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


                                    FORM 10-K

(Mark One)

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

         For the fiscal year ended December 31, 1996

                                       OR

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

         For the transition period from                   to
                                        -----------------    -----------------

         Commission file number 0-17660

                                 METRIC PARTNERS

                          GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership
             (Exact name of Registrant as specified in its charter)

          CALIFORNIA                                            94-3050708
---------------------------------                            -------------------
(State or other jurisdiction                                 (I.R.S. Employer 
of incorporation or organization)                            Identification No.)

         1 California Street
      San Francisco, California                                 94111-5415
---------------------------------                            -------------------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code: (415) 678-2000
                                                    (800) 347-6707 in all states

Securities registered pursuant to Section 12(b) of the Act:            None
Securities registered pursuant to Section 12(g) of the Act:  Limited Partnership
                                                             Assignee Units

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No
                                             ---   ---

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

      No market for the Limited Partnership  Assignee Units exists and therefore
a market value for such Units cannot be determined.







<PAGE>



                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership


                                     PART I

Item 1.    Business.

Metric Partners Growth Suite Investors,  L.P., a California Limited  Partnership
(the "Partnership"),  was organized in 1984 under the California Uniform Limited
Partnership  Act.  The managing  general  partner of the  Partnership  is Metric
Realty,  an  Illinois  general  partnership.  Metric  Realty  is owned by Metric
Holdings,  Inc. and Metric  Realty  Corp.  Metric  Realty Corp.  is the Managing
Partner of Metric Realty.  The associate  general  partner of the Partnership is
GHI Associates II, L.P., a California Limited  Partnership.  The general partner
of  GHI   Associates   II  is  Metric   Realty  and  the   limited   partner  is
Prudential-Bache Properties, Inc.

It is  anticipated  that  affiliates  of Metric  Realty  will be  involved  in a
reorganization  effective  April 1, 1997.  As a result,  it is expected that the
partners of Metric Realty as of such date will be SSR Realty Advisors,  Inc. and
Metric Property Management, Inc.; SSR Realty Advisors, Inc. will be the Managing
Partner.  This  change in the  partners  of Metric  Realty will have no material
effect on the Partnership.

The Partnership's Registration Statement filed pursuant to the Securities Act of
1933 (No.  33-8610)  was  declared  effective  by the  Securities  and  Exchange
Commission on April 14, 1988. The Partnership  marketed its securities  pursuant
to its  Prospectus  dated  April  14,  1988  which was  thereafter  supplemented
(hereinafter  the  "Prospectus").  This Prospectus was filed with the Securities
and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933.

The principal  business of the  Partnership is to acquire,  hold for investment,
manage and ultimately  sell  all-suite,  extended stay hotels which are operated
under franchise licenses from Residence Inn by Marriott, Inc. The Partnership is
a "closed" limited partnership real estate syndicate.  For a further description
of the  Partnership's  business,  see the sections  entitled  "Risk Factors" and
"Investment Objectives and Policies" in the Prospectus.

Beginning  in  April  1988,  the  Partnership  offered  $60,000,000  in  Limited
Partnership  Assignee Units. The offering was closed on June 30, 1989 with total
funding of  $59,932,000.  The net proceeds of the offering were used to purchase
ten hotel properties,  which are described in Item 2. The acquisition activities
of the  Partnership  were  completed on March 16,  1990,  with the purchase of a
final hotel property,  the Residence Inn - Altamonte  Springs.  Since that time,
the principal  activity of the Partnership  has been managing its portfolio.  As
the Partnership's  long-term goal is to ultimately liquidate the portfolio,  the
markets  where the hotels are  located  are  monitored  on an ongoing  basis for
potential sales opportunities. In mid 1995, the Partnership believed that market
conditions  in  Atlanta  were  optimum  to  consider  a sale  of  the  Residence
Inn-Atlanta   (Perimeter   West)  and  initiated   discussions   with  potential
purchasers.  Following a series of negotiations,  the Partnership entered into a
purchase and sale agreement with an unaffiliated  buyer and sold the property on
October 3, 1995. The Partnership's remaining hotels are currently being marketed
for sale.

Both the income and expenses of operating the properties  which the  Partnership
owns  are  subject  to  factors  outside  the  Partnership's  control,  such  as
oversupply  of similar  properties  resulting  from  overbuilding,  increases in
unemployment or population  shifts, or changes in patterns of needs of users. In
addition,  there are risks  inherent  in owning and  operating  hotels and other
lodging  facilities  because such  properties are management and labor intensive
and  especially  susceptible  to the  impact of  economic  and other  conditions
outside the control of the Partnership.

Expenses,  such as local real estate taxes and management expenses,  are subject
to change and cannot  always be reflected in room rate  increases  due to market
conditions.  The  profitability and marketability of developed real property may
be adversely affected by changes in general and local economic conditions and in
prevailing  interest  rates,  and  favorable  changes in such  factors  will not
necessarily  enhance the  profitability or marketability of such property.  Even
under the most  favorable  market  conditions,  there is no  guarantee  that any
property owned by the Partnership can be sold or, if sold, that such sale can be
made upon favorable terms.

There have been, and it is possible there may be other, federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The managing  general partner is unable to predict the extent,  if
any, to which such

                                        1

<PAGE>



new legislation or regulations might occur and the degree to which such existing
or new legislation or regulations might adversely affect the properties owned by
the Partnership.

Environmental  site assessments were performed for each of the properties at the
time of property acquisition.  No material adverse  environmental  conditions or
liabilities were identified. In no case has the Partnership received notice that
it is a potentially  responsible party with respect to an environmental clean-up
site.

The Partnership and the hotel management company maintain property and liability
insurance  on the  properties.  The  Partnership  believes  such  coverage to be
adequate.

The Partnership is subject to the general competitive  conditions of the lodging
industry. In addition, each of the Partnership's  properties competes in an area
which  normally  contains  numerous  other  properties  which may be  considered
competitive.

Item 2.    Properties.

A description of the hotel properties which the Partnership owns is as follows:


Name and Location                           Date of Purchase     Rooms
-----------------                           ----------------     -----
Residence Inn-Ontario                              04/88          200
 2025 East D Street
 Ontario, California

Residence Inn-Fort Wayne                           06/88           80
 4919 Lima Road
 Fort Wayne, Indiana

Residence Inn-Columbus East                        06/88           80
 2084 South Hamilton Road
 Columbus, Ohio

Residence Inn-Indianapolis                         06/88           88
 3553 Founders Road
 Indianapolis, Indiana

Residence Inn-Lexington                            06/88           80
 1080 Newtown Pike
 Lexington, Kentucky

Residence Inn-Louisville                           06/88           96
 120 North Hurtsbourne Lane
 Louisville, Kentucky

Residence Inn-Winston-Salem                        06/88           88
 7835 North Point Boulevard
 Winston-Salem, North Carolina

Residence Inn-Nashville (Airport)                  05/89          168
  2300 Elm Hill Pike
  Nashville, Tennessee

Residence Inn-Atlanta (Perimeter West)(1)          10/89          128
  6096 Barfield Road
 Atlanta, Georgia

Residence Inn-Altamonte Springs                    03/90          128
 270 Douglas Avenue
 Altamonte Springs, Florida

--------

(1) Sold in October 1995.

                                        2
<PAGE>

See  the  Financial   Statements  in  Item  8  for  information   regarding  any
encumbrances to which the properties of the Partnership are subject.


Occupancy  and room rates for the years ended  December 31, 1996,  1995 and 1994
are as follows:

<TABLE>
<CAPTION>
                                                                 Average                          Average
                                                           Occupancy Rate (%)               Daily Room Rate ($)
                                                       --------------------------       -----------------------
------------------------------------------------
                                                          1996     1995    1994           1996     1995    1994
                                                          ----     ----    ----           ----     ----    ----
<S>                                                        <C>      <C>     <C>           <C>      <C>     <C>
HOTELS:
Residence Inn-Ontario...........................           74       72      69            69.60    67.84   67.57
Residence Inn-Columbus East.....................           87       89      87            74.54    68.98   64.23
Residence Inn-Fort Wayne........................           88       93      89            67.45    62.43   59.04
Residence Inn-Indianapolis......................           82       80      85            76.06    75.69   69.48
Residence Inn-Lexington.........................           91       84      87            71.92    71.90   70.66
Residence Inn-Louisville........................           86       85      90            86.31    79.92   75.04
Residence Inn-Winston-Salem.....................           84       85      85            75.95    71.94   65.47
Residence Inn-Nashville (Airport)...............           76       77      75            78.74    77.43   72.71
Residence Inn-Atlanta (Perimeter West) (1)......            -       81      82              -      87.82   76.76
Residence Inn-Altamonte Springs.................           86       82      78            83.73    78.31   77.52

</TABLE>
--------
(1) Sold in October 1995.


                               Project Operations

Project  Operations  for the years ended  December 31,  1996,  1995 and 1994 are
shown on the following three pages.

Project  Operations tables reflect the components of income or loss (before gain
on sale) for each property which the Partnership  owns and the components of the
loss at the Partnership level. In addition,  non-cash items such as depreciation
and amortization are shown.  The tables also reflect  principal  payments on the
Partnership's notes payable and capital improvements.


                                        3
<PAGE>


<TABLE>
                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
                        a California Limited Partnership

                  Project Operations of the Residence Inns for
                        the Year Ended December 31, 1996
                                     (000's)
<CAPTION>
                                       Columbus     Fort                                    
                              Ontario   (East)      Wayne  Indianapolis Lexington Louisville
                              -------    -----      -----  ------------ --------- ---------
<S>                          <C>        <C>        <C>        <C>        <C>        <C>    
REVENUES:
Hotel operations:
  Rooms                      $3,843     $1,923     $1,753     $2,031     $1,947     $2,653
  Telephone and other           242         82         98         94        140        160
                              -----      -----      -----      -----      -----      -----
Hotel operations              4,085      2,005      1,851      2,125      2,087      2,813
Interest and other                0          0          0          0          0          0
                              -----      -----      -----      -----      -----      -----
Total revenues                4,085      2,005      1,851      2,125      2,087      2,813
                              -----      -----      -----      -----      -----      -----

EXPENSES:
Hotel operations:
  Rooms                         698        458        366        490        342        482
  Administrative                467        254        234        287        287        270
  Marketing                     468        198        197        259        248        310
  Energy                        245        109         95        114         88        100
  Repair and maintenance        202        115         88        123        131        121
  Management fees               123         74         89         64         76        115
  Property taxes                 94         71         29         76         52         77
  Other                         146         60         51         48         70         83
                              -----      -----      -----      -----      -----      -----
Hotel operations              2,443      1,339      1,149      1,461      1,294      1,558
Depreciation and other
  amortization                  505        218        224        264        258        301
Interest                        855        277        291        337        328        379
General and
  administrative                  0          0          0          0          0          0
                              -----      -----      -----      -----      -----      -----
Total expenses                3,803      1,834      1,664      2,062      1,880      2,238
                              -----      -----      -----      -----      -----      -----
INCOME(LOSS)                    282        171        187         63        207        575

Plus non-cash items - net       505        222        228        269        263        307
Less notes payable
  principal payments              3         18         19         22         22         25
                              -----      -----      -----      -----      -----      -----
Project operations              784        375        396        310        448        857

Capital Improvements             84        179        276        319        361        221
                              -----      -----      -----      -----      -----      -----
Project operations after
  capital improvements       $  700     $  196     $  120     $   (9)    $   87     $  636
                              =====      =====      =====      =====      =====      =====


Occupancy                        74%        87%        88%        82%        91%        86%
ADR                          $69.60     $74.54     $67.45     $76.06     $71.92     $86.31

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                              Winston                             Altamonte 
                               Salem       Nashville    Atlanta    Springs    Partnership      Total
                              -------      ---------    -------    -------    -----------      -----
<S>                           <C>           <C>           <C>       <C>         <C>           <C>
REVENUES:                 
Hotel operations:
  Rooms                       $ 2,082       $ 3,744       $ 0       $3,412      $     0       $23,388
  Telephone and other             134           148         0          124            0         1,222
                              -------       -------       ---       ------      -------       -------
Hotel operations                2,216         3,892         0        3,536            0        24,610
Interest and other                  0             0         0            0          435           435
                              -------       -------       ---       ------      -------       -------
Total revenues                  2,216         3,892         0        3,536          435        25,045
                              -------       -------       ---       ------      -------       -------

EXPENSES:
Hotel operations:
  Rooms                           444           930         0          689            0         4,899
  Administrative                  287           627         9          379            0         3,101
  Marketing                       252           451         0          379            0         2,762
  Energy                          115           239         0          176            0         1,281
  Repair and maintenance          146           320         0          165            0         1,411
  Management fees                  94           117         0          164            0           916
  Property taxes                   63           112         0          164            0           738
  Other                            66           316         0           77            0           917
                              -------       -------       ---       ------      -------       -------
Hotel operations                1,467         3,112         9        2,193            0        16,025
Depreciation and other
  amortization                    263           496         0          404            0         2,933
Interest                          333           872         0          678            0         4,350
General and
  administrative                    0             0         0            0        1,216         1,216
                              -------       -------       ---       ------      -------       -------
Total expenses                  2,063         4,480         9        3,275        1,216        24,524
                              -------       -------       ---       ------      -------       -------
INCOME(LOSS)                      153          (588)       (9)         261         (781)          521

