SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q – QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

Or

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. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ X ] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer” and “small reporting company”.in in Rule 12b-2 of the Exchange ActAct.

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). [ ] Yes [X] No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No

Not Applicable

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Not Applicable

SB PARTNERS

INDEX

1

ITEM 1. FINANCIAL STATEMENTS

SB PARTNERS

(A New York Limited Partnership)

CONSOLIDATED BALANCE SHEETS

See notes to consolidated financial statements

2

SB PARTNERS

(A New York Limited Partnership)

CONSOLIDATEDSTATEMENTS OF OPERATIONS (Unaudited)

See notes to consolidated financial statements

3

SB PARTNERS

(A New York Limited Partnership)

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT

For the nine months ended September 30, 2014Three Months Ended March 31, 2015 (Unaudited)

See notes to consolidated financial statements.

4

SB PARTNERS

(A New York Limited Partnership)

CONSOLIDATEDSTATEMENTS OF CASHFLOWS (Unaudited)

See notes to consolidated financial statements

5

SB PARTNERS

Notes to Consolidated Financial Statements (Unaudited)

(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

SB Partners, a New York limited partnership, and its subsidiaries (collectively, the "Partnership" or the “Registrant”), have been engaged since April 1971 in acquiring, operating, and holding for investment a varying portfolio of real estate interests. SB Partners Real Estate Corporation (the "General Partner") serves as the general partner of the Partnership.

The consolidated financial statements included herein are unaudited; however, the information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to a fair presentation of the financial position, results of operations and cash flows for the interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Partnership’s latest annual report on Form 10-K.

The results of operations for the ninethree month period ended September 30, 2014March 31, 2015 are not necessarily indicative of the results to be expected for a full year.

For a discussion of the significant accounting and financial reporting policies of the Partnership, refer to the Annual Report on Form 10–K for the year ended December 31, 2013.2014.

(2) INVESTMENTS IN REAL ESTATE

As of September 30, 2014,March 31, 2015, the Partnership owns an industrial flex property in Maple Grove, Minnesota and a warehouse distribution center in Lino Lakes, Minnesota. The following is the cost basis and accumulated depreciation of the real estate investments owned by the Partnership at September 30, 2014March 31, 2015 and December 31, 2013:2014. See footnote 3 regarding the Partnership’s marketing the Lino Lakes property for sale.

(3) REAL ESTATE HELD FOR SALE

The Partnership has initiated marketing Lino Lakes, its warehouse distribution property located in Lino Lakes, MN. for sale. The assets and liabilities for this property at March 31, 2015 and December 31, 2014 are reflected as assets and liabilities from discontinued operations in the accompanying consolidated balance sheets and the results of operations for the three months ended March 31, 2015 and 2014 are reflected as income from discontinued operations in the accompanying consolidated statements of operations.

(3)6

(4)    INVESTMENT IN SENTINEL OMAHA, LLC

In 2007, the Partnership made an investment in the amount of $37,200,000 in Sentinel Omaha, LLC (“Omaha”). Omaha is a real estate investment company which as of September 30, 2014March 31, 2015 owns 14 multifamily properties in 10 markets. Omaha is an affiliate of the Registrant’s general partner. The investment represents a 30% ownership interest in Omaha.

The following are the condensed financial statements (000’s omitted) of Omaha as of and for the periods ended September 30, 2014March 31, 2015 and December 31, 2013.2014.

(4)

(5) MORTGAGE NOTE AND UNSECURED LOAN PAYABLE

Mortgage notenotes and unsecured loan payable consist of the following non-recourse first liens:

 7

As additional security for the Partnership’s payment of its obligations under the Loan Agreement, the Partnership, through its wholly-owned subsidiary Eagle IV Realty, LLC, has executed a Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement (“Eagle IV Security Agreement”) and a Pledge Agreement (“Eagle IV Pledge Agreement”) in favor of Holder. The Eagle IV Security Agreement provides Holder with a security interest on the Partnership’s property located in Maple Grove, Minnesota (“Eagle IV”) of up to $5,000,000. The Eagle IV Pledge Agreement pledges to Holder the Partnership’s membership interest in Eagle IV Realty, LLC, the direct owner of Eagle IV. The Partnership has no other debt obligation secured by Eagle IV. The Loan Agreement also provides for a negative pledge on the Partnership’s remaining properties and investments.

