~~United~~UNITED ~~States~~STATES

~~Securities~~SECURITIES ~~and~~AND ~~Exchange~~EXCHANGE ~~Commission~~COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

~~EXCHANGE~~For ~~ACT~~the OFquarterly ~~1934~~period ended March 31, 2013

~~For the Quarterly Period Ended September 30, 2012~~OR

o 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 33-11096

CRI HOTEL INCOME PARTNERS, L.P.

(Exact Name of Issuer as Specified in its Charter)



Delaware	52-1500621
(State of Incorporation)	(I.R.S. Employer Identification No.)
11200 Rockville Pike
Rockville, MD	20852
(Address of Principal Executive Offices)	(ZIP Code)

(301) 468-9200

(Issuer’s Telephone Number, Including Area Code)

_____________________

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 ¨ þ No x o

Indicate by check mark whether the ~~registrant~~Registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its~~accelerated ~~corporate Website~~filer, ifor ~~any,~~a ~~every~~non-accelerated ~~Interactive~~filer. See ~~Date~~definition ~~File~~of ~~required~~accelerated tofiler ~~be submitted~~ and ~~posted~~large ~~pursuant~~accelerated tofiler@ in Rule ~~405 of Regulation S~~12b-T2 ~~(§232.405~~ of ~~this chapter) during~~ the ~~preceding~~Exchange ~~12 months (or for such shorter period that the registrant was required to submit and post such files)~~Act.

~~Yes~~Large ~~¨ No~~accelerated xfiler o Accelerated filer o Non-accelerated filer o Smaller reporting company þ

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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filero

Non-accelerated filer (Do not check if a smaller reporting company) o Smaller reporting companyx

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x þ

AsThe units of ~~February~~limited ~~15,~~partner ~~2013~~interest of the Registrant are not traded in any market. Therefore, the ~~issuer~~units of limited partner interest had ~~868,662~~neither ~~outstanding~~a ~~beneficial~~market ~~assignee~~selling ~~certificates~~price nor an average bid or asked price.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date 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).

Yes o No þ

As of July 25, 2013, the issuer had 868,662 outstanding beneficial assignee certificates.

CRI HOTEL INCOME PARTNERS, L.P.

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER~~MARCH 3031, ~~2012~~2013

	Page	~~Page~~
Part I	FINANCIAL INFORMATION
Part I FINANCIAL INFORMATION
Item 1.	Financial Statements
Item 1. Financial Statements
	Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets - March 31, 2013 and December 31, 2012	1
	- September 30, 2012 and December 31, 2011	1
Condensed Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012	2
	Condensed Consolidated Statements of Operations
Condensed Consolidated Statement of Changes in Partners' Deficit for the three months ended
	- for the three and nine months ended September 30, 2012 and 2011	2
March 31, 2013 and 2012	3
	Condensed Consolidated Statement of Changes in Partners’ Deficit
Condensed Consolidated Statements of Cash Flows for the three months ended
	- for the nine months ended September 30, 2012	3
March 31, 2013 and 2012	4
	Condensed Consolidated Statements of Cash Flows
Notes to Condensed Consolidated Financial Statements	5
	- for the nine months ended September 30, 2012 and 2011	4
Item 2. Management's Discussion and Analysis of Financial condition and Results of Operations	11
	Notes to Condensed Consolidated Financial Statements	5
Item 3. Quantitative and Qualitative Disclosures about Market Risk	15
Item 2.	Management's Discussion and Analysis of Financial Condition
Item 4. Controls and Procedures	15
	and Results of Operations	16
Part II OTHER INFORMATION
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 5. Other Information	16
Item 4.	Controls and Procedures	21
Item 6. Exhibits	17
Part II	OTHER INFORMATION
Signature	18
Item 5.	Other Information	21
Item 6.	Exhibits	22
Signature		23

Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

CRI HOTEL INCOME PARTNERS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

ASSETS

		September 30,				December 31,
	March 31,				December 31,
		2012				2011
	2013				2012
					(Note 1)	~~(Note 1)~~
Assets held for sale		$	255,266			$	1,847,101
Assets related to discontinued operations	$	13,097			$	71,273
Property and Equipment - at cost
Property and equipment - at cost
Land	1,191,990		~~1,191,990~~		1,191,990		~~1,191,990~~
Buildings and site improvements	11,105,244		~~11,051,370~~		11,051,370		~~11,051,370~~
Furniture, fixtures and equipment	2,457,230		~~2,369,006~~		2,383,286		~~2,275,854~~
Leasehold improvements	1,521,020		~~1,521,020~~		1,521,020		~~1,521,020~~
			16,133,386				16,040,234
	16,275,484				16,147,666
Less: accumulated depreciation and amortization	(12,573,033		~~(12,301,942~~)	)	(12,436,992		~~(11,882,733~~)	)
			3,831,444				4,157,501
	3,702,451				3,710,674
Hotel Operating Cash			303,617				63,202
Hotel operating cash	125,143				100,370
Working capital reserves	951,074		~~1,256,776~~		1,353,505		~~628,413~~
Restricted Cash			907,686				999,636
Restricted cash	1,072,307				993,220
Receivables and other assets, net of
Receivables and other assets, net of allowance for doubtful accounts of $24,516 and $23,415, respectively	422,911				430,388
allowance for doubtful accounts of $25,857 and $34,996 respectively			390,371				317,275
Acquisition fees, principally paid to related parties, net of
Acquisition fees, principally paid to related parties, net of
accumulated amortization of $705,330 and $699,436, respectively	110,752				116,646
accumulated amortization of $693,543 and $675,861, respectively			122,540				140,221
Property purchase costs, net of
Property Purchase costs, net of
accumulated amortization of $147,559 and $146,403, respectively	22,056				23,212
accumulated amortization of $145,247 and $141,779, respectively			24,368				27,836
Loan refinancing costs, net of
Loan refinancing costs, net of
accumulated amortization of $231,684 and $221,429, respectively	57,101				67,356
accumulated amortization of $211,174 and $180,410 respectively			77,611				108,375
Total assets	$	6,476,892			$	6,866,644
			6,914,413				6,442,459
Total assets		$	7,169,679			$	8,289,560

LIABILITIES AND PARTNERS' DEFICIT

Accounts payable and accrued expenses	$	$461,049	~~493,762~~		$	$404,843	~~522,187~~
Hotel trade payables	107,637		~~89,099~~		122,245		~~58,508~~
Mortgages payable	6,665,403		~~6,772,957~~		6,718,617		~~6,923,701~~
Liabilities related to assets held for sale			218,246				1,335,162
Liabilities related to discontinued operations	14,113				140,512
Total liabilities	7,248,202		~~7,574,064~~		7,386,217		~~8,839,558~~
Partners’ (deficit)
General Partner	(404,211		)		(399,176		)
General Partner			(396,873	)			(399,785	)
Beneficial Assignee Certificates (BACs) Series A; 868,662
Beneficial Assignee Certificates (BACs) Series A;
Issued and outstanding	(367,099		)		(120,397		)
868,662 BACs issued and outstanding			(7,512	)			(150,213	)
Total partners' deficit	(771,310		)		(519,573		)
Total partners' deficit			(404,385	)			(549,998	)
Total liabilities and partners' deficit	$	6,476,892			$	6,866,644
Total liabilities and partners' deficit		$	7,169,679			$	8,289,560

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~of these condensed consolidated financial statements.~~ 1