Plus non-cash items - net         268           496         0          564            0         3,122
Less notes payable
  principal payments               22           129         0          100            0           360
                              -------       -------       ---       ------      -------       -------
Project operations                399          (221)       (9)         725         (781)        3,283

Capital Improvements              430           548         0          153            0         2,571
                              -------       -------       ---       ------      -------       -------
Project operations after
  capital improvements        ($   31)      ($  769)      ($9)      $  572      ($  781)      $   712
                              =======       =======       ===       ======      =======       =======


Occupancy                          84%           76%        0%          86%                        82%
ADR                            $75.95        $78.74     $0.00       $83.73                    $ 76.13

</TABLE>


                                        4

<PAGE>


<TABLE>
                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
                        a California Limited Partnership

                  Project Operations of the Residence Inns for
                        the Year Ended December 31, 1995
                                     (000's)
<CAPTION>
                                             Columbus       Fort                                             
                                Ontario       (East)        Wayne    Indianapolis    Lexington     Louisville
                                -------       ------        -----    ------------    ---------     ----------
<S>                             <C>          <C>            <C>          <C>          <C>            <C>
REVENUES:
Hotel operations:
  Rooms                         $3,603       $ 1,783        $1,693       $1,994       $ 1,751        $2,363
  Telephone and other              244            66            94           99           135           157
                                ------       -------        ------       ------       -------        ------
Hotel operations                 3,847         1,849         1,787        2,093         1,886         2,520
Interest and other                  53             0             0            0             0             0
                                ------       -------        ------       ------       -------        ------
Total revenues                   3,900         1,849         1,787        2,093         1,886         2,520
                                ------       -------        ------       ------       -------        ------

EXPENSES:
Hotel operations:
  Rooms                            672           396           331          444           380           416
  Administrative                   385           298           196          292           236           264
  Marketing                        446           157           165          228           174           243
  Energy                           274           107            91           97            90            98
  Repair and maintenance           189           101            64          127           123           115
  Management fees                  154           120           116          137           123           165
  Property taxes                    78            89            80           79            51            80
  Other                            201            54            51           56            70            78
                                ------       -------        ------       ------       -------        ------
Hotel operations                 2,399         1,322         1,094        1,460         1,247         1,459
Depreciation and other
  amortization                     496           206           204          253           245           286
Interest                           855           279           293          339           330           381
General and administrative           0             0             0            0             0             0
                                ------       -------        ------       ------       -------        ------
Total expenses                   3,750         1,807         1,591        2,052         1,822         2,126
                                ------       -------        ------       ------       -------        ------
INCOME(LOSS) (1)                   150            42           196           41            64           394

Plus non-cash items - net          442           210           209          258           250           292
Less notes payable
  principal payments                 5            17            17           20            20            23
                                ------       -------        ------       ------       -------        ------
Project operations                 587           235           388          279           294           663

Capital Improvements               163           268           228          163           326           220
                                ------       -------        ------       ------       -------        ------
Project operations after
  capital improvements          $  424       ($   33)       $  160       $  116       ($   32)       $  443
                                ======       =======        ======       ======       =======        ======

(1) Before gain on sale of property.
Occupancy                           72%           89%           93%          80%           84%           85%
ADR                             $67.84        $68.98        $62.43       $75.69        $71.90        $79.92

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                Winston                                 Altamonte                        
                                 Salem      Nashville      Atlanta       Springs    Partnership       Total 
                                 -----      ---------      -------       -------    -----------       -----
<S>                             <C>          <C>            <C>          <C>            <C>          <C>
REVENUES:
Hotel operations:
  Rooms                         $1,956       $ 3,654        $2,496       $ 2,982        $   0        $24,275
  Telephone and other              111           173           153           142            0          1,374
                                ------       -------        ------       -------        -----        -------
Hotel operations                 2,067         3,827         2,649         3,124            0         25,649
Interest and other                   0             7            54             0          344            458
                                ------       -------        ------       -------        -----        -------
Total revenues                   2,067         3,834         2,703         3,124          344         26,107
                                ------       -------        ------       -------        -----        -------

EXPENSES:
Hotel operations:
  Rooms                            391           877           493           767            0          5,167
  Administrative                   280           415           533           325            0          3,224
  Marketing                        192           384           258           291            0          2,538
  Energy                           100           236           131           174            0          1,398
  Repair and maintenance           121           216           109           164            0          1,329
  Management fees                  135           115           132           167            0          1,364
  Property taxes                    66           105            82           167            0            877
  Other                             64           264            64            68            0            970
                                ------       -------        ------       -------        -----        -------
Hotel operations                 1,349         2,612         1,802         2,123            0         16,867
Depreciation and other
  amortization                     248           597           349           626            0          3,510
Interest                           335           899           467           674            0          4,852
General and administrative           0             0             0             0          809            809
                                ------       -------        ------       -------        -----        -------
Total expenses                   1,932         4,108         2,618         3,423          809         26,038
                                ------       -------        ------       -------        -----        -------
INCOME(LOSS) (1)                   135          (274)           85          (299)        (465)            69

Plus non-cash items - net          254           590           307           773            0          3,585
Less notes payable
  principal payments                20           100            28            83            0            333
                                ------       -------        ------       -------        -----        -------
Project operations                 369           216           364           391         (465)         3,321

Capital Improvements                84           331           178           202            0          2,163
                                ------       -------        ------       -------        -----        -------
Project operations after
  capital improvements          $  285       ($  115)       $  186       $   189        ($465)       $ 1,158
                                ======       =======        ======       =======        =====        =======

(1) Before gain on sale of property.
Occupancy                           85%           77%           81%           82%                         81%
ADR                             $71.94        $77.43        $87.82       $ 78.31                     $ 74.18

</TABLE>




                                        5

<PAGE>


<TABLE>
                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
                        a California Limited Partnership

                  Project Operations of the Residence Inns for
                        the Year Ended December 31, 1994
                                     (000's)
<CAPTION>
                                              Columbus         Fort                                              
                                Ontario        (East)          Wayne      Indianapolis    Lexington    Louisville
                                -------        ------          -----      ------------    ---------    ----------
<S>                             <C>            <C>            <C>            <C>            <C>          <C>
REVENUES:
Hotel operations:
  Rooms                         $ 3,381        $ 1,636        $ 1,527        $ 1,892        $1,780       $2,354
  Telephone and other               220             59             84            104           134          122
                                -------        -------        -------        -------        ------       ------
Hotel operations                  3,601          1,695          1,611          1,996         1,914        2,476
Interest and other                   40              0              0              0             0            0
                                -------        -------        -------        -------        ------       ------
Total revenues                    3,641          1,695          1,611          1,996         1,914        2,476
                                -------        -------        -------        -------        ------       ------

EXPENSES:
Hotel operations:
  Rooms                             649            342            309            410           353          392
  Administrative                    428            268            189            236           275          252
  Marketing                         436            152            166            215           148          244
  Energy                            250            122             96             98            89          103
  Repair and maintenance            171             77             87            104           117          113
  Management fees                   144            110            105            129           125          162
  Property taxes                     63             57             65             70            51           81
  Other                             147             50             43             53            62           64
                                -------        -------        -------        -------        ------       ------
Hotel operations                  2,288          1,178          1,060          1,315         1,220        1,411
Depreciation and other
  amortization                      550            283            272            346           307          371
Interest                            856            281            294            341           332          383
General and administrative            0              0              0              0             0            0
                                -------        -------        -------        -------        ------       ------
Total expenses                    3,694          1,742          1,626          2,002         1,859        2,165
                                -------        -------        -------        -------        ------       ------
INCOME(LOSS)                        (53)           (47)           (15)            (6)           55          311

Plus non-cash items - net           510            287            277            351           313          377
Less notes payable
  principal payments                  4             15             16             18            18           20
                                -------        -------        -------        -------        ------       ------
Project operations                  453            225            246            327           350          668

Capital Improvements                184             27             37            200            37          266
                                -------        -------        -------        -------        ------       ------
Project operations after
  capital improvements          $   269        $   198        $   209        $   127        $  313       $  402
                                =======        =======        =======        =======        ======       ======


Occupancy                            69%            87%            89%            85%           87%          90%
ADR                             $ 67.57        $ 64.23        $ 59.04        $ 69.48        $70.66       $75.04

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                Winston                                   Altamonte                        
                                 Salem        Nashville      Atlanta       Springs     Partnership       Total
                                 -----        ---------      -------       -------     -----------       -----
<S>                             <C>            <C>            <C>          <C>            <C>         <C> 
REVENUES:
Hotel operations:
  Rooms                         $ 1,790        $ 3,347        $2,931       $ 2,808        $   0        $ 23,446
  Telephone and other               113            169           169           134            0           1,308
                                -------        -------        ------       -------        -----        --------
Hotel operations                  1,903          3,516         3,100         2,942            0          24,754
Interest and other                    0             20            18             0          176             254
                                -------        -------        ------       -------        -----        --------
Total revenues                    1,903          3,536         3,118         2,942          176          25,008
                                -------        -------        ------       -------        -----        --------

EXPENSES:
Hotel operations:
  Rooms                             395            789           605           680            0           4,924
  Administrative                    264            330           355           316            0           2,913
  Marketing                         182            344           302           248            0           2,437
  Energy                            103            248           159           170            0           1,438
  Repair and maintenance            130            216           144           142            0           1,301
  Management fees                   124            105           155           147            0           1,306
  Property taxes                     67            121            75           187            0             837
  Other                              76            270            75            61            0             901
                                -------        -------        ------       -------        -----        --------
Hotel operations                  1,341          2,423         1,870         1,951            0          16,057
Depreciation and other
  amortization                      323            688           453           611            0           4,204
Interest                            337            901           622           670            0           5,017
General and administrative            0              0             0             0          677             677
                                -------        -------        ------       -------        -----        --------
Total expenses                    2,001          4,012         2,945         3,232          677          25,955
                                -------        -------        ------       -------        -----        --------
INCOME(LOSS)                        (98)          (476)          173          (290)        (501)           (947)

Plus non-cash items - net           329            668           451           747            0           4,310
Less notes payable
  principal payments                 18             99            37            72            0             317
                                -------        -------        ------       -------        -----        --------
Project operations                  213             93           587           385         (501)          3,046

Capital Improvements                116            427            38           116            0           1,448
                                -------        -------        ------       -------        -----        --------
Project operations after
  capital improvements          $    97        ($  334)       $  549       $   269        ($501)       $  1,598
                                =======        =======        ======       =======        =====        ========


Occupancy                            85%            75%           82%           78%                          80%
ADR                             $ 65.47         $72.71        $76.76       $ 77.52                     $  70.42

</TABLE>



                                       6

<PAGE>

Item 3. Legal Proceedings.

There are no material  pending legal  proceedings to which the  Partnership is a
party or to which any of its assets are subject, except the following:

Metric Partners Growth Suite Investors,  L.P. vs. Kenneth E. Nelson,  The Nelson
Group, et al., San Francisco County Superior Court, Case No. 928065.

Nashville  Lodging Company vs. Metric Partners Growth Suite Investors,  L.P., et
al., Circuit Court, State of Wisconsin, Case No. 94CV001212.

Orlando  Residence,  Ltd.  (Plaintiff) vs.  Nashville  Lodging  Company,  Metric
Partners  Growth Suite  Investors,  L.P., et al.  (Defendants);  Metric Partners
Growth Suite Investors  (Third Party  Plaintiff) vs. 2300 Elm Hill Pike, Inc. et
al. (Third Party Defendant),  Tennessee Chancery Court for Davidson County, Case
No. 92-3086-III.

Orlando  Residence,  Ltd.  (Plaintiff)  vs.  2300 Elm Hill  Pike,  Inc.,  et al.
(Defendants/Third  Party Plaintiffs) vs. Metric Partners Growth Suite Investors,
L.P. (Third Party Defendant), Tennessee Chancery Court for Davidson County, Case
No. 94-1911-I.

Metric Partners Growth Suite Investors, L.P. vs. Nashville Lodging Co., 2300 Elm
Hill Pike, Inc., Orlando Residence,  Ltd., and LaSalle National Bank, as trustee
under that certain pooling and servicing agreement, dated July 11, 1995, for the
holders of the WHP Commercial Mortgage Pass Through Certificates,  Series 1995C1
and Robert Holland,  Trustee,  Chancery Court for Davidson County, in Nashville,
Tennessee, Case No. 96-1405-III.

For  information  regarding  these  lawsuits  see  Management's  Discussion  and
Analysis of Financial  Condition and Results of Operations and Item 8, Note 7 to
the Financial Statements.

Metric Partners Growth Suite Investors, L.P. vs. Joe Huddleston, Commissioner of
Revenue  for the State of  Tennessee,  Tennessee  Chancery  Court  for  Davidson
County, Case No. 94-1227-II.

Metric Partners Growth Suite Investors, L.P. vs. Joe Huddleston, Commissioner of
Revenue for the State of Tennessee.