8

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FOR THETHREE MONTHS ENDED MARCH 31, 2015 AND 2014

FOR THETHREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

General

The consolidated financial statements for the three and nine months ended September 30,March 31, 2015 and 2014 and 2013 reflect the operations of one industrial flex property and one warehouse distribution center as well as a 30% interest in Omaha.

Registrant’s wholly owned property located in Lino Lakes, Minnesota is 100% leased to a single tenant until September 30, 2017. The tenant’s base rent is fixed and there are no remaining increases scheduled during the initial lease period. The tenant has two options to renew its lease for five years each at a yet undetermined market rate. Tenant either pays directly or reimburses Registrant for all utilities, real estate taxes, insurance and most of the property operating expenses and property management fees. Registrant’s wholly owned property located in Maple Grove, Minnesota is 100% leased to a single tenant until October 31, 2019. However, tenant has on ongoing option to terminate the lease after July 31, 2015.2017 under certain conditions as set forth in the lease terms as amended. One of the conditions is the payment of an early termination penalty the calculation of which is based on the remaining time period in the lease. Another condition is the tenant must provide notice twelve months prior to the termination. The tenant pays fixed base rent which increases approximately 3% each year. The tenant has no renewal options available. The tenant pays directly or reimburses Registrant for all utilities, real estate taxes, insurance and most of the property operating expenses and property management fees. Sentinel Omaha LLC’s portfolio consists of 13 garden apartment properties and one high rise apartment property. Leases generally are for one year or less. Tenants generally pay fixed rent plus utilities used by tenant.

The tenant at Registrant’s property located in Maple Grove has informed Registrant that it does not intend to lease the space for a long term period beyond the expiration in July 2015 but has requested a short term extension for 2 years only. Registrant is continuing discussions with the tenant regarding the terms of an extension but. there is no assurance the current tenant and Registrant will agree on terms for an extension beyond July 2015.

Results of Operations

Total revenues from continuing operations for the three months ended September 30, 2014March 31, 2015 increased $63,000$20,000 to approximately $692,000$248,000 as compared to approximately $629,000$228,000 for the three months ended September 30, 2013.March 31, 2014. Total revenues increased due to increasesan increase in other rental income combined with an increase in base rental income and increases in other income. Base rental income increased $19,000$5,000 to approximately $469,000$160,000 for the three months ended September 30, 2014March 31, 2015 as compared to the same period in 20132014 due to a scheduled increase in base rent at both of Registrant’s properties.property located in Maple Grove, MN. Other rental income increased $43,000$15,000 to approximately $222,000$88,000 for the three months ended September 30, 2014March 31, 2015 from approximately $179,000$73,000 for the same period in 20132014 due to higher expense reimbursement from the tenant at Registrant’s property located in Maple Grove, MN partially offset by lower expense reimbursement from the tenant at Registrant’s property located in Lino Lakes, MN.

Total revenuesLoss from operations for the nine months ended September 30, 2014 increased $132,000 to approximately $2,010,000 as compared to approximately $1,878,000 for the nine months ended September 30, 2013. Total revenues increased due to increases in base rental income and increases in other income. Base rental income increased $34,000 to approximately $1,374,000 for the nine months ended September 30, 2014 as compared to the same period in 2013 due to a scheduled increase in base rent at both of Registrant’s properties. Other income increased $98,000 to approximately $636,000 for the nine months ended September 30, 2014 from approximately $538,000 for the same period in 2013 due to higher expense reimbursement from the tenant at Registrant’s property located in Maple Grove, MN partially offset by lower expense reimbursement from the tenant at Registrant’s property located in Lino Lakes, MN.

Net loss fromcontinuing operations decreased $71,000$42,000 to a loss of approximately $196,000$292,000 for the three months ended September 30, 2014,March 31, 2015, as compared to an approximate loss of $267,000$334,000 for the three months ended September 30, 2013March 31, 2014 due to the aforementioned increase in total revenues combined with a decrease in total expenses. Total expenses from operations for the three months ended September 30, 2014,March 31, 2015, decreased $8,000$22,000 to approximately $888,000$541,000 from approximately $896,000$563,000 for the three months ended September 30, 2013.March 31, 2014. Total operating expenses decreased due to lower real estate operating expenses combined with lower real estate taxes.amortization costs. Operating expenses were lower due to lower utilityrepairs and maintenance costs at Registrant’s property located in Maple Grove, MN. Real estate tax was lower at Registrant’s property located in Lino Lake, MN due to a lower tax assessment.