- 1 -

Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

CRI HOTEL INCOME PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the three months ended	~~For the three months ended~~							~~For the nine months ended~~
		September 30,							September 30,
	March 31,
		2012				2011			2012			2011
	2013				2012
					(Note 1)	~~(Note 1)~~						~~(Note 1)~~
Revenue:
Rooms	$	$1,048,210	~~1,640,469~~		$	$1,109,190	~~1,597,733~~		$	~~4,147,274~~		$	~~3,938,024~~
Rental and other	72,163		~~82,516~~		73,365		~~85,369~~			~~236,120~~			~~238,413~~
Telephone	508		~~872~~		336		~~1,577~~			~~2,181~~			~~4,243~~
			1,723,857				1,684,679			4,385,575			4,180,680
Food and Beverage	—				—
Departmental expenses:
	1,120,881				1,182,891
Rooms			(492,933	)			(482,948	)		(1,327,825	)		(1,236,738	)
Departmental expenses:
Rental and other			(7,003	)			(7,240	)		(23,006	)		(22,815	)
Rooms	(391,376		)		(405,003		)
Telephone			(6,854	)			(6,532	)		(21,174	)		(21,926	)
Rental and other	(6,202		)		(7,331		)
			(506,790	)			(496,720	)		(1,372,005	)		(1,281,479	)
Telephone	(6,811		)		(7,793		)
Gross operating income			1,217,067				1,187,959			3,013,570			2,899,201
Food and Beverage	—				—
Unallocated operating income (expenses):
	(404,389		)		(420,127		)
Interest and other income			349				1,533			1,295			4,267
Gross operating income	716,492				762,764
General and administrative			(223,038	)			(336,047	)		(686,180	)		(741,586	)
Unallocated operating income (expenses):
Depreciation and amortization			(154,496	)			(156,141	)		(467,622	)		(470,498	)
Interest and other income	207				588
Building Lease Expense			(5,815	)			(5,865	)		(11,629	)		(16,775	)
General and administrative	(204,480		)		(255,059		)
Marketing			(109,109	)			(109,329	)		(288,346	)		(280,185	)
Building lease expense	(5,814		)		(5,814		)
Energy			(86,829	)			(81,543	)		(252,588	)		(269,004	)
Marketing	(86,564		)		(85,754		)
Property operations and maintenance			(115,512	)			(102,625	)		(317,615	)		(293,373	)
Depreciation and amortization	(155,528		)		(156,047		)
Property taxes			(99,811	)			(99,441	)		(298,551	)		(289,865	)
Energy	(115,542		)		(101,168		)
Management fees			(60,678	)			(58,983	)		(153,478	)		(146,376	)
Property taxes	(105,865		)		(99,142		)
Professional fees			(111,013	)			(285,018	)		(338,883	)		(478,847	)
Property operations and maintenance	(104,796		)		(104,882		)
Base asset management fee			(23,438	)			(23,438	)		(70,313	)		(70,313	)
Management fees	(39,229		)		(41,394		)
Total operating costs and expenses			(989,390	)			(1,256,897	)		(2,883,910	)		(3,052,555	)
Base asset management fee	(16,250		)		(23,438		)
Operating income (loss) from continuing operations			227,677				(68,938	)		129,660			(153,354	)
Professional fees	(15,000		)		(177,224		)
Interest expense			(121,169	)			(141,748	)		(360,207	)		(446,299	)
Total operating costs and expenses	(848,861		)		(1,049,334		)
Income (loss) from continuing operations			106,508				(210,686	)		(230,547	)		(599,653	)
Operating loss from continuing operations	(132,369		)		(286,570		)
Gain on sale of hotel property			-				-			417,303			-
Interest expense	(117,591		)		(118,917		)
Asset impairment			(87,104	)			-			(87,104	)		-
Loss from continuing operations	(249,960		)		(405,487		)
(Loss) income from operations of asset held for sale			(176,884	)			(190,518	)		45,961			(33,073	)
Gain on sale of hotel property	—				317,303
Net (loss) income from discontinued operations			(263,988	)			(190,518	)		376,160			(33,073	)
(Loss) income from operations related to discontinued operations	(1,777		)		338,897
Net (loss) income		$	(157,480	)		$	(401,204	)	$	145,613		$	(632,726	)
Net (loss) income from discontinued operations	(1,777		)		656,200
Net (loss) income allocated to GP (2%)		$	(3,150	)		$	(8,024	)	$	2,912		$	(12,655	)
Net (loss) income	$	(251,737	)		$	250,713
Net (loss) income allocated to BAC holders (98%)		$	(154,330	)		$	(393,180	)	$	142,701		$	(620,071	)
Net (loss) income allocated to GP (2%)	$	(5,035	)		$	5,014
Income(loss) from continuing operations per BAC, based on 868,662 BACs outstanding		$	0.12			$	(0.24	)	$	(0.26	)	$	(0.69	)
Net (loss) income allocated to LPs (98%)	$	(246,702	)		$	245,699
Income(loss) from discontinued operations per BAC, based on 868,662 BACs outstanding		$	(0.30	)		$	(0.21	)	$	0.42		$	(0.02	)
Loss from continuing operations per BAC, based on 868,662 BACs outstanding	$	(0.29	)		$	(0.48	)
Net (loss) income per BAC, based on 868,662 BACs outstanding		$	(0.18	)		$	(0.45	)	$	0.16		$	(0.71	)
Income (loss) from discontinued operations per BAC, based on 868,662 BAC's outstanding	$	—			$	0.76
Net (loss) income per BAC, based on 868,662 BACs outstanding	$	(0.29	)		$	0.28

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~of these condensed consolidated financial statements.~~2

- 2 -

Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

CRI HOTEL INCOME PARTNERS, L.P.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CHANGES IN PARTNERS’ DEFICIT

OFFor ~~CHANGES~~the INthree ~~PARTNERS’~~months ~~DEFICIT~~ended March 31, 2013 and 2012

(Unaudited)

						Beneficial
	GeneralPartner				BeneficialAssigneeCertificateHolders				Total
						Assignee
Partners' deficit, January 1, 2013	$	(399,176	)		$	(120,397	)		$	(519,573	)
		General				Certificate
Net loss, March 31, 2013	(5,035		)		(246,702		)		(251,737		)
		Partner				Holders				Total
Partners' deficit, March 31, 2013	$	(404,211	)		$	(367,099	)		$	(771,310	)
Partners' deficit, January 1, 2012		$	(399,785	)		$	(150,213	)		$	(549,998	)
Net income			2,912				142,701				145,613
Partners' deficit , September 30, 2012		$	(396,873	)		$	(7,512	)		$	(404,385	)

The accompanying notes are an integral part of these consolidated financial statements.

~~of these condensed consolidated financial statements.~~3

- 3 -

Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

CRI HOTEL INCOME PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		For the nine months ended
	For the three months ended March 31,
		September 30,
	2013				2012
		2012				2011
					(Note 1)
Cash flows from operating activities:						~~(Note 1)~~
Net income (loss)		$	145,613			$	(632,726	)
Net (loss) income	$	(251,737	)		$	250,713
Adjustments to reconcile net income (loss) to net cash provided
Adjustments to reconcile net (loss) income to net cash (used in) provided by
by operating activities:
operating activities:
Depreciation and amortization	155,528		~~467,622~~		156,047		~~470,498~~
Gain on sale of hotel property	—		~~(417,303~~	)	(317,303		-)
Asset impairment			87,104				-
Changes in assets and liabilities:
Changes in assets and liabilities:
Decrease in assets related to discontinued operations	58,176				83,926
Increase in receivables and other assets, net			(73,096	)			(29,405	)
Decrease (increase) in receivables and other assets, net	5,295				(123,422		)
(Decrease) increase in accounts payable and accrued expenses			(28,426	)			311,011
Increase in accounts payable and accrued expenses	56,206				250,990
Increase (decrease) in hotel trade payables			30,591				(68,228	)
Decrease in hotel trade payables	(14,608		)		(45,817		)
(Decrease) increase in liabilities held for sale			(72,840	)			97,848
Decrease in liabilities related to discontinued operations	(126,399		)		(94,581		)
Increase (decrease) in assets related to assets held for sale			109,181				(10,315	)
Net cash (used in) provided by operating activities	(117,539		)		160,553
Net cash provided by operating activities			248,446				138,683
Cash flows from investing activities:
Cash flows from investing activities:
Proceeds from sale of hotel property	—				1,744,775
Net additions to property and equipment			(93,152	)			(111,355	)
Additions to property and equipment	(127,818		)		(63,485		)
Change in working capital reserve	402,431		~~(628,363~~	)	(674,942		~~219,883~~)
Change in restricted cash	(79,087		~~91,950~~)		26,456		-
Change in property and equipment held for sale			(28,421	)			-
Net cash provided by investing activities	195,526				1,032,804
Proceeds from sale of hotel property			1,844,775				-
Cash flows from financing activities:
Net cash provided by investing activities			1,186,789				108,528
Repayment of principal on mortgage loan	(53,214		)		(1,094,499		)
Cash flows from financing activities:
Net cash used in financing activities	(53,214		)		(1,094,499		)
Repayment of principal on mortgage loan			(1,194,820	)			(135,443	)
Net increase in hotel operation cash and cash equivalents	24,773				98,858
Net cash used in financing activities			(1,194,820	)			(135,443	)
Hotel operating cash and cash equivalents, beginning of period	100,370				79,639
Net increase in hotel operating cash			240,415				111,768
Hotel operating cash and cash equivalents, end of period	$	125,143			$	178,497
Hotel operating cash, beginning of period			63,202				85,020
Supplemental disclosure of cash flow information:
Hotel operating cash, end of period		$	303,617			$	196,788
Cash paid during the period for interest	$	117,591			$	118,917
Supplemental disclosure of cash flow information:
Supplemental disclosure of non-cash investing activities:
Cash paid during the period for interest		$	360,207			$	304,550
Fixed asset reduction	$	—			$	1,354,368
Significant noncash investing and financing activity:
Write-off of financing costs	$	—			$	73,104
Fixed Asset reduction		$	1,354,368			$	-
Write-off of financing costs		$	73,104			$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~of these condensed consolidated financial statements.~~4

- 4 -

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~MARCH 3031, ~~2012~~2013 ~~and~~AND ~~2011~~2012

(Unaudited)

1. BASIS OF PRESENTATION

In the opinion of CRICO Hotel Associates I, L.P. (the “General Partner”), the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial position of CRI Hotel Income Partners, L. P. and CRI Hotel Income of Minnesota, LLC (the “Partnership”) as of ~~September 30~~March 31, ~~2012~~2013, and the results of ~~its~~their operations and ~~its~~their cash flows for the three ~~and nine~~ month periods ended ~~September 30~~March 31, ~~2012~~2013 and ~~2011~~2012. The results of operations for the interim period ended ~~September 30~~March 31, ~~2012,~~2013 are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) and with the instructions to Form10-Q. Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in conformity with US GAAP have been condensed or omitted pursuant to such instructions. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Partnership's annual report on Form 10-K at December 31, ~~2011~~2012.

