Corporation                   1st         9.00%           01-Jul-2003      1,263,683
Cottage Grove, MN               IDS Life Insurance (d)                     1st         8.75%           01-Nov-2016      5,746,719
Crescent City, CA               First Oxford Corporation                   1st         9.50%           01-May-1999        496,454
Dunmore, PA                     NONE
East Haven, CT                  Aetna Life Insurance Company               1st         8.88%           01-Sep-2005      1,937,921
                                Beal Bank                                  2nd         8.53%           01-Aug-2005      1,151,303
Escanaba, MI                    Developers Diversified                     1st         9.75%           01-Nov-2012        856,546
Fairborn, OH                    Aetna Life Insurance Company               1st         9.50%           01-Sep-2004      1,453,169
                                Federal Deposit Insurance Corp.            2nd        10.35%           27-May-2004        794,941
Fairfield, IA                   State of Wisconsin Investment Brd          1st         9.13%           01-Jul-1999         66,174
Federal Way,  WA                First Oxford Corporation                   1st         9.50%           01-Oct-1998        218,309
Fond du Lac, WI                 Associated Commercial Mortgage             1st         8.75%           12-Sep-2002      4,300,155
Fort Wayne, IN                  New York Life Insurance Company            1st         8.63%           15-Nov-2003      2,439,185
Huntington, WV                  Suburban Capital Markets, Inc. (a)         1st         9.13%           01-Feb-2007      1,712,317
Huntsville, AL                  Credit Suisse First Boston (b)             1st         7.05%           31-Jul-2008        707,505
Huron, SD                       State of Wisconsin Investment Brd          1st         9.13%           01-Jul-1999         87,463
Hutchinson, MN                  Developers Diversified                    Wrap         8.75%           01-Jul-2013      1,878,955
Independence, MO                Credit Suisse First Boston (b)             1st         7.05%           31-Jul-2008      1,604,351
International Falls, MN         Developers Diversified                    Wrap         8.75%           01-Aug-2013      1,938,632
Kalamazoo, MI                   New York Life Insurance Company            1st         8.63%           10-Dec-2000        944,151
Lake Mary, FL                   Kidder Peabody Mortgage Capital            1st         7.88%           01-Jan-2016      8,623,954
Lockport, IL                    Credit Suisse First Boston (b)             1st         7.05%           31-Jul-2008      1,664,137
Marquette, MI                   State of California Public
                                  Employees Retirement System              1st         8.87%           01-Nov-1999        309,466
                                Union Labor Life Insurance Co.             1st         7.88%           01-Nov-2003      6,268,976
Maryville, MO                   NONE
Menominee, MI                   NONE
Minot, ND                       First American Bank and Trust Co.          1st         9.00%           15-Jan-2006      1,875,000
Newberry, SC                    Western National Life Insurance Co.        1st        13.00%           01-Sep-2008      1,031,530
New Hope, MN                    Credit Suisse First Boston (b)             1st         7.05%           31-Jul-2008      1,753,825
North Augusta, SC               E & H Properties. Inc.                     1st         8.00%           01-Oct-1999        116,379
North Sarasota, FL              Credit Suisse First Boston (b)             1st         7.05%           31-Jul-2008      3,188,769
Oak Lawn, IL                    Board of Trustees NECA Pension
                                  Benefit Trust Fund                       1st         8.50%           30-Jun-2003      2,907,307
Ocala, FL                       B & K Properties                           1st         9.00%           01-Mar-2013      1,673,594
O' Fallon, MO                   Credit Suisse First Boston (b)             1st         7.05%           31-Jul-2008      2,331,785
Philadelphia, PA                Equitable Life Assurance Society (c)       1st         9.25%           01-Jun-2010      2,778,001
</TABLE>


         (a)      Mortgages are cross - collateralized and cross - defaulted
         (b)      Mortgages are cross - collateralized and cross - defaulted
         (c)      Loan is callable on August 1, 2000
         (d)      Loan is callable on November 1, 2006

                                       14
<PAGE>   17
SCHEDULE 3, CONTINUED

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                              THIRD PARTY UNDERLYING OBLIGATIONS
                                                                                                                       PRINCIPAL
    PROPERTY                                                           MORTGAGE      INTEREST                          BALANCE AT
    LOCATION                             MORTGAGEE (S)                   TYPE          RATE            DUE DATE        31-DEC-98
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                                    <C>           <C>               <C>             <C>
San Mateo, CA                   Meritor Savings Bank                      1st          8.25%           01-Feb-2005     $2,296,869
Sault Ste. Marie, MI            EDC County of Chippewa, MI                1st          6.70%           01-Jan-2007      1,010,000
Seven Hills, OH                 B & K Properties                          1st          9.75%           01-Nov-2012      2,017,766
Sparks, NV                      Prin & Company                            1st          8.60%           12-Dec-2006      5,973,438
                                Teachers Retirement of Texas              1st          9.75%           12-Dec-2006      3,357,637
                                Bank of Nevada                            1st          8.60%           12-Dec-2006        267,532
Steger, IL                      Credit Suisse First Boston (b)            1st          7.05%           31-Jul-2008      2,271,903
Taylorville, IL                 Suburban Capital Markets, Inc. (a)        1st          9.13%           01-Feb-2007      1,476,706
Urbana, IL                      Credit Suisse First Boston (b)            1st          7.05%           31-Jul-2008      2,471,295
Waverly, OH                     Suburban Capital Markets, Inc. (a)        1st          9.13%           01-Feb-2007      1,476,706
Wahpeton, ND                    State of Wisconsin Investment Brd         1st          9.13%           01-Jul-1999         84,540
Washington, IA                  State of Wisconsin Investment Brd         1st          9.13%           01-Jul-1999         63,538
Wheelersburg, OH                Equitable Life Assurance Society          1st         10.00%           31-Dec-2000      1,169,274
Yazoo City,  MS                 Credit Suisse First Boston (b)            1st          7.05%           31-Jul-2008      1,145,962
</TABLE>

         (a)      Mortgages are cross - collateralized and cross - defaulted
         (b)      Mortgages are cross - collateralized and cross - defaulted
         (c)      Loan is callable on August 1, 2000
         (d)      Loan is callable on November 1, 2006

                                       15
<PAGE>   18
SCHEDULE 3, CONTINUED

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                             THIRD PARTY UNDERLYING OBLIGATIONS
                                                                                                                     OWNERSHIP
                                                                                    ANNUAL              BALLOON      INTEREST
  PROPERTY                                                             MORTGAGE      DEBT               DUE AT         FEE/
  LOCATION                             MORTGAGEE (S)                     TYPE       SERVICE           EXPIRATION    LEASEHOLD
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                                    <C>         <C>                <C>          <C>
Ardmore, OK                     Pacific Life Insurance Company            1st       $694,308          $1,275,803       Fee
Borger, TX                      First Oxford Corporation                  1st         29,100             225,770       Fee
Bowling Green, OH               Credit Suisse First Boston (b)            1st        206,220           2,207,962       Fee
Cahokia, IL                     Equitable Life Assurance Society          1st         38,539                   0       Fee
                                Equitable Life Assurance Society          1st        250,702                   0
                                Equitable Life Assurance Society          1st         79,680                   0
                                GE Capital Asset Management               1st         19,820                   0
Chesapeake, VA                  John Hancock Real Estate Finance          1st        334,776                   0    Leasehold
                                Lawrence Kadish                           2nd         44,356                   0
Clackamas, OR                   First Oxford Corporation                  1st        227,100             637,586       Fee
Cottage Grove, MN               IDS Life Insurance (d)                    1st        636,272             105,663       Fee
Crescent City, CA               First Oxford Corporation                  1st        217,800             438,896       Fee
Dunmore, PA                     NONE                                                                                Leasehold
East Haven, CT                  Aetna Life Insurance Company              1st        381,258                   0       Fee
                                Beal Bank                                 2nd        116,716             985,836
Escanaba, MI                    Developers Diversified                    1st        112,032              19,146       Fee
Fairborn, OH                    Aetna Life Insurance Company              1st        329,406                   0    Leasehold
                                Federal Deposit Insurance Corp.           2nd         88,044             751,017
Fairfield, IA                   State of Wisconsin Investment Brd         1st         36,733              34,941       Fee
Federal Way,  WA                First Oxford Corporation                  1st         45,000             218,309       Fee
Fond du Lac, WI                 Associated Commercial Mortgage            1st        466,599           3,900,911       Fee
Fort Wayne, IN                  New York Life Insurance Company           1st        605,724                   0       Fee
Huntington, WV                  Suburban Capital Markets, Inc. (a)        1st        177,949           1,454,799       Fee
Huntsville, AL                  Credit Suisse First Boston (b)            1st         56,976             609,982    Leasehold
Huron, SD                       State of Wisconsin Investment Brd         1st         48,420              46,059       Fee
Hutchinson, MN                  Developers Diversified                   Wrap        229,632                   0       Fee
Independence, MO                Credit Suisse First Boston (b)            1st        129,192           1,383,198       Fee
International Falls, MN         Developers Diversified                   Wrap        236,250                   0       Fee
Kalamazoo, MI                   New York Life Insurance Company           1st        283,500             524,638    Leasehold
Lake Mary, FL                   Kidder Peabody Mortgage Capital           1st        919,440                   0       Fee
Lockport, IL                    Credit Suisse First Boston (b)            1st        134,004           1,434,746       Fee
Marquette, MI                   State of California Public
                                   Employees Retirement System            1st        177,600             180,107    Leasehold
                                Union Labor Life Insurance Co.            1st        615,161           5,542,557
Maryville, MO                   NONE                                                                                Leasehold
Menominee, MI                   NONE                                                                                Leasehold
Minot, ND                       First American Bank and Trust Co.         1st        347,366                   0       Fee
Newberry, SC                    Western National Life Insurance Co.       1st        187,154                   0       Fee
New Hope, MN                    Credit Suisse First Boston (b)            1st        141,216           1,512,067       Fee
North Augusta, SC               E & H Properties. Inc.                    1st        154,020                   0    Leasehold
North Sarasota, FL              Credit Suisse First Boston (b)            1st        256,764           2,749,213       Fee
Oak Lawn, IL                    Board of Trustees NECA Pension
                                   Benefit Trust Fund                     1st        433,810           1,888,273    Leasehold
Ocala, FL                       B & K Properties                          1st        217,350                   0       Fee
O' Fallon, MO                   Credit Suisse First Boston (b)            1st        187,764           2,010,362       Fee
Philadelphia, PA                Equitable Life Assurance Society (c)      1st        395,220                   0    Leasehold
</TABLE>


         (a)      Mortgages are cross - collateralized and cross - defaulted
         (b)      Mortgages are cross - collateralized and cross - defaulted
         (c)      Loan is callable on August 1, 2000
         (d)      Loan is callable on November 1, 2006

                                       16
<PAGE>   19
SCHEDULE 3, CONTINUED

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                             THIRD PARTY UNDERLYING OBLIGATIONS
                                                                                                                        OWNERSHIP
                                                                                        ANNUAL             BALLOON      INTEREST
  PROPERTY                                                               MORTGAGE        DEBT               DUE AT        FEE/
  LOCATION                              MORTGAGEE (S)                      TYPE         SERVICE           EXPIRATION    LEASEHOLD
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                                      <C>          <C>                <C>            <C>
San Mateo, CA                   Meritor Savings Bank                        1st         $474,046                  $0    Leasehold
Sault Ste. Marie, MI            EDC County of Chippewa, MI                  1st          131,320                   0       Fee
Seven Hills, OH                 B & K Properties                            1st          263,917              66,537    Leasehold
Sparks, NV                      Prin & Company                              1st        1,040,954                   0       Fee
                                Teachers Retirement of Texas                1st          609,303                   0
                                Bank of Nevada                              1st           46,621                   0
Steger, IL                      Credit Suisse First Boston (b)              1st          182,952           1,958,814       Fee
Taylorville, IL                 Suburban Capital Markets, Inc. (a)          1st          153,404           1,254,615       Fee
Urbana, IL                      Credit Suisse First Boston (b)              1st          198,996           2,130,640       Fee
Waverly, OH                     Suburban Capital Markets, Inc. (a)          1st          153,404           1,254,615       Fee
Wahpeton, ND                    State of Wisconsin Investment Brd           1st           46,751              44,470       Fee
Washington, IA                  State of Wisconsin Investment Brd           1st           35,063              33,353       Fee
Wheelersburg, OH                Equitable Life Assurance Society            1st          116,927           1,169,274       Fee
Yazoo City,  MS                 Credit Suisse First Boston (b)              1st           92,280             987,998       Fee
</TABLE>

         (a)      Mortgages are cross - collateralized and cross - defaulted
         (b)      Mortgages are cross - collateralized and cross - defaulted
         (c)      Loan is callable on August 1, 2000
         (d)      Loan is callable on November 1, 2006

                                       17
<PAGE>   20
                                     PART II


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

                  I.    NO TRADING MARKET

         There is no trading market for the Units in the MLP. MLP Units are not
transferrable except by will, inheritance or operation of law. To date no
transfers other than those by will, inheritance and operation of law have been
permitted.

         In addition, the Partnership Agreement places additional restrictions
on the transferability of the Units. The Limited Partners of the MLP are
prohibited from selling their Units unless such sale is at the Managing General
Partner's direction, is accomplished in a single transaction involving all
Limited Partners' interests to a single purchaser, and is accomplished
simultaneously with the sale of the Equity General Partner's interest in the
MLP.

         As of December 31, 1998, there were 97,752 Units outstanding held by
approximately 2,600 Limited Partners.


                  II.   DISTRIBUTIONS OF CASH FLOW FROM OPERATIONS

         The MLP may make annual distributions to its partners in an aggregate
amount equal to its Cash Flow from Operations. It is not anticipated that the
MLP will be in a position to distribute Cash Flow from Operations to its
partners in the foreseeable future.

         The MLP may not reinvest Cash Flow from Operations in additional real
estate investments.