Net loss from operations decreased $157,000 to a loss of approximately $686,000 for the nine months ended September 30, 2014, as compared to an approximate loss of $843,000 for the nine months ended September 30, 2013 due to the aforementioned increase in total revenues combined with a decrease in total expenses. Total expenses from operations for the nine months ended September 30, 2014, decreased $25,000 to approximately $2,696,000 from approximately $2,721,000 for the nine months ended September 30, 2013. Total operating expenses decreased due to lower real estate operating expenses combined with lower real estate taxes. Operating expenses were lower due to lower utility costs at Registrant’s property located in Maple Grove, MN combined with lower partnership administrative costs. Real estate tax was lower at Registrant’s property located in Lino Lake, MN due to a lower tax assessment.

The Registrant has a 30% non-controlling interest in Omaha that is accounted for on a fair value basis. Due to the mortgageglobal financial crisis, stagnant real estate market and slowing economy, Omaha reported a net write-down of the value of its real estate portfolio of approximately $120,452,000 (-23%$100,852,000 (-18.6%) during 2008 to 2012.2014. During 2013,2014 and 2015 capitalization rates for older properties in tertiary, markets where Omaha owns most of its properties, showed little improvement. For 2013 Omaha reportedgenerally were lower than for the prior year. Occupancy improved at some of the properties while occupancy went down at others. Job growth continued to improve but at a slight increase in the value of its portfolio of approximately $3,900,000.slow pace. For the nine monthsquarter ended September 30, 2014,March 31, 2015, Omaha reported net income of approximately $9,652,000.$3,843,000. Registrant’s share was approximately $2,895,000.$1,153,000. On September 30, 2013, Omaha executed a modification and extension of its unsecured loan to December 31, 2017. The modification and extension, among other items, requires Omaha to make specific periodic principal payments on the unsecured loan at scheduled dates through December 31, 2017. It has also reduced the pay rate on a portion of the unsecured loan to a float rate of 200 basis points over LIBOR while increasing the accrual rate on the same portion of the unsecured loan to 500 basis points over LIBOR.

However, the aforementioned accrued interest will be forgiven each time Omaha pays the above mentioned required principal payment timely, as defined in the loan agreement. Omaha is precluded from making distributions to its investors until its unsecured loan is paid in full. As a result of the aforementioned, Registrant does not anticipate receiving any distributions from Omaha during the foreseeable future and had reserved 100% of the reported value of its investment in Omaha on the balance sheet as of September 30, 2014March 31, 2015 and December 31, 2013.2014.

For additional analysis, please refer to the discussions of the individual properties below.

This report on Form 10-Q includes statements that constitute "forward looking statements" within the meaning of Section 27(A) of theSecuritiesthe

Securities Act of 1933 and Section 21(E) of the Securities Exchange Act of 1934 and that are intended to come within the safe harbor protection provided by those sections. By their nature, all forward looking statements involve risks and uncertainties as further described in the Registrant’s latest annual report on Form 10-K. Actual results may differ materially from those contemplated by the forward looking statements.

9

CRITICAL ACCOUNTING POLICIES

The Registrant’s critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2013.2014. There were no significant changes to such policies in 2014.2015. There are no accounting pronouncements or interpretations that have been issued, but not yet adopted, that Registrant believes will have a material impact on its consolidated financial statements.

Liquidity and Capital Resources

As of September 30, 2014,March 31, 2015, the Registrant had cash and cash equivalents of approximately $773,000.$938,000. These balances are approximately $149,000$5,000 higher than cash and cash equivalents held on December 31, 2013.2014. Cash and cash equivalents increased during the ninethree months ended September 30, 2014March 31, 2015 due to cash flow generated from operating activities at Registrant’s two wholly owned properties partially offset by interest and principal payments on Registrant’s bank loan and partnership expenses.