The Partnership and the chief operating decision maker consider the hotels’' operations as a single homogeneous business activity as it relates to achieving their objectives of cash flow growth and capital appreciation. The chief operating decision maker reviews cash flow and operating results in the aggregate in order to determine the appropriate level of cash available, if any, for distribution to the investors in the Partnership. Accordingly, the Partnership considers itself to operate in a single reportable segment.

During the three ~~and nine~~ month periods ended ~~September 30~~March 31, 2013 and 2012, the Scottsdale Inn was classified as held for sale on the condensed consolidated balance ~~sheet~~sheets and its operations were reported separately on the condensed consolidated ~~statement~~statements of operations as (loss) income from operations ofrelated ~~asset~~to ~~held~~discontinued ~~for~~operations ~~sale~~ ( see Note 2). As such, the 2011 balances on the condensed consolidated balance sheets, condensed consolidated statements of operations, and cash flows have been reclassified to conform to the current year presentation.

2. LONG-LIVED ASSETS AND ASSETS HELD FOR SALE

The Partnership reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Recoverability is measured by a comparison of the carrying amount of an asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If an asset were determined to be impaired, its basis would be adjusted to fair value through the recognition of an impairment loss. During the three month ~~and nine month~~ periods ended ~~September 30~~March 31, 2013 and 2012, ~~$87,104~~no of impairment loss was recognized. ~~No impairment loss was recognized for the periods ended September 30, 2011.~~

Assets to be disposed of are separately presented on the condensed consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. Real estate assets are only classified as held for sale when all of the specific criteria under accounting principles generally accepted in the United States are met. Criteria include the commitment to sell the asset and the active marketing of the asset at a price that is reasonable in relation to its current fair value.

~~- 5~~The -assets and liabilities of a group classified as held for sale are presented separately in the appropriate asset and liability sections of the condensed consolidated balance sheet. Operations from a group classified as held for sale are reported in operations of asset held for sale.

As of December 31, 2011, Clearwater was classified as held for sale. On January 6, 2012, the Clearwater hotel was sold. As of September 30, 2012, Scottsdale is classified as held for sale. Operations were terminated at the Scottsdale hotel on December 31, 2012. During the three months ended March 31 2013, management was winding up the affairs of the Scottsdale hotel. Assets related to discontinued operations for Clearwater and Scottsdale as of March 31, 2013 were $0 and $13,097, respectively. Liabilities related to discontinued operations as of March 31, 2013 were $0 and $14,113 for Clearwater and Scottsdale, respectively.

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~September~~MARCH 3031, ~~2012~~2013 ~~and~~AND ~~2011~~2012

(Unaudited)

~~2. LONG-LIVED ASSETS AND ASSETS HELD FOR SALE – Continued~~(Unaudited)

The assets and liabilities of a group classified as held for sale are presented separately in the appropriate asset and liability sections of the condensed consolidated balance sheet. Operations from a group classified as held for sale are reported in operations of asset held for sale.

As of December 31, 2011, Clearwater is classified as held for sale. On January 6, 2012 the Clearwater hotel was sold. As of September 30, 2012, Scottsdale is classified as held for sale. Assets held for sale for Clearwater and Scottsdale as of September 30, 2012 were $0 and $255,266, respectively. As the fair value of the Scottsdale assets were less than the carrying value, an impairment loss was recorded in the amount of $87,104. Liabilities related to assets held for sale as of September 30, 2012 were $0 and $218,246 for Clearwater and Scottsdale, respectively.

3. HOTEL OPERATING CASH; CASH AND CASH EQUIVALENTS

Hotel operating cash and cash and cash equivalents consist of demand deposits, repurchase agreements and money market funds with original maturities when purchased of three months or less, which have not been designated as a working capital reserve by the General Partner. Hotel operating cash represents funds maintained at the hotels and by the hotels’ unaffiliated manager, while cash and cash equivalents represents ~~the~~ funds maintained at the Partnership. The Partnership has determined that the carrying amounts for these items approximate fair value.

4. WORKING CAPITAL RESERVE

The working capital reserve represents all cash and cash equivalents, as defined above, maintained as working capital for the Partnership. The General Partner has determined that all cash and cash equivalents maintained at the Partnership which are not currently distributable to the BAC holders and General Partner of the Partnership shall be deemed as a working capital reserve. The working capital reserve may be increased or reduced by the General Partner as it deems appropriate. The General Partner at its own discretion may use the working capital reserve for operations or to reduce the amount of the existing debt.

5. RESTRICTED CASH

Restricted cash is cash that has been escrowed in order to pay for real estate taxes, environmental matters and property maintenance. These escrow accounts were required as part of the mortgage loan covenants for the loan entered into by CRI Hotel of Minnesota, LLC (discussed further in Note 6.) . As of ~~September~~March 3031, ~~2012~~2013, $~~907~~1,~~686~~072,307 of restricted cash is being held at Franklin Bank. Of this amount, $336,~~508~~602 is in an environmental escrow which will be released upon resolution of the environmental matter further discussed below.

- 6. MORTGAGE -PAYABLE

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

6. MORTGAGES PAYABLE

On May 6, 2008, the Partnership refinanced the mortgage loans associated with the Plymouth, Roseville and Clearwater hotels with General Electric Credit Corporation (GE). A separate mortgage loan was issued with respect to each property, each collateralized by a property. An event of default under each mortgage loan constitutes an event of default under the other mortgage loans. The mortgage loans had original principal balances of $1,150,000, $2,700,000 and $1,150,000 for the Plymouth, Roseville and Clearwater hotels, respectively. The mortgage loans each bear interest rates of 6.79% and require monthly payments of principal and interest in the amounts of $8,837, $20,748 and $8,837 for the Plymouth, Roseville and Clearwater hotels, respectively, through December 31, 2013 at which time the interest rates of the mortgage loans shall be adjusted based upon an Index of the then prevailing five (5) year Interest Rate Swap plus 366 basis points. The monthly principal and interest payments will be adjusted as of July 1, 2013 to a monthly payment of principal and interest based upon the adjusted interest rate that will amortize the remaining balances over the remaining term of the mortgages. The mortgage loans have a maturity date of January 1, 2016, at which time the entire outstanding principal balances are due.

On January 6, 2012, the Clearwater loan and related interest was paid in full at ~~the~~ closing of the sale of the Clearwater hotel.

On ~~May~~November 69, ~~2008~~2010, CRI Hotel Income of Minnesota, LLC was formed for the ~~Partnership~~purpose ~~closed~~of creating a ~~loan~~single ~~with~~purpose ~~Remediation~~entity ~~Capital~~to ~~Funding,~~own ~~LLC~~the ~~(Remediation~~University ~~Capital)~~hotel infor ~~the~~refinancing ~~amount~~purposes ofwith $2Franklin Bank. On December 17,~~900~~ 2010,~~000,~~ ofCRI ~~which~~Hotel ~~$500~~of Minnesota,~~000~~ ~~was~~LLC ~~held~~refinance by the ~~lender~~mortgage ~~pending~~loan ~~resolution~~associated ofwith the ~~environmental~~University ~~matter~~hotel ~~further~~with ~~discussed~~Franklin ~~below~~Bank. ~~The~~ Franklin ~~loan~~Bank ~~was~~issued a loan secured by the University hotel into CRI Hotel of Minnesota~~. The~~, ~~loan~~LLC in the principal amount of $3,500,000 for a term of three (3) years with ~~Remediation~~an ~~Capital~~interest ~~was~~rate ~~paid~~of ~~off~~seven onpercent ~~December~~(7%) per year. ~~17,~~The ~~2010~~mortgage loan requires monthly payments of principal and interest in the amount of $~~500~~27,~~000~~350 ~~environmental~~through ~~escrow~~December ~~held~~31, by2013 ~~Remediation~~at ~~Capital~~which ~~was~~time ~~credited against~~ the ~~payoff~~entire onoutstanding ~~December~~principal ~~17,~~balance ~~2010~~is due. OnAn ~~December~~environmental ~~22,~~escrow ~~2010,~~reserve in the ~~Partnership~~amount ~~filed~~of $350,000 awas ~~Form 8-K~~established ~~stating~~which ~~that~~will ~~the~~be ~~Partnership~~released ~~had~~upon ~~entered~~resolution ~~into~~of the ~~loan~~environmental ~~agreement~~matter ~~with~~further ~~Franklin~~discussed ~~Bank~~below. Please ~~which~~see ~~constituted~~Note a14 ~~material~~for ~~definitive~~additional ~~agreement~~information ~~for~~on ~~SEC~~this ~~purposes~~mortgage loan.

OnThe ~~December~~Partnership ~~17,~~made ~~2010,~~installments ~~CRI Hotel~~ of ~~Minnesota~~principal ~~entered~~and ~~into~~interest afor all mortgage ~~loan~~loans ~~with~~aggregating ~~Franklin~~$170,805 ~~Bank~~ for the ~~purpose~~ ~~of refinancing~~period ~~the~~ending ~~loan with Remediation Capital,~~March ~~which was maturing on December~~ 31, ~~2011~~2013. ~~Franklin~~ Additionally, ~~Bank issued a loan secured by~~ the ~~University hotel to CRI Hotel of Minnesota in the principal amount of~~ $31,~~500~~044,~~000~~076 ~~for~~promissory anote ~~term~~balance ofrelated ~~three~~to ~~(3)~~Clearwater ~~years~~was ~~with~~paid anat ~~interest~~the ~~rate~~January of6, ~~seven~~2012 ~~percent~~sale ~~(7%) per year~~closing. The ~~mortgage~~Partnership's ~~loan~~aggregate ~~requires~~balance ~~monthly~~on ~~payments~~the ofloans ~~principal~~was $6,665,403 and ~~interest in the amount of~~ $276,~~350~~718,617 ~~through~~as ~~December~~of March 31, 2013 atand ~~which~~December 31, ~~time~~2012, ~~the entire outstanding principal balance is due~~respectively.