                  III.  PROCEEDS OF SALES DISTRIBUTIONS

         The Proceeds of Sales of the Properties may not be reinvested in
additional real properties, except as permitted with respect to transactions
that are non-taxable in whole or in substantial part under Section 1031 or 1033
of the Internal Revenue Code. The Proceeds of Sales of the Properties, after
payment of related expenses and indebtedness and provision for reasonable
reserves, will be available for MLP purposes, including paying Debt Service or
providing for Capital Improvements with respect to other Properties owned by the
MLP. All proceeds not utilized for MLP purposes will, after making the payments
required by the Restructuring Agreement with respect to the Wrap Mortgages, be
distributed to the partners of the MLP.

         The Restructuring Agreement provides for a sharing of cash from the
Proceeds of Sales of the Properties after repayment of the Third Party
Underlying Obligations once the net Proceeds of Sale of the Properties exceed
the Threshold Amount. Additionally, the Limited Partners of the MLP receive 40%
of the Cash Flow from Operations, if any, in excess of Debt Service and any
Capital Improvements and Reserves as considered necessary. The remaining cash
flow, if any, is applied to the Wrap Mortgages in payment of accrued interest
and then principal.

         The MLP has not made any Proceeds of Sales Distributions to its
partners since its organization.


                  IV.  CERTAIN INCOME TAX CONSIDERATIONS

         A.  RECOGNITION OF GAIN

         It is anticipated that the forgiveness of Wrap Mortgages and the
process of selling Properties, which are owned by Unaudited Partnerships, and
applying sales proceeds to make payments on the Wrap Mortgages will require the
Limited Partners to report substantial taxable income when the Properties are
sold without the corresponding receipt of any cash proceeds therefrom (unless
and until the Threshold Amount has been exceeded).

         Limited Partners are allocated their share of the MLP's taxable income
and gain even if they receive no cash distributions from the MLP with which to
pay any resulting tax liability, and will be allocated their share of the MLP's
tax losses, including depreciation deductions. It is anticipated that the MLP
will generate gradually increasing amounts (which will ultimately be
substantial) of taxable income, inasmuch as interest expense and depreciation
expense are gradually decreasing each year.

                                       18
<PAGE>   21
         As and when the Properties are sold or otherwise disposed of (and
whether or not any cash is distributed to Limited Partners in respect of such
sales), all taxable income will be allocated among those Limited Partners who
were partners in the Partnership which owned the Property prior to the
Consolidation up to the amount by which the fair market value of such Properties
exceeded their adjusted basis at the time of contribution to the MLP (gain in
excess of such amounts will be allocated ratably among all Limited Partners).
This rule does not apply to tax-free exchanges except to the extent of cash or
"other property" received.

         B.  TREATMENT OF DISTRIBUTIONS BY THE MLP

         Cash distributions made to a Limited Partner are not, per se, taxable;
rather, they represent a return of capital up to the amount of his adjusted
basis in his interest in the MLP. A return of capital generally does not result
in any recognition of gain or loss for federal income tax purposes, but reduces
the recipient's adjusted basis in his investment. Certain partners whose returns
were audited and adjusted (in connection with their investment in NPA sponsored
limited partnerships) may have signed a closing agreement with the Internal
Revenue Service ("IRS"); pursuant to the terms of such closing agreement, their
tax treatment may vary from the foregoing; such partners are urged to consult
with their own tax advisors with respect to this issue.

         Distributions, if any, in excess of a Limited Partner's adjusted basis
in his MLP interest immediately prior thereto will result in the recognition of
gain to that extent. Except in the unlikely event that the MLP is treated for
tax purposes as a "dealer" in real property, such gain generally should be
capital gain.

         C.  OPERATING INCOME (LOSS) OF THE MLP

         Each Limited Partner will receive an annual Schedule K-1 (U.S. Form
1065) to indicate his share of the MLP's taxable income (loss) for each tax
year. Such income (loss), rather than the distributions described in Part B
above, is reportable by the Limited Partner. Since any loss generated by the MLP
is, with respect to Limited Partners, a passive loss, the deductibility of such
loss is governed by Section 469, Internal Revenue Code of 1986, and may be
limited thereby.

         Certain Partnerships were audited by the IRS (the "Audited
Partnerships") and the partners thereof executed an agreement relating to their
past and future federal tax liability (the "Closing Agreement"). The foregoing
paragraph applies to those investors who have not signed a Closing Agreement
with IRS with respect to their Units. As to those Limited Partners who have
signed such a Closing Agreement, the appropriate tax treatment may differ from
the foregoing and is governed by the Closing Agreement. Again, each affected
Limited Partner is urged to consult with his own tax advisors on this issue.

                                       19
<PAGE>   22
ITEM 6.  SELECTED FINANCIAL DATA

         The following is selected financial data for the MLP for the five years
ended December 31, 1998 derived from the audited financial statements of the MLP
prepared in conformity with generally accepted accounting principles (GAAP). The
selected financial data set forth below should be read in conjunction with
"Managements Discussion and Analysis of Financial Condition and Results of
Operations" and with the Combined Financial Statements of the MLP and the notes
thereto included elsewhere in this Form 10-K.


<TABLE>
<CAPTION>
                                                 Year Ended December 31
                                          (In Thousands, except per unit data)

                                      1998             1997               1996            1995              1994
                                      ----             ----               ----            ----              ----
<S>                                 <C>              <C>               <C>              <C>               <C>
INCOME:
Rental Income                       $ 21,782         $ 22,876          $ 23,984         $ 23,976          $ 24,486
Other Charges to tenants               6,682            6,884             6,819            9,849             8,378
Interest income                          200              136               129              299               443
Other income                              62               97
                                    --------         --------          --------         --------          --------
TOTAL INCOME                          28,726           29,993            30,932           34,124            33,307
                                    --------         --------          --------         --------          --------


OPERATING EXPENSES:
Interest expense                      18,035           23,038            23,054           23,770            24,109
Other operating expenses               9,886           11,797            12,365           12,173            12,746
Depreciation and
 amortization                          8,141            8,865             8,839            8,885             9,082
                                    --------         --------          --------         --------          --------
Total Operating Expenses             (36,062)          43,700            44,258           44,828            45,937
                                    --------         --------          --------         --------          --------
OPERATING LOSS                        (7,336)         (13,707)          (13,326)         (10,704)          (12,630)
                                    --------         --------          --------         --------          ---------

OTHER EXPENSES:
Net (loss) gain on
 disposition of properties            (11,894)       $   (866)              454              103           (15,763)
Write down of rental
 property                               -              (1,000)           (1,100)            -                  -
                                    --------         --------          --------         ---------         ---------
LOSS BEFORE EXTRAORDINARY
 ITEM                                (19,230)         (15,573)          (13,972)         (10,601)          (28,393)
                                    --------         --------          --------         ---------         --------- 
EXTRAORDINARY ITEM:
Forgiveness of wraparound
 mortgages payable on
 disposition of properties            51,183              373               493               12            12,680
                                    --------         --------          --------         --------          --------
NET INCOME (LOSS)                   $ 31,953         $(15,200)         $(13,479)        $(10,613)         $(15,713)
                                    ========         ========          ========         ========          ========

PER UNIT DATA:
Operating Loss                      $ (74.05)        $(137.07)         $(133.26)        $(107.04)         $(126.30)
                                    ========         ========          ========         ========          ========
Net Income (Loss)                   $ 322.55         $(152.00)         $(134.79)        $(106.13)         $(157.13)
                                    ========         ========          ========         ========          ========

Weighted average units
 outstanding                          99,063          100,000           100,000          100,000           100,000
                                    ========         ========          ========         ========          ========

ASSETS:
Rental Property - Net               $127,093         $151,286          $161,874         $168,945          $182,276
Other Assets                           7,811            4,199             6,423            7,294             9,776
                                    --------         --------          --------         --------          --------
TOTAL ASSETS                        $134,904         $155,485          $168,297         $176,239          $192,052
                                    ========         ========          ========         ========          ========


LIABILITIES AND PARTNERS' DEFICIT:
Wraparound Mortgages
 payable less
 unamortized discount(1)            $149,265         $198,662          $196,928         $193,835          $200,025
Other Liabilities                      7,257           10,394             9,740            7,296             6,306
                                    --------         --------          --------         --------          --------
Total Liabilities                   $156,522          209,056           206,668          201,131           206,331
Partners' Deficit                    (21,618)         (53,571)          (38,371)        (24,892)           (14,279)
                                    --------         ---------         ---------        --------          ---------

TOTAL LIABILITIES AND
 PARTNERS' DEFICIT                  $134,904         $155,485          $168,297         $176,239          $192,052
                                    ========         ========          ========         ========          ========
</TABLE>


------------------------------

    (1) Unamortized discount is based on imputed interest at 12%.

                                       20
<PAGE>   23
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

         The following discussion should be read in conjunction with the MLP's
combined financial statements and notes thereto appearing elsewhere in this
Report.


                  I.  LIQUIDITY AND CAPITAL RESOURCES

         A.  GENERAL

         As previously noted, the Properties owned by the MLP are encumbered by
the Wrap Mortgages. As a result of the Restructuring, the Debt Service on the
Wrap Mortgages was adjusted to be the same as the 1990 debt service required on
the Third Party Underlying Obligations. The MLP's ability to meet its
obligations on the Wrap Mortgages is dependent on the Properties generating
sufficient cash flow to meet the Debt Service.

         B.  THIRD PARTY DEBT SERVICE

         As of December 31, 1998, the Third Party Underlying Obligations were
current for all the Properties except for the properties located in Borger,
Texas, Cahokia, Illinois, and Federal Way, Washington. The mortgage loans on the
Borger and Federal Way properties matured in 1998. The MLP is negotiating with
lenders for extensions or refinancings.

         At December 31, 1998, the mortgage loan on the Cahokia property was
delinquent. During 1998 the lender declared a default and instituted a
foreclosure action on the Cahokia property. See "Item 3. Legal Proceedings."

         As of December 31, 1998, the net book value and net Wrap Mortgage
balance for these Properties were as follows:

<TABLE>
<CAPTION>
Property                  Net Book Value                   Net Wrap Mortgage Balance
--------                  --------------                   -------------------------
<S>                       <C>                              <C>
Borger                      $  668,000                            $  647,000
Cahokia                      3,396,000                              4,240,000
Federal Way                    860,000                              2,586,000
</TABLE>

         C.  WORKING CAPITAL

         As of December 31, 1998, the MLP has working capital of approximately
$798,000 excluding amounts due to the Managing General Partner and the advances
to the Pension Groups of $573,000 and $101,000, respectively. The MLP's
operating budget for 1999 projects a cash deficit of approximately $132,000.
Consequently, the MLP does not have sufficient reserves to satisfy balloon loan
obligations with respect to the Third Party Underlying Obligations. The
Partnership Agreement and the Restructuring Agreement do not permit the Third
Party Underlying Obligations to be refinanced in order to provide working
capital to create a working capital reserve. The Managing General Partner may,
in its discretion, create a reserve in light of anticipated costs or other
economic contingencies.

         To date, the MLP has replenished its working capital reserves through
the sale of Properties. This has occurred when holders of the Second Mortgage
and Wrap Mortgage have released their liens on Properties which have been sold,
notwithstanding that pursuant to the terms of the Restructuring Agreement the
proceeds were payable to the holders of the Second Mortgage and the Wrap
Mortgage. They have agreed in certain instances to release their liens and
provide proceeds from the sale to the MLP because their mortgages are
cross-collateralized against all of the Properties and because the proceeds from
the sale of such Properties have been utilized for the remaining Properties.
Although the Second Mortgage and Wrap Mortgage lenders are not obligated to
subordinate or release their mortgages, their continued cooperation in this
regard is expected. As of December 31, 1998, the Managing General Partner has
advanced approximately $573,000 to the MLP. The General Partners do not have the
financial wherewithal to continue to advance funds to the MLP and the Managing
General Partner may in fact require the repayment of the advances for its own
operational needs. As a result, it may be necessary for the MLP to sell
Properties.

         D.  LOAN OBLIGATIONS

         As of December 31, 1998 the Third Party Underlying Obligations for the
Borger, Texas and Federal Way, Washington properties have matured and had
balloon payments due. The Third Party Underlying Obligations that have matured
relating to these properties are as follows: Borger - $226,000 and Federal Way -
$218,000.

         The MLP has made refinancing proposals to the existing lenders holding
the related Third Party Underlying Obligations and is currently engaged in

                                       21
<PAGE>   24
negotiations with these lenders. If the MLP is not able to obtain refinancing
commitments and loan extensions from the existing lenders or refinancing from
alternative lenders, the Properties could be lost to foreclosure.

         With respect to the year ending December 31, 1999, Third Party
Underlying Obligations for the Crescent City ($439,000), Fairfield ($35,000),
Huron ($46,000), Marquette ($180,000), Wahpeton ($45,000) and Washington
($33,000) properties are scheduled to mature.

         Although all the Third Party Underlying Obligations on which balloons
have become due to date have been refinanced there can be no assurance that loan
extensions will be successfully negotiated with the lenders holding the Third
Party Underlying Obligations on these Properties. See "Item 2.
Properties."

         E.  CAPITAL REQUIREMENTS

         The average age of the Properties owned by the MLP is in excess of 20
years. Due to the age of the Properties, there is a continuing need for capital
expenditures in order to properly maintain the Properties. At December 31, 1998,
the MLP was obligated for approximately $238,000 of capital commitments which
were primarily for tenant fit-outs and asphalt repair. The 1999 operating budget
for the Properties provides for approximately $516,000 in capital repair
reserves.

         During 1998, the MLP completed new construction and other renovations
to the East Haven property in order to refit the premises for various new
tenants. The cost of these improvements was approximately $841,000.

         During 1998, $13,730,000 of Third Party Underlying Obligations were
refinanced with $19,770,000 of new debt (the "New Debt") secured by mortgages or
deeds of trust on ten of its Properties (the "Refinanced Properties") with
Credit Suisse First Boston Mortgage Capital, LLC (the "Lender"). This
transaction is referred to below as the "CSFB Refinancing." As a result of the
CSFB Refinancing, the maturities of the prior debt on the Refinanced Properties
were extended from various maturity dates to July 11, 2028. Payments on the New
Debt are calculated on a thirty year amortization schedule; however, if the New
Debt is not paid in full by July 11, 2008, the interest rate will increase for
the remainder of the term. The annual debt requirements on the Refinanced
Properties for the MLP will remain unchanged. After satisfying the prior debt
on the Refinanced Properties, the proceeds of the CSFB Refinancing were used to
pay off the Third Party Underlying Obligations on two additional Properties
owned by the MLP and the balance of $6,040,000 was loaned by MLPG to the MLP to
establish approximately $3,729,000 in Capital Improvement Reserves for the
Refinanced Properties and for the other Properties owned by the MLP, to pay off
the Capital Improvements Line, for closing and legal expenses of the CSFB
Refinancing, and to fund escrows for insurance and taxes.