GSI filed this action April 25, 1994 to challenge the  assessment of a sales and
use tax  deficiency  by the State for the period 1989 through 1993 in the amount
of $122,799  with  accrued  interest  through  February 20, 1994 of $35,248 (the
alleged  deficiency plus estimated accrued interest totaled $205,000 at December
31, 1996). In general,  the claimed  deficiency  relates presumably to sales tax
related to food and beverage items used in the Hotel's  complimentary  breakfast
and evening  social hour. In February  1997, GSI learned that this case had been
dismissed  for  failure  to  prosecute  by  its  attorneys.   A  motion  seeking
reinstatement  of the case was filed by GSI on March 18, 1997,  and a hearing is
scheduled for April 18, 1997.

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

No matter was submitted to a vote of security  holders during the period covered
by this report.

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

The  Limited   Partnership   Assignee  Unit  holders  are  entitled  to  certain
distributions as provided in the Partnership  Agreement.  From inception through
February  15, 1997,  Assignee  Unit holders  have  received  distributions  from
operations  and  sales  ranging  from  $291  -  $384  for  each  $1,000  limited
partnership  assignee Unit,  exclusive of a $2 payment made in 1995 to the State
of Georgia for real  property  taxes due on gain from the sale of the  Residence
Inn-Atlanta (Perimeter West).  No market for Limited Partnership  Assignee Units
exists, nor is expected to develop.



                                        7

<PAGE>
As  of  December  31,  1996,  the  approximate  number  of  holders  of  Limited
Partnership Assignee Units was as follows:

                                                                   Number of
                                                                    Record
                Title of Class                                     Holders*
                --------------                                     --------
                Limited Partnership Assignee Units..........        4,939

--------
*Number of Investments

Item 6.    Selected Financial Data.

The following  represents  selected  financial data for Metric  Partners  Growth
Suite Investors,  L.P., a California Limited  Partnership,  for each of the five
years  in the  period  ended  December  31,  1996.  The data  should  be read in
conjunction with the financial statements included elsewhere herein.

<TABLE>
<CAPTION>
                                         For the Year Ended December 31,
                                         -------------------------------
                                  1996     1995      1994       1993       1992
                                  ----     ----      ----       ----       ----
                                   (Amounts in thousands except per unit data)

<S>                             <C>      <C>      <C>        <C>        <C>
TOTAL REVENUES ...............  $25,045  $26,107  $ 25,008   $ 24,190   $ 23,331
                                =======  =======  ========   ========   ========

NET INCOME (LOSS) ............  $   521  $ 3,344  $   (947)  $ (2,138)  $ (2,329)
                                =======  =======  ========   ========   ========

NET INCOME (LOSS) PER LIMITED
 PARTNERSHIP ASSIGNEE UNIT (1)  $     8  $    52  $    (19)  $    (39)  $    (38)
                                =======  =======  ========   ========   ========

TOTAL ASSETS .................  $67,436  $71,071  $ 74,936   $ 77,899   $ 81,951
                                =======  =======  ========   ========   ========

LONG TERM OBLIGATIONS:
   Notes Payable .............  $42,518  $42,669  $ 48,800   $ 49,003   $ 49,014
                                =======  =======  ========   ========   ========

CASH DISTRIBUTIONS PER LIMITED
 PARTNERSHIP ASSIGNEE UNIT ...  $    68  $    32  $     30   $     30   $     28
                                =======  =======  ========   ========   ========
</TABLE>

(1)  $1,000 original  contribution per limited partnership  assignee Unit, based
     on limited partnership  assignee units outstanding during the period, after
     allocation to the General Partners.


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

Introduction

This Item should be read in  conjunction  with  Financial  Statements  contained
elsewhere in this Report.

Results of Operations

1996 Compared to 1995

Net income was $521,000 in 1996  compared to net income of  $3,344,000  in 1995.
The net income in 1995 was  comprised of $69,000  income  before gain on sale of
property and $3,275,000  gain on sale of property,  whereas there was no gain on
sale of property in 1996.  Income  before gain on sale of property  increased by
$452,000 in 1996  compared to 1995 despite the loss of income from the Residence
Inn - Atlanta.  Income before gain on sale of property increased at seven of the
nine remaining properties, although substantially reduced by an increase in loss
at the  Residence  Inn - Nashville  and an  increase in loss at the  Partnership
level.

Revenues from hotel operations decreased 4% for 1996 compared to 1995 due to the
sale of the Residence Inn - Atlanta in 1995. The remaining  nine  properties all
experienced increases in revenue totaling 7% as average daily room rates

                                        8
<PAGE>



increased  or stayed even and  occupancy  increased  at five of the  properties.
Properties  experiencing  decreases in occupancy  had increases in rates to more
than  offset  the fall in  occupancy.  Hotel  operating  expenses  decreased  5%
primarily as a result of the sale of the Residence Inn - Atlanta in 1995.  Hotel
operating expenses,  exclusive of the effect of the sale of one hotel, increased
by 6% primarily due to significant  increases in  administrative  and repair and
maintenance  expenses at the Residence Inn - Nashville and in marketing costs at
all of the  hotels.  Administrative  expenses at the  Residence  Inn - Nashville
increased  due to the increase in accrual,  from $40,000 at December 31, 1995 to
$205,000 at December 31, 1996, for potential  payment to the State of Tennessee,
as a result of a sales and use tax audit  covering  the  period  1989-1993  (see
Residence  Inn - Nashville  below).  Overall  management  fee expense  decreased
compared to 1995 due to the restructured  agreements with Marriott  Corporation,
which  provided  for lower base fees and  introduced  incentive  fees on all the
properties which are tied to the operations of the properties.  Furthermore, the
agreements  provided  for an  increase  in  certain  marketing  fees  charged by
Marriott  causing an increase in marketing costs for 1996 when compared to 1995.
Interest and other income decreased by $23,000 in 1996. The decrease was the net
result of a $91,000  increase in interest  income  primarily  due to higher cash
balances, specifically the proceeds from the sale of the Residence Inn - Atlanta
and a $114,000 decrease in income resulting from recognition in 1995 of deferred
income relating to the terminated  management contracts for the Residence Inns -
Ontario and Atlanta. Depreciation and amortization decreased $577,000 in 1996 as
compared  to 1995 due to the sale of one hotel in the fourth  quarter of 1995 as
well as fully depreciated  furnishings at certain of the other hotels.  Interest
expense decreased $502,000 in 1996 compared to 1995 primarily due to the sale of
the  Residence  Inn - Atlanta.  General and  administrative  expenses  increased
$407,000  in 1996 when  compared to 1995  primarily  due to the  write-off  of a
$194,000  receivable (as discussed  below),  increases in legal costs associated
with the Residence Inn - Nashville and increases in administrative  expenses. In
addition,  the $74,000  additional loan  obligation,  assumed as a result of the
Partnership becoming the direct obligor on the first note on the Residence Inn -
Nashville,  was  recorded as a  Partnership  expense in 1996.  See Note 4 to the
Financial Statements. The $194,000 receivable from a previous management company
of the  Residence  Inn -  Ontario  has  been  written  off.  It  was  previously
financially  supported  by  the  contemplated  sale  to  the  Partnership  by an
affiliated entity of said management company (the owner until August 1996 of the
land  whereupon  the  Residence  Inn -  Nashville  is  located,  with  whom  the
Partnership  is involved  in various  litigations  [see Note 7 to the  Financial
Statements, Legal Proceedings]) of such land, but collection is no longer deemed
probable for financial statement purposes only.

The  operations of the  properties and the markets in which they are located are
described below.

Residence Inn-Ontario: In 1996 room revenues increased 6.7% in comparison to the
prior year due to an increase in occupancy and in room rates,  which was offset,
in part, by an increase in hotel operations expenses. During the year, the local
economy continued to strengthen with new business development and the opening of
the nearby  Mills  Shopping  Center.  This  growth has also  prompted  increased
competition,  as nearby suite hotels are offering heavily  discounted  rates. In
addition,  construction  permits  have been issued for three new  extended  stay
hotels  within the  market.  A variety of  marketing  programs  remain in place,
focusing on promoting new business as well as retaining the existing clients.

Residence  Inn-Columbus East: Room revenues increased 7.9% in 1996 as room rates
improved  substantially in comparison to the prior year.  Occupancy  reflected a
modest  decrease.  Competition  within the market will increase  dramatically in
1997, as four new hotels are expected to open by mid year. Marketing efforts are
focused on maintaining the existing patronage base in addition to increasing new
business in light of the anticipated new competition.

Residence  Inn-Fort Wayne: Room revenues increased 3.5% in 1996 in comparison to
the prior year, which was offset by a 5% increase in hotel operations  expenses.
Occupancy declined 5% for the year although room rates improved significantly as
compared to 1995. Growth in the local economy has prompted increased competition
from apartment complexes and other hotels within the market, two of which opened
in the fourth quarter of 1996.

Residence  Inn-Indianapolis:  A slight  increase  in room  revenues  for 1996 is
primarily  attributable  to a modest  increase  in  occupancy  and  room  rates.
Revenues were severely impacted by the boycott of the Indianapolis 500 auto race
by  several  of its  major  competitors.  Growth in the  Indianapolis  market is
creating  increased  pressure on the Partnership's  hotel, with three new hotels
expected  to  open  by mid  1997,  and  construction  to  begin  on two  others.
Management,  in addition to marketing to its  traditional  extended  stay client
base, is focusing  efforts on increasing its share of the leisure and convention
market.

                                        9

<PAGE>



Residence  Inn-Lexington:  Room revenues in 1996 increased 11.2% compared to the
prior  year,  which was only  partially  offset  by an  increase  in  operations
expenses of 3.8%.  Occupancy  increased 7% as compared to the prior year,  while
room rates remained stable. The Lexington economy continues to be strong, and it
appears new hotel competition is being largely absorbed by growth in the market.
Management is working to increase patronage from its largest corporate clients.

Residence  Inn-Louisville:  Room revenues increased by 12.3% in 1996 as compared
to the prior year,  resulting from significant growth in room rates and a slight
increase in occupancy,  which were only  partially  offset by a 6.8% increase in
operations expenses. Although competition is very strong in the Louisville hotel
market,  with competitors  offering heavily  discounted rates, the Partnership's
property  has been able to maintain  its  position by  providing a high level of
customer service. This position will be difficult to maintain,  however, as five
new  hotels  are  expected  to open in 1997,  which  will  create a  significant
marketing challenge for Management.

Residence  Inn-Winston Salem: Room revenues increased 6.4% in 1996 in comparison
to the prior year due  primarily  to an increase  in room rates,  which was only
partially offset by an increase in operations  expenses.  Market  conditions are
unstable, as several of the area's largest employers are moving their operations
to other areas,  which is resulting in a shift from an  industrial  to a service
based  economy.  Management  is striving to maintain  its market  share  through
aggressive sales campaigns aimed at increasing patronage in all market sectors.

Residence Inn-Nashville:  Room revenues increased 2.5% for 1996 in comparison to
the prior year, primarily attributable to a slight increase in room rates at the
hotel.  This  increase  was more than  offset by an  increase  of 19.1% in hotel
operations  expenses due to the increased  accrual (from $40,000 at December 31,
1995,  to $205,000 at December 31, 1996) for  potential  payment to the State of
Tennessee  for a sales and use tax assessed  against the  property  covering the
period from 1989 through 1993 and from a significant increase for certain repair
and  expense  items.  The  Partnership  has  filed a lawsuit  against  the State
disputing  the sales and use tax,  but  recently  learned  that this lawsuit was
dismissed  for lack of  prosecution  by the  Partnership's  attorneys.  A motion
seeking  reinstatement  of the case was  filed by the  Partnership  on March 18,
1997,  and a hearing is scheduled for April 18, 1997.  Competition  in the hotel
market, already intense, is anticipated to increase as yet another extended stay
hotel is scheduled to open by mid-1997.

Residence  Inn-Altamonte  Springs: Room revenues for 1996 increased by 14.4% for
1996 as compared to the prior year, arising from increases in both occupancy and
room rates.  These  increases were only  partially  offset by a 3.3% increase in
hotel  operations  expenses  in  comparison  to 1995.  The  Partnership's  hotel
maintained  a  favorable  position  in the  market in 1996 as the local  economy
improved and no new supply was added in the hotel market.  However, in 1997 five
new extended stay hotels are planned,  and existing competitors are intending to
expand which will provide a significant challenge to the Partnership's property.

1995 Compared to 1994

Net income was  $3,344,000  in 1995  compared to a net loss of $947,000 in 1994.
The change was  primarily  due to the gain from the sale of the  Residence Inn -
Atlanta  (Perimeter  West) as well as  increases  in hotel  operations  revenue,
resulting from improved occupancy and room rates at certain of the Partnership's
properties and reduced  depreciation  and interest  expense.  Revenue from hotel
operations  increased  3.6%  for 1995  compared  to 1994.  An  increase  in room
revenues  at eight of the nine  Partnership's  hotels  held at year end was only
slightly offset by a very modest decrease at the Residence Inn-Lexington.  Hotel
operating  expenses  increased  5.0%  in  comparison  to 1994  primarily  due to
increases in  administrative  and marketing  expenses and room operating  costs.
Interest and other income  increased  $204,000 in 1995  primarily as a result of
larger cash balances,  specifically  the proceeds from the sale of the Residence
Inn-Atlanta   (Perimeter  West),   invested  in  interest  bearing  investments.
Depreciation and other amortization  decreased $694,000 in 1995, due to the sale
of one hotel and fully  depreciated  furnishings at certain of the other hotels.
Interest expense  decreased by $165,000 in 1995 primarily due to the sale of one
hotel.  General and administrative  expense increased $132,000 in 1995 primarily
due to an increase in legal costs.