The Partnership made installments of principal and interest for all mortgage loans aggregating $512,417 and $779,059 for the period ended September 30, 2012 and the period ended December 31, 2011, respectively. Additionally, the $1,044,076 promissory note balance related to Clearwater was paid at the January 6, 2012 sale closing. The Partnership’s aggregate balance on the loans was $6,772,957 and $7,967,777 as of September 30, 2012 and December 31, 2011, respectively. The Clearwater loan balance at December 31, 2011 is included in liabilities related to assets held for sale.

- 7 -

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~September~~MARCH 3031, ~~2012~~2013 ~~and~~AND ~~2011~~2012

(Unaudited)

The approximate aggregate scheduled principal maturities are as follows:





December 31, 2013	$	3,402,843
2014	135,384
2015	145,004
2016	2,982,172
Total	$	6,665,403

7. ENVIRONMENTAL MATTERS

~~During~~In ~~the~~ 2008 ~~financing with GE~~, ~~the~~a Phase I environmental study and subsequent Phase II environmental study of the University hotel ~~required by GE~~ revealed excess levels of certain chemicals in the groundwater on the hotel property that are deemed hazardous. The Partnership engaged ~~NOVA as~~ a consultant with respect to the environmental contamination of the University hotel property and to enroll the University hotel property in the Voluntary Investigation and Cleanup (“VIC”) Program of the Minnesota Pollution Control Agency (“MPCA”). The Partnership’'s ultimate goal is to obtain a No Further Action Letter determination with a Covenant Not to Sue from MPCA with respect to this environmental issue which will enable the University hotel to be refinanced at better rates and/or ultimately sold without an ongoing environmental problem. ~~NOVA~~ Extensive ~~conducted~~testing ~~extensive~~was ~~testing~~conducted of all aspects of the University hotel property from 2008 through early 2011 to determine the source of the observed contamination. ~~NOVA~~ It has determined that the source of the solvent contamination appears to be on the northeast corner of the University hotel property. ~~NOVA~~ Active ~~has recommended active~~ remediation of the northeast corner of the property was recommended to mitigate the vapors and the potential for a continued intrusion condition. To facilitate a reduction in contaminant concentrations and the receipt of a subsequent No Further Action determination, ~~NOVA prepared~~ a Corrective Action Design (CAD) plan ~~which~~ was submitted to and approved by the MPCA. In December of 2011, the installation of a remediation system which incorporates soil vapor extraction, groundwater sparging and air stripping technologies was completed. The remediation system ~~will~~is be monitored and ground water and air samples ~~will~~are be tested monthly ~~for a minimum one year period~~ to determine if risks associated with the contaminants are reduced to an acceptable level. The Partnership ~~incurred~~has been informed that the remediation system continues to operate as designed and ~~paid~~that ~~costs~~significant contaminants have been removed from the site, however, the effect on the groundwater will need to be monitored over a longer period of time. The remediation system will be operated until groundwater concentrations, sub-slab vapor concentrations, and other contaminants concentrations warrant a system shut-down test. At this time, it is unknown as to how long the Partnership will be required to continue the operations of the remediation system. During 2011, the Partnership incurred costs totaling $~~116~~228,~~371~~965 for remediation related services ~~in 2011~~. As of ~~September~~March 3031, ~~2012~~2013 and December 31, ~~2011~~2012, $3719,~~817~~765 and $~~156~~25,~~837~~515, ofrespectively, ~~expenses~~remained ~~have~~payable ~~been~~relating ~~accrued related~~ to ~~the~~these ~~CAD plan~~costs.

8. DISTRIBUTIONS TO BAC HOLDERS

The Partnership did not make a distribution ~~during~~in the first, ~~second or third~~ quarter of ~~2012~~ 2013 or ~~2011~~in 2012.

~~9. COMMITMENTS~~7

a. Hotel Management Agreements

The Partnership entered into management contracts with Oak Hotels, Inc., for the management of the hotels. The management contracts expire December 31, 2016, with the exception of Scottsdale which is coterminous with the land lease on which the hotel is located. The agreements provide for a base management fee of 3.5% of gross revenues from operations with the exception of Scottsdale which provides for a base management fee of 4.5% of gross revenues from operations.

- 8 -

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~September~~MARCH 3031, ~~2012~~2013 ~~and~~AND ~~2011~~2012

(Unaudited)

9. COMMITMENTS ~~– Continued~~

a. Hotel Management fee expense, for the three and nine month periods ended September 30, 2012, was $60,678 and $153,478, respectively, and $58,983 and $146,376 for the three and nine month periods ended September 30, 2011, respectively.Agreements

The Partnership entered into management contracts with Oak Hotels, Inc., for the management of the hotels. The management contracts expire December 31, 2016, with the exception of Scottsdale which was coterminous with the land lease on which the hotel is located. The land lease expired on December 31, 2012. The agreements provide for a base management fee of 3.5% of gross revenues from operations with the exception of Scottsdale which provides for a base management fee of 4.5% of gross revenues from operations.

For the periods ending March 31, 2013 and 2012, management fee expense was $39,229 and $41,394, respectively.

b. Lease Agreements

The Partnership ~~owns~~owned a leasehold interest in the Scottsdale Days Inn. The Partnership ~~has~~had entered into various amendments to the lease extending its term and required lease payments. For the year 2011, lease payments were based upon a percentage rent equal to (i) 22% of gross room revenue up to $3,300,000 and 30% of gross room revenue in excess of $3,300,000, and (ii) 2.5% of restaurant sales, with a minimum base rent of $500,000. On December 1, 2011, the Partnership executed a restated Seventh Addendum to ~~the~~ Lease and Fifth Extension Term which among other things extended the lease term to December 31, 2012 and fixed the annual lease payment to $350,000 paid in equal monthly installments. On September 30, 2012, management decided not to renew the lease upon its expiration on December 31, 2012. ~~Subsequently~~ Consequently, operations of the hotel ceased on November 30, 2012. During December 2012, all ~~the~~ personal property at the hotel was sold for a sum of $82,500. These assets were written down to the sale amount at September 30, 2012, resulting in an impairment loss of $87,104, which was recognized during the fourth quarter of 2012. ~~Costs~~ Net costs incurred to ~~vacate~~cease operations of the ~~premises~~hotel totaled $35,000 ~~and~~which ~~were~~was accrued for at ~~September~~December 3031, 2012 and paid in first quarter of 2013. For the three month periods ended March 31, 2013 and 2012, annual lease payments were $0 and $89,381, respectively.

For the three and nine month periods ended September 30, 2012, the lease payments were $89,382 and $268,146, respectively. For the three and nine month periods ended September 30, 2011, the lease payments were $82,227 and $389,518, respectively.

c. License Agreements

Each of the hotels is are operated as a Days Inn under separate License Agreements between the Partnership and Days Inn Worldwide, Inc. . The License Agreement for the Scottsdale hotel expired on December 31, 2012. The License Agreements for the remaining three hotels, University, Roseville and Plymouth, expire on ~~September~~June 30, 2018.

d. Legal Proceedings

There are no material pending legal proceedings to which the Partnership is a party.

~~- 9~~10. LEASE -AGREEMENTS

On June 22, 2009, the Partnership executed a ten year lease with Asian Mill, Inc., doing business as the Tea House Restaurant. The lease has two options to renew for five years each. The base rent for years one through five is $100,700. In addition to base rent, the tenant is responsible for their share of operating expenses. Rent commenced on April 19, 2010 upon the opening of the premises for business to the general public. Revenue for the Tea House Restaurant is being recognized using the straight-line method as of possession date. Gross rental income pursuant to the lease agreement with Tea House, which is included in rental and other in the accompanying condensed consolidated statements of operations, was $24,462 for each of the three month periods ended March 31, 2013 and 2012.

The Partnership leases an adjacent building on the Roseville Days Inn property to India Palace, Inc., which operates a restaurant on the property. The lease originally was scheduled to expire on September 30, 2010 and the tenant exercised its option to extend for an additional five years to expire on September 30, 2015. Gross base rental income pursuant to the lease agreement with India Palace, which is included in rental and other income in the accompanying condensed consolidated statements of operations, was $7,500 for each of the three month periods ended March 31, 2013 and 2012.