         During 1998, the MLP had an outstanding line of credit with E&H
Properties, Inc., an affiliate of NPA, ("E&H") under which E&H would advance up
to $1 million to the MLP for purposes of making Capital Improvements (the "MLP
Line of Credit"). Pursuant to the MLP Line of Credit, the obligation of E&H to
make advances to the MLP is at all times in the sole and absolute discretion of
E&H. At December 31, 1998, there were $445,000 of advances under the MLP Line of
Credit.

         Amounts advanced pursuant to the MLP Line of Credit bear interest at
the rate of 1% above "E&H Borrowing Rate" (as defined below, currently 10.25%).
Amounts advanced pursuant to the MLP Line of Credit are not directly secured by
any collateral. However, the East Haven, Connecticut property has been pledged
to secure a line of credit extended to E & H by Jefferson Bank of Philadelphia,
Pennsylvania ("Jefferson Bank") which will enable E&H to fund the MLP Line of
Credit in order to finance Capital Improvements and Tenant Improvements (the "E
& H Line of Credit"). In accordance with the terms of the E & H Line of Credit,
the MLP has granted a security interest in and assigned a deed-in-lieu of
foreclosure with respect to the East Haven property to Jefferson Bank (the "East
Haven Security").

         At December 31, 1998, the E & H Line of Credit permitted E & H to
borrow up to $750,000 which it can loan to the MLP and can use for E & H's
general working capital.

         Pursuant to the promissory note executed with respect to the E & H Line
of Credit (the "Jefferson Note"), the amounts advanced pursuant to the Jefferson
Note bear interest at a rate equal to .25% per annum in excess of the "Base
Rate" of Jefferson Bank (the "E & H Borrowing Rate"). The current E & H
Borrowing Rate is 10.25%. The principal amount evidenced by the Jefferson Note
was scheduled to mature on November 30, 1998. E & H is in negotiations to extend
and modify the E & H Line of Credit. Jefferson Bank has agreed to extend the
expiration date under the E & H Line of Credit until such time as the extension
has been finalized.

                                       22
<PAGE>   25
         The Jefferson Note is secured by an assignment of certain Wrap Notes
and Second Mortgages, the East Haven Security and certain Guaranty and
Suretyship Agreements executed by EBL&S, Inc., EBL&S Property Management, Inc.,
National Property Analysts Partners and Edward B. Lipkin. Additionally, the
Jefferson Note contains a confession of judgment against the borrower.

         The Jefferson Note provides for certain events of default. In addition
to providing for an event of default arising from a failure to pay principal and
interest on the E&H Line of Credit when due, the Jefferson Note provides that
Jefferson Bank may declare a default if, in its sole discretion, it determines
that it is insecure with respect to any of the collateral or the ability of E&H
or any other obligor to perform all of its obligations under the Jefferson Note
or any of the other loan documents. The loan and security agreement executed by
E&H in connection with the E&H Line of Credit (the "Jefferson Loan and Security
Agreement") provides that upon the occurrence of an event of default, Jefferson
Bank will have the right to sell the East Haven property and apply the proceeds
of the sale to payment of all amounts due pursuant to the Jefferson Note, the
Jefferson Loan and Security Agreement or the other loan documents in such order
of priority as Jefferson Bank may determine in its sole discretion.

         At December 31, 1998, $445,000 has been advanced under the MLP Line of
Credit and $445,000 has been borrowed under the E&H Line of Credit.

         In 1996, the MLP obtained a $1,000,000 line of credit from Firstrust
Bank (the "Capital Improvements Line"). The maximum amount outstanding under the
Capital Improvements Line was $593,000. During 1998, the Capital Improvements
Line was paid in full and expired under its terms.

         F.  TENANT IMPROVEMENTS

         The current retail rental market is such that proposed tenants for
vacant space and those tenants whose leases are scheduled for renewal are aware
of the pressure landlords are under to obtain and keep tenants and in certain
instances are able to negotiate lease terms at reduced rental rates. Many of
these tenants insist on substantial tenant improvement contributions from
landlords. In the event that the tenants pay for their own improvements, they
may pay a correspondingly lower rental rate than they would otherwise pay or are
allowed rental abatements during the term of their leases. For the year ending
December 31, 1998, approximately $11,000 was provided to tenants in rental
abatements.


                  II.  RESULTS OF OPERATIONS

         A.  PROPERTY DISPOSITIONS DURING FISCAL 1998

         During 1998, the Temple Terrace, Florida, Trenton, New Jersey and
Wichita, Kansas properties were sold; the East Meadow, New York and East
Greenbush, New York properties were transferred to the holders of the Third
Party Underlying Obligation in accordance with the terms of the plans of
reorganization of East Meadow Associates and Ocala Realty Associates,
respectively; and the La Mesa, California and Las Vegas, Nevada properties were
transferred to the holder of the options in accordance with the 1995 sales
contracts. Proceeds, if any, were used to pay off the Third Party Underlying
Obligations and pay down the Wrap Mortgages. In addition, any remaining balances
due on the Third Party Underlying Obligations and Wrap Mortgages were either
assumed or forgiven by the holder of the respective mortgages. The disposition
of these properties may result in tax liability to those who had been Limited
Partners in the Partnerships which owned the property. See "Item 5. Market Price
for the Registrant's Common Equity and Related Stockholder Matters - Certain
Income Tax Consequences - Recognition of Gain."

         B.  FORGIVENESS OF WRAP MORTGAGES DURING FISCAL 1998

         During 1998, MLPG agreed to the forgiveness of $98,239,000 of Wrap
Mortgages with related discounts of $59,677,000, of which $13,908,000 of Wrap
Mortgages with related discounts of $4,441,000 were written off with the
dispositions of the East Meadow and Las Vegas properties during the 1st half of
1998. In addition, MLPG agreed to the forgiveness of $1,954,000 which was due to
MLPG for past due payments. The aggregate of $31,049,000 is included in
"Forgiveness of wraparound mortgages payable on disposition of properties."

         Through December 31, 1997, MLPG had forgiven the Wrap Mortgages
remaining after the disposition of Properties which were owned by Audited
Partnerships. In 1998 MLPG agreed to forgive certain Wrap Mortgages remaining
after the disposition of Properties which were owned by Unaudited Partnerships.
For the year ended December 31, 1998, Wrap Mortgages of approximately
$36,523,000 with related discounts of $16,389,000 were forgiven in connection
with various Property dispositions. The aggregate of $20,134,000 is in
"Forgiveness of wraparound mortgages payable on disposition

                                       23
<PAGE>   26
of properties."  The forgiveness of these Wrap Mortgages may result in tax
liabilities to those who had been Limited Partners in the Partnerships which
had the Wrap Mortgages forgiven.  See "Item 5. Market Price for the
Registrant's Common Equity and Related Stockholder Matters - Certain Income
Tax Consequences - Recognition of Gain."

         As noted above, during 1998, MLPG forgave the remainder of the
$98,239,000 of wraparound mortgage obligations with related discounts of
$59,677,000 on 14 properties previously owned by the MLP as it was unlikely that
these obligations would ultimately be repaid. After consultation with the MLP's
outside tax counsel and independent public accountants, the MLP structured the
transaction to minimize the tax effect of such a write-off to the limited
partners as a whole. As a result of this debt forgiveness, certain limited
partners of the MLP (those who were originally limited partners in the limited
partnerships which owned these 14 properties) (the "Affected Limited Partners")
will recognize taxable income in 1998, allocated among the Affected Limited
Partners in varying amounts in proportion to their interests in the original
partnerships. Affected Limited Partners may apply any suspended passive losses
they may have from prior years against their allocable share of such income.

Affiliates of the Managing General Partner ("Affiliates") had acquired in 1995
an option to purchase certain of the Wrap Mortgages from MLPG. In anticipation
of this acquisition and in order to prevent potential adverse tax consequences
described below, Affiliates had to divest themselves of their interests in the
MLP. Therefore, on August 1, 1998, Affiliates assigned their entire economic
interest as limited partners to the MLP in exchange for the MLP's interest in
Mountain View Mall Associates ("Mountain View"). Affiliates have agreed to hold
one of Mountain View's two properties (the "Ardmore Property") in trust for the
MLP, with all benefits of ownership of the Ardmore Property accruing to the MLP.
Affiliates will also remit a portion of sales proceeds in excess of related
debt, if any, of Mountain View's other property (the "Trenton Property") to the
MLP. The debt on the Trenton Property greatly exceeds the anticipated sales
price for this property. Because Affiliates assigned their interests to the MLP
before MLPG effectively forgave the Wrap Mortgages as described above, the
Affected Limited Partners will have an additional tax liability which is not
expected to be significant. Such liability may be offset by any suspended
passive losses available to such partner.

During 1998, Affiliates exercised their option to purchase certain Wrap
Mortgages from MLPG. These obligations remain outstanding, with no economic
change to the MLP. If the Affiliates had remained as either general or limited
partners of the MLP, the partners might have been required to recognize
substantial current income (without corresponding cash distributions) and
further, the MLP's ability to deduct future losses, if any, could have been
called into question. This could have effectively eliminated the tax basis of
all partners in the MLP. To prevent this result, Affiliates assigned their
interests in the MLP as described above.

The net effect of this series of transactions for the MLP was to reduce the
MLP's Wrap Mortgages by $120,854,000 with related discounts of $71,625,000, to
reduce the number of outstanding Units of the MLP by the 2,248 Units formerly
owned by Affiliates (2.25% of the outstanding Units ) and, as to the Affected
Limited Partners, to recognize certain amounts of ordinary income for tax
purposes.


         C.  FULL FISCAL YEARS

         Over the five year period ended December 31, 1998, the MLP disposed of
16 Properties. The number of Properties owned and disposed of by year are as
follows:

<TABLE>
<CAPTION>
                                            1998          1997         1996         1995         1994
                                            ----          ----         ----         ----         ----
<S>                                         <C>           <C>          <C>          <C>          <C>
Beginning of year                            56            57           60           62           65
Properties disposed                           7             1            3            2            3
                                             --            --           --           --           --
End of year                                  49            56           57           60           62
                                             ==            ==           ==           ==           ==
</TABLE>


         The disposition of Properties resulted in "Net (loss) gain on
disposition of properties" and "Forgiveness of wraparound mortgages payable on
disposition of properties" as reflected in the financial statements.

                                       24
<PAGE>   27
         The following table reflects the operating results for the MLP for the
years ended December 31, 1998, 1997, 1996, 1995 and 1994, excluding the
operating results for 16 Properties that were disposed during the five year
period. The table is presented in order to facilitate an understanding of the
operating results and trends of the MLP.

<TABLE>
<CAPTION>
                              1998             1997              1996              1995             1994
                              ----             ----              ----              ----             ----
<S>                          <C>              <C>               <C>              <C>               <C>
INCOME:

Rental Income                $19,491          $18,713           $18,673          $18,237           $18,403
Other Charges
 to tenant                     5,823            5,839             5,486            8,740             6,595
Interest income                  200              128               115              294               437
Other income                      62               97              -                -                 -
                             -------          -------          --------         --------          --------
TOTAL INCOME                  25,576           24,777            24,274           27,271            25,435
                             -------          -------          --------         --------          --------


OPERATING EXPENSES:

Interest expense              12,201           15,221            15,172           15,120            15,202
Other operating
 expenses                      9,825            9,999             9,760            9,633             9,261
Depreciation and
 amortization                  7,513            7,466             7,280            7,160             7,097
                             -------          -------           -------          -------           -------
TOTAL OPERATING
 EXPENSES                     29,539           32,686            32,212           31,913            31,560
                             -------          -------           -------          -------           -------
OPERATING LOSS               $(3,963)         $(7,909)          $(7,938)         $(4,642)          $(6,125)
                             =======          =======           =======          =======           =======
</TABLE>


         The fluctuations in "Rental Income" between years has been modest and
did not exceed 4.2% for any of the years presented. This is consistent with the
Property portfolio which has a significant portion of space rented to Anchor
Tenants under long term leases. In 1997 and 1998, there was a $294,000 decrease
and a $257,000 increase in percentage rental income, respectively.

         In 1995, the MLP received approximately $2,400,000 in proceeds from
tenant lease terminations. In 1996, real estate tax recoveries decreased by
approximately $700,000 and there were no substantial proceeds from tenant lease
terminations.

         During the five year period, certain advances were made by the MLP to
MLPG. Interest income is earned on these advances and on available funds which
are invested. The changes in interest income from 1994 through 1996 were due to
a decrease during this period in advances to MLPG.

         The Properties are financed by long term fixed rate debt and
consequently there was virtually no fluctuation in interest expense from 1994
through 1997. During 1998, $84,331,000 of Wrap Mortgages were forgiven on
properties previously owned by Unaudited Partnerships resulting in a substantial
decrease in interest expense between 1997 and 1998.

         The increases in depreciation and amortization between 1994 and 1998
are due to capital improvements.


                  III.  YEAR 2000

         The MLP relies on the computer system of the Property Manager for its
management information systems. The Property Manager is in the process of
converting its computer hardware and software with respect to the year 2000
millennium change. The replacement of this system is planned to be completed and
tested during the first half of 1999. This included the purchase of new hardware
equipment and a software package in 1998. The total cost of the hardware and
software was borne by the Property Manager. The Property Manager does not
anticipate any other material incremental costs relating to this replacement as
the Property Manager has and will continue to use current employees to install
and test the equipment and software.

         The MLP's reliance on information systems is not significant. In the
worse case scenario, the MLP could continue to operate using non-automated
processes due to the limited number of properties its owns (49 properties at
December 31, 1998).