Currently, Registrant’s only source of cash is rental income received from two tenants who lease 100% of the leasable space at Registrant’s two wholly owned properties. The tenants either pay directly or reimburse Registrant for real estate taxes, insurance and most of the properties’ operating expenses leaving a significant portion of the base rent received available to pay property debt service, current debt service on Registrant’s Note A, capital improvements and partnership administrative expenses. A portion of any remaining annual cash flow is used to pay down the principal balance of Note A in accordance with the Loan Agreement while the remainder cash income is retained by Registrant as cash reserves. As part of Registrant and the Holder restructuring the Unsecured Debtbank loan in 2011, Registrant set aside $500,000 in escrow to be held and used only to pay the costs to releasere-tenant the space at either of Registrant’s wholly owned properties if one or both of Registrant’s tenants default on their lease or fail to renew.

Total outstanding debt at September 30, 2014March 31, 2015 consisted of a $10,000,000 long-term non-recourse first mortgage note secured by real estate owned by the Registrant due in October 2015 and $9,953,036$9,943,466 under a loan agreement with a bank.

Registrant’s property located in Lino Lakes, MN is encumbered by a $10,000,000 mortgage which matures October 5, 2015. It is unlikely Registrant will be able to refinance or extend the maturity date of the mortgage due to the remaining short term of the single tenant who currently leases 100% of the space. Registrant has engaged a broker to market the property for a sale to be completed prior to the maturity date of the mortgage. Net proceeds will be used first to pay off the property mortgage and all closing costs. A portion or all of the remaining proceeds will be used to pay down the bank loan described below.

The loan agreement consists of Note A in the amount of $3,953,036 whose maturity has been extended to$3,943,466 which matures July 2015 and Note B in the amount of $6,000,000 which matures April 2018. Registrant has one remaining 1-year option to extend the maturity of Note A as long as (a) both wholly owned properties are 100% leased to the current tenants and (b) Registrant is not in default of its obligations under the terms of the Notes. On May 5, 2014,4, 2015, the Partnership sent notification to Holder to exercise its first option to extend the maturity date of Note A to July 31, 2015.2016. Holder responded that there were no issues regarding the extension to July 31, 2015.2016. Many borrowers are still finding it difficult to secure debt at acceptable terms as lenders have imposed stricter terms on borrowers. If the Registrant does not have funds on hand sufficient to repay its indebtedness at maturity, the Registrant may need to refinance such indebtedness with new debt financing or provide necessary funds through equity offering(s). The Registrant may be unable to obtain a loan which will be sufficient to retire the existing loan. If it is unable to refinance this indebtedness on acceptable terms, the Registrant may be forced to dispose of properties upon disadvantageous terms, which could result in losses to the Registrant and adversely affect the amount of cash reserves. If prevailing interest rates or general economic conditions result in higher interest rates at a time when the Registrant must refinance its indebtedness, the Registrant's interest expense could increase, which would adversely affect the Registrant's results of operations and financial condition. Further, to the extent the Registrant's properties are mortgaged to secure payment of indebtedness and the Registrant is unable to meet the mortgage payments, mortgagee could foreclose or otherwise transfer the property, with a consequent loss of income and asset value to the Registrant. The Registrant has no other debt except normal trade accounts payable, accrued interest on mortgage notes payable and accrued investment management fees.

Although the two remaining commercial properties owned by the Registrant are 100% occupied, there remains a risk that one or both tenants could default on their respective leases. While the national industrial market improved in 2013,2014, Registrant may require a long time period to replace one of its tenants should a default occur or should either or both of the tenants not renew their leases at the end of the lease term. In 20132015 and 2014 most of the markets where Omaha has properties had reported a small improvement in employment and job growth. This combined with a decline in apartment development has led to an increase in average physical and economic occupancy in the Omaha portfolio.

During the quarter, inflation and changing prices did not significantly affect the markets in which the Registrant conducts its business, or the Registrant's business overall.