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~September~~MARCH 3031, ~~2012~~2013 ~~and~~AND ~~2011~~2012

(Unaudited)

1011. ~~BUILDING~~RELATED-PARTY ~~LEASE AGREEMENTS~~TRANSACTIONS

OnIn ~~June~~accordance ~~22,~~with ~~2009,~~ the ~~Partnership~~terms ~~executed~~of athe ~~ten~~Partnership ~~year lease with Asian Mill~~Agreement, ~~Inc.,~~the ~~doing~~Partnership ~~business~~paid as the ~~Tea~~General ~~House~~Partner ~~Restaurant. The~~a ~~lease~~fee ~~has two options to renew~~ for ~~five~~services ~~years~~in ~~each. The~~connection ~~base~~with ~~rent~~the ~~for~~review, ~~years one through five is $100~~selection,~~700. Rent~~ ~~commenced on April 19~~evaluation, ~~2010~~negotiation ~~upon~~and ~~the~~acquisition ~~opening~~ of the ~~premises~~hotels. The ~~for~~Partnership ~~business~~paid to$1,142,516 ~~the~~in ~~general~~acquisition ~~public~~fees. ~~Revenue~~The ~~for~~acquisition ~~the~~fees ~~Tea~~were ~~House~~capitalized ~~Restaurant~~and isare being ~~recognized~~amortized over a thirty-year period using the straight-line method ~~as of possession date~~. ~~Gross~~ When ~~rental income pursuant to~~ the ~~lease~~Partnership ~~agreement~~sells ~~with~~a ~~Tea House~~hotel, ~~which is included in rental and other income in~~ the ~~accompanying~~associated ~~combined~~acquisition ~~consolidated~~fees ~~statements~~are ofwritten ~~operations, was $73,385 for each of the nine months ended September 30, 2012 and 2011, respectively~~off.

~~The~~In ~~Partnership~~accordance ~~leases~~with anthe ~~adjacent~~terms ~~building~~of on the ~~Roseville~~Partnership ~~Days Inn property to India Palace~~Agreement, ~~Inc.,~~the ~~which~~Partnership ~~operates~~reimbursed ~~a restaurant on~~ the ~~property.~~General ~~The~~Partner ~~lease~~or ~~originally~~its ~~was~~affiliates ~~scheduled~~for tocosts ~~expire~~incurred on ~~September~~behalf ~~30,~~of ~~2010~~the ~~and~~Partnership ~~the~~for ~~tenant~~real ~~exercised~~estate ~~its~~appraisals ~~option~~and tomarket ~~extend~~studies, ~~for~~engineering anstudies, ~~additional~~legal ~~five~~consultation ~~years~~and toaccounting ~~expire~~fees, onas ~~September~~well ~~30,~~as ~~2015. Gross~~travel ~~base~~and ~~rental~~communication ~~income~~expenses ~~pursuant~~related to the ~~lease~~acquisition ~~agreement~~of ~~with~~the ~~India~~hotels. The ~~Palace,~~Partnership ~~which~~paid is$233,474 ~~included~~ in ~~rental~~such ~~and~~costs. The ~~other~~costs ~~income~~were incapitalized ~~the~~and ~~accompanying~~are ~~combined~~being ~~consolidated~~amortized ~~statements~~over ofa ~~operations,~~thirty-year ~~was~~period ~~$7,500~~using ~~for~~the ~~each~~straight-line ofmethod. When the ~~nine~~Partnership ~~month~~sells ~~periods~~a ~~ended~~hotel, ~~September~~the ~~30,~~associated ~~2012~~property ~~and~~purchase ~~2011,~~costs ~~respectively~~are written off.

11In accordance with the terms of the Partnership Agreement, the Partnership is obligated to reimburse the General Partner or its affiliates for certain direct expenses and payroll expenses in connection with managing the Partnership. ~~ASSETS~~ Payroll ~~HELD~~expenses ~~FOR~~are ~~SALE~~reimbursed ~~AND~~at ~~RELATED~~a ~~OPERATING~~factor ~~LOSS~~of ~~FROM~~1.75 ~~OPERATIONS~~times base salary. For the three month periods ended March 31, 2013 and 2012, the Parthership paid $5,718 and $25,022, respectively, to the Managing General Partner or its affiliates as direct reimbursement of expenses incurred on behalf of the Partnership. In addition, certain employees of the Managing General partner provided legal and tax accounting services to the Partnership, which are reimbursed comparable to third party service charges. For the three month periods ended ended March 31, 2013 and 2012, the Partnership paid $113,995 and $55,840, respectively, to the Managing General Partner or its affiliates for these services. Such reimbursed expenses are included in the accompanying condensed consolidated statements of operations as general and administrative expenses.

~~The~~In ~~following~~accordance iswith athe ~~summary~~terms of the ~~assets~~Partnership ~~held~~Agreement, ~~for~~the ~~sale~~Partnership ~~and~~is ~~liabilities~~obligated ~~related~~to pay the General Partner or its affiliates an annual base asset management fee (Management Fee), equal to ~~assets~~0.50% ~~held~~of ~~for~~the ~~sale~~weighted asaverage balance of ~~September~~the 30adjusted partnership investment during the period, ~~2012~~as defined in the Partnership Agreement. The Partnership paid a Management Fee of $16,250 and ~~December~~$23,438 for the periods ended March 31, ~~2011~~2013 ~~for~~and ~~Scottsdale~~2012, ~~(unaudited):~~respectively.

~~ASSETS~~12. DEPRECIATION ~~HELD~~AND ~~FOR~~AMORTIZATION ~~SALE~~

	September 30,			December 31,
	2012			2011
Building improvements	$	97,545		$	119,801
Furniture, fixtures and equipment		1,591,594			1,628,021
		1,689,139			1,747,822
Less: Accumulated depreciation		(1,606,639	)		(1,585,084	)
Net property and equipment		82,500			162,738
Other assets		172,766			176,208
	$	255,266		$	338,946

Depreciation is based on the estimated useful lives of depreciable assets using the straight-line method. Salvage value has been incorporated relating to the Scottsdale hotel. The estimated lives used in determining depreciation is as follows:

LIABILITIES RELATED TO ASSETS HELD FOR SALE



Type of asset		Estimated life

Building and site improvements		10-30 years
Furniture, fixtures and equipment		7 years
Leasehold improvements		Shorter of estimated life (usually 7 years) or remaining lease term

Accounts payable and accrued expenses	$	141,117	$	75,136
Hotel trade payables		77,129		121,370
	$	218,246	$	196,506

Property purchase costs and acquisition fees are being amortized over a thirty-year period using the straight-line method, except for the Scottsdale hotel which was being amortized over the remaining lease term. Loan refinancing costs are being amortized over the life of the loans using the straight-line method, which approximates the effective interest method.

~~- 10 -~~ 9

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~September~~MARCH 3031, ~~2012~~2013 ~~and~~AND ~~2011~~2012

(Unaudited)

1113. ~~ASSETS~~CASH ~~HELD~~CONCENTRATION ~~FOR SALE AND RELATED OPERATING LOSS FROM OPERATIONS – Continued~~RISK

~~The~~Financial ~~following~~instruments isthat apotentially ~~summary~~subject of the ~~assets~~Partnership ~~held~~to ~~for~~concentrations ~~sale~~of ~~and~~risk ~~liabilities~~consist ~~related~~primarily toof ~~assets~~cash. ~~held~~The ~~for~~Partnership ~~sale~~maintains as16 cash accounts. As of ~~September~~March 31, 302013, ~~2012~~the ~~and~~portion ~~December~~of ~~31,~~the ~~2011~~cash ~~for~~balance ~~Clearwater~~in ~~(unaudited):~~excess of FDIC limits was $1,273,386.

ASSETS HELD FOR SALE



	Number of	Bank Balance		Insured		Uninsured
Bank	Accounts	3/31/2013		3/31/2013		3/31/2013
Bank of America, N.A.	5	$	60,451	$	60,451	$	—
Wells Fargo	2	$	7,234	$	7,234	$	—
Franklin Bank	6	$	1,159,517	$	337,205	$	822,312
Eagle Bank	3	$	951,074	$	500,000	$	451,074

	September 30,		December 31,
	2012		2011
Land	$	-	$	382,500
Building		-		3,226,426
Furniture, fixtures and equipment		-		839,844
		-		4,502,770
Less: Accumulated depreciation		-		(3,148,401	)
Net property and equipment		-		1,354,369
Deferred costs, net		-		73,104
Other assets		-		80,682
	$	-	$	1,508,155

LIABILITIES RELATED TO ASSETS HELD FOR SALE

Accounts payable and accrued expenses	$	-	$	34,033
Mortgage payable		-		1,044,076
Hotel trade payables		-		60,547
	$	-	$	1,138,656

- 11 -

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~September~~MARCH 3031, ~~2012~~2013 ~~and~~AND ~~2011~~2012

(Unaudited)

11. ASSETS HELD FOR SALE AND RELATED OPERATING LOSS FROM OPERATIONS – Continued

The following is a summary of operating (loss) income from operations of Scottsdale for the periods noted:

	For the three months ended						For the nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Revenue:
Rooms	$	321,578		$	366,205		$	1,613,979		$	1,733,033
Food and beverage		4,807			6,176			17,446			22,569
Rental and other		5,606			6,213			25,592			23,646
Telephone		1,656			2,601			7,644			10,138
		333,647			381,195			1,664,661			1,789,386
Departmental expenses:
Rooms		(116,452	)		(132,355	)		(416,549	)		(436,094	)
Food and beverage		(2,727	)		(3,172	)		(10,805	)		(13,209	)
Rental and other		(15	)		(11	)		(241	)		(155	)
Telephone		(4,350	)		(3,542	)		(10,141	)		(11,829	)
		(123,544	)		(139,080	)		( 437,736	)		(461,287	)
Gross operating income		210,103			242,115			1,226,925			1,328,099
Unallocated operating income (expenses):
General and administrative		(87,067	)		(52,359	)		(200,165	)		(167,461	)
Depreciation and amortization		(9,967	)		(3,361	)		(29,397	)		(9,355	)
Marketing		(48,889	)		(63,512	)		(186,320	)		(210,696	)
Energy		(58,956	)		(68,710	)		(139,350	)		(156,012	)
Building lease		(89,382	)		(82,227	)		(268,146	)		(389,518	)
Property operations and maintenance		(49,304	)		(50,011	)		(148,705	)		(143,558	)
Property taxes		(28,413	)		(30,876	)		(85,239	)		(92,628	)
Management fees		(15,009	)		(17,153	)		(74,875	)		(80,489	)
		(386,987	)		(368,209	)		(1,132,197	)		(1,249,717	)
Operating (loss) income from operations of
asset held for sale	$	(176,884	)	$	(126,094	)	$	94,728		$	78,382

- 12 -

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

1114. ~~ASSETS~~ PLAN ~~HELD~~OF ~~FOR SALE AND RELATED OPERATING LOSS FROM OPERATIONS – Continued~~LIQUIDATION

~~The~~On ~~following~~April is1, 2013 the General Partner of CRI Hotel Income Partners, L.P., a ~~summary~~Delaware limited partnership (the “Partnership”), adopted, subject to partner approval, a Plan of ~~operating~~Liquidation ~~loss~~and ~~from~~Dissolution ~~operations~~for the Partnership (the “Plan of ~~Clearwater~~Liquidation”). On June 14, 2013, the partners of the Partnership approved the Plan of Liquidation. Under the Plan of Liquidation, the General Partner of the Partnership will (1) seek to sell the assets of the Partnership and use the sales proceeds and/or other Partnership funds to pay all expenses in connection with such sales, (2) pay or make provision for payment of all Partnership obligations and liabilities, including accrued fees and unpaid loans to the ~~periods~~General ~~noted:~~Partner and (3) distribute the remaining assets as set forth in the Partnership’s Agreement of Limited Partnership, dated as of September 23, 1986.

	For the three months ended					For the nine months ended
	September 30,					September 30,
	2012		2011			2012			2011
Revenue:
Rooms	$	-	$	177,557		$	10,040		$	663,410
Rental and other		-		5,021			228			21,878
Telephone		-		405			875			1,153
		-		182,983			11,143			686,441
Departmental expenses:
Rooms		-		(93,411	)		(16,372	)		(292,659	)
Rental and other		-		(855	)		(101	)		(2,272	)
Telephone		-		(3,004	)		-			(9,089	)
		-		(97,270	)		( 16,473	)		(304,020	)
Gross operating income (loss)		-		85,713			(5,330	)		382,421
Unallocated operating income (expenses):
General and administrative		-		(40,479	)		(12,634	)		(122,816	)
Depreciation and amortization		-		-			-			(45,212	)
Marketing		-		(21,742	)		(7,526	)		(66,295	)
Energy		-		(32,016	)		2,132			(92,534	)
Building lease		-		(553	)		(18,453	)		(1,658	)
Property operations and maintenance		-		(30,099	)		(5,942	)		(84,823	)
Property taxes		-		(18,849	)		(667	)		(56,547	)
Management fees		-		(6,399	)		(347	)		(23,991	)
		-		(150,137	)		(43,437	)		(493,876	)
Operating loss from operations of
asset held for sale	$	-	$	(64,424	)	$	(48,767	)	$	(111,455	)

15. SUBSEQUENT EVENTS

-CRI 13Hotel -Income Partners, LP, entered into a Purchase and Sale Agreement dated as of July 12, 2013 with Mohammad Bashir for the sale of the real and personal property operated as Plymouth Days Inn for the sale price of $2,200,000. The sale of the property is expected to occur on or before September 30, 2013. There is no assurance that the purchaser will be able to purchase the property on the terms set forth in the Purchase and Sale Agreement or at all. Closing of the purchase and sale is subject to customary conditions.

~~CRI~~Item ~~HOTEL~~2. ~~INCOME~~Management's ~~PARTNERS,~~Discussion ~~L.P.~~and Analysis of Financial Condition and Results of Operations

~~NOTES~~The TOPartnership's ~~CONDENSED~~Management's ~~CONSOLIDATED~~Discussion ~~FINANCIAL~~and ~~STATEMENTS~~Analysis of Financial Condition and Results of Operations section is based on the financial statements, and contains information that may be considered forward looking, including statements regarding the effect of governmental regulations. Actual results may differ materially from those described in the forward looking statements and will be affected by a variety of factors including seasonality with respect to the hotel industry, national and local economic conditions, the general level of interest rates, governmental regulations affecting the Partnership and interpretations of those regulations, the competitive environment in which the Partnership operates, and the availability of working capital.

September 30, 2012 and 2011

(Unaudited)

12. RELATED PARTY TRANSACTIONS

In accordance with the terms of the Partnership Agreement, the Partnership paid the General Partner a fee for services in connection with the review, selection, evaluation, negotiation and acquisition of the hotels. The Partnership paid $1,142,516 in acquisition fees. The acquisition fees were capitalized and are being amortized over a thirty-year period using the straight-line method. When the Partnership sells a hotel, the associated acquisition fees are written off.

In accordance with the terms of the Partnership Agreement, the Partnership reimbursed the General Partner or its affiliates for costs incurred on behalf of the Partnership for real estate appraisals and market studies, engineering studies, legal consultation and accounting fees, as well as travel and communication expenses related to the acquisition of the hotels. The Partnership paid $233,474 in such costs. The costs were capitalized and are being amortized over a thirty-year period using the straight-line method.

In accordance with the terms of the Partnership Agreement, the Partnership is obligated to reimburse the Managing General Partner or its affiliates for certain direct expenses and payroll expenses in connection with managing the Partnership. Payroll expenses are reimbursed at a factor of 1.75 times base salary. For the three and nine month periods ended September 30, 2012, the Partnership paid $12,487 and $51,301 and $5,785 and $47,640 for the three and nine month periods ended September 30, 2011, respectively, to the Managing General Partner or its affiliates as direct reimbursement of expenses incurred on behalf of the Partnership. In addition, certain employees of the Managing General partner provided legal and tax accounting services to the Partnership. For the three and nine month periods ended September 30, 2012, the Partnership paid $24,766 and $114,746 and $29,347 and $111,088 for the three and nine month periods ended September 30, 2011, respectively, to the Managing General Partner or its affiliates for these services. Such reimbursed expenses are included in the accompanying combined consolidated statements of operations as general and administrative expenses.

In accordance with the terms of the Partnership Agreement, the Partnership is obligated to pay the General Partner or its affiliates an annual base asset management fee (Management Fee) equal to 0.50% of the weighted average balance of the adjusted partnership investment during the period, as defined in the Partnership Agreement. The Partnership paid a Management Fee of $23,438 for each of the three month periods ended September 30, 2012 and 2011. The Management Fee paid for each of the nine month periods ended September 30, 2012 and 2011 was $70,313.

13. DEPRECIATION AND AMORTIZATION

	Type of asset	Estimated life
	Building and site improvements	10-30 years
	Furniture, fixtures and equipment	7 years
	Leasehold improvements	Shorter of estimated life (usually 7 years) or
		remaining lease term

- 14 -

CRI HOTEL INCOME PARTNERS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

13. DEPRECIATION AND AMORTIZATION - Continued

Property purchase cost and acquisition fees are being amortized over a thirty-year period using the straight-line method, except for the Scottsdale hotel which is being amortized over the remaining lease

term. Loan refinancing costs are being amortized over the life of the loans using the straight-line method, which approximates the effective interest method.

14. CASH CONCENTRATION RISK

Financial instruments that potentially subject the Partnership to concentrations of risk consist primarily of cash. The Partnership maintains eighteen cash accounts. As of September 30, 2012, the uninsured portion of the cash balance was $714,902.

Bank	Number of Accounts	Bank Balance September 30, 2012	Insured September 30, 2012	Uninsured September 30, 2012
Bank of America, N.A.	7	$128,413	$128,413	$0
Wells Fargo	2	$18,160	$18,160	$0
Franklin Bank	6	$1,059,910	$402,225	$657,685
Eagle Bank	3	$1,273,289	$1,216,072	$57,217

- 15 -

Part I.	FINANCIAL INFORMATION
Item 2.	Management's Discussion and Analysis
	of Financial Condition and Results of Operations

The Partnership’s Management’s Discussion and Analysis of Financial Condition and Results of Operations section is based on the financial statements, and contains information that may be considered forward looking, including statements regarding the effect of governmental regulations. Actual results may differ materially from those described in the forward looking statements and will be affected by a variety of factors including seasonality with respect to the hotel industry, national and local economic conditions, the general level of interest rates, governmental regulations affecting the Partnership and interpretations of those regulations, the competitive environment in which the Partnership operates, and the availability of working capital.