Partnership Liquidity and Capital Resources

Introduction


                                        10

<PAGE>



As presented  in the  Statements  of Cash Flows,  cash was provided by operating
activities.  Cash was also used by investing  activities  for  purchases of cash
investments  and  improvements to properties and was provided from proceeds from
cash  investments.  Cash  was used by  financing  activities  for  note  payable
payments and distributions to partners.

The results of project operations before capital improvements for the year ended
December  31, 1996 are  determined  by net income or loss  adjusted for non-cash
items such as depreciation and amortization,  and reduced by principal  payments
made on the notes  payable  (see Item 2,  Properties).  The  project  operations
before capital  improvements is an indication of the operational  performance of
the property.  During 1996, eight of the Partnership's nine remaining properties
generated   positive   project   operations   before   deductions   for  capital
improvements.  The  Partnership,  after taking into  account  results of project
operations  before  capital  improvements,  interest  income,  and  general  and
administrative  expenses, on an accrual basis, experienced positive results from
operations. Project operations should not be considered as an alternative to net
income or loss (as  presented in the financial  statements),  as an indicator of
the Partnership's operating performance,  or as an alternative to cash flow as a
measure of liquidity.  Project  operations  after capital  improvements  for any
given  year may not be  indicative  of the  property's  general  performance  as
capital improvements are likely to be made in large amounts when associated with
renovation programs.

The Partnership  considers cash investments to be those  investments  (primarily
commercial  paper) with an original  maturity  date of more than three months at
time of purchase.  The cash  investments  at December 31, 1996 are  described in
Note 1 to the Financial Statements.

The former management  company at the Residence  Inn-Ontario which is controlled
by Kenneth E.  Nelson  ("Nelson")  defaulted  on certain  obligations  under the
management  agreement.  As discussed in Note 7 to the financial  statements,  in
1991, the  Partnership  terminated the management  agreement and initiated legal
proceedings  against  the former  management  company.  The  management  company
withheld  $194,000 from property funds in unauthorized  management fees prior to
relinquishing  management  of  the  property.  The  $194,000  was  treated  as a
receivable  in the  Partnership's  financial  statements  until 1996 when it was
written off. See discussion in the Results of Operations  section. In March 1993
the  parties  verbally  agreed  to settle  the  lawsuit  (the "SF  Settlement");
however,  difficulties arose in consummating the settlement.  After a hearing in
May 1994,  the Court ruled in June that in the settlement  the  Partnership  had
agreed to purchase the land underlying the Residence  Inn-Nashville (the "Land")
from Nashville Lodging Company ("NLC"), an affiliate of Nelson, subject to a lis
pendens on the land.

Following this ruling, the Partnership has attempted to negotiate and enter into
a settlement agreement and a land purchase agreement and related agreements (the
"Settlement  Documents")  among  itself and Nelson  and NLC and  another  Nelson
entity, 2300 Elm Hill Pike, Inc. ("2300").  To date, these parties have not been
able to reach agreement on all issues relating to the Settlement Documents.

As  discussed  in  Note  7 to  the  financial  statements,  in  May  1991  legal
proceedings  were  initiated  against  the  Partnership  and  others by  Orlando
Residence  Ltd.,  ("Orlando"),  holder of a promissory note issued by a previous
owner of the Residence  Inn-Nashville  (Airport) (the "Hotel").  Orlando claimed
the sale of the Hotel to the Partnership by NLC was intended to defraud,  hinder
and delay Orlando's recovery of the amount owed to it. The Partnership  obtained
a summary judgement dismissing the case against it on September 15, 1993.

In July 1994,  the Court in the case  filed by Orlando  ruled that the Hotel had
been  fraudulently  conveyed  to NLC by 2300 in 1986 and voided the  conveyance.
Judgements totaling more than $1,350,000 were subsequently entered by this Court
against Nelson,  NLC and 2300.  Based on this judgement,  Orlando  purchased the
land at a judicial sale and became the landlord under the Lease.  However,  this
judgement was reversed in December, 1996 and, if the reversal becomes final, NLC
will likely become the owner of the Land pending the outcome of a new trial.

In another  action in Nashville,  Tennessee,  2300 and NLC have alleged that the
Partnership  refused to purchase the Land as required by the SF  Settlement  and
demanded  indemnification  for all costs and losses of 2300 and NLC  relating to
Orlando's  claims.  In February  1996, the Court in this action granted a motion
filed by 2300 and NLC for partial summary judgement, ruling that the Partnership
had breached the SF  Settlement.  The action will continue to determine  damages
and other issues. The Partnership does not believe it breached the SF Settlement
and, in any event,  does not believe  that any  damages it might  ultimately  be
required  to pay in this  action  will  have a  material  adverse  effect on the
Partnership.


                                       11

<PAGE>



See Note 7 to the financial  statements for more information about the foregoing
and other related proceedings.

The loans on all the hotels mature in 1998. The Partnership periodically reviews
alternative  financing  options  which  may be  available  in  the  marketplace.
However,  as reported to investors  in December  1996,  it is the  Partnership's
intention to proceed with the marketing for sale of the remaining  hotels in the
portfolio.  This  decision  was  reached  after  consideration  of many  factors
including the improvement in operations of the hotels, in combination with their
age and the increasing  competition in each of their respective markets, and the
recent  activity  of buyers  purchasing  hotels  similar  to those  owned by the
Partnership.  After  review of the 1996  year end  appraisals,  the  Partnership
interviewed  a number of real estate  brokerage  firms and selected  brokers who
have begun marketing the hotels.

In 1996, the Partnership spent $2,571,000 on capital improvements.  The majority
was spent on room,  meeting room and/or  gatehouse  renovations at the Residence
Inns  -  Columbus,  Fort  Wayne,  Indianapolis,  Winston-Salem,  Lexington,  and
Nashville.  Capital was spent on deck and stairway work and exterior painting at
the Residence Inns - Lexington and Nashville, doors and entryway improvements at
the  Residence Inn - Fort Wayne,  HVAC units at the Residence  Inns - Louisville
and Indianapolis,  siding replacements and painting of trim at the Residence Inn
- Altamonte  Springs,  and for lock upgrades at the  Residence  Inns - Columbus,
Indianapolis,  Lexington,  Louisville,  and  Winston-Salem.  Improvements to the
landscaping  and  grounds  were  made  at the  Residence  Inns -  Lexington  and
Nashville.  Voicemail  systems were  installed at the Residence Inns - Altamonte
Springs  and  Nashville.   In  1997,  the   Partnership   anticipates   spending
approximately  $2,300,000  on  capital  improvements.   These  improvements  are
necessary to enable the  properties to remain  competitive  in their  respective
markets and are required under the franchise agreements.

During  the  second  and third  quarters  of 1995 the  Partnership  worked  with
Marriott in an effort to  restructure  contracts on certain  Partnership  hotels
under their  management.  An agreement was reached whereby  Marriott reduced the
base  management  fee,  and  incorporated  incentive  fees which are tied to the
operations of the properties.  The restructured  agreements also provided for an
increase  in  certain  marketing  fees  charged by  Marriott.  The length of the
contract  terms was  reduced.  In  addition,  the  Partnership  is  permitted to
terminate the contract  after a five year term in connection  with a sale of the
hotels. A termination fee would be payable if the purchaser were not to continue
the Residence Inn by Marriott franchise.  In exchange,  the Partnership executed
new agreements with Marriott for the management of the Residence Inns located in
Altamonte Springs,  Nashville, and Ontario.  Effective January 1, 1996, Marriott
manages all nine of the Partnership's remaining hotels.

In  accordance  with,  and as is  customary  in the  management  of hotels,  the
management  agreements  provide  for a  percentage  of  revenues to be placed in
capital  replacement  funds.  The  capital  replacement  funds  are used to fund
on-going  capital  improvements  as  well  as room  or  other  major  renovation
programs.  In general,  the capital replacement funds are being held in separate
accounts  with   additions   generally   made  monthly  based  on  revenues  and
expenditures  which are based on  approved  capital  expenditure  budgets by the
Partnership.  Unused funds are held in interest-bearing  accounts. To the extent
not available from an individual  property's capital replacement fund, a capital
improvement or renovation may be funded from the  Partnership's  working capital
reserve.

In February,  October,  and December 1996 (two)  unsolicited  offers to purchase
Units were made to the investors in the  Partnership,  of which the  Partnership
was aware.  Under  applicable  securities  laws, the Partnership was required to
notify  its  investors  of its  views  regarding  these  offers,  and  did so in
February,  November, December 1996, and in January 1997. The Partnership took no
position  with respect to the offers but rather  advised the holders of assignee
limited partnership Units to consult their personal financial  advisors,  as the
desirability  of any  particular  offer to any Unit holder could differ  greatly
depending upon such Unit holder's financial, tax, and other individual status.

Unit holders were also advised that the Partnership and its Transfer Agent would
take such action as the  Partnership  deemed  appropriate  to ensure that resale
transactions  do not result in termination of the  Partnership for tax purposes,
cause the Partnership to be classified as a publicly traded partnership or cause
the  Partnership to be taxed as a corporation.  Unit holders were reminded that,
in order to protect its status as a partnership for federal income tax purposes,
secondary  market  activity in its Units would be limited to less than 5% of the
outstanding  Units per calendar  year,  and that,  for any of these  reasons the
Partnership may refuse to recognize a resale transaction.

Primarily as a result of the  unsolicited  offer in February  1996, in the early
part of the year there were a number of resale  transactions of assignee limited
partnership  Units of the  Partnership  which caused trading to reach 4.9% as of
April 9, 1996. Subsequent to that date and through the remainder of the calendar
year, the Partnership did not recognize resale

                                       12

<PAGE>



transactions  for 1996, and its Transfer Agent returned all paperwork  regarding
such  transactions  to the  originators.  This  action was taken by the  General
Partner in accordance with its fiduciary  responsibility  and with the advice of
Counsel to protect the Partnership's tax status as a limited partnership.

At the  beginning of 1997 the  suspension  of resale  transactions  was removed;
however,  on February 26, 1997,  the  Partnership's  Transfer Agent informed the
General  Partner  that  trading  had again  reached  4.9%  (near the 5%  maximum
percentage),  at which time the General  Partner again  suspended  processing of
resale transactions. Unit holders were advised of that suspension, in accordance
with  Section 12.1 of the  Partnership  Agreement,  via a special  communication
dated February 27, 1997. All paperwork submitted from the time of the suspension
through the remainder of the calendar year will be returned to the originator.

Conclusion

The  Partnership  established  an estimated  value for the assignee Units in the
Partnership as of December 31, 1996.  Appraisals of the hotels were commissioned
and  undertaken by a firm which is a recognized  appraiser and consultant to the
hotel industry.  The primary methodology  employed in the appraisals used in the
evaluation,  which  was  selected  by the  appraiser  and  not  pursuant  to any
instructions from the Partnership,  was the income approach to value utilizing a
discounted  cash flow  analysis.  In  conjunction  with the  preparation  of the
appraisals,  a discount rate was  determined  by the appraiser  based on several
relevant factors,  including, but not limited to, the current investment climate
for hotel properties, local hotel market and economic conditions, comparisons of
occupancy and room rates with prevailing market rates for similar properties and
the status of the management  contract for each hotel. The Partnership  believes
that the assumptions utilized in the process were not unreasonable. The value of
the properties as determined by the appraisal  process,  in combination with the
book value of other Partnership  assets,  has resulted in an estimated net asset
value of each  assignee Unit of $503 as of December 31, 1996. As of December 31,
1995,  the value of the  properties as determined by the appraisal  process,  in
combination  with the book value of other  Partnership  assets,  resulted  in an
estimated net asset value of each assignee unit of $521. The change in value was
primarily due to the  distribution of a portion of the proceeds from the sale of
the  Residence  Inn - Atlanta  (Perimeter  West) in the  amount  of  $33.37  per
assignee  Unit and due to only  modest  changes in values of the hotels over the
past year. It should be noted,  however,  that  appraised  values  represent the
opinion of the appraisal  firm as of the date of the appraisals and are based on
market  conditions at the time of the appraisals  and on assumptions  concerning
future circumstances which may or may not be accurate.

This  valuation  is an estimate of the  assignee  Unit value only which has been
made as of December 31, 1996 based on the methodology  described herein and does
not  represent a market value.  There can be no assurance  that the sales of the
assets  in the  current  market  or at any time in the  future  would  yield net
proceeds  which on a per  assignee  Unit basis would be equal to or greater than
the estimated value.  Further,  there can be no assurance that sales of assignee
Units now or in the future  would yield net  proceeds  equal to or greater  than
this value. The assignee Units are illiquid and there is no formal liquid market
where they are regularly  traded.  However,  the  Partnership is aware that some
resales  have taken place in the informal  secondary  market.  In this  informal
market, transactions may or may not take place in any time period and occur at a
price negotiated between buyer and seller. We have no knowledge concerning how a
particular  price may be  determined.  A total of 325 resale  transactions  were
recorded on the books of the Transfer Agent between January 1, 1997 and February
26,  1997  (at  which  time  the  Partnership  suspended  trading-  see  above),
reflecting  prices  ranging  from $191 to $466 per Unit,  with a simple  average
price (not  weighted) of $283. In 1996 a total of 122 resale  transactions  were
recorded on the books of the Transfer Agent  reflecting  prices between $100 and
$340,  with a simple  average  price (not  weighted) of $239 per Unit.  In 1995,
sixty-five  resale  transactions,  of which the Partnership had knowledge,  were
recorded at a simple  average price (not weighted) of $244 per assignee unit. In
1994,  thirty-one resale  transactions,  of which the Partnership had knowledge,
were  recorded at a simple  average  price (not  weighted)  of $196 per assignee
unit. The Partnership's  knowledge of these  transactions is based solely on the
books and records of its Transfer Agent.