The Registrant's properties are expected to generate sufficient cash flow to cover operating and capital improvement costs, and other working capital requirements of the Registrant for the next 9foreseeable future.However, Registrant’s Note A due to 15 months. Following that period there is greater uncertainty regarding Registrant’s cash flow and reserves. Registrant’s wholly owned property locatedthe Holder, which has a current outstanding balance of $3,943,466, will mature in Maple Grove, MN is 100% leased to a single tenant until July 2015. The tenant has informed2016 after Registrant that it does not intend to lease the space for a long term beyond the expiration in July 2015 but has requested a short term extension for 2 years only. There is no assurance the current tenant and Registrant will agree on terms for an extension beyond July 2015.exercises its final 1-year extension. 

Registrant’s mortgage related to its property in Lino Lakes, MN is due to mature in October 2015. The current balance and the maturity balance is $10,000,000. Either of the failure of the existing tenant at the Maple Grove, MN property to renew or failure to refinance the Lino Lakes mortgage combined with the required amortization payments on Note A could cause a significant drain on or exhaust Registrant’s cash reserves in 15 to 21 months.

10

Eagle Lake Business Center IV (Maple Grove, Minnesota)

Total revenues for the three months ended September 30, 2014March 31, 2015 increased $53,000$20,000 to approximately $279,000$248,000 as compared to approximately $226,000$228,000 for the three months ended September 30, 2013.March 31, 2014. The property reported higher base rental income and higher other rental income. Base rental income was higher in 20142015 as the tenant received a scheduled rent increase. Other rental income was higher due to an increase in operating expense reimbursements from the tenant. Net income, which includes deductions for depreciation, increased $63,000$42,000 for the three months ended September 30, 2014March 31, 2015 to approximately $181,000$140,000 from approximately $119,000$98,000 for the three months ended September 30, 2013March 31, 2014 due primarily to the aforementioned increase in total revenues.lower operating expenses. Operating expenses were lower due to lower utility costs.

Total revenues for the nine months ended September 30, 2014 increased $132,000 to approximately $800,000 as compared to approximately $668,000 for the nine months ended September 30, 2013. The property reported higher base rental income and higher other income. Base rental income was higher in 2014 as the tenant received a scheduled rent increase. Other income was higher due to an increase in operating expense reimbursements from the tenant. Net income, which includes deductions for depreciation, increased $132,000 for the nine months ended September 30, 2014 to approximately $464,000 from approximately $332,000 for the nine months ended September 30, 2013 due primarily to the aforementioned increase in total revenues. Total operating expenses were approximately the same as higher real estate taxes and repair and maintenance costs were offset by lower utility costs and depreciation costs.

435 Park Court (Lino Lakes, Minnesota)

Total revenues for the three months ended September 30, 2014March 31, 2015 increased $9,000$12,000 to approximately $412,000$409,000 as compared to approximately $403,000$397,000 for the three months ended September 30, 2013.March 31, 2014. Total revenues were higher due to higher base rental income partially offset by lower real estate tax expense reimbursement from the tenant.income. Base rental income was higher in 20142015 as the tenant received a scheduled rent increase.increase in May 2014. Net income, which includes deductions for interest expense, and depreciation, increased $13,000$101,000 for the three months ended September 30, 2014March 31, 2015 to approximately $53,000$151,000 from approximately $40,000$50,000 for the three months ended September 30, 2013March 31, 2014 due primarily to lower depreciation expenses. The property stopped recognizing depreciation expense as of January 1, 2015 due to lower operating expenses combined withreclassifying the aforementioned higher total revenues. Operating expenses decreased due to lower real estate tax expenseproperty as a result of a lower tax assessment.

Total revenuesan asset held for the nine months ended September 30, 2014 decreased slightly to approximately $1,209,000 as compared to approximately $1,210,000 for the nine months ended September 30, 2013. Total revenues were slightly lower due to lower real estate tax expense reimbursement from the tenant offset by higher base rental income. Base rental income was higher in 2014 as the tenant received a scheduled rent increase. Net income, which includes deductions for interest expense and depreciation, increased $15,000 for the nine months ended September 30, 2014 to approximately $146,000 from approximately $131,000 for the nine months ended September 30, 2013 due to lower operating expenses. Operating expenses decreased due to lower real estate tax expense as a result of a lower tax assessment.sale.

Investment in Sentinel Omaha, LLC

As of September 30, 2014,March 31, 2015, the Omaha portfolio consisted of 14 multi-family properties located in 10 markets.