                  IV.   INDEBTEDNESS SECURED BY THE PROPERTIES

         The Properties are subject to certain indebtedness which was incurred
in connection with the acquisition of the Properties by the Partnerships. As of
December 31, 1998, the aggregate indebtedness of the MLP pursuant to the Wrap
Mortgages was approximately $319 million, of which approximately $101 million
constituted indebtedness under the Third Party Underlying Obligations and $83
million constituted indebtedness under the Second Mortgages. See "Item 5. IV.
Certain Income Tax Considerations - A. Recognition of Gain." As of December 31,
1998, the aggregate historical cost of the Properties securing the indebtedness
of the MLP mortgages was approximately $240 million.

                                       25
<PAGE>   28
         The original acquisition of the Properties by the Partnerships was
typically structured as set forth below.

         Typically, an affiliate of NPA acquired a Property from an unaffiliated
seller. The NPA affiliate thereafter sold the Property to a Pension Group. The
Partnership acquired the Property from the Pension Group. In both the original
acquisition and the purchase by the Pension Group, the purchasers (i.e., the NPA
affiliate and the Pension Group) took the Properties subject to existing
mortgages in favor of the sellers or unaffiliated third parties. Consequently,
as a general matter, at the time it was acquired by the Partnership, each
Property was subject to a Third Party Underlying Obligation and a Second
Mortgage.

         The Partnerships typically paid the purchase price for the Properties
in part by delivering to the Pension Group a Wrap Mortgage. The Wrap Mortgage
represented a lien on the Property subordinate to the Third Party Underlying
Obligation and the Second Mortgage. Neither the Third Party Underlying
Obligation nor the Second Mortgage represented direct financial obligations of
the Partnership. Rather, the Wrap Mortgage required the Pension Group to use the
payments made thereunder to make the required payments under the Third Party
Underlying Obligation and the Second Mortgage. The Third Party Underlying
Obligation and the Second Mortgage continued, however, as liens against the
Property. The Wrap Mortgage obligated the Partnership to comply with all the
terms and conditions of the Third Party Underlying Obligation and the Second
Mortgage.

         The Properties whose ownership was consolidated in the MLP remain
subject to the Third Party Underlying Obligations, Second Mortgages and Wrap
Mortgages incurred in connection with the acquisition of the Properties.
However, the Wrap Mortgages and Second Mortgages have been restructured.

         A.  THIRD PARTY UNDERLYING OBLIGATIONS

         Information relating to the Third Party Underlying Obligations is
included in Schedule 3 which appears under "Item 2. Properties" above.

         B.  THE SECOND MORTGAGES AND NOTES

           Under the terms of the Restructuring Agreement, no payments are
currently due on the Second Mortgages. The approximate outstanding principal
balance of the Second Mortgages as of December 31, 1998 was approximately $83
million. The Restructuring Agreement provides that this indebtedness will be
paid from proceeds realized from the sale of property subject to the sharing
arrangement established in the Restructuring Agreement.

         C.  THE RESTRUCTURED WRAP MORTGAGES

         The Wrap Mortgages represent an obligation of the MLP and a lien
against the Properties in favor of the Pension Groups. The lien is subordinate
to the Third Party Underlying Obligations and the Second Mortgages.

         The Restructuring Agreement amended and restructured each Wrap Note to
provide that each Wrap Note would consist of the obligation to pay two principal
balances, an interest-bearing principal balance equal to the original principal
indebtedness when the Wrap Note was first executed and delivered by the
Partnership less amounts of principal, if any, paid prior to January 1, 1990,
and an non-interest bearing principal balance equal to the amount of interest
accrued and unpaid under the Wrap Note prior to January 1, 1990. The
Restructuring Agreement adjusted the interest rate on the Wrap Notes in such a
way that the interest bearing principal balance earns interest at a rate elected
by the Managing General Partner to assure that there will be adequate interest
paid over the life of the Wrap Note to comply with applicable Internal Revenue
Code requirements in order to prevent the imputation of interest. The interest
rates on the restructured Wrap Mortgages (the "Restructured Wrap Mortgages")
range from 0% of the principal balance of some Wrap Mortgages to 10%. The Wrap
Notes mature on December 31, 2013.

         Each amended Wrap Note requires a minimum annual payment from the MLP
in an amount equal to the 1990 debt service payable on the Third Party
Underlying Obligations secured by the same Properties as the Wrap Mortgages
which secured such Wrap Note prior to the Restructuring. These minimum payments
are applied first to past due interest and principal payments under the Wrap
Notes, if any, then to current interest and principal payments due on the Wrap
Notes, then against the interest-bearing principal balances of the Wrap Notes,
allocated among the Wrap Notes as the Pension Groups elect, and finally to the
non-interest-bearing principal balances, allocated among the Wrap Notes as the
Pension Groups elect. The Restructuring Agreement requires the MLP to make
additional payments on the Wrap Notes on April 10th of each year equal to sixty
percent (60%) of the amounts by which Cash Flow from Operations for the previous
year exceeded the sum of the minimum annual payment in such year plus the
current payments due in such year on any indebtedness incurred after January 1,
1990 for Capital Improvements to any of the Properties. The holder

                                       26
<PAGE>   29
of the Wrap Notes applies the minimum annual payments to pay the current
payments due on the Third Party Underlying Obligations.

         The Restructuring Agreement provides that all the Wrap Notes which were
originally secured by Wrap Mortgages on the Properties which the MLP acquired
from partnerships audited by the Internal Revenue Service will be secured by all
of those Wrap Mortgages and will not be secured by Wrap Mortgages on the
Properties which the MLP acquired from the Unaudited Partnerships. All of the
Wrap Notes which were originally secured by Wrap Mortgages on the Properties
which the MLP acquired from Unaudited Partnerships are secured by all of those
Wrap Mortgages and are not secured by Wrap Mortgages on the Properties which the
MLP acquired from partnerships audited by the Internal Revenue Service. The
holder of the Wrap Mortgages agreed in the Restructuring Agreement to release
from the lien of the Wrap Mortgages any Property sold by the MLP, upon payment
to the holder of the Wrap Mortgages, as a pre-payment of the Wrap Notes, an
amount equal to all of the Proceeds of Sales of the Properties not permitted by
the Restructuring Agreement to be retained by the MLP.

         The Restructuring Agreement permits the MLP to have the opportunity to
retain, in certain circumstances, a portion of the Excess Proceeds. In
accordance with the Restructuring Agreement the Excess Proceeds derived from the
Proceeds of Sales of the Properties are applied as noted below.

         The Excess Proceeds are applied as follows: (a) 100% of the Excess
Proceeds are applied in payment of the Wrap Mortgages until the Threshold Amount
has been paid; (b) the next $70 million of Excess Proceeds are allocated 60% to
the payment of the Wrap Mortgage and 40% are retained by the MLP; (c) 100% of
the next Excess Proceeds up to an amount equal to the Investor Note Recovery or
$25 million, whichever is less, are retained by the MLP and distributed by the
MLP to the Investor Note Payors; (d) the next Excess Proceeds are allocated by
60% to the payment of the Wrap Mortgages and 40% are retained by the MLP up to
an amount equal to the outstanding balances for the Wrap Mortgages on January 1,
1990 less the sum of: (i) the aggregate amount of the sums previously paid as
Minimum Payoff Amounts; (ii) the Investor Note Recovery, and (iii) $70 million;
(e) 100% of the next excess Proceeds are applied in payment of the Wrap
Mortgages in the amount equal to (i) the amount necessary to pay in full the
Wrap Mortgages on Properties acquired from partnerships audited by the Internal
Revenue Service, in the case of Excess Proceeds generated by the sale of such a
Property, and (ii) the amount necessary to pay in full the Wrap Mortgages on
Properties acquired from Unaudited Partnerships, in the case of Excess Proceeds
generated by the sale of such a Property; and (f) 100% of any additional Excess
Proceeds are retained by the MLP.

         The Restructuring Agreement provides for indebtedness which may be
incurred to finance Capital Improvements to the Properties after January 1,
1990, and requires that in connection with any sale of Property by the MLP, the
loans for Capital Improvements to such Property must either be paid in full or
assumed by the purchaser of the Property before the Wrap Mortgage on such
Property will be released.

         The Restructuring Agreement permits the holders of the Wrap Mortgages
to refinance or negotiate modifications to the Third Party Underlying
Obligations, so long as the aggregate amount of all Third Party Underlying
Obligations is not increased. The fees and expenses associated with any such
refinancing or modification are required to be borne by the holders of the Wrap
Mortgages.

         The Restructuring Agreement spreads the lien securing each of the
Second Mortgages to all of the Properties owned by the MLP and all of the Second
Mortgages have been "wrapped" or included within all of the Wrap Mortgages.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The combined financial statements, including the notes thereto and the
report of the independent certified public accountants, are included in Part IV,
Item 14 of this Form 10-K.

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

                  None.

                                       27
<PAGE>   30
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         EBL&S, Inc., a Delaware corporation incorporated in December, 1989, and
an affiliate of NPA, is the Managing General Partner of the MLP. Feldman
International, Inc., a Delaware corporation incorporated in September 1998 is
the Equity General Partner of the MLP. The Managing General Partner is owned
100% by E&H Properties, Inc., a Pennsylvania corporation incorporated in July,
1979, which is owned 100% by Edward B. Lipkin. The Equity General Partner is
owned 100% by Robert McKinney.

         The directors and executive officers of the General Partners are as
follows:

         Edward B. Lipkin, age 53, serves as Director of the Managing General
Partner.  Mr. Lipkin has also been President of NPA since it was organized in
1976.  Mr. Lipkin received a Bachelor of Science degree in Finance from Temple
University.  Mr. Lipkin was a Trustee of the International Council of Shopping
Centers, a leading industry organization, from 1986 to 1992.

         Robert McKinney, age 43, serves as Director of the Equity General
Partner. Mr. McKinney received a Masters of Science and Masters of Business
Administration from Villanova University and Temple University, respectively.

ITEM 11.  EXECUTIVE COMPENSATION

         Neither the General Partners nor the officers of the General Partners
receive compensation from the MLP. Certain administrative services related to
tax and accounting service and to investor note collections were performed by
the Managing General Partner on behalf of the MLP as provided in the Partnership
Agreement. The amount payable to the Managing General Partner for such services
aggregated $58,000, $58,000 and $53,000 for the years ended December 31, 1998,
1997 and 1996, respectively. See "Item 13. Certain Relationships and Related
Transactions - I. Compensation and Fees and II. Property Management by
Affiliate."

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT

<TABLE>
<CAPTION>
TITLE OF CLASS               NAME & ADDRESS OF                AMOUNT AND                         % OF CLASS
                             BENEFICIAL OWNER                 NATURE OF
                                                              BENEFICIAL OWNERSHIP (2)
<S>                          <C>                              <C>                                <C>
Units of Limited             Robert McKinney                  1,000 Units                        1.0%
Partnership Interest         230 S. Broad Street
                             Philadelphia, PA 19102
</TABLE>


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

                  I. COMPENSATION AND FEES

         The amounts and kinds of compensation and fees to be paid to the
General Partners and its affiliates during the operation of the MLP are
summarized below.

<TABLE>
<CAPTION>
PERSON RECEIVING                                                                    ESTIMATED AMOUNT
COMPENSATION           TYPE OF COMPENSATION                                         OF COMPENSATION

                                       ORGANIZATIONAL PHASE
<S>                                 <C>                                             <C>
Equity General Partner                                                              1% general
                                                                                    partners' interest
                                                                                    in the MLP.

                                       OPERATIONAL PHASE

Equity General Partner              General Partners' share of                      On an annual
                                    Cash Flow from Operations                       basis, 1% of
                                                                                    Cash Flow from
                                                                                    Operations.  Actual
                                                                                    amounts will depend
                                                                                    upon future
                                                                                    operations and are
                                                                                    not now determinable.
</TABLE>

                                       28
<PAGE>   31
<TABLE>
<CAPTION>
<S>                                 <C>                                             <C>
EBL&S Property                      Property Management Fees                        Annual fee of 5%
Management, Inc.                                                                    of gross operating
                                                                                    revenues derived from
                                                                                    the Properties.
                                                                                    Actual amounts will
                                                                                    depend upon future
                                                                                    operations and are
                                                                                    not now determinable.

EBL&S Property                        Leasing Fees                                  For all obtained
Management, Inc.                                                                    or renewed leases, an
                                                                                    amount equal to the
                                                                                    fees customarily
                                                                                    charged in the
                                                                                    geographic area of
                                                                                    leased property.
                                                                                    Actual amounts will
                                                                                    depend upon future
                                                                                    operations and are
                                                                                    not now
                                                                                    determinable.

Equity General Partner              General Partners' share                         The Equity General
                                    Of Profit and Losses                            Partner will be
                                                                                    allocated 1% of the
                                                                                    profits and losses
                                                                                    from MLP operations.

Managing General                    Reimbursement of Expenses(1)                    Actual cost of goods
Partner                                                                             and services utilized
                                                                                    for or by the MLP,
                                                                                    including certain
                                                                                    administrative
                                                                                    services performed by
                                                                                    the Managing General
                                                                                    Partner.

                                                 LIQUIDATION PHASE

Equity General Partner              General Partners' share                         The Equity General
                                    of Proceeds of Sales of                         Partner will be
                                    the Properties.                                 allocated 1% of the
                                                                                    Proceeds of Sale of
                                                                                    the Properties.

E&H Properties,                     Repayment of Indebtedness                       Actual amounts
Inc.                                secured by Second Mortgages                     will depend on
                                                                                    the price of
                                                                                    Properties and are
                                                                                    not now determinable.
</TABLE>


                  II.  PROPERTY MANAGEMENT BY AFFILIATE

         As of January 1, 1990, the MLP entered into a management agreement with
EBL&S Property Management, Inc., a Delaware corporation ("Property Manager"),
with respect to the management of the Properties ("Management Agreement").
EBL&S Property Management, Inc. is owned 100% by E&H Properties, Inc. which
also is the sole shareholder of the MLP's Managing General Partner, EBL&S,
Inc.  The directors of EBL&S Property Management, Inc. are the same as those
of the Managing General Partner.