The Partnership  anticipates that it will have sufficient  resources to meet its
capital and operating requirements into the foreseeable future.

                                       13

<PAGE>



Item 8. Financial Statements and Financial Statement Schedules.

<TABLE>

                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership

                                TABLE OF CONTENTS
<CAPTION>
                                                                                        Page
                                                                                        ----
<S>                                                                                   <C>
Report of Independent Auditors.....................................................      15
Financial Statements:
   Balance Sheets at December 31, 1996 and 1995....................................      16
   Statements of Operations for the Years ended December 31, 1996, 1995 and 1994...      17
   Statements of Partners' Equity for the Years ended
    December 31, 1996, 1995 and 1994...............................................      18
   Statements of Cash Flows for the Years ended December 31, 1996, 1995 and 1994...      19
   Notes to Financial Statements...................................................   20-25
Financial Statement Schedule:
   Schedule III -  Real Estate and Accumulated Depreciation at December 31, 1996...   26-27

      Financial  statements and financial  statement schedules not included have
been omitted because of the absence of conditions  under which they are required
or because the information is included elsewhere in the financial statements.

</TABLE>
                                       14

<PAGE>









                         REPORT OF INDEPENDENT AUDITORS

Metric Partners Growth Suite Investors, L.P., a California Limited Partnership:

      We have audited the accompanying  balance sheets of Metric Partners Growth
Suite Investors, L.P., a California Limited Partnership,  (the "Partnership") as
of  December  31,  1996 and  1995  and the  related  statements  of  operations,
partners'  equity and cash flows for the three year period  ended  December  31,
1996. Our audit also included the financial  statement  schedule for 1996 of the
Partnership  listed  in the  accompanying  table of  contents.  These  financial
statements  and  financial  statement  schedule  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.

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

      In our opinion,  the financial  statements present fairly, in all material
respects,  the financial  position of the  Partnership  at December 31, 1996 and
1995 and the  results  of its  operations  and its cash flows for the three year
period ended December 31, 1996 in conformity with generally accepted  accounting
principles.  Also, in our opinion, the financial statement schedule for 1996 and
1995, when considered in relation to the basic financial  statements  taken as a
whole,  presents  fairly in all  material  respects  the  information  set forth
therein.



Ernst & Young LLP

San Francisco, California
February 26, 1997

                                       15

<PAGE>



                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership

                                 BALANCE SHEETS
                                  December 31,

                                                        1996            1995
                                                        ----            ----

                                     ASSETS

CASH AND CASH EQUIVALENTS ......................   $  3,436,000    $ 10,248,000
CASH INVESTMENTS ...............................      3,893,000            --
RESTRICTED CASH ................................        308,000         302,000
ACCOUNTS RECEIVABLE ............................        715,000       1,034,000
PREPAID EXPENSES AND OTHER ASSETS ..............        209,000         196,000

PROPERTIES AND IMPROVEMENTS ....................     90,456,000      87,885,000
ACCUMULATED DEPRECIATION .......................    (31,825,000)    (28,935,000)
                                                   ------------    ------------

NET PROPERTIES AND IMPROVEMENTS ................     58,631,000      58,950,000

DEFERRED FINANCING COSTS .......................         73,000         127,000
DEFERRED FRANCHISE FEES ........................        171,000         214,000
                                                   ------------    ------------

TOTAL ASSETS ...................................   $ 67,436,000    $ 71,071,000
                                                   ============    ============

                        LIABILITIES AND PARTNERS' EQUITY

ACCOUNTS PAYABLE ...............................   $  1,107,000    $  1,022,000
ACCRUED PROPERTY TAXES .........................        311,000         391,000
ACCRUED INTEREST ...............................        263,000         344,000
OTHER LIABILITIES ..............................      1,347,000       1,095,000
DEFERRED GAIN ON SALE OF PROPERTY ..............        300,000         300,000
NOTES PAYABLE ..................................     42,518,000      42,669,000
                                                   ------------    ------------

TOTAL LIABILITIES ..............................     45,846,000      45,821,000
                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES...................

PARTNERS' EQUITY:
 GENERAL PARTNERS ..............................         59,000         100,000
 LIMITED PARTNERS (59,932 units outstanding) ...     21,531,000      25,150,000
                                                   ------------    ------------

TOTAL PARTNERS' EQUITY .........................     21,590,000      25,250,000
                                                   ------------    ------------

TOTAL LIABILITIES AND PARTNERS' EQUITY .........   $ 67,436,000    $ 71,071,000
                                                   ============    ============






                       See notes to financial statements.


                                       16

<PAGE>


<TABLE>
                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership

                            STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                               1996           1995            1994
                                                               ----           ----            ----
<S>                                                        <C>           <C>             <C>
REVENUES:
Hotel operations .......................................   $24,610,000   $ 25,649,000    $ 24,754,000
Interest and other .....................................       435,000        458,000         254,000
                                                           -----------   ------------    ------------

Total revenues .........................................    25,045,000     26,107,000      25,008,000
                                                           -----------   ------------    ------------

EXPENSES (Including $461,000, $410,000 and $390,000
paid to managing general partner and affiliates in 1996,
1995 and 1994, respectively) 
Hotel operations
        Rooms ..........................................     4,899,000      5,167,000       4,924,000
        Administrative .................................     3,101,000      3,224,000       2,913,000
        Marketing ......................................     2,762,000      2,538,000       2,437,000
        Energy .........................................     1,281,000      1,398,000       1,438,000
        Repair and maintenance .........................     1,411,000      1,329,000       1,301,000
        Management fees ................................       916,000      1,364,000       1,306,000
        Property taxes .................................       738,000        877,000         837,000
        Other ..........................................       917,000        970,000         901,000
                                                           -----------   ------------    ------------
Total hotel operations .................................    16,025,000     16,867,000      16,057,000
Depreciation and other amortization ....................     2,933,000      3,510,000       4,204,000
Interest ...............................................     4,350,000      4,852,000       5,017,000
General and administrative .............................     1,216,000        809,000         677,000
                                                           -----------   ------------    ------------

Total expenses .........................................    24,524,000     26,038,000      25,955,000
                                                           -----------   ------------    ------------

INCOME (LOSS) BEFORE GAIN ON SALE OF PROPERTY ..........       521,000         69,000        (947,000)
Gain on sale of property ...............................          --        3,275,000            --
                                                           -----------   ------------    ------------
NET INCOME (LOSS) ......................................   $   521,000   $  3,344,000    $   (947,000)
                                                           ===========   ============    ============

NET INCOME (LOSS) PER LIMITED PARTNERSHIP
 ASSIGNEE UNIT:
Income (loss) before gain on sale of property ..........   $         8   $         (1)   $        (19)
Gain on sale of property ...............................          --               53            --
                                                           -----------   ------------    ------------
NET INCOME (LOSS) ......................................   $         8   $         52    $        (19)
                                                           ===========   ============    ============

CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP
 ASSIGNEE UNIT .........................................   $        68   $         32    $         30
                                                           ===========   ============    ============
</TABLE>
                       See notes to financial statements.


                                       17

<PAGE>


<TABLE>
                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership

                   STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
              For the Years Ended December 31, 1996, 1995 and 1994

<CAPTION>
                                                  General       Limited
                                                  Partner       Partners         Total
                                                  -------       --------         -----
<S>                                             <C>          <C>             <C>
BALANCE, JANUARY 1, 1994 ....................   $(252,000)   $ 26,882,000    $ 26,630,000
Net Income (Loss) ...........................     221,000      (1,168,000)       (947,000)
Cash Distributions ..........................     (37,000)     (1,798,000)     (1,835,000)
                                                ---------    ------------    ------------
BALANCE, DECEMBER 31, 1994 ..................     (68,000)     23,916,000      23,848,000
Income (Loss) Before Gain on Sale of Property     105,000         (36,000)         69,000
Gain on Sale of Property ....................     102,000       3,173,000       3,275,000
Cash Distributions from Sale ................      (2,000)       (105,000)       (107,000)
Cash Distributions from Operations ..........     (37,000)     (1,798,000)     (1,835,000)
                                                ---------    ------------    ------------
BALANCE, DECEMBER 31, 1995 ..................     100,000      25,150,000      25,250,000
Net Income ..................................      43,000         478,000         521,000
Cash Distributions from Sale ................     (41,000)     (2,000,000)     (2,041,000)
Cash Distributions from Operations ..........     (43,000)     (2,097,000)     (2,140,000)
                                                ---------    ------------    ------------
BALANCE, DECEMBER 31, 1996 ..................   $  59,000    $ 21,531,000    $ 21,590,000
                                                =========    ============    ============

</TABLE>
                       See notes to financial statements.


                                       18

<PAGE>


<TABLE>
                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership

                            STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                                         1996           1995           1994
                                                                         ----           ----           ----
<S>                                                                <C>             <C>             <C>
OPERATING ACTIVITIES:
Net income (loss) ..............................................   $    521,000    $  3,344,000    $  (947,000)
Adjustments to reconcile net income (loss) to net cash provided
 by operating activities:
        Depreciation and amortization ..........................      3,122,000       3,585,000      4,310,000
        Cost associated with note payable change (see Note 4) ..         74,000            --             --
        Gain on sale of property ...............................           --        (3,275,000)          --
        Changes in operating assets and liabilities:
           Accounts receivable .................................        319,000        (288,000)          --
           Prepaid expenses and other assets ...................        (13,000)        118,000        (13,000)
           Accounts payable, accrued expenses
            and other liabilities ..............................        176,000         678,000        100,000
                                                                   ------------    ------------    -----------
Net cash provided by operating activities ......................      4,199,000       4,162,000      3,450,000
                                                                   ------------    ------------    -----------

INVESTING ACTIVITIES:
Proceeds from sale of property - net ...........................           --         5,684,000           --
Capital improvements ...........................................     (2,571,000)     (2,163,000)    (1,448,000)
Restricted cash - increase .....................................         (6,000)       (302,000)          --
Purchase of cash investments ...................................     (5,862,000)     (1,409,000)      (494,000)
Proceeds from sale of cash investments .........................      1,969,000       1,409,000      1,478,000
                                                                   ------------    ------------    -----------
Net cash provided (used) by investing activities ...............     (6,470,000)      3,219,000       (464,000)
                                                                   ------------    ------------    -----------

FINANCING ACTIVITIES:
Notes payable principal payments ...............................       (360,000)       (333,000)      (317,000)
Cash distributions to partners .................................     (4,181,000)     (1,942,000)    (1,835,000)
                                                                   ------------    ------------    -----------
Cash used by financing activities ..............................     (4,541,000)     (2,275,000)    (2,152,000)
                                                                   ------------    ------------    -----------

INCREASE (DECREASE) IN
 CASH AND CASH EQUIVALENTS .....................................     (6,812,000)      5,106,000        834,000
Cash and cash equivalents at beginning of year .................     10,248,000       5,142,000      4,308,000
                                                                   ------------    ------------    -----------

CASH AND CASH EQUIVALENTS
 AT END OF YEAR ................................................   $  3,436,000    $ 10,248,000    $ 5,142,000
                                                                   ============    ============    ===========



                SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest paid in cash during the year ..........................   $  4,242,000    $  4,636,000    $ 4,819,000
                                                                   ============    ============    ===========



      SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES

Balance of note payable assumed by buyer........................             -     $  5,922,000             -
                                                                   ============    ============    ===========

Note payable increase (see Note 4)..............................   $     74,000              -              -
                                                                   ============    ============    ===========
</TABLE>

                       See notes to financial statements.


                                       19

<PAGE>



                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership


                          NOTES TO FINANCIAL STATEMENTS


1.    Organization and Summary of Significant Accounting Policies

Organization  - Metric  Partners  Growth  Suite  Investors,  L.P.,  a California
Limited  Partnership  (the  "Partnership"),  was organized under the laws of the
State of California to acquire,  hold for  investment,  manage,  and  ultimately
sell, all-suite, extended stay hotels which are a franchise of the Residence Inn
by Marriott,  Inc. The managing  general  partner is Metric Realty,  an Illinois
general  partnership.  The Associate  General  Partner of the Partnership is GHI
Associates II, L.P., a California Limited Partnership, of which Metric Realty is
the general  partner  and  Prudential-Bache  Properties,  Inc.,  a  wholly-owned
subsidiary of Prudential  Securities Group Inc., is the limited partner.  Metric
Realty is owned by Metric Holdings,  Inc. and Metric Realty Corp.  Metric Realty
Corp. is the Managing Partner of Metric Realty. The Partnership was organized on
June 28, 1984 and commenced operations on April 14, 1988. Capital  contributions
of $59,932,000 ($1,000 per assignee Unit) were made by the limited partners.