Comparison of three months ended September 30, 2014 to September 30, 2013:

Total Omaha’s total revenues for the three months ended September 30, 2014March 31, 2015 were approximately $9,861,000.$10,012,000. Income before net unrealized income and net realized loss was approximately $2,206,000.$1,440,000. Major expenses included approximately $2,416,000$2,238,000 for interest expense, $922,000$760,000 for repairs and maintenance, $1,252,000$1,388,000 for payroll, $1,254,000 for financing costs and $1,130,000$1,137,000 for real estate taxes. Omaha reported a net unrealized income of approximately $2,580,000$2,403,000 resulting in net income of approximately $4,786,000.$3,843,000. For the three months ended September 30, 2014,March 31, 2015, the Registrant’s equity interest in the income of Omaha was approximately $1,436,000. However,$1,153,000. Registrant continues to reserve 100% of the reported value of Omaha on its balance sheet. The reserve for value was adjusted in conjunction with recording the equity income for the quarter ended September 30, 2014.March 31, 2015. As a result, Registrant reported a net zero income from equity in investment in Omaha for the quarter ended September 30, 2014.March 31, 2015.

Total revenues for the three months ended September 30, 2013March 31, 2014 were approximately $9,532,000.$9,556,000. Income before net unrealized income and net realized loss was approximately $990,000.$1,830,000. Major expenses included approximately $3,085,000$2,405,000 for interest expense, $937,000$746,000 for repairs and maintenance, $1,223,000$1,352,000 for payroll, $380,000 for deferred interest costs and $1,069,000$1,089,000 for real estate taxes. Omaha reported net unrealized loss of approximately ($1,185,000) resulting in a net loss of approximately ($195,000). For the three months ended September 30, 2013, the Registrant’s equity interest in the income of Omaha was approximately ($59,000).

Revenues increased from 2013 to 2014 primarily due to higher physical and economic occupancy partially offset by the sale by Omaha of one apartment property in November 2013. Operating expenses were lower due to the aforementioned sale combined with lower interest expense. Interest expense was lower due to the lower float rate on Omaha’s unsecured loan and proceeds from the sale of properties was used to partially pay down the unsecured loan.

Comparison of nine months ended September 30, 2014 to September 30, 2013:

Total revenues for the nine months ended September 30, 2014 were approximately $29,117,000. Income before net unrealized income and net realized loss was approximately $6,194,000. Major expenses included approximately $7,220,000 for interest expense, $2,599,000 for repairs and maintenance, $3,952,000 for payroll and $3,359,000 for real estate taxes. Omaha reported a net unrealized income of approximately $3,458,000$186,000 resulting in net income of approximately $9,652,000.$2,016,000. For the ninethree months ended September 30,March 31, 2014, the Registrant’s equity interest in the income of Omaha was approximately $2,895,000.$605,000. Registrant continues to reserve 100% of the reported value of Omaha on its balance sheet. The reserve for value was adjusted in conjunction with recording the equity income for the nine monthsquarter ended September 30,March 31, 2014. As a result, Registrant reported a net zero income from equity in investment in Omaha for the quarter ended September 30,March 31, 2014.

Total revenues for the nine months ended September 30, 2013 were approximately $29,486,000. Income before net unrealized income and net realized loss was approximately $3,571,000. Major expenses included approximately $9,572,000 for interest expense, $2,799,000 for repairs and maintenance, $4,140,000 for payroll and $3,234,000 for real estate taxes. Omaha reported a net realized loss of ($20,783,000) and net unrealized income of approximately $33,528,000 resulting in net income of approximately $16,316,000. For the nine months ended September 30, 2013, the Registrant’s equity interest in the income of Omaha was approximately $4,895,000. However, Registrant reduced the net income reported from Omaha for the unrecognized loss of approximately $354,000 from 2012.

Revenues and operating expenses were lower for the nine months ended September 30, 2014 as compared to the same period in 2013 primarily due to the sales by Omaha of three apartment properties in March 2013, May 2013 and November 2013. Operating expenses were also lower due to lower interest expense. Interest expense was lower due to the lower float rate on Omaha’s unsecured loan and proceeds from the sale of properties was used to partially pay down the unsecured loan.

11

ITEM 3.

None

ITEM 4.

CONTROLS AND PROCEDURES

PART II – OTHER INFORMATION

ITEM 6.