Travel and the Economy

Starting in the fourth quarter of 2008 and continuing throughout 2009, the weakened U.S. and global economies resulted in considerable negative pressure on both consumer and business spending. As a result, lodging demand and revenues weakened substantially during this period as compared to the lodging demand and revenues we experienced prior to the fourth quarter of 2008. After this extremely difficult recessionary period, the outlook for the U.S. and global economies began improving in 2010 and that improvement has continued through the first quarter of ~~2012~~2013. However, to date, the recovery has not been particularly robust, as spending by businesses and consumers remains restrained, and there are still several trends which make our performance difficult to forecast.

Distributions

The Partnership did not make a distribution in the first, ~~second, or third~~ quarter of ~~2012~~2013 or ~~2011~~2012.

Financial Condition/Liquidity

The Partnership's liquidity and future results of operations are primarily dependent upon the performance of the underlying hotels. Hotel operations may be materially affected by changing market conditions and by seasonality caused by variables such as vacations, holidays and climate. The General Partner continues to work closely with the hotels’' manager to institute an aggressive marketing campaign and stricter cost-cutting and cost-control measures in an effort to maintain liquidity at the hotels.

For the three ~~and nine~~ month ~~periods~~period ended ~~September~~March 3031, ~~2012~~2013, existing cash resources were adequate to support operating and financing requirements. The Partnership anticipates that future cash flows from the hotels’' operations and existing cash resources, in the aggregate, will be sufficient to pay operating expenses, hotel trade payables, accounts payable and accrued expenses. Accrued expenses ~~decreased~~increased from December 31, ~~2011~~2012 ~~largely~~primarily due to ~~payments~~unpaid ofreal ~~costs~~estate ~~associated~~taxes ~~with~~as ~~the~~of ~~environmental~~March ~~remediation at the University hotel~~31, ~~which were previously accrued~~2013.

The working capital reserve of $1951,~~256,776~~ 074 and $~~628~~1,~~413~~353,505 as of ~~September~~March 3031, ~~2012~~2013 and December 31, ~~2011~~2012, respectively, represents all cash and cash equivalents, as defined in Note 34 of the accompanying condensed consolidated financial statements, maintained as working capital for the Partnership. The working capital reserve may be increased or reduced by the General Partner as it deems appropriate. The General Partner at its own discretion may use the working capital reserve for operations or to reduce the amount of the existing debt.

- 16 -

Part I.	FINANCIAL INFORMATION
Item 2.	Management's Discussion and Analysis
	of Financial Condition and Results of Operations - Continued

Financing

On May 6, 2008, the Partnership refinanced the mortgage loans associated the Plymouth, Roseville and Clearwater hotels with General Electric Credit Corporation (GE). A separate mortgage loan was issued with respect to each property, each collateralized by a property. An event of default under each mortgage loan constitutes an event of default under the other mortgage loans. The mortgage loans had original principal balances of $1,150,000, $2,700,000 and $1,150,000 for the Plymouth, Roseville and Clearwater hotels, respectively. The mortgage loans each bear interest rates of 6.79% and require monthly payments of principal and interest in the amounts of $8,837, $20,748 and $8,837 for the Plymouth, Roseville and Clearwater hotels, respectively, through September 30, 2013 at which time the interest rates of the mortgage loans shall be adjusted based upon an Index of the then prevailing five (5) year Interest Rate Swap plus 366 basis points. The monthly principal and interest payments will be adjusted as of July 1, 2013 to a monthly payment of principal and interest based upon the adjusted interest rate that will amortize the remaining balances over the remaining term of the mortgages. The mortgage loans have a maturity date of January 1, 2016, at which time the entire outstanding principal balances are due.

On January 6, 2012, the Clearwater loan and related interest was paid in full at the closing of the sale of the Clearwater hotel.

On May 6, 2008, the Partnership closed a loan with Remediation Capital Funding, LLC (Remediation Capital) in the amount of $2,900,000, of which $500,000 was held by the lender pending resolution of the environmental matter further discussed below. The loan was secured by the University hotel in Minnesota. The loan with Remediation Capital was paid off on December 17, 2010 and the $500,000 environmental escrow held by Remediation Capital was credited against the payoff on December 17, 2010. On December 22, 2010, the Partnership filed a Form 8-K stating that the Partnership had entered into the loan agreement with Franklin Bank which constituted a material definitive agreement for SEC purposes.11

On November 9, 2010, the Partnership formed CRI Hotel Income of Minnesota, LLC ~~(CRI Hotel of Minnesota), was formed~~ for the purpose of creating a single purpose entity to own the University hotel for refinancing purposes with Franklin ~~National~~ Bank ~~of Minneapolis (Franklin Bank)~~. ~~CRI~~ ~~Hotel of Minnesota is a wholly-owned subsidiary of CRI Hotel Income Partners, L.P and, accordingly, will at times hereinafter be referred to with the Partnership as the Partnership.~~ On December 17, 2010, CRI Hotel of Minnesota, ~~entered~~LLC ~~into~~refinanced athe mortgage loan associated with ~~Franklin Bank for~~ the ~~purpose~~ ~~of refinancing~~University ~~the~~hotel ~~loan~~ with ~~Remediation~~Franklin ~~Capital, which was maturing on December 31, 2011~~Bank. Franklin Bank issued a loan secured by the University hotel to CRI Hotel of Minnesota, LLC in the principal amount of $3,500,000 for a term of three (3) years with an interest rate of seven percent (7%) per year. The mortgage loan requires monthly payments of principal and interest in the amount of $27,350 through December 31, 2013 at which time the entire outstanding principal balance is due. ~~An environmental escrow reserve in the amount of $350,000 was established which will be released upon resolution of the environmental matter further discussed below.~~

-The 17Partnership -made installments of principal and interest for all mortgage loans aggregating $170,805 for the period ending March 31, 2013. The Partnership's aggregate balance on the loans was $6,665,403 and $6,718,617 as of March 31, 2013 and December 31, 2012, respectively.

Part I.	FINANCIAL INFORMATION
Item 2.	Management's Discussion and Analysis
	of Financial Condition and Results of Operations - Continued

During the 2008 financing with GE, the Phase I environmental study and subsequent Phase II environmental study of the University hotel required by GE revealed excess levels of certain chemicals in the groundwater on the hotel property that are deemed hazardous. The Partnership engaged NOVA as a consultant with respect to the environmental contamination of the University hotel property and to enroll the University hotel property in the Voluntary Investigation and Cleanup (“VIC”) Program of the Minnesota Pollution Control Agency (“MPCA”). The Partnership’s ultimate goal is to obtain a No Further Action Letter determination with a Covenant Not to Sue from MPCA with respect to this environmental issue which will enable the University hotel to be refinanced at better rates and/or ultimately sold without an ongoing environmental problem. NOVA conducted extensive testing of all aspects of the University hotel property from 2008 through early 2011 to determine the source of the observed contamination. NOVA has determined that the source of the solvent contamination appears to be on the northeast corner of the University hotel property. NOVA has recommended active remediation of the northeast corner of the property to mitigate the vapors and the potential for a continued intrusion condition. To facilitate a reduction in contaminant concentrations and the receipt of a subsequent No Further Action determination, NOVA prepared a Corrective Action Design (CAD) plan which was submitted to and approved by the MPCA. In December of 2011, the installation of a remediation system which incorporates soil vapor extraction, groundwater sparging and air stripping technologies was completed. The remediation system will be monitored and ground water and air samples will be tested monthly for a minimum one year period to determine if risks associated with the contaminants are reduced to an acceptable level. At September 30, 2012, $37,817 of expenses have been accrued related to the CAD plan.

Working Capital Reserve

The working capital reserve of $1,256,776 and $628,413 as of September 30, 2012 and December 31, 2011, respectively, represents all cash and cash equivalents maintained as working capital for the Partnership. In accordance with the terms of the Partnership Agreement, the working capital reserve may be increased or reduced by the General Partner as it deems appropriate. The General Partner at its own discretion may use the working capital reserve for operations or to reduce the amount of existing debt.

Results of Operations - Partnership

The Partnership experienced a ~~decrease in~~ net loss for the three month period ended ~~September~~March 3031, ~~2012~~2013 compared to ~~the~~ net ~~loss~~income for the three month period ended ~~September~~March 3031, ~~2011~~ 2012 primarily due to a decrease in ~~partnership~~gross operating ~~expenses~~income and the gain on the sale of the Clearwater hotel that was recorded in 2012.

The General Partner is not able to predict the future trend of hotel gross operating income, especially room revenue as it is affected by occupancy and average daily rate. The General Partner continues to work closely with the hotels’' manager to contain any increase in unallocated operating expenses.

An analysis of each hotel's operating results for the three month periods ended ~~September~~March 3031, ~~2012~~2013 and ~~2011,~~2012 follows.

- 18 -

Part I.	FINANCIAL INFORMATION
Item 2.	Management's Discussion and Analysis
	of Financial Condition and Results of Operations - Continued

Results of Operations -- Hotels

Operating statistics

The hotels' results of operations are affected by changing market conditions and by seasonality caused by variables such as vacations, holidays and climate. Based on the hotels' operating budgets and historical trends, the following months should provide the highest net cash flow to the Partnership from each of the hotels.:



	Hotel Location	Peak Months

	Minneapolis, MN	March through November
	Plymouth, MN	April through October
	Roseville, MN	April through October
	Scottsdale, AZ	January through April; and October and November

The hotels’' results of operations set forth below may not be consistent with longer-term historical trends.