Fair Value of  Financial  Instruments  - The  Partnership  discloses  fair value
information  about  financial  instruments,  whether  or not  recognized  in the
balance sheet.  Fair value is a subjective  measurement based on assumptions and
market data. The carrying amounts of cash and cash equivalents, restricted cash,
receivables  and  obligations   under  accounts  payable  and  accrued  expenses
approximate their fair value. An estimate of the fair value of the Partnership's
notes payable and related accrued  interest  requires the use of discounted cash
flow  analysis  based on the current  market rate for similar types of borrowing
arrangements.   The  carrying  amounts  of  the   Partnership's   notes  payable
approximate their fair value.

Use of Estimates - The  preparation  of the  financial  statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

Cash  and  Cash  Equivalents  - The  Partnership  considers  all  highly  liquid
investments, primarily commercial paper, with an original maturity date of three
months or less at the time of purchase to be cash equivalents.

Cash Investments - Cash investments  include all cash investments not considered
cash or cash  equivalents.  The cash  investments at December 31, 1996 mature in
February  and March  1997 and bear  interest  at an  effective  rate of 5.7% per
annum.

Restricted Cash - Restricted cash consists of amounts related to the sale of the
Residence Inn - Atlanta  (Perimeter  West) which were  deposited  into an escrow
account. See Note 6.

Credit Risk - Financial instruments which potentially subject the Partnership to
concentrations  of credit risk include cash and cash  equivalents and restricted
cash. The  Partnership  places its cash deposits and temporary cash  investments
with creditworthy,  high-quality  financial  institutions.  The concentration of
such cash  deposits and  temporary  cash  investments  is not deemed to create a
significant risk to the Partnership.

Properties and  Improvements - Properties and  improvements  are stated at cost.
The Partnership  adopted FASB Statement No. 121,  "Accounting for the Impairment
of Long-Lived  Assets and for Long-Lived Assets to be Disposed Of", in 1996. The
statement was issued in March 1995 and requires impairment losses to be recorded
on long-lived  assets used in  operations  when  indicators  of  impairment  are
present and the  undiscounted  cash flows  estimated  to be  generated  by those
assets  during the  holding  period are less than the assets'  carrying  amount.
Statement No. 121 also addresses the  accounting for long-lived  assets that are
expected to be disposed of. No  impairment  losses were  recorded as a result of
the  Partnership  adopting  Statement  No. 121.  Prior to 1996, a provision  for
impairment  of value  was  recorded  when a  decline  in value of  property  was
determined to be other than temporary.


                                       20

<PAGE>



Depreciation  -  Depreciation  is  computed  by the  straight-line  method  over
estimated  useful lives of 30 years for buildings and improvements and six years
for furnishings.

Deferred  Financing  Costs -  Financing  costs are  deferred  and  amortized  as
interest  expense  over the lives of the related  loans,  which are three to ten
years, or expensed, if financing is not obtained.

Deferred   Franchise  Fees  -  Franchise  fees,  paid  in  connection  with  the
acquisition of the Residence Inns, are deferred and amortized over the remaining
lives of the franchise agreements which range from ten to fifteen years.

Net Income (Loss) Per Limited Partnership  Assignee Unit - Net income (loss) per
limited  partnership  assignee  Unit is computed by dividing  net income  (loss)
allocated to the limited partners by 59,932 assignee Units.

Income Taxes - No provision  for Federal and state income taxes has been made in
the  financial  statements  because  income  taxes  are  the  obligation  of the
partners.

2.    Transactions With the Managing General Partner and Affiliates

In accordance with the Partnership agreement,  the Partnership is charged by the
managing   general   partner  and  affiliates  for  services   provided  to  the
Partnership. The amounts are as follows:

                                               1996          1995          1994
                                               ----          ----          ----

Partnership management fees ..........      $186,000      $160,000      $160,000
Reimbursement of expenses ............       275,000       250,000       230,000
                                            --------      --------      --------

Total ................................      $461,000      $410,000      $390,000
                                            ========      ========      ========

Reimbursement of expenses include partnership accounting,  professional services
and investor services.

In accordance with the Partnership  agreement the general partners are allocated
their two percent  continuing  interest in the  Partnership's net income or loss
and cash distributions. In addition, in 1994 the general partners were allocated
gross  income of  $245,000 in  accordance  with and  calculated  pursuant to the
Partnership agreement.  However,  beginning in 1995, due to the general partners
equity  account  balance,  the  Partnership  adjusted  and  limited  the  income
allocation  to the  general  partners  to  amounts  equal to their  two  percent
continuing interest in cash distributions.

The general partners were allocated taxable gain and loss in accordance with the
Partnership agreement.

3.    Properties and Improvements

Hotel  properties and  improvements at December 31, 1996 and 1995 are summarized
as follows:

                                                     1996               1995
                                                     ----               ----

Land .....................................      $  9,358,000       $  9,358,000
Buildings and improvements ...............        62,840,000         61,487,000
Furnishings ..............................        18,258,000         17,040,000
                                                ------------       ------------

Total ....................................        90,456,000         87,885,000
Accumulated depreciation .................       (31,825,000)       (28,935,000)
                                                ------------       ------------

Net properties and improvements ..........      $ 58,631,000       $ 58,950,000
                                                ============       ============

4.    Notes Payable

The  Partnership  has one or more notes payable  associated  with each property.
Individual  properties  are pledged as collateral for the related notes payable.
The notes are generally  payable monthly and require  balloon  payments in 1998.
Interest  rates on the notes are fixed at  December  31,  1996 and range  from 8
percent to 10.25 percent. Certain of the

                                       21

<PAGE>



notes have been  discounted  over their term to yield  interest at 10.15 to 10.5
percent per annum. Discount amortization was $135,000, $124,000 and $114,000 for
the years ended December 31, 1996, 1995 and 1994, respectively.

Each note for the six  Residence  Inns  acquired  in June 1988 (with a total net
book   value   of    $29,787,000    at   December   31,   1996)   provides   for
cross-collateralization  to all of these properties. The principal amount of all
six notes was $18,610,000 at December 31, 1996.

The Residence Inn - Nashville (Airport) note payable with an original balance of
$9,250,000   originally  wrapped  an  existing  loan  which  had  a  balance  of
approximately  $9,336,000  at the time the  Partnership  acquired the  property.
However,  on April 15,  1996 the  Partnership  made a payment  of  approximately
$176,000  to the  lender  of the  underlying  mortgage  of the wrap  note on the
Residence  Inn - Nashville  (Airport).  The payment was made to cure defaults by
that  lender  to the  holder of the wrap  note for  non-payment  of the debt and
impound  payments due on January 1, 1996 and  February 1, 1996.  As described in
Note 7, Legal  Proceedings,  the  Partnership  is now the direct  obligor to the
first note holder and the note  payable  balance has been  increased by $74,000,
the difference between the balance of the first note and the balance of the wrap
note on April 15, 1996. The $74,000 cost incurred to prevent  foreclosure and to
eliminate  the wrap note was  recorded in 1996 as a general  and  administrative
expense in these financial statements. The terms of the first note vary slightly
from those of the wrap note.  The  interest  rate is 9.5% per annum on the first
note  compared to 9.9433% on the wrap note and monthly  payments of interest and
principal are approximately  $2,600 lower on the first note. Similar to the wrap
note, the first note matures in April 1998 and requires a balloon payment.  As a
further  consequence of the  Partnership  becoming a direct obligor to the first
note holder,  the payments due under the land lease on Residence Inn - Nashville
(Airport) are reduced by $50,000 per year. See Note 5 below.

Principal payments at December 31, 1996 are required as follows:

1997 ................................................              $    374,000
1998 ................................................                42,324,000
Unamortized amount ..................................                  (180,000)
                                                                   ------------
Total ...............................................              $ 42,518,000
                                                                   ============

Amortization of deferred  financing costs totaled  $54,000,  $50,000 and $70,000
for the years ended December 31, 1996, 1995 and 1994, respectively.

5.    Minimum Future Rental Commitments

One property, the Residence Inn-Nashville  (Airport), is utilized through a land
lease which  provides for lease payments of $100,000 per annum for the first ten
years, plus an additional $50,000 per annum until the purchase money note to the
seller is paid in full.  As described in Note 4, the purchase  money note to the
seller was paid in full in April  1996,  and the  $50,000  annual  payment is no
longer  due.  Prior to April 1996,  the  $50,000  was  payable in equal  monthly
installments  with payment of the balance being  subordinated  to returns to the
Partnership. Furthermore, up to $210,000 of the balance of the ground lease can,
and has  been,  applied  by the  Partnership  as an  offset  under  a  guarantee
agreement.  The portion of the accrued rent not paid currently  accrues interest
at a rate of ten percent per annum, compounded annually.  Furthermore, the lease
provides for additional payments based on 1.8% of the revenues of the hotel.

Beginning in the eleventh lease year, the annual lease payment is adjusted every
five years with the payment based on  application  of the then current  ten-year
United States Treasury Bond rate of interest,  to a valuation of the land at the
higher of its then fair market value or the option price in the lease. The lease
extends through May 25, 2049 and contains an option to purchase the fee interest
in the land.

Rental  expense  (including  the 1.8% of revenues)  for this lease was $186,000,
$219,000 and $214,000 in 1996, 1995 and 1994.



                                       22

<PAGE>



6.    Sale of Property

The Partnership  sold the Residence  Inn-Atlanta  (Perimeter West) on October 3,
1995.  The net sales price was  $11,350,000  after  deducting  $300,000 that was
deposited  into an  escrow  account  (the  "Shortfall  Guaranty  Account").  The
Partnership has guaranteed certain income levels to the buyer for the years from
1996 through 1998. To the extent these income levels are not attained, the buyer
will receive the  deficiency,  up to the maximum  $300,000,  from the  Shortfall
Guaranty Account. Any unused funds in the Shortfall Guaranty Account at December
31,  1998,  will be returned to the  Partnership  together  with  interest.  The
guaranteed  income  level for 1996 was  achieved  and no funds are due to seller
from the Short Fall  Guarantee  Account for 1996.  Gain on sale of $300,000  has
been deferred until the contingency has been removed.

The buyer assumed the existing loan with a balance of $5,922,000.  After payment
of  expenses  of  sale,  the  proceeds  to  the  Partnership  are  approximately
$5,384,000.   Of  that  amount,  $107,000,   representing  state  real  property
withholding  taxes due on the gain on sale, was paid to the State of Georgia and
recorded  as  cash  distributions  to  partners  from  sale in  these  financial
statements because such taxes are the obligation of the partners.

7.    Legal Proceedings

Metric Partners Growth Suite Investors,  L.P. vs. Kenneth E. Nelson,  The Nelson
Group, et al., San Francisco  County  Superior  Court,  Case No. 928065 (the "SF
Lawsuit).  [This  lawsuit is related to the other  proceedings  described  below
(other than the sales tax related case). Terms defined in the description of one
case may be used in the description of the other cases.]

This  lawsuit   relates  to  disputes  in  connection  with  management  of  the
Partnership's  Residence  Inn - Ontario  by an entity  controlled  by Kenneth E.
Nelson  ("Nelson")  from  April  1988 to  February  1991.  In  March  1993,  the
Partnership  and Nelson verbally agreed to settle the SF Lawsuit at a settlement
conference (the "SF  Settlement"),  whereby the  Partnership  would purchase the
land (the "Land")  underlying the  Partnership's  Residence Inn - Nashville (the
"Hotel")  currently  leased by the  Partnership  from Nashville  Lodging Company
("NLC"),  an entity  controlled  by Nelson.  Various  disagreements  between the
Partnership  and Nelson  regarding the SF Settlement  arose after March 1993 and
documents to effectuate the SF Settlement were never completed or executed.

In July 1994, the Court in the Nashville Case I, discussed below, ruled that the
Hotel had been  fraudulently  conveyed to NLC in 1986 and voided the conveyance.
The Court in the  Nashville  Case I ordered a sale of the Land,  subject  to all
prior  encumbrances,  including the ground lease of the Land by the  Partnership
(the  "Lease").  As  discussed in more detail  below (see  "Nashville  Case I"),
subsequent  to a  judicial  sale held on July 24,  1996,  the  Court  ruled in a
confirmation  hearing held in August 1996 that the Land would be sold to Orlando
Residence,  Ltd ("Orlando").  In December,  1996, the Tennessee Court of Appeals
reversed the judgement  underlying the judicial  sale;  this reversal is not yet
final,  but could  result in NLC  regaining  ownership  of the Land  pending the
outcome  of a  new  trial.  Unless  NLC  regains  ownership  of  the  Land,  the
Partnership  will  not  be  able  to  purchase  the  Land  as  agreed  in the SF
Settlement.

Orlando Residence Ltd. vs. Metric Partners Growth Suite Investors,  L.P. et al.,
Chancery  Court  for  Davidson  County,  in  Nashville,   Tennessee,   Case  No.
92-3086-III ("Nashville Case I")

2300 Elm Hill  Pike,  Inc.  ("2300")  (formerly  known  as  Nashville  Residence
Corporation  until  1986) was the  original  owner of the Hotel  (including  the
Land).  2300 conveyed its interest in the Hotel  (including  the Land) to NLC in
1986 by unrecorded  quitclaim deed. In April 1989, NLC sold the Hotel and leased
the Land to the Partnership pursuant to the Lease.