         Pursuant to the Management Agreement, the Property Manager receives a
management fee equal to five (5%) percent of all gross operating revenues
derived from the Properties payable as and when such income is received, plus a
leasing fee for all obtained or renewed leases equal to the fees customarily
charged in the geographic area of the leased property, payable as customary in
such area. An aggregate of approximately $1,196,000 was earned by the Property
Manager for management fees, and an aggregate of approximately $63,000 was
earned by the Property Manager for leasing fees for the fiscal year 1998.




--------
         (1) All expenses of the MLP are billed directly to and paid by the MLP.
The Managing General Partner is reimbursed for the actual cost of goods and
materials used for or by the MLP and obtained from entities which are not
affiliates of the Managing General Partner. In addition, the Managing General
Partner is reimbursed for administrative services performed for the MLP,
provided that such services are necessary for the prudent operation of the MLP
and further provided that such reimbursement is at the lower of (i) the Managing
General Partner's actual cost or (ii) the cost of obtaining comparable
administrative services from independent parties in the same geographic
location. Reimbursement to the Managing General Partner for services for which
it is entitled to compensation by way of a separate fee is not allowed. No
reimbursement is made for rent, depreciation, utilities, or capital equipment in
the building in which the MLP maintains offices and other overhead costs.

                                       29
<PAGE>   32
                  III.  CONFLICTS OF INTEREST

         From time to time, there may be conflicts of interest between the
Managing General Partner and its affiliates (including the Property Manager) on
the one hand and the MLP and its Limited Partners on the other hand. The
Managing General Partner will attempt to resolve any conflicts of interest by
exercising the good faith required of fiduciaries, and the Managing General
Partner believes that it will generally be able to resolve conflicts on an
equitable basis. Depending on the relevant facts and circumstances, however, the
resolution of any particular conflict may not be in favor of the MLP. A
resolution which is unfavorable to the MLP will result only if the Managing
General Partner determines in good faith, bearing in mind its fiduciary duties,
that it is the most appropriate to deal with the overall situation. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

         A.  CONFLICT REGARDING SALES AND REFINANCING

         The Managing General Partner is an affiliate of NPA. NPA or its
affiliates hold the Second Mortgages aggregating $83 million. This lack of
independence gives rise to certain conflicts of interest with respect to the
sale or refinancing of the Properties.

         The Managing General Partner oversees sales, leases, financing,
operations and management of the Properties and decides which Properties are
sold and how to apply the Proceeds of Sales of the Properties. Because NPA or
its affiliates hold the Second Mortgages on the Properties which will be repaid
from the Proceeds of Sales of the Properties and the Managing General Partner is
an affiliate of NPA, the Managing General Partner may not be solely interested
in ensuring that sales of Properties generate sufficient proceeds to enable the
Limited Partners to receive distributions with respect thereto. However,
pursuant to the Restructuring Agreement, a portion of all proceeds derived from
sale of the Properties in excess of the Threshold Amount will be applied in
payment of the Wrap Mortgages. Accordingly, the Managing General Partner (as an
affiliate of NPA) will have a financial incentive to cause the MLP to maximize
Proceeds of Sales of the Properties. Furthermore, the Managing General Partner
is accountable to the MLP and the Limited Partners as a fiduciary and,
consequently, must exercise good faith and integrity in handling the affairs of
the MLP and must take its Limited Partners' interests in account in making
decisions regarding sales and refinancing.

         B.  OTHER ACTIVITIES OF THE AFFILIATES OF THE GENERAL PARTNERS

          There is no limitation on the right of the affiliates of the General
Partners to engage in any business even if the business is competitive with the
business of the MLP. For instance, if an affiliate of the General Partners owns
or manages a property which competes for tenants with a Property owned by the
MLP, the economic interest of the equity owners of the General Partners in that
affiliate may create a conflict between the General Partners or the Property
Manager on the one hand and the MLP on the other with respect to allocating
prospective tenants between competitive properties. The Managing General Partner
and its affiliates presently own properties that are competitive with the
Properties and affiliates of the Managing General Partner may act as manager of
such properties.

         C.  COMPETITION BY THE MLP WITH AFFILIATES OF THE MANAGING
             GENERAL PARTNER FOR SERVICES OF OFFICERS AND EMPLOYEES

         The MLP depends on the Managing General Partner to operate the MLP. The
Managing General Partner believes it will have sufficient staff personnel and
resources to perform all of its duties with respect to managing the MLP.
However, because the staff personnel and resources are shared with affiliates,
the Managing General Partner and certain of its affiliates have conflicts of
interest in the allocation of management and staff time, services and functions
among the MLP and other entities in existence or which may be organized.


                  IV.  SUMMARY OF RELATIONSHIPS

         E&H Properties, Inc. owns 100% of the equity interest in EBL&S,
Inc. (the Managing General Partner) and EBL&S Property Management, Inc.
(the Property Manager).  EBL&S, Inc. is owned 100% by Edward B. Lipkin.
Feldman International, Inc. is owned 100% by Robert McKinney.  The
General Partners and the Property Manager both have ongoing
relationships with the MLP.  E&H Properties, Inc. and the affiliates
which it controls are the holders of the Second Mortgages.

                                       30
<PAGE>   33
                  V.   RELATED PARTY TRANSACTIONS

         During 1996, the El Paso, Texas property was sold to a limited
partnership owned by directors and executives of the Managing General Partner.
The sales price of the property was determined to be at fair market value by an
independent appraiser. In connection with the transaction, a promissory note was
issued to the MLP in the approximate amount of $436,000. The note is interest
only, bears interest at 10% and matures on November 1, 2008.

         During 1998, the Third Party Underlying Obligation on the North
Augusta, South Carolina property was acquired by E & H Properties for its
balance as of the date of acquisition. The mortgage was extended and modified to
fully amortize on October 1, 1999.

         NPA and its principals owned 4,362 of the 100,000 units of the MLP as
of December 31, 1997. During 1998, NPA and its principals redeemed their
interest in the MLP in exchange for the transfer of the Trenton property and
related wraparound mortgage obligations to these three partners. As a result,
NPA and its principals did not own any of the 97,752 units of as of December 31,
1998. See "Item 7. Management's Discussion and Analysis of Financial Conditions
and Results of Operations - II. Results of Operations - B. Forgiveness of Wrap
Mortgages During Fiscal 1998."


                                    PART IV

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

                  I.  DOCUMENTS FILED AS PART OF THIS REPORT

         A.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
<S>                                                                          <C>
         Independent Auditors' Report..............................          F-1

         Combined Financial Statements:

           Combined Balance Sheets at December 31, 1998 and 1997...          F-2

           Combined Statements of Operations and Changes
           in Partners' Deficit for the years ended
           December 31, 1998, 1997 and 1996........................          F-3

           Combined Statements of Cash Flows for the years ended
           December 31, 1998, 1997 and 1996........................          F-4

         Notes to Combined Financial Statements....................          F-5

         Attachments

           1  Properties Effectively Owned by the MLP at
              December 31, 1998....................................          F-15

           2 Schedules II and III to the Combined Financial
              Statements...........................................          F-16
</TABLE>

         B.  EXHIBITS

<TABLE>
<CAPTION>
                  Exhibit No.                                     Description
                  -----------                                     -----------
<S>                <C>                                            <C>
                    *2.1                                          Consolidation Agreement by and
                                                                  among the National Property
                                                                  Analysts MasterLimited
                                                                  Partnership (the "MLP"); EBL&S,
                                                                  Inc. ("EBL&S") and Buster,
                                                                  Inc.("Buster").

                    *2.2                                          Settlement Agreement by and
                                                                  among plaintiffs as a class,
                                                                  National Property Analysts, Inc.
                                                                  ("NPA") and certain additional
                                                                  defendants in James O'Brien, et
                                                                  al. v. National Property
                                                                  Analysts, Inc., et al. (the
                                                                  "Action").

                    *2.3                                          Judgment and Order Approving the
                                                                  Transaction, the Formation of
                                                                  the Master Limited Partnership,
                                                                  and the Allocation of Interests
                                                                  in the Master Limited
</TABLE>

                                       31
<PAGE>   34
<TABLE>
<CAPTION>
<S>                <C>                                            <C>
                                                                  Partnership entered by the
                                                                  Court.

                    *3.1                                          Initial Limited Partnership
                                                                  Agreement of the MLP.

                    *3.2                                          Amended and Restated Limited
                                                                  Partnership Agreement of the
                                                                  MLP.

                    *3.3                                          Certificate of Limited
                                                                  Partnership of the MLP.

                   *10.1                                          Restructuring and Mortgage
                                                                  Modification Agreement by and
                                                                  among Main Line Pension Group,
                                                                  L.P. ("MLPG"), the MLP and
                                                                  National Property Analysts, Inc.

                   *10.2                                          Leasing and Management Agreement
                                                                  by and between EBL&S Property
                                                                  Management, Inc. and the MLP.

                   *10.3                                          Information Statement Relating
                                                                  to the formation of the MLP.

                   *10.4                                          Proof of Claim and Release and
                                                                  Vote on Consolidation.

                  **10.5                                          Loan and Security Agreement
                                                                  between E&H Properties, Inc. and
                                                                  Jefferson Bank.

                  **10.6                                          Line of Credit Promissory
                                                                  Note.
</TABLE>


                  II.  REPORTS ON FORM 8-K

                        Not Applicable



 *Incorporated by reference from Registrant's Report on Form 10 filed
  July 14, 1994 (0-24816)
**Incorporated by reference from Registrant's Report on Form 10-K filed
  April 1, 1996 (0-24816)

                                       32
<PAGE>   35
                                   SIGNATURES

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

NATIONAL PROPERTY ANALYSTS MASTER
LIMITED PARTNERSHIP
(Registrant)

By:  EBL&S, Inc., its managing general partner



     By: /s/ Edward B. Lipkin
         -------------------------
            Edward B. Lipkin
            Director

Date:    March 26, 1999
         -------------------------


By: Feldman International, Inc., its equity general partner



     By: /s/ Robert McKinney
         -------------------------
            Robert McKinney
            Director


Date:    March 26, 1999
         -------------------------


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

<TABLE>
<CAPTION>
Signature                           Capacity                                                   Date
---------                           --------                                                   ----
<S>                                 <C>                                                        <C>
/s/Edward B. Lipkin                 Director of EBL&S, Inc.
------------------                  Principal Executive Officer,
Edward B. Lipkin                    Principal Accounting Officer and
                                    Principal Financial Officer                                March 26, 1999
                                                                                               --------------



/s/Robert McKinney                  Director of Feldman International, Inc.                    March 26, 1999
------------------                                                                             --------------
Robert McKinney
</TABLE>

                                       33
<PAGE>   36
                          INDEPENDENT AUDITORS' REPORT


General Partners
National Property Analysts
    Master Limited Partnership:


We have audited the combined financial statements of National Property Analysts
Master Limited Partnership (NPAMLP) (a limited partnership) as listed in the
accompanying index. In connection with our audits of the combined financial
statements, we have also audited the financial statement schedules as listed in
the accompanying index. These combined financial statements and financial
statement schedules are the responsibility of NPAMLP's management. Our
responsibility is to express an opinion on these combined financial statements
and financial statement schedules based on our audits.

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

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of NPAMLP as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 1998, in
conformity with generally accepted accounting principles. Also, in our opinion,
the related financial statement schedules, when considered in relation to the
basic combined financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.




/s/ KPMG  LLP


March 23, 1999


                                      F-1
<PAGE>   37
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                             Combined Balance Sheets

                           December 31, 1998 and 1997
                                 (in thousands)

<TABLE>
<CAPTION>
                              ASSETS                                1998              1997
                                                                    ----              ----
<S>                                                              <C>               <C>
Rental property, at cost:
    Land                                                         $  16,292            17,970
    Buildings                                                      224,029           255,764
                                                                 ---------         ---------

                                                                   240,321           273,734
    Less:  accumulated depreciation                                113,228           122,448
                                                                 ---------         ---------

            Rental property, net                                   127,093           151,286

Cash and cash equivalents                                            2,190             1,068
Restricted cash                                                      3,459             1,412
Tenant accounts receivable, net of allowance of
     $30 for both 1998 and 1997                                        179                53
Unbilled rent receivable                                               850               882
Tenant leasing costs                                                    76               117
Accounts receivable and other assets                                 1,057               667
                                                                 ---------         ---------

Total assets                                                     $ 134,904           155,485
                                                                 =========         =========

                        LIABILITIES AND PARTNERS' DEFICIT

Wraparound mortgages payable                                     $ 318,555           446,712
Less:  unamortized discount based on imputed
    interest rate of 12%                                           169,290           248,050
                                                                 ---------         ---------

            Wraparound mortgages payable less
               unamortized discount                                149,265           198,662

Due to Pension Groups                                                   --             1,954
Other borrowings                                                       445               593
Deferred revenue                                                       331               396
Accounts payable and other liabilities                               1,780             2,361
Finance lease obligation                                             2,650             2,650
Deposit on sale of property                                          2,051             2,440
                                                                 ---------         ---------

            Total liabilities                                      156,522           209,056

Partners' deficit                                                  (21,618)          (53,571)
                                                                 ---------         ---------

Total liabilities and partners' deficit                          $ 134,904           155,485
                                                                 =========         =========
</TABLE>

See accompanying notes to combined financial statements.

                                      F-2
<PAGE>   38
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

       Combined Statements of Operations and Changes in Partners' Deficit

                  Years ended December 31, 1998, 1997 and 1996
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>
                                                          1998              1997             1996
                                                          ----              ----             ----
<S>                                                     <C>              <C>              <C>
Income:
    Rental income                                       $ 21,782           22,876           23,984
    Other charges to tenants                               6,682            6,884            6,819
    Interest income                                          200              136              129
    Other income                                              62               97               --
                                                        --------         --------         --------

            Total income                                  28,726           29,993           30,932
                                                        --------         --------         --------

Operating expenses:
    Interest expense                                      18,035           23,038           23,054
    Real estate taxes                                      4,934            6,468            6,457
    Management fees                                        1,216            1,292            1,413
    Common area maintenance expenses                       1,922            2,389            2,568
    Ground rent                                              528              627              603
    Repairs and maintenance                                  407              583              535
    General and administrative                               879              438              789
    Depreciation and amortization                          8,141            8,865            8,839
                                                        --------         --------         --------

            Total operating expenses                      36,062           43,700           44,258
                                                        --------         --------         --------

            Operating loss                                (7,336)         (13,707)         (13,326)

Other (expense) income:
    Net (loss) gain on disposition of properties         (11,894)            (866)             454
    Write-down of rental property                             --           (1,000)          (1,100)
                                                        --------         --------         --------

            Loss before extraordinary gain               (19,230)         (15,573)         (13,972)

Extraordinary gain:
    Forgiveness of wraparound mortgages
       payable on disposition of properties               51,183              373              493
                                                        --------         --------         --------

            Net income (loss)                             31,953          (15,200)         (13,479)

Partners' deficit:
    Beginning of year                                    (53,571)         (38,371)         (24,892)
                                                        --------         --------         --------

    End of year                                         $(21,618)         (53,571)         (38,371)
                                                        ========         ========         ========

Net income (loss) per unit                              $ 322.55          (152.00)         (134.79)
                                                        ========         ========         ========

Weighted average units outstanding                        99,063          100,000          100,000
                                                        ========         ========         ========
</TABLE>

See accompanying notes to combined financial statements.