The Partnership's statements of operations include operating results for each of the hotels as summarized below. Gross Operating Income represents total revenue from rooms, rental and other, telephone, and food and beverage, less the related departmental expenses. Operating Income represents Gross Operating Income less unallocated operating income and expenses. The results of operations and average occupancy for the hotels for the three month periods ended ~~September~~March 3031, ~~2012~~2013 and ~~2011,~~2012 follow.

	Gross Operating Income				Gross Operating Income (Loss)
	for the three months ended				For the nine months ended
	September 30,				September 30
Hotel Location	2012		2011		2012			2011
Minneapolis, MN	$	675,886	$	665,002	$	1,717,636		$	1,750,668
Plymouth, MN		238,173		218,930		542,257			448,376
Roseville, MN		303,008		304,027		753,677			700,157
Total continuing operations		1,217,067		1,187,959		3,013,570			2,899,201
Operations of asset held for sale:
Scottsdale, AZ		210,103		242,115		1,226,925			1,328,099
Clearwater, FL		-		85,713		(5,330	)		382,421
Total	$	1,427,170	$	1,515,787	$	4,235,165		$	4,609,721

- 19 -



	Gross Operating Income
	for the three months ended
	March 31,
Hotel Location	2013		2012

Minneapolis, MD	$	453,859	$	443,765
Plymouth, MN	83,136		126,633
Roseville, MN	179,497		192,366

Total continuing operations	716,492		762,764

Operations related to discontinued operations:
Clearwater, FL	—		(5,330		)
Scottsdale, AZ	263		768,807

Totals	$	716,755	$	1,526,241

Part I.	FINANCIAL INFORMATION
	Operating (Loss) Income
Item 2.	Management's Discussion and Analysis
	for the three months ended
	of Financial Condition and Results of Operations - Continued
	March 31,
Hotel Location	2013			2012
Minneapolis, MD	$	123,944		$	114,885
Plymouth, MN	(69,431		)	(33,830		)
Roseville, MN	4,216			17,937
Depreciation and net partnership operating expenses	(191,098		)	(386,399		)
Total continuing operations	(132,369		)	(287,407		)
Operations related to discontinued operations:
Clearwater, FL	—			(44,977		)
Scottsdale, AZ	(1,777		)	383,874
Totals	$	(134,146	)	$	51,490

	Operating Income (Loss)						Operating Income (Loss)
	for the three months ended						for the nine months ended
	September 30,						September 30,
Hotel Location	2012			2011			2012			2011
Minneapolis, MN	$	326,668		$	322,884		$	721,668		$	755,839
Plymouth, MN		74,315			62,299			74,760			13,526
Roseville, MN		113,316			134,128			226,679			223,062
Depreciation and net partnership
operating expenses		(286,622	)		(588,249	)		(893,447	)		(1,145,781	)
Total continuing operations		227,677			(68,938	)		129,660			(153,354	)
Operations of asset held for sale:
Scottsdale, AZ		(176,884	)		(126,094	)		94,728			78,382
Clearwater, FL		-			(64,424	)		(48,767	)		(111,455	)
Total	$	50,793		$	(259,456	)	$	175,621		$	(186,427	)

	Average Occupancy	~~Average Occupancy~~							~~Average Occupancy~~
	for the three months ended	~~for the three months ended~~							~~for the nine months ended~~
		September 30,							September 30,
	March 31,
Hotel Location	2013	~~2012~~		2012		~~2011~~			~~2012~~			~~2011~~
Minneapolis, MN	68	%	87	%72	%		86	%		80	%		79	%
Plymouth, MN	41	%	75	%53	%		77	%		64	%		57	%
Roseville, MN	56	%	81	%62	%		80	%		70	%		66	%
Operations of asset held for sale:
Clearwater, FL			--	%			40	%		--	%		43	%
Scottsdale, AZ	—	%		69	%
Scottsdale, AZ			50	%			55	%		55	%		60	%

Minneapolis, Minnesota: Gross operating income for the three month period ended ~~September~~March 3031, ~~2012~~2013 increased from ~~2011~~2012 primarily due to an increase in ~~occupancy~~average room rates as well as a decrease in departmental expenses.

Plymouth, Minnesota: Gross operating income ~~increased~~decreased for the three month period ended ~~September~~March 3031, ~~2012~~2013 compared to ~~2011~~2012 primarily due to ana ~~increase~~decrease in ~~the average room rates~~occupancy.

Roseville, Minnesota: Gross operating income decreased for the three month period ended ~~September~~March 3031, ~~2012~~2013 compared to ~~2011~~2012 primarily due to ana ~~increase~~decrease in ~~room expenses~~occupancy.

~~Scottsdale, Arizona: Gross operating income for the three month period ended September 30, 2012 decreased from 2011 primarily due to a decrease in occupancy which affected room revenue.~~14

-Plan 20of -Liquidation and Dissolution

Part I.	FINANCIAL INFORMATION
Item 3.	Quantitative and Qualitative Disclosures About Market Risk

On April 1, 2013, the General Partner of CRI Hotel Income Partners, L.P., a Delaware limited partnership (the “Partnership”), adopted, subject to partner approval, a Plan of Liquidation and Dissolution for the Partnership (the “Plan of Liquidation”). On June 14, 2013, the partners of the Partnership approved the Plan of Liquidation. Under the Plan of Liquidation, the General Partner of the Partnership will (1) seek to sell the assets of the Partnership and use the sales proceeds and/or other Partnership funds to pay all expenses in connection with such sales, (2) pay or make provision for payment of all Partnership obligations and liabilities, including accrued fees and unpaid loans to the General Partner and (3) distribute the remaining assets as set forth in the Partnership’s Agreement of Limited Partnership, dated as of September 23, 1986, as the same may be amended.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure controls and procedures

As of the end of the period covered by this report, our principal executive officer and principal financial officer carried out an evaluation of the effectiveness of the Partnership’'s “disclosure controls and procedures” as defined in Securities Exchange Act of 1934 Rule 13a-15 and 15d-15. Based on that evaluation, the principal executive officer and chief financial officer have concluded that, as the end of the period covered by this report, the Partnership’'s disclosure controls and procedures were not effective to ensure that material information required to be disclosed in the Partnership’'s periodic report filings with SEC is recorded, processed, summarized and reported within the time period specified by the SEC’'s rules and forms, consistent with the definition of “disclosure controls and procedures” under the Securities Exchange Act of 1934.

We are currently in the process of the remediation of the weakness in our internal control over financial reporting by the employment of a consultant with the requisite accounting expertise to resolve the above issue and expect to implement changes in the near term.

Changes in internal controls

There have been no significant changes in the Partnership’'s internal controls over financial reporting that occurred during the Partnership’'s most recent fiscal quarter ended ~~September~~March 3031, ~~2012~~ 2013 that has materially affected, or is reasonably likely to materially affect, the Partnership’'s internal controls over financial reporting.

Part II	OTHER INFORMATION
Item 5.	Other Information

aPart II. OTHER ~~There~~INFORMATION has not been any information required to be disclosed in a report on Form 8-K during the quarter ended September 30, 2012, but not reported, whether or not otherwise required by this Form 10-Q at September 30, 2012.

Item 5. Other Information


a.	There has not been any information required to be disclosed in a report on Form 8-K during the quarter ended March 31, 2013, but not reported, whether or not otherwise required by this Form 10-Q at March 31, 2013.


b.	There is no established market for the purchase and sale of BACs, although various informal secondary market services may exist. Due to the limited markets, investors may be unable to sell or otherwise dispose of their BACs.

c. In addition, certain transfers of BACs in the Partnership may not exceed two percent of the total interests in the Partnership’'s capital or profits during any one taxable year to avoid the Partnership being deemed a publicly traded partnership.

~~- 21 -~~16

Part II	OTHER INFORMATION
Item 6.	Exhibits

Item 6. Exhibits

Exhibit No.	Description
10.1	Form of Management Agreement dated March 1, 2008, between Registrant and Oak Hotels, Inc. for the University, Plymouth and Roseville hotels, April 1, 2008 for the Clearwater Hotel and July 1, 2008 for the Scottsdale Hotel.
31.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

All other items are not applicable.

~~- 22 -~~17

~~SIGNATURE~~SIGNATURES

In accordance with ~~the~~Section ~~requirements~~13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CRI HOTEL INCOME PARTNERS, L.P.
	(Registrant)
	by:	CRICO Hotel Associates I, L.P.
		General Partner
	by:	C.R.I., Inc.
		by:	C.R.I., Inc.
July 25, 2013	by:	/s/ William B. Dockser
			Managing General Partner
DATE	William B. Dockser
February 19, 2013			by:	/s/ H. William Willoughby
	Director, Chairman of the Board,
DATE				H. William Willoughby
	and Treasurer
				Director, President, Secretary,
	Principal Executive Officer
				Principal Financial Officer and
				Principal Acount Officer

-In 23accordance - with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



July 25, 2013	by:	/s/ H. William Willoughby
DATE		H. William Willoughby
		Director, President, Secretary,
		Principal Financial Officer and
		Principal Accounting Officer

Filing Compare · CRI HOTEL INCOME PARTNERS L P