In October 1992, Orlando filed this lawsuit against NLC and its general partners
and the Partnership, alleging that the sale of the Hotel and the Land by 2300 to
NLC in 1986 and NLC's  subsequent sale of the Hotel and lease of the Land to the
Partnership in 1989 were fraudulent conveyances,  intended to hinder Plaintiff's
recovery of a judgment  against 2300. In August 1993,  the Court  dismissed this
action  against the  Partnership.  The  Partnership's  only material  continuing
interest in the case is its effect on ownership of the Land and the Lease.

In August  1994,  the Court held that the sale of the Hotel by 2300 to NLC was a
fraudulent  conveyance and voided the  conveyance.  The defendants  appealed the
judgment for Orlando in this case to the Tennessee Court of Appeals, but the

                                       23

<PAGE>



judgment was not stayed pending appeal. Oral argument on this appeal was held on
November  1, 1996,  and in  December  1996,  the Court of Appeals  reversed  the
judgement  for  Orlando,  sending  the case back to the lower  court for further
proceedings.

Prior to this reversal,  Orlando requested and the Court ordered a judicial sale
of the Land,  with the sale subject to  encumbrances  of record,  including  the
Lease.  The sale was a credit sale,  with the purchase  price due in six months.
This sale was held on July 24, 1996. At a  confirmation  hearing in August 1996,
the Court  ordered  the Land to be sold to  Orlando.  He  further  ordered  that
Orlando  was to become the  landlord  under the Lease.  If the  afore-referenced
reversal  becomes  final,  NLC will likely regain  ownership of the Land and the
landlord under the Lease, pending the outcome of a new trial.

Nashville  Lodging Company vs. Metric Partners Growth Suite  Investors,  L.P. et
al., Circuit Court, State of Wisconsin, Case No. 94CV001212.

In February 1994, NLC served this lawsuit on the Partnership. NLC alleges fraud,
breach of  settlement  contract  and breach of good faith and fair  dealing  and
seeks compensatory,  punitive and exemplary damages in an unspecified amount for
the Partnership's failure to consummate the SF Settlement. In February 1994, the
Partnership filed an answer and requested that the Court stay the action pending
resolution of the SF Lawsuit  including  all appeals.  The Court refused to stay
the action and discovery commenced.  In February 1995, the Court determined that
the  Partnership  could be sued in  Wisconsin  but  stayed  the case  until  the
settlement of the SF Lawsuit has been finalized.

Orlando  Residence  Ltd.  vs. 2300 Elm Hill Pike,  Inc.  and  Nashville  Lodging
Company vs. Metric Partners  Growth Suite  Investors,  L.P.,  Chancery Court for
Davidson County, in Nashville,  Tennessee,  Case No. 94-1911-I  ("Nashville Case
II").

Orlando filed this action against 2300 and NLC in the Davidson  County  Chancery
Court to  attempt to execute on its  judgment  against  Nelson,  NLC and 2300 in
Nashville Case I by subjecting the Land to sale. In May 1995, 2300 and NLC filed
a  third-party  complaint  against the  Partnership,  alleging it had refused to
purchase the Land as required by the SF Settlement.  2300 and NLC demand payment
by the  Partnership  of 2300 and NLC's costs of defending  Nashville Case II and
indemnification  for any loss resulting from the claims of Orlando,  among other
claims of damage.

In February  1996,  the Court granted a motion filed by 2300 and NLC for partial
summary  judgement,  ruling that the Partnership had breached the SF Settlement.
The action will continue to determine damages and other issues.  The Partnership
does not believe it breached the SF Settlement and will appeal this ruling at an
appropriate  time.  However,  no assurance  can be given that its appeal will be
successful.  In any event,  the Partnership does not believe that any damages it
might  ultimately be required to pay in this action will have a material adverse
effect on the Partnership.

In June 1996, the  Partnership  filed a counterclaim,  claiming  damages for the
failure of NLC to complete the SF  Settlement.  The  Partnership  also added the
general  partners of NLC as additional  counterclaim  defendants to the case. In
July 1996, the counterclaim defendants filed an answer to the counterclaim and a
motion for  summary  judgment  dismissing  the  counterclaim.  A hearing on this
motion  was  held  in  January  1997  and  the  Partnership's  counterclaim  was
dismissed.

Metric Partners Growth Suite Investors,  L.P., vs.  Nashville  Lodging Co., 2300
Elm Hill Pike,  Inc.,  Orlando  Residence,  Ltd., and LaSalle  National Bank, as
trustee under that certain pooling and servicing agreement, dated July 11, 1995,
for the holders of the WHP Commercial Mortgage Pass Through Certificates, Series
1995C1 and Robert  Holland,  Trustee,  Chancery  Court for Davidson  County,  in
Nashville, Tennessee, Case No. 96-1405-III ("Nashville Case III").

GSI filed this  action May 3, 1996 to obtain,  among  other  things,  a judicial
determination  of the  rights  and  obligations  of GSI and NLC under the senior
mortgage on the Hotel ("Senior  Mortgage"),  a note held by NLC "wrapped around"
the Senior  Mortgage (the "Wrap Note") and the Lease as a  consequence  of GSI's
cure of certain defaults by NLC under the Senior Mortgage.  GSI believed that as
a result of such  cure,  it became the  direct  obligor to the lender  under the
Senior  Mortgage and that the Wrap Note had been  satisfied and the payments due
under the Lease  reduced by $50,000 per year.  GSI also sought  preliminary  and
permanent  injunctive  relief to prevent NLC from  attempting  to  accelerate or
foreclose  the Wrap Note and/or from  attempting  to enforce any  remedies  with
regard to the Lease in connection with

                                       24

<PAGE>



this  matter  and a  judgment  establishing  that GSI is the owner of the Hotel,
subject only to the Lease and certain specified security interests.

In May 1996, the Partnership  obtained a temporary  injunction  staying NLC from
undertaking  any efforts to exercise any  remedies  pursuant to the Wrap Note or
the Lease.  NLC and 2300 filed an answer in June,  together with a  counterclaim
against the  Partnership.  NLC and 2300 claimed damages from the Partnership and
asked the Court to permit  acceleration  of the Wrap Note and termination of the
Lease. In July 1996, the Partnership filed a motion for summary judgment in this
case,  asking  that the Court  award the relief  sought by it and that the Court
dismiss the  counterclaim  of NLC and 2300.  At a hearing on this motion held in
August 1996 the Court granted the  Partnership's  motion.  The  defendants  have
purported to appeal from this ruling.  The Partnership plans to seek recovery of
its attorneys' fees in this action from NLC.

The ultimate  disposition  of these  lawsuits  cannot be predicted at this time;
however,  based  solely  on the  facts  known to it as of the date  hereof,  the
Partnership does not believe the lawsuits will have a material adverse effect on
the Partnership.

8.    Reconciliation to Income Tax Method of Accounting

The  differences  between the method of accounting  for income tax reporting and
the  accrual  method  of  accounting  used in the  financial  statements  are as
follows:

<TABLE>
<CAPTION>
                                                         1996            1995            1994
                                                         ----            ----            ----
<S>                                                 <C>             <C>             <C>
Net income (loss) - financial statements ........   $    521,000    $  3,344,000    $   (947,000)
Differences resulted from:
   Gain on sale of property .....................           --           281,000            --
   Depreciation .................................       (137,000)        (95,000)        166,000
   Amortization of notes payable discount .......        135,000         124,000         114,000
   Interest .....................................         (6,000)        (17,000)        (33,000)
   Other ........................................        (58,000)       (141,000)        (65,000)
                                                    ------------    ------------    ------------

Net income (loss) - income tax method ...........   $    455,000    $  3,496,000    $   (765,000)
                                                    ============    ============    ============

Taxable income (loss) per limited partnership
 assignee unit after giving effect to the
 allocation to the general partners .............   $          3    $         53    $        (17)
                                                    ============    ============    ============

Net assets and liabilities - financial statements   $ 21,590,000    $ 25,250,000    $ 23,848,000
Cumulative differences resulted from:
   Gain on sale of property .....................        300,000         300,000            --
   Depreciation .................................        514,000         651,000         827,000
   Amortization of notes payable discount .......      2,347,000       2,211,000       2,087,000
   Interest .....................................     (2,211,000)     (2,205,000)     (2,186,000)
   Capital account adjustment ...................      5,993,000       5,993,000       5,993,000
   Other ........................................         (6,000)         53,000         130,000
                                                    ------------    ------------    ------------

Net assets and liabilities - income tax method ..   $ 28,527,000    $ 32,253,000    $ 30,699,000
                                                    ============    ============    ============
</TABLE>

                                       25

<PAGE>


<TABLE>
                                                                                                              SCHEDULE III
                  METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                        a California Limited Partnership

                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                December 31, 1996

COLUMN                COLUMN        COLUMN            COLUMN                 COLUMN             COLUMN    COLUMN    COLUMN
   A                     B             C                 D                      E                  F         G         H

                                                       Cost Capitalized
                                        Initial Cost      Subsequent      Gross Amount at Which
                                        to Partnership  to Acquisition Carried at Close of Period(1)
                                        -------------   -------------- -----------------------------
<CAPTION>
                                                                                                Accumu-   Date
                                             Buildings                        Buildings         lated      of         Date
                                               and                              and            Deprecia-   Con-        of
                               Encum-        Improve- Improve- Carrying        Improve-          tion     struc-      Acqui-
Description                  brances(5) Land  ments    ments     Costs  Land    ments  Total(2) (3)(4)     tion       sition
-----------                  ---------- ----  -----    -----     -----  ----    -----  -------- ------     ----       ------
<S>                           <C>      <C>    <C>      <C>      <C>    <C>     <C>     <C>      <C>       <C>         <C>
                                                       (Amounts in thousands)
HOTELS:

Residence Inn-Ontario
   Ontario, California........$ 9,000  $3,338 $13,555  $1,316   $(775) $3,185  $14,249 $17,434  $5,550      2/86      4/29/88

Residence Inn-Columbus (East)
   Columbus, Ohio.............  2,654     587   5,277   1,086    (176)    571    6,203   6,774   2,652      1986      6/17/88

Residence Inn-Fort Wayne
   Fort Wayne, Indiana........  2,782     595   5,541     969    (229)    573    6,303   6,876   2,554      1985      6/17/88

Residence Inn-Indianapolis
   Indianapolis, Indiana......  3,228     996   6,128   1,462    (167)    973    7,446   8,419   3,092      1984      6/17/88

Residence Inn-Lexington                                                                                   11/85 &
   Lexington, Kentucky........  3,139     799   6,114   1,339     (92)    787    7,373   8,160   2,892    3/86 (6)    6/17/88

Residence Inn-Louisville
   Louisville, Kentucky.......  3,624   1,093   6,880   1,419    (164)  1,070    8,158   9,228   3,476      1984      6/17/88

Residence Inn-Winston-Salem
   Winston-Salem,
   North Carolina.............  3,183     669   6,341   1,150    (132)    657    7,371   8,028   3,032      1986      6/17/88

Residence Inn-Nashville (Airport)
   Nashville, Tennessee.......  8,647       -  11,416   2,590    (525)      -   13,481  13,481   4,747      1/85      5/26/89

Residence Inn-Altamonte Springs
 Altamonte Springs,                                                                                        1985 &
   Florida....................  6,261   1,594   9,862     950    (350)  1,542   10,514  12,056   3,830     1988(7)    3/16/90
                              -------  ------ ------- ------- -------  ------  ------- ------- -------

TOTAL.........................$42,518  $9,671 $71,114 $12,281 $(2,610) $9,358  $81,098 $90,456 $31,825
                              =======  ====== ======= ======= =======  ======  ======= ======= =======

</TABLE>





                             See accompanying notes.

                                       26

<PAGE>


<TABLE>
                                                                                                       SCHEDULE III


                                   METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
                                         A California Limited Partnership

                                     REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                 December 31, 1996
<CAPTION>
NOTES:
<S>                                                                                         <C>
(1)  The aggregate cost for Federal income tax purposes is $90,733,000.

(2)  Balance, January 1, 1994...............................................................$    94,765,000
     Capital Improvements ...................................................................     1,448,000
                                                                                                -----------

     Balance, December 31, 1994 .............................................................    96,213,000
     Cost of property and improvements sold .................................................   (10,491,000)
     Capital Improvements ...................................................................     2,163,000

     Balance, December 31, 1995 .............................................................    87,885,000
     Capital Improvements ...................................................................     2,571,000

     Balance, December 31, 1996 .............................................................    90,456,000

(3)  Balance, January 1, 1994...............................................................$    23,855,000
     Additions charged to expense ...........................................................     4,153,000
                                                                                                -----------

     Balance, December 31, 1994 .............................................................    28,008,000
     Accumulated depreciation on property and improvements sold .............................    (2,533,000)
     Additions charged to expense ...........................................................     3,460,000
                                                                                                -----------

     Balance, December 31, 1995 .............................................................    28,935,000
     Additions charged to expense ...........................................................     2,890,000

     Balance, December 31, 1996.............................................................$    31,825,000

(4)  Depreciation is computed on lives ranging from six to 30 years.