                                      F-3
<PAGE>   39
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                        Combined Statements of Cash Flows

                  Years ended December 31, 1998, 1997 and 1996
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                          1998              1997             1996
                                                                          ----              ----             ----
<S>                                                                     <C>              <C>              <C>
Cash flows from operating activities:
    Net income (loss)                                                   $ 31,953          (15,200)         (13,479)
    Adjustments to reconcile net income (loss) to net cash
       provided by operating activities:
          Depreciation                                                     7,937            8,604            8,606
          Amortization of discount                                         7,135           11,071            8,326
          Net (gain) loss on disposition of properties
            including forgiveness of wraparound
            mortgages payable                                            (36,946)             493             (947)
          Write-down of rental property                                       --            1,000            1,100
          (Increase) decrease in tenant accounts receivable, net            (126)             800             (171)
          Decrease in unbilled rent receivable                                32              558              274
          Decrease in tenant leasing costs                                    41              206               22
          (Increase) decrease in accounts receivable and
            other assets                                                    (390)             243             (456)
          (Decrease) increase in accounts payable and
            other liabilities                                               (581)            (636)             791
          (Decrease) increase in deferred revenue                            (65)             148              248
                                                                        --------         --------         --------

            Net cash provided by operating activities                      8,990            7,287            4,314
                                                                        --------         --------         --------

Cash flows from financing activities:
       Payments on wraparound mortgages                                   (7,712)          (9,617)          (9,257)
       Repayment of advances to the Pension Groups                            --               --            2,199
       (Decrease) increase in due to Pension Groups                       (1,954)             784            1,170
       (Payments) proceeds from other borrowings                            (148)             358              235
       Proceeds from additional debt                                       2,363              653            4,518
                                                                        --------         --------         --------

            Net cash used in financing activities                         (7,451)          (7,822)          (1,135)
                                                                        --------         --------         --------

Cash flows from investing activities:
       Disposition of properties                                           3,948            1,736            2,944
       Improvements to rental property                                    (1,929)          (1,618)          (5,126)
       Decrease in deposit on sale of property                              (389)              --               --
                                                                        --------         --------         --------

            Net cash provided by (used in) investing activities            1,630              118           (2,182)
                                                                        --------         --------         --------

            Increase (decrease) in cash and cash equivalents               3,169             (417)             997

Cash and cash equivalents:
    Beginning of year                                                      2,480            2,897            1,900
                                                                        --------         --------         --------

    End of year                                                         $  5,649            2,480            2,897
                                                                        ========         ========         ========

Supplemental disclosures of cash flow information:
       Cash paid during the year for interest                           $ 10,596           11,661           14,443
                                                                        ========         ========         ========

Supplemental disclosure of noncash activities:
    Reduction in wraparound mortgages from forgiveness
       of debt, net of related discount                                 $ 51,183              373              493
                                                                        ========         ========         ========
</TABLE>

See accompanying notes to combined financial statements.

                                      F-4
<PAGE>   40
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

(1)    FORMATION AND DESCRIPTION OF BUSINESS

       National Property Analysts Master Limited Partnership (NPAMLP), a limited
       partnership, was formed effective January 1, 1990. NPAMLP is owned 99% by
       the limited partners and 1% collectively by EBL&S, Inc., the managing
       general partner, and Feldman International, Inc., the equity general
       partner (note 8). EBL&S, Inc. assigned its economic interest as general
       partner to Feldman International, Inc. on September 30, 1998.

       The properties included in NPAMLP consist primarily of shopping centers
       and free standing, single tenant retail stores with national retailers as
       prime tenants. The ownership and operations of these properties have been
       combined in NPAMLP pursuant to a consolidation (the Consolidation) of
       properties owned by certain limited partnerships (the Electing
       Partnerships) previously sponsored by National Property Analysts, Inc.
       and its affiliates (NPA). NPAMLP intends to hold the properties until
       such time as it is deemed prudent to dispose of them. The precise timing
       of disposition of the properties is at the discretion of the managing
       general partner. However, in accordance with the partnership agreement,
       the partnership will terminate on December 31, 2015. It is anticipated
       that as a result of the sale of the properties, the limited partners will
       have to report substantial taxable income without the corresponding
       receipt of any cash proceeds.

       The properties were originally purchased by the Electing Partnerships
       from unaffiliated limited partnerships owned by various pension and
       profit sharing trusts, whose interests were subsequently acquired by Main
       Line Pension Group (MLPG). Properties were purchased by the Electing
       Partnerships subject to existing senior mortgages in favor of the sellers
       or unaffiliated third parties. In connection with the acquisition of the
       properties, wraparound mortgages were delivered by the Electing
       Partnerships to MLPG which were subordinate to the third party underlying
       mortgage obligations and other second mortgages. Neither these third
       party underlying obligations or the second mortgages represented direct
       financial obligations of the Electing Partnerships. The Electing
       Partnerships were required to make payments on the wraparound mortgages
       to MLPG, which was required to make payments on the underlying
       obligations.

       In accordance with the Consolidation, the Electing Partnerships
       transferred their interests to NPAMLP. The Electing Partnerships include
       both partnerships that contributed their interests to NPAMLP and certain
       partnerships whose partnership interests were not contributed as of the
       effective date of NPAMLP's formation on January 1, 1990, but were
       allocated their interests in NPAMLP as if they were contributed on
       January 1, 1990. The combined financial statements include the accounts
       of all Electing Partnerships.

       In connection with the Consolidation, NPAMLP, MLPG and certain affiliates
       entered into a restructuring agreement to modify the terms of repayment
       of the wraparound notes. The restructuring agreement provided that all
       wraparound notes which were originally secured by wraparound mortgages on
       properties owned by Electing Partnerships which were audited by the
       Internal Revenue Service (the Audited Partnerships) are
       cross-collateralized by all other wraparound mortgages on other Audited
       Partnerships. In addition, all wraparound notes which were originally
       secured by wraparound mortgages on properties owned by Electing
       Partnerships which were not audited by the Internal Revenue Service (the
       Unaudited Partnerships) are cross-collateralized by all other wraparound
       mortgages on other Unaudited Partnerships.

                                      F-5
<PAGE>   41
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

       Effective October 1, 1998, National Property Analysts Employee
       Partnership (NPAEP) and Penn Valley Pension Group (PVPG) acquired the
       interest of MLPG in certain wraparound mortgages. MLPG, NPAEP and PVPG
       are collectively referred to as the Pension Groups (note 6).

       The wraparound mortgages provide for a sharing of cash from the proceeds
       of sales of properties. The wraparound mortgages generally provide that
       the limited partners of NPAMLP receive 40% of the net proceeds, if any,
       from the sale of properties after repayment of the third party underlying
       mortgage obligations once the net proceeds, as defined in the
       restructuring agreement, from the sale of properties exceed a threshold
       amount of $45,000 (the threshold).

       Through December 31, 1998, NPAMLP sold properties that generated
       approximately $36,422 in net proceeds which have been applied as a
       reduction of the threshold amount. NPAMLP has not distributed any sales
       proceeds to its partners since its organization.

       Additionally, the limited partners of NPAMLP receive 40% of the cash
       flow, if any, from operations in excess of debt service requirements and
       any capital improvements or reserves considered necessary. The remaining
       cash flow, if any, is applied to the wraparound mortgages in payment of
       accrued interest and then principal. It is not anticipated that NPAMLP
       will be in a position to distribute cash flow to its partners in the
       foreseeable future.

       Under the terms of the NPAMLP partnership agreement, the limited partners
       are entitled to a 99% share of any income or loss and the equity general
       partner is entitled to a 1% share.

       NPAMLP has working capital as of December 31, 1998, of approximately $798
       excluding amounts due to the managing general partner and advances to the
       Pension Groups of $573 and $101, respectively. NPAMLP may not have
       sufficient working capital reserves to satisfy mortgage obligations.
       NPAMLP has $2,190 of unrestricted cash and $555 available under a line of
       credit agreement at December 31, 1998, to meet its short-term
       obligations. Through December 31, 1998, NPAMLP has replenished its
       working capital reserves through the sale of properties on which the
       holders of the second mortgage and the wraparound mortgage have released
       their liens. In addition, as of December 31, 1998, the managing general
       partner has advanced approximately $573 to NPAMLP. The managing general
       partner does not have the financial wherewithal to continue to advance
       funds to NPAMLP and may in fact require the repayment of the advances for
       its own operational needs. As a result, it may be necessary for NPAMLP to
       sell properties. In the event that NPAMLP is not able to obtain
       refinancing commitments and loan extensions from the existing senior
       mortgage lenders or refinancing from alternative lenders, the properties
       could be lost to foreclosure.


(2)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a)    RENTAL PROPERTY

              Rental properties are stated at original cost to the Electing
              Partnerships. Depreciation on buildings and building improvements
              is calculated on the straight-line method over their estimated
              useful lives of 30 years and 15 to 39 years, respectively.

                                      F-6

                                                                     (Continued)
<PAGE>   42
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

              In March 1995, the Financial Accounting Standards Board issued
              Statement of Financial Accounting Standards (SFAS) No. 121,
              Accounting for the Impairment of Long-Lived Assets and for
              Long-Lived Assets to Be Disposed Of. SFAS No. 121 requires that
              long-lived assets and certain identifiable assets be reviewed by
              management for impairment whenever events or changes in
              circumstances indicate that the carrying amount of an asset may
              not be recoverable. Recoverability of assets to be held and used
              is measured by a comparison of the carrying amount of an asset to
              future net cash flows expected to be generated by the asset. If
              such assets are considered to be impaired, the impairment to be
              recognized is measured by the amount by which the carrying amount
              of the assets exceed the fair value of the assets. Assets to be
              disposed are reported at the lower of the carrying amount or the
              fair value less costs to sell.

              NPAMLP adopted SFAS No. 121 on January 1, 1996. The estimated
              undiscounted cash flows from the Ardmore, Oklahoma property
              indicated that a write-down to fair market value was required
              under SFAS No. 121 in 1996. This write-down from the initial
              adoption of SFAS No. 121 resulted in a charge to income of $1,100
              in 1996 which is included in the combined statements of operations
              as write-down of rental property. In 1997, the estimated
              undiscounted cash flows from the Las Vegas, Nevada and East
              Greenbush, New York properties indicated that a write-down to fair
              market value of $1,000 was required in 1997, which is included in
              the combined statements of operations as write-down of rental
              property. The estimated fair values of these properties were
              determined by management based on projected cash flows and market
              trends.

       (b)    RESTRICTED CASH

              Restricted cash consists principally of amounts held in escrow for
              capital improvements, real estate taxes and insurance expenses and
              amounts due from various bank trust departments in connection with
              certain property rents that are assigned to these banks in order
              to satisfy the debt service on the underlying mortgage
              obligations. The bank's trust departments periodically remit
              excess funds to NPAMLP as required under the respective trust
              agreements. Restricted cash also includes amounts held in reserve
              for tenant security deposits received.

       (c)    RENTAL INCOME

              Rental income is recognized on a straight-line basis over the
              terms of the respective leases. Unbilled rent receivable
              represents the amount by which the straight-line rentals exceed
              the current rents collectible under the payment terms of the lease
              agreements. Tenant pass-through charges including common area
              maintenance, real estate taxes and property insurance are
              recognized in income when earned and are recorded as other charges
              to tenants.

       (d)    DISCOUNT ON WRAPAROUND MORTGAGES

              The discount on wraparound mortgages represents the difference
              between the present value of mortgage payments at the stated
              interest rate and the imputed rate. The discount is amortized
              using the interest method over the terms of the mortgages and is
              recorded as interest expense.

                                      F-7

                                                                     (Continued)
<PAGE>   43
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

       (e)    INCOME TAXES

              No provision has been made in the combined financial statements
              for income taxes as any such liability is the liability of the
              individual partners.

       (f)    CASH AND CASH EQUIVALENTS

              All highly liquid interest-bearing deposits with original
              maturities of three months or less are considered to be cash
              equivalents.

       (g)    FAIR VALUE OF FINANCIAL INSTRUMENTS

              SFAS No. 107, Disclosures About Fair Value of Financial
              Instruments, requires disclosure of the fair value of certain
              financial instruments. Cash, tenant accounts receivable, accounts
              payable, and other liabilities as reflected in the combined
              financial statements approximate fair value because of the
              short-term maturity of these instruments.

              In accordance with SFAS No. 107, NPAMLP has determined the
              estimated fair value of its wraparound mortgages based on
              discounted future cash flows at a current market rate. Management
              estimates that the carrying value approximates the estimated fair
              value of the wraparound mortgages at December 31, 1998 and 1997.

       (h)    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. Significant estimates have been made by management with
              respect to the recoverability of the carrying amounts of rental
              property. Actual results could differ from these estimates.


(3)    OTHER BORROWINGS

       During 1996, NPAMLP secured a $1,000 revolving line of credit with a bank
       secured by certain properties. The maximum amount outstanding under the
       line of credit during the years ended December 31, 1998 and 1997, was
       $593. During 1998, this line of credit was paid in full and expired under
       its terms.

