SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER ~~PERSUANT~~SECTIONS ~~TO SECTION~~ 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended:		Commission File Number:
March 31, 2004		33-2320
September 30, 2004		33-2320
EXCEL PROPERTIES, LTD.
(Exact name of registrant as specified in its charter)
CALIFORNIA		87-0426335
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)
17140 Bernardo Center Drive, Suite 300 San Diego, California 92128
(Address of principal executive offices and zip code)

~~Registrant’s telephone~~EXCEL ~~number~~PROPERTIES, ~~including area code: (858) 675-9400~~LTD.

(Exact name of registrant as specified in its charter)

CALIFORNIA		87-0426335
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

17140 Bernardo Center Drive, Suite 310 San Diego, California 92128

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (858) 613-1800

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

Indicate by check mark ~~whether~~ 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, and (3) is an accelerated filer (as defined in Exchange Act Rule 12 ~~12b~~b-2).

(1)	Yes ý	No o
(2)	Yes ý	No o
(3)	Yes o	No ý

(1) Yes ý No o

(2) Yes ý No o

(3) Yes o No ý

EXCEL PROPERTIES, LTD.

INDEX TO FINANCIAL STATEMENTS

PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:	~~Item 1. Financial Statements:~~
Balance Sheets		~~Balance Sheets~~
			March 31, 2004 (Unaudited)
	September 30, 2004 (Unaudited)
	December 31, 2003		~~December 31, 2003~~
Statements of Income		~~Statements of Income~~
			Three Months Ended March 31, 2004 (Unaudited)
	Three Months Ended September 30, 2004 (Unaudited)
			Three Months Ended March 31, 2003 (Unaudited)
	Three Months Ended September 30, 2003 (Unaudited)
		Statements of Changes in Partners’ Equity
	Nine Months Ended September 30, 2004 (Unaudited)
			Three Months Ended March 31, 2004 (Unaudited)
	Nine Months Ended September 30, 2003 (Unaudited)
			Three Months Ended March 31, 2003 (Unaudited).
Statements of Changes in Partners’ Equity
		Statements of Cash Flows
	Nine Months Ended September 30, 2004 (Unaudited)
			Three Months Ended March 31, 2004 (Unaudited)
	Nine Months Ended September 30, 2003 (Unaudited)
			Three Months Ended March 31, 2003 (Unaudited).
Statements of Cash Flows
		Notes to Financial Statements.
	Nine Months Ended September 30, 2004 (Unaudited)
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Nine Months Ended September 30, 2003 (Unaudited)
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
Notes to Financial Statements
	Item 4. Controls and Procedures
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
PART II. OTHER INFORMATION

~~EXCEL PROPERTIES, LTD~~2

EXCEL PROPERTIES, LTD.

BALANCE SHEETS

	March 31, 2004		December 31, 2003
	September 30, 2004		December 31, 2003
	(Unaudited)
ASSETS
Cash	$94,126	~~64,705~~	$941,148	~~941,198~~
Notes receivable, net of allowance of $50,000 in both 2004 and 2003	165,750		165,750
Notes receivable, net of allowance of $50,000 in 2003	165,750		165,750
Interest receivable and other assets	—		407
Other assets	296		407
Total assets	$	~~230~~260,~~455~~172	$	1,107,355
LIABILITIES AND PARTNERS’ EQUITY
Liabilities:
Accounts payable	$	8,235	$	3
Accounts payable:	$	2	$	3
Total liabilities	~~8,235~~2		3
Partners’ Equity:
Partners’ equity:
General partner’s equity	—196		150
Limited partners’ equity, 235,308 units authorized, 135,199 units issued and outstanding in 2004 and 2003, respectively.	~~222~~259,~~220~~974		1,107,202
Total partners’ equity	~~222~~260,~~220~~170		1,107,352
Total liabilities and partners’ equity	$	~~230~~260,~~455~~172	$	1,107,355

The accompanying notes are an integral part
of the financial statements.

EXCEL PROPERTIES, LTD.

STATEMENTS OF INCOME