(5)  Encumbrances are shown net of a discount of $180,000.

(6)  Completed in stages from November 1985 to March 1986.

(7)  Construction completed in two phases.

</TABLE>


Item 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

The information  called for by this item is incorporated  herein by reference to
the Registrant's Current Report on Form 8-K filed September 14, 1994 (Commission
File No. 0-17660).


                                       27

<PAGE>



                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

The  Partnership  has no  directors  or executive  officers.  For  informational
purposes only, the following are the names and additional  information  relating
to the  directors and  executive  officers of Metric Realty Corp.,  the managing
partner of Metric Realty,  the managing general partner of the Partnership which
also provides asset management services to the Partnership, and Metric Holdings,
Inc., the only other partner of Metric Realty.

      (a)  Directors

Robert A. Fiddaman
Director, President and Chief Executive Officer, Metric Realty Corp.

Mr.  Fiddaman,  age 59, has served as a director of the general partner managing
Metric Realty since March 1988 and was Executive Vice  President,  Institutional
Investments,  of such general  partner from March 1988 to December  1993 when he
became  President and Chief  Executive  Officer of such general  partner,  i.e.,
Metric  Realty Corp.  Mr.  Fiddaman was also a director of the other  partner of
Metric Realty from June 1990 to December 1992.  Since February 1994, he has been
Chairman of the Board,  President and Chief  Executive  Officer of Metric Income
Trust Series,  Inc., a  publicly-held  real estate  investment  trust,  of which
Metric  Realty is the  Advisor.  He was an  officer  of Fox  Capital  Management
Corporation  ("FCMC")  from 1979 to March  1993,  and,  since  1985,  has been a
partner (or since  December  1993,  a limited  partner of a limited  partnership
which is a partner) of Fox Realty  Investors.  FCMC and Fox Realty Investors are
real estate investment  management  companies which serve directly or indirectly
as general partner for a substantial number of publicly-held real estate limited
partnerships.  Mr.  Fiddaman  graduated from Stanford  University in 1959 with a
Bachelor's  Degree and from  University  of Santa  Clara in 1970 with a Master's
Degree in  Business  Administration-Finance.  Mr.  Fiddaman  is a licensed  real
estate broker and has served as President of the Bay Area  Mortgage  Association
and President of the Northern California Mortgage Bankers Association.

Ralph F. Verni
Chairman of the Board, Metric Realty Corp.; Chairman of the Board, President and
Chief Executive Officer, Metric Holdings, Inc.

Mr.  Verni,  age 54, was elected to his positions  with Metric Realty Corp.  and
Metric  Holdings,  Inc. in March  1993.  He joined  State  Street  Research  and
Management Company ("State Street Research"),  a subsidiary of Metropolitan Life
Insurance Company  ("MetLife"),  in 1992 as Chairman and Chief Executive Officer
and became  President  in  January  1993.  He also  serves as  Chairman  of SSRM
Holdings,  Inc., a wholly-owned  subsidiary of MetLife which in turn serves as a
holding company for several of MetLife's investment and management subsidiaries.
He is a trustee  of 10  registered  investment  companies  in the  State  Street
Research  Fund  complex  which  are  managed  by  State  Street  Research  or an
affiliate.  Mr.  Verni is a member of the Board of  Directors  of the CML Group,
Inc.,  a  publicly-traded  company.  In  addition,  Mr. Verni is a member of the
Advisory Committee for the MIT Center for Real Estate  Development,  the Colgate
University  Board  of  Trustees  and its  Finance  Committee,  and the  Advisory
Committee of Commonwealth  Capital Ventures,  L.P. Prior to joining State Street
Research,  Mr. Verni was  President and Chief  Executive  Officer of New England
Investment  Companies,  a  holding  company  for  the  real  estate,  investment
management,  and broker/dealer subsidiaries of New England Mutual Life Insurance
Company ("The New  England"),  and was also the Chief  Investment  Officer and a
director of The New England.  Prior to joining The New England in 1982, Mr Verni
spent 16 years with The Equitable  Life Assurance  Company in senior  investment
management positions. He holds a Bachelor's Degree from Colgate University and a
Master's Degree in Business Administration from Columbia University.

                                       28

<PAGE>



Gerard P. Maus
Director, Metric Realty Corp. and Metric Holdings, Inc.

Mr. Maus,  age 45, was elected as a director of Metric  Realty Corp.  and Metric
Holdings,  Inc.  in March  1993.  He  joined  State  Street  as  Executive  Vice
President,  Chief Financial Officer and Chief Administrative Officer in February
1993.  Prior to joining State Street,  Mr. Maus served since 1983 as a financial
officer of New England and its  subsidiary,  New  England  Investment  Companies
("NEIC"),  most recently as Executive Vice President and Chief Financial Officer
of NEIC from 1990 to January 1993.  Prior to holding these  positions,  Mr. Maus
held  financial  positions  with Bank of New  England,  Coopers &  Lybrand,  and
Liberty Mutual Life Insurance Company.  He received a Bachelor of Arts Degree in
Business  Administration  from  Rutgers  University  in 1973 and is a  Certified
Public Accountant.


      (b)  Executive Officers

Margot M. Giusti
Executive  Vice  President,  Finance  and  Administration,  and Chief  Financial
Officer, Metric Realty Corp.; Executive Vice President, Chief Financial Officer,
Metric Holdings, Inc.

Mrs. Giusti,  44, has served as Chief Financial  Officer of the partner managing
Metric Realty since March 1988 and as head of Administration  since August 1990.
She has also held the same  positions  with the other  partner of Metric  Realty
since December 1992. From 1980 to 1988, she was employed by Fox Realty Investors
or  an  affiliate  in  various  financial  positions.  She  graduated  from  the
University  of San  Francisco  in 1974  with a  Bachelor  of  Science  Degree in
Business  Administration.  From 1974 until 1979, Mrs. Giusti was employed on the
audit staff of Deloitte  Haskins & Sells.  From 1979 until 1980, Mrs. Giusti was
controller  of  Wallbangers,  Inc. She is a Certified  Public  Accountant  and a
member  of the  American  Institute  of  Certified  Public  Accountants  and the
California Society of Certified Public Accountants.

Herman H. Howerton  
Executive Vice President, General Counsel and Secretary, Metric Realty Corp. and
Metric Holdings, Inc.

Mr.  Howerton,  age 53, has served as General Counsel with the partner  managing
Metric Realty since 1988. He has held the same  positions with the other partner
of  Metric  Realty  since   December  1993  and  has  been  Secretary  of  these
corporations  since March 1993.  From 1984 to 1988,  he was  employed by FCMC in
various  legal  positions.  He was employed by Cushman & Wakefield in commercial
leasing from 1983 to 1984.  Prior to that,  from 1972 to 1982, Mr. Howerton held
various   positions   with   Itel   Corporation,   including   those   of   Vice
President-Administration  and Vice President,  General Counsel and Secretary. He
received a Bachelor of Arts Degree from California State University at Fresno in
1965 and a Juris  Doctorate  Degree  from  Harvard  Law School in 1968.  He is a
member of the State Bar of  California  and a licensed  California  real  estate
broker.

James S. Keagy
Executive Vice President, Director of Investment Services, Metric Realty Corp.

Mr. Keagy,  age 37,  joined Metric Realty in July,  1995 and is in charge of all
investment services for Metric Realty,  including marketing  investment programs
and advisory services to pension plans and other tax-exempt  entities.  Prior to
joining Metric Realty,  Mr. Keagy had been a senior executive of Aldrich Eastman
Waltch   ("AEW"),   a  real  estate   investment   advisor,   since  1989.   His
responsibilities  at AEW  included  business and product  development  and asset
management.  From  1982 to 1989,  he  worked in the real  estate  department  of
Thomson McKinnon  Securities in New York,  serving as the Associate  Director of
the department from 1985 to 1989. His responsibilities  included raising capital
for real  estate  investments,  acquisitions  and asset  management.  Mr.  Keagy
received a Bachelor of Science  Degree from Yale  College in 1980 and a Master's
Degree  in  Business  Administration-Marketing  and  Real  Estate  from  Harvard
University in 1982.


                                       29

<PAGE>



Ronald E. Zuzack
Executive Vice President, Chief Investment Officer, Metric Realty Corp.

Mr.  Zuzack,  age 53, has been in charge of  Portfolio  Services for the partner
managing  Metric Realty since March 1988.  From 1981 to 1988, he was employed by
FCMC in various portfolio management positions. Prior to 1981 he was employed by
Union Bank as Vice President/Manager  Real Estate,  Sacramento Region, and acted
as Vice  President,  Development  and  Property  Management  while  employed  by
Inter-Cal  Real Estate  Corporation.  He received his Bachelor of Science Degree
and Master's Degree in Business Administration from the University of Missouri.

Item 11.  Executive Compensation.

The Partnership  does not pay or employ any directors or officers.  Compensation
to the directors and officers of Metric  Realty Corp.,  the managing  partner of
Metric  Realty (the managing  general  partner of the  Partnership),  is paid by
Metric  Realty  or its  affiliates  and is not  related  to the  results  of the
Partnership.

The Partnership has not established any plans pursuant to which plan or non-plan
compensation  has been paid or  distributed  during the last  fiscal  year or is
proposed to be paid or distributed in the future, nor has the Partnership issued
or  established  any  options  or  rights  relating  to the  acquisition  of its
securities  or any plan  relating  to such  options or rights.  However,  Metric
Realty is  expected  to receive  certain  allocations,  distributions  and other
amounts  pursuant  to  the  Partnership's  limited  partnership  agreement.   In
addition, included in the expense reimbursements made to such general partner or
affiliates by the Partnership is an allocation for a portion of the compensation
(including  employee benefit plans) paid to personnel rendering asset management
services to the Partnership.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

There is no person known to the Partnership  who owns  beneficially or of record
more than five percent of the voting securities of the Partnership.  Neither the
Partnership's  managing  general  partner nor  affiliates  of the  Partnership's
managing general partner have contributed capital to the Partnership.

The Partnership is a limited  partnership and has no officers or directors.  The
managing  general partner has  discretionary  control over most of the decisions
made by or for the  Partnership in accordance  with the terms of the Partnership
Agreement.  Each of the  directors  and officers of the  Partnership's  managing
general  partner,  and all of these  individuals  as a group,  own less than one
percent of the Partnership's voting securities.

There are no arrangements known to the Partnership, the operations of which may,
at a subsequent date, result in a change in control of the Partnership.

Item 13.  Certain Relationships and Related Transactions.

None;  except  that the  Partnership  in 1995 paid and in 1996 will pay fees and
expense   reimbursements   to  Metric  Realty  for  services   provided  to  the
Partnership.  See the Prospectus filed pursuant to Rule 424(b) of the Securities
Act of 1933,  which  is  incorporated  by  reference  herein,  and Note 2 to the
Financial  Statements in Item 8. All of the individuals  listed in Item 10 above
are officers and employees of and receive  compensation from Metric Realty or an
affiliate.


                                       30

<PAGE>



                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)   1., 2. and 3. See Item 8 of Form  10-K for  Financial  Statements  for the
      Partnership, Notes thereto, and Financial Statement Schedules. (A table of
      contents to Financial  Statements  and  Financial  Statement  Schedules is
      included in Item 8 and incorporated herein by reference.)

(b)   No reports on Form 8-K were  required to be filed  during the last quarter
      of the period  covered  by this  Report  other  than the  letter  from the
      Registrant  to  investors  dated  December  10,  1996 filed on Form 8-K on
      December 11, 1996.

(c)   Financial Statement Schedules, if required by Regulation S-K, are included
      in Item 8.

                                       31

<PAGE>



                                   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.

                                   REGISTRANT

                                   METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
                                   a California Limited Partnership

                                      By: Metric Realty,
                                          --------------------------------------
                                          an Illinois general partnership,
                                          its Managing General Partner

                                      By: Metric Realty Corp.,
                                          --------------------------------------
                                          a Delaware corporation,
                                          its managing partner


                                      By: /s/ Robert A. Fiddaman
                                          --------------------------------------
                                          Robert A. Fiddaman
                                          President and Chief Executive Officer,
                                          Metric Realty Corp.

                                      Date: March 27, 1997
                                          --------------------------------------

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 date indicated.
<TABLE>
<CAPTION>
<S>                                              <C>

By: /s/ Robert A. Fiddaman                       By:  /s/ Ralph F. Verni
    -----------------------------------------         ------------------------------------------------------

    Robert A. Fiddaman                                Ralph F. Verni
    Director, President and Chief Executive           Chairman of the Board, Metric Realty Corp; Chairman
    Officer, Metric Realty Corp.                      of the Board, President and Chief Executive Officer,
                                                      Metric Holdings, Inc.
   


By: /s/ Margot M. Giusti                         By:  /s/ Gerard P. Maus
    -----------------------------------------         ------------------------------------------------------

    Margot M. Giusti                                  Gerard P. Maus
    Principal Financial and Accounting Officer        Director, Metric Realty Corp. and Metric Holdings, Inc.
    of Metric Realty; Executive Vice President,
    Finance and Administration, and Chief
    Financial Officer, Metric Realty Corp.;
    Executive Vice President, Chief Financial
    Officer, Metric Holdings, Inc.

</TABLE>


Date:      March 27, 1997
     -----------------------------------------


                                       32