       During 1995, NPAMLP negotiated with E&H Properties, Inc. (E&H), a related
       party (note 8), for E&H to advance up to $1,000 to NPAMLP for the purpose
       of making capital and tenant improvements to the properties. Pursuant to
       the agreement, the obligation of E&H to make advances to NPAMLP is at all
       times the sole and absolute discretion of E&H. The line bears interest
       based on a variable rate (11.25% at December 31, 1998) and has no
       expiration date. The amounts advanced to NPAMLP are not directly secured
       by any collateral; however, the East Haven, Connecticut property (with a
       net book value of rental property of $4,398 and a wraparound mortgage
       payable of $7,037 at December 31, 1998) has been pledged to secure a line
       of credit extended to E&H by a bank which enables E&H to make advances to
       NPAMLP. As of December 31, 1998, $445 was owed by NPAMLP and E&H under

                                      F-8

                                                                     (Continued)
<PAGE>   44
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

       the lines of credit, respectively. As of December 31, 1997, borrowings
       under the E&H line were $150; however, there were no advances to NPAMLP.
       The maximum amount outstanding under the lines of credit during the year
       ended December 31, 1998, was $445 for NPAMLP and E&H, respectively.
       During 1997, there were no advances to NPAMLP. During 1996, NPAMLP was
       advanced and repaid $703 under the agreement.


(4)    TENANT LEASES

       At December 31, 1998, NPAMLP effectively owns and operates 49 properties
       (56 at December 31, 1997), as listed in Attachment 1, that are comprised
       principally of shopping centers and free standing, single tenant retail
       stores with approximately 190 tenants under various lease agreements
       which are treated as operating leases.

       In addition to minimum rental payments, the leases generally provide for
       additional rents based on operating results of the tenants, reimbursement
       for certain common area maintenance charges, real estate taxes and
       property insurance, and renewal options. The leases expire under their
       original terms at various dates over the next 18 years.

       Future minimum lease rentals to be received under noncancelable leases
       are approximately:

<TABLE>
<CAPTION>
<S>            <C>               <C>
               1999              $16,365
               2000               14,066
               2001               12,449
               2002               11,227
               2003                9,893
               Thereafter         31,266
</TABLE>

       Rental income includes approximately $1,113, $856 and $1,150 related to
       percentage rents billed for the years ended December 31, 1998, 1997 and
       1996, respectively.


(5)    GROUND LEASES

       NPAMLP is obligated under 13 noncancelable ground leases that expire
       between 2000 and 2078 (see Attachment 1).

       During the year ended December 31, 1991, NPAMLP sold the land underlying
       five rental properties and simultaneously entered into ground leases to
       leaseback the land from the buyer. The ground leases have maturities
       ranging from 2004 to 2012, excluding renewal options.

       During the term of the 1991 ground leases, NPAMLP is responsible for
       maintaining the buildings and building improvements, as well as making
       the respective mortgage payments. Under the terms of sale, at the
       expiration of the respective 1991 ground leases, including renewal
       options, title to the buildings will be conveyed to the buyer with no
       additional consideration and any amounts still outstanding under the
       respective wraparound mortgages will remain the liability of NPAMLP.

                                      F-9

                                                                     (Continued)
<PAGE>   45
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

       Aggregate proceeds from the five land sales were $2,650 and are recorded
       as a finance lease obligation. The amounts paid in accordance with the
       1991 ground leases are recorded as interest expense. Any gain or loss
       arising from this transaction will be recognized at the date upon which
       title to the buildings is conveyed to the buyer.

       Future minimum lease payments under all noncancelable ground leases as of
       December 31, 1998, are approximately:

<TABLE>
<CAPTION>
<S>            <C>               <C>
               1999              $  677
               2000                 635
               2001                 622
               2002                 622
               2003                 479
               Thereafter         2,649
</TABLE>

       Total rental expense for ground leases for the years ended December 31,
       1998, 1997 and 1996, was approximately $528, $627 and $603, respectively.
       In addition, $263, $255 and $255 was recorded as interest expense for the
       years ended December 31, 1998, 1997 and 1996, respectively.


(6)    WRAPAROUND MORTGAGES

       The properties combined in NPAMLP are subject to nonrecourse wraparound
       mortgages. The wraparound mortgages are cross-collateralized among the
       properties owned by NPAMLP as described in note 1. The wraparound
       mortgages are secured by liens on the properties and are subordinate to
       the third-party underlying mortgage obligations and the purchase money
       mortgages (note 8), collectively the senior mortgage obligations. The
       wraparound mortgages are payable to the Pension Groups and the Pension
       Groups are liable to the holders of the senior mortgage obligations.

       As stated in note 1, NPAEP and PVPG acquired the interest of MLPG in
       certain wraparound mortgages. Each of the wraparound mortgages are
       secured by liens on specific properties and are subordinate to the senior
       mortgage obligations as stated above.

       During 1998, MLPG agreed to the forgiveness of $98,239 of wraparound
       mortgage obligations with related discounts of $59,677 which remained
       after property dispositions in prior years, of which $13,908 of
       wraparound mortgage obligations with related discounts of $4,441 were
       written off with the dispositions of the East Meadow and Las Vegas
       properties during the first half of 1998. In addition, MLPG agreed to the
       forgiveness of $1,954 that was due to MLPG for past due payments. The
       aggregate of $31,049 is included in Extraordinary Gain from Forgiveness
       of wraparound mortgages payable on disposition of properties.

                                      F-10
                                                                     (Continued)
<PAGE>   46
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

       Through December 31, 1997, MLPG had forgiven the wraparound mortgages
       remaining after the disposition of properties that were owned by Audited
       Partnerships. In 1998 MLPG agreed to forgive certain wraparound mortgages
       remaining after the disposition of properties which were owned by
       Unaudited Partnerships. For the years ended December 31, 1998, 1997 and
       1996, wraparound mortgage obligations of approximately $36,523, $5,180
       and $2,027 with related discounts of $16,389, $4,807 and $1,534,
       respectively, were forgiven in connection with various property
       dispositions. The aggregate of $20,134, $373 and $493 is included in
       Extraordinary Gain from Forgiveness of wraparound mortgages payable on
       disposition of properties for the years ended December 31, 1998, 1997,
       and 1996, respectively.

       The wraparound mortgages have maturity dates varying from August 2009 to
       December 2013 and stated interest rates varying from 0% to 10%.

       Certain wraparound mortgages are fully amortizing over the life of the
       mortgage loan while other wraparound mortgages require balloon payments
       to satisfy the wraparound mortgage obligations. Also, the Pension Groups
       have balloon payments due on the third-party underlying mortgage
       obligations which aggregate approximately $1,222 during the year ended
       December 31, 1999. Discussions and negotiations with the lenders for
       these properties are in process; however, there can be no assurance that
       loan extensions will be successfully negotiated with these lenders.

       Wraparound mortgage principal payment requirements for the next five
       years are approximately:

<TABLE>
<CAPTION>
<S>            <C>         <C>
               1999        $6,724
               2000         6,846
               2001         7,038
               2002         7,466
               2003         7,181
</TABLE>

(7)    PROPERTY SUBJECT TO SALES CONTRACTS

       During the years ended December 31, 1990 and 1995, NPAMLP sold options
       for the purchase of two and three rental properties, respectively. The
       1990 options provide that title to the land and buildings will be
       conveyed to the holder of the options without additional consideration on
       November 14, 2003 and December 11, 2006. The 1995 options provided that
       title to the land and buildings would be conveyed to the holder of the
       options without additional consideration on July 13, 1998, October 31,
       1998, and June 30, 2003. Aggregate proceeds received from the sale of the
       options were $2,440 and were recorded as a Deposit on sale of property.
       Estimated losses arising from these transactions have already been
       recognized by NPAMLP. Any gain arising from these transactions is
       recognized at the date upon which title to the land and buildings is
       conveyed to the buyer. During 1998, the Las Vegas, Nevada and La Mesa,
       California properties were conveyed to the holder of the option without
       additional consideration. As a result, $389 was recognized as a net gain
       on disposition of properties and the deposit on sale of property was
       reduced to $2,051 as of December 31, 1998.

                                      F-11

                                                                     (Continued)
<PAGE>   47
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

 (8)   RELATED-PARTY TRANSACTIONS

       NPAMLP is owned 99% by the limited partners and 1% collectively by EBL&S,
       Inc., the managing general partner and Feldman International, Inc. (FII),
       the equity general partner. EBL&S, Inc. assigned its economic interest as
       general partner to FII, and FII was admitted as the equity general
       partner on September 30, 1998. EBL&S, Inc. is owned by E&H Properties,
       Inc.

       NPAMLP entered into a leasing and property management agreement with
       EBL&S Property Management, Inc. (EBL&S) in 1990. EBL&S is owned by E&H.
       Under the agreement, EBL&S is to receive a property management fee equal
       to 5% of the gross annual rentals collected, including tenant
       reimbursements for common area maintenance charges, real estate taxes and
       property insurance. EBL&S is also entitled to receive leasing commissions
       for obtaining or renewing leases.

       In addition, certain administrative services were performed by EBL&S on
       behalf of NPAMLP as provided for in NPAMLP's Partnership Agreement.
       Amounts earned by EBL&S for the years ended December 31 were as follows:

<TABLE>
<CAPTION>
                                        1998          1997          1996
                                        ----          ----          ----
<S>                                    <C>            <C>           <C>
       Property management fees        $1,196         1,292         1,413
       Leasing commissions                 63           108           263
       Administrative services             58            58            53
                                       ------        ------        ------

                                       $1,317         1,458         1,729
                                       ======        ======        ======
</TABLE>

       Included in accounts payable and other liabilities at December 31, 1998
       and 1997, was approximately $573 and $1,337, respectively, that was owed
       to EBL&S for property management fees, leasing commissions,
       administrative services and cash advances for debt service.

       During 1996, the El Paso, Texas property was sold to a limited
       partnership owned by directors and executives of EBL&S, Inc. The sales
       price of the property was determined to be at fair market value by an
       independent appraiser. A gain on the sale of the property in the amount
       of $524 is reflected in the statement of operations. In connection with
       the transaction a promissory note was issued to NPAMLP in the approximate
       amount of $436. The note is interest only, bears interest at 10% and
       matures on November 1, 2008.

       During 1998, the third-party underlying mortgage obligation on the North
       Augusta, South Carolina property was acquired by E&H for its remaining
       principal balance as of the date of acquisition. The mortgage was
       extended and modified to fully amortize on October 1, 1999.

       NPA and its principals owned 4,362 of the 100,000 units of NPAMLP as of
       December 31, 1997. During 1998, NPA and its principals redeemed their
       interest in NPAMLP in exchange for the transfer of the Trenton, New
       Jersey property and related wraparound mortgage obligations to these
       three partners. As a result, NPA and its principals did not own any of
       the 97,752 units of NPAMLP as of December 31, 1998.

                                      F-12

                                                                     (Continued)
<PAGE>   48
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

       NPA holds purchase money mortgages on certain properties of NPAMLP. The
       purchase money mortgages aggregated approximately $83,156 at December 31,
       1998 and 1997.


(9)    COMMITMENTS AND CONTINGENCIES

       Upon NPAMLP's formation, the title of the properties of the Electing
       Partnerships were to be transferred to NPAMLP. State and local laws vary
       with respect to transfer taxes and are susceptible to varying
       interpretations. NPAMLP's interpretation of the laws relating to these
       transfer taxes could result in significant adjustments if successfully
       challenged by the respective taxing authority, however, a reasonable
       estimation of the potential liability, if any, cannot be made at this
       time.

       NPAMLP is involved in various claims and legal actions arising in the
       ordinary course of property operations. In the opinion of the managing
       general partner, the ultimate disposition of these matters will not have
       a material adverse effect on NPAMLP's financial position, results of
       operations or liquidity.

       During 1998, Cahokia Associates (Cahokia), a wholly owned partnership,
       filed for protection under the provisions of Chapter 11 of the U.S.
       Bankruptcy Code. Cahokia owns and operates the Cahokia, Illinois
       property. Cahokia has been operating as a Debtor-In-Possession since the
       filing date. Prior to December 31, 1998, the bankruptcy was dismissed
       pursuant to a settlement agreement between Cahokia and the holder of the
       third-party underlying mortgage obligation. The agreement was effective
       January 1999 and provided for the transfer of the majority of the Cahokia
       property to the third-party underlying mortgage holder as well as an
       option to purchase a portion of the property retained by Cahokia. The
       transfer of the Cahokia property in 1999 and release of the related
       mortgage obligation is expected to result in a gain in excess of $750 in
       1999.

       Certain scheduled payments on third-party underlying mortgage obligations
       discussed in note 1 have not been made on the Borger, Texas and Federal
       Way, Washington properties at December 31, 1998. In the event that NPAMLP
       is not able to obtain refinancing commitments and loan extensions from
       the existing lenders or refinancing from alternative lenders, the
       properties could be lost to foreclosure. The carrying value of the
       wraparound mortgages payable exceeds the related net book value of rental
       property for Borger, Texas and Federal Way, Washington by approximately
       $1,705 at December 31, 1998, which could result in a gain to NPAMLP in
       the event of foreclosure.


(10)   MAJOR TENANTS

       During the years ended December 31, 1998, 1997 and 1996, one tenant
       accounted for approximately 55%, 50% and 52% of the rental income of
       NPAMLP, respectively. Six of the stores occupied by this tenant had been
       vacated as of December 31, 1998, however, the tenant has continued to
       make rental payments under the terms of its leases at these properties
       while they attempt to market the space to other users. The tenant remains
       obligated under the terms of its leases at these six properties for terms
       ranging from three to seven years.

                                      F-13

                                                                     (Continued)
<PAGE>   49
              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                     Notes to Combined Financial Statements

                        December 31, 1998, 1997, and 1996
                             (dollars in thousands)

 (11)  PARTNERS' DEFICIT

       Following is a summary of the combined changes in partners' deficit for
       the three years ended December 31, 1998 (in thousands except unit data):


<TABLE>
<CAPTION>
                                                UNITS                               PARTNERS' DEFICIT
                                 -----------------------------------      -------------------------------------
                                 GENERAL      LIMITED                     GENERAL        LIMITED
                                 PARTNERS     PARTNERS       TOTAL        PARTNERS       PARTNERS       TOTAL
                                 --------     --------       -----        --------       --------       -----
<S>                              <C>          <C>           <C>          <C>            <C>           <C>
         December 31, 1995          1,000       99,000       100,000      $   (249)      (24,643)      (24,892)
         Net loss                      --           --            --          (135)      (13,344)      (13,479)
                                 --------     --------      --------      --------      --------      --------

         December 31, 1996          1,000       99,000       100,000          (384)      (37,987)      (38,371)
         Net loss                      --           --            --          (152)      (15,048)      (15,200)
                                 --------     --------      --------      --------      --------      --------

         December 31, 1997          1,000       99,000       100,000          (536)      (53,035)      (53,571)
         Net income                    --           --            --           320        31,633        31,953
         Redemption of units           --       (2,248)       (2,248)           --            --            --
                                 --------     --------      --------      --------      --------      --------

         December 31, 1998          1,000       96,752        97,752      $   (216)      (21,402)      (21,618)
                                 ========     ========      ========      ========      ========      ========
</TABLE>

                                      F-14
<PAGE>   50
                                                                    ATTACHMENT 1

              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

         Properties Effectively Owned by NPAMLP at December 31, 1998 (1)




                                PROPERTY LOCATION

<TABLE>
<CAPTION>
<S>                           <C>                                  <C>
Ardmore, OK                   Huntsville, AL*                      Ocala, FL
Borger, TX                    Huron, SD                            O'Fallon, MO
Bowling Green, OH             Hutchinson, MN                       Philadelphia, PA*+
Cahokia, IL                   Independence, MO                     San Mateo, CA*
Chesapeake, VA*+              International Falls, MN              Sault Ste. Marie, MI
Clackamas, OR***              Kalamazoo, MI*+                      Seven Hills, OH*+
Cottage Grove, MN             Lake Mary, FL                        Sparks, NV***
Crescent City, CA             Lockport, IL                         Steger, IL
Dunmore, PA*                  Marquette, MI*                       Taylorville, IL
East Haven, CT                Maryville, MO*                       Urbana, IL
Escanaba, MI                  Menominee, MI*                       Wahpeton, ND
Fairborn, OH*+                Minot, ND                            Washington, IA
Fairfield, IA                 New Hope, MN                         Waverly, OH
Federal Way, WA               Newberry, SC                         Wheelersburg, OH
Fond du Lac, WI               North Augusta, SC*                   Yazoo City, MS
Fort Wayne, IN***             North Sarasota, FL
Huntington, WV                Oak Lawn, IL*
</TABLE>



  * Properties with ground leases (note 5).
*** Property subject to sales contracts (note 7).
  + Land sales (note 5).

(1) Effectively owned refers to the fact that legal title to the properties is
    held by certain partnerships as nominee titleholder and agent for NPAMLP.
    NPAMLP has all beneficial interest in and equitable title to the properties
    and has the right to cause a transfer of legal title at its request.

                                      F-15
<PAGE>   51
                                                                     SCHEDULE II

              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

                   Combined Valuation and Qualifying Accounts

                        December 31, 1998, 1997 and 1996
                                 (in thousands)

<TABLE>
<CAPTION>
                                            BALANCE        ADDITIONS                                BALANCE
                                           BEGINNING       CHARGED TO                                END OF
                                            OF YEAR        OPERATIONS            DEDUCTIONS           YEAR
                                            -------        ----------            ----------           ----
<S>                                        <C>             <C>                   <C>               <C>
Allowance for doubtful accounts:

     Year ended December 31, 1996            $  20              --                   --                20

     Year ended December 31, 1997               20              10                   --                30

     Year ended December 31, 1998               30              --                   --                30
</TABLE>

                                      F-16
<PAGE>   52
                                                                    SCHEDULE III

              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

           Combined Real Estate and Accumulated Depreciation Schedule

                        December 31, 1998, 1997 and 1996
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                        COST CAPITALIZED
                                                                                     (WRITTEN OFF) SUBSEQUENT
                                                           INITIAL COST                TO ACQUISITION
                                                                    BUILDINGS AND               BUILDINGS AND
PROPERTY LOCATION                  ENCUMBRANCES        LAND         IMPROVEMENTS      LAND      IMPROVEMENTS        LAND
-----------------                  ------------        ----         ------------      ----      ------------        ----
<S>                                <C>               <C>            <C>              <C>        <C>              <C>
Ardmore, OK                           $7,120           750             14,989          --          (923)            750
Bowling Green, OH                      4,789           496              5,270          --            13             496
Borger, TX                               647           106              1,143          --           --              106
Cahokia, IL                            4,240           600              5,800          --           154             600
Chesapeake, VA                         3,622           416              4,797          --           --              416
Clackamas, OR                          1,157           124              3,091          --           --              124
Cottage Grove, MN                      6,600           740              5,550         (83)        4,516             657
Crescent City, CA                      1,483           129              2,220          --           --              129
Dunmore, PA                              715           --               1,350          --           --              --
East Haven, CT                         3,633           447              4,883          --         2,117             447
Escanaba, MI                           1,029           159              1,616          --           --              159
Fairborn, OH                           3,414           377              4,961          --            10             377
Fairfield, IA                            246            45                461          --           --               45
Federal Way, WA                        2,586            86              1,894          --           --               86
Fond du Lac, WI                        4,844           760              7,721         (24)           33             736
Fort Wayne, IN                         4,126           575              6,616          --           --              575
Huntington, WV                         2,492           336              3,649          --           443             336
Huntsville, AL                         1,322           --               1,904          --            44             --
Huron, SD                                320            58                598          --           --               58
Hutchinson, MN                         1,935           179              3,304          --           --              179
Independence, MO                       2,871           394              3,550          --           320             394
International Falls, MN                1,764           179              3,071          --           --              179
Kalamazoo, MI                          2,550           250              4,850          --           253             250
Lake Mary, FL                          5,246         1,310              7,422          --           --            1,310
Lockport, IL                           2,136           286              2,572          --           458             286
Marquette, MI                          8,253           --               5,700          --         8,373             --
Maryville, MO                            195           --               1,248          --            44             --
Menominee, MI                          1,832           --               2,722          --           --              --
Minot, ND                              3,187           420              4,625          --            35             420
New Hope, MN                           3,146           357              3,774          --           290             357
Newberry, SC                           1,705           201              2,192          --           --              201
North Augusta, SC                      1,919           100              2,900          --           --              100
North Sarasota, FL                     4,843           459              5,686          --           249             459
O'Fallon, MO                           3,140           343              3,626          --           --              343
Oak Lawn, IL                           5,840           --               9,029          --           178             --
Ocala, FL                              2,427           417              3,301          --           --              417
Philadelphia, PA                       3,587           529              5,859          --           188             529
Steger, IL                             2,316           332              2,488          --            28             332
</TABLE>






<TABLE>
<CAPTION>



                                   BUILDINGS AND                ACCUMULATED          DATE OF
PROPERTY LOCATION                  IMPROVEMENTS      TOTAL      DEPRECIATION      ACQUISITION
-----------------                  ------------      -----      ------------      -----------
<S>                                <C>             <C>         <C>
Ardmore, OK                           14,066        14,816          7,601             09/83
Bowling Green, OH                      5,283         5,779          3,152             02/81
Borger, TX                             1,143         1,249            581             10/83
Cahokia, IL                            5,954         6,554          3,159             10/82
Chesapeake, VA                         4,797         5,213          2,612             09/82
Clackamas, OR                          3,091         3,215          1,580             09/83
Cottage Grove, MN                     10,066        10,723          3,476             11/81
Crescent City, CA                      2,220         2,349          1,147             07/83
Dunmore, PA                            1,350         1,350          1,061             06/75
East Haven, CT                         7,000         7,447          3,049             08/80
Escanaba, MI                           1,616         1,775            875             10/82
Fairborn, OH                           4,971         5,348          2,730             07/82
Fairfield, IA                            461           506            228             03/84
Federal Way, WA                        1,894         1,980          1,121             04/81
Fond du Lac, WI                        7,754         8,490          4,186             10/82
Fort Wayne, IN                         6,616         7,191          3,308             01/84
Huntington, WV                         4,092         4,428          1,797             10/84
Huntsville, AL                         1,948         1,948            951             03/84
Huron, SD                                598           656            296             03/84
Hutchinson, MN                         3,304         3,483          1,716             06/83
Independence, MO                       3,870         4,264          2,168             05/81
International Falls, MN                3,071         3,250          1,587             07/83
Kalamazoo, MI                          5,103         5,353          3,034             09/80
Lake Mary, FL                          7,422         8,732            772             12/94
Lockport, IL                           3,030         3,316          1,472             07/82
Marquette, MI                         14,073        14,073          5,318             05/83
Maryville, MO                          1,292         1,292            642             11/83
Menominee, MI                          2,722         2,722          1,565             10/81
Minot, ND                              4,660         5,080          2,793             12/80
New Hope, MN                           4,064         4,421          2,260             03/81
Newberry, SC                           2,192         2,393          1,041             10/84
North Augusta, SC                      2,900         3,000          1,821             03/80
North Sarasota, FL                     5,935         6,394          3,482             11/80
O'Fallon, MO                           3,626         3,969          2,155             03/81
Oak Lawn, IL                           9,207         9,207          5,261             10/81
Ocala, FL                              3,301         3,718          1,752             02/83
Philadelphia, PA                       6,047         6,576          3,657             08/80
Steger, IL                             2,516         2,848          1,429             11/81
</TABLE>

                                                                     (Continued)

                                      F-17
<PAGE>   53
                                                         SCHEDULE III, CONTINUED

              NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP
                             (A LIMITED PARTNERSHIP)

      Combined Real Estate and Accumulated Depreciation Schedule, Continued

                        December 31, 1998, 1997 and 1996
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                          COST CAPITALIZED
                                                                                      (WRITTEN OFF) SUBSEQUENT
                                                            INITIAL COST                    TO ACQUISITION
                                                         ----------------------      ---------------------------------
                                                                   BUILDINGS AND                BUILDINGS AND
PROPERTY LOCATION                     ENCUMBRANCES       LAND      IMPROVEMENTS      LAND       IMPROVEMENTS      LAND
-----------------                     ------------       ----      ------------      ----       ------------      ----
<S>                                   <C>              <C>         <C>              <C>        <C>              <C>
San Mateo, CA                           $  2,811          --           6,672          --             --            --
Sault St. Marie, MI                        1,880          375          2,816          --             --            375
Seven Hills, OH                            2,073          371          3,771          --             --            371
Sparks, NV                                11,555        1,648         20,409          --             --          1,648
Taylorville, IL                            2,533          492          3,696          --             118           492
Urbana, IL                                 3,672          633          4,753          --              91           633
Wahpeton, ND                                 306           56            577          --             --             56
Washington, IA                               230           41            431          --             --             41
Waverly, OH                                2,420          471          2,920          --              67           471
Wheelersburg, OH                           1,252          194          2,081          --             202           194
Yazoo City, MS                             2,529          158          1,820          --             350           158
                                        --------       ------        -------        ----          ------        ------
                 Total                  $144,538       16,399        206,378        (107)         17,651        16,292
                                        ========       ======        =======        ====          ======        ======

Cross-collateralized wraparound
    mortgages on properties
    previously disposed                 $  4,727
                                        --------

                                        $149,265
                                        ========
</TABLE>




<TABLE>
<CAPTION>



                                       BUILDINGS AND                 ACCUMULATED           DATE OF
PROPERTY LOCATION                      IMPROVEMENTS       TOTAL      DEPRECIATION        ACQUISITION
-----------------                      ------------       -----      ------------        -----------
<S>                                    <C>              <C>          <C>                <C>
San Mateo, CA                              6,672          6,672          3,818               11/81
Sault St. Marie, MI                        2,816          3,191          1,518               11/82
Seven Hills, OH                            3,771          4,142          2,043               10/82
Sparks, NV                                20,409         22,057         10,317               11/83
Taylorville, IL                            3,814          4,306          2,026               11/82
Urbana, IL                                 4,844          5,477          2,566               11/82
Wahpeton, ND                                 577            633            285               03/84
Washington, IA                               431            472            213               03/84
Waverly, OH                                2,987          3,458          1,594               10/82
Wheelersburg, OH                           2,283          2,477          1,108               10/83
Yazoo City, MS                             2,170          2,328            905               09/84
                                         -------        -------        -------
                 Total                   224,029        240,321        113,228
                                         =======        =======        =======
</TABLE>

Properties consist primarily of shopping centers and free standing, single
tenant retail stores.

Depreciation of NPAMLP's investment in building and improvements reflected in
the statements of operations is calculated over the estimated useful lives of
the assets as follows:


<TABLE>
<CAPTION>
<S>                                       <C>                     <C>                                        <C>
  Base building............................30 years               Building components........................15-39 years
</TABLE>

The aggregate cost for federal income tax purposes was approximately $232,868 at
December 31, 1998.

The changes in total real estate assets and accumulated depreciation for the
years ended December 31, are as follows:

<TABLE>
<CAPTION>
                                        TOTAL REAL ESTATE ASSETS
                                ----------------------------------------
                                1998              1997              1996
                                ----              ----              ----
<S>                          <C>                 <C>               <C>
Beginning Balance            $ 273,734           277,585           278,698
Improvements                     1,929             1,618             5,126
Acquisitions                        --                41                --
Disposals/write-downs          (35,342)           (5,510)           (6,239)
                             ---------         ---------         ---------

                             $ 240,321           273,734           277,585
                             =========         =========         =========
</TABLE>



<TABLE>
<CAPTION>
                                              ACCUMULATED DEPRECIATION
                                      -----------------------------------------
                                      1998               1997              1996
                                      ----               ----              ----
<S>                                <C>                 <C>               <C>
Beginning Balance                  $ 122,448           115,711           109,753
Depreciation - Original                7,150             7,950             8,112
Depreciation - Improvements              787               654               494
Disposals                            (17,157)           (1,867)           (2,648)
                                   ---------         ---------         ---------

                                   $ 113,228           122,448           115,711
                                   =========         =========         =========
</TABLE>

The Ardmore, Oklahoma property was written down by $1,100 during 1996 upon
NPAMLP's adoption of SFAS No. 121.

The East Greenbush, New York and Las Vegas, Nevada properties were written down
by $600 and $400, respectively, during 1997 in accordance with SFAS No. 121.

                                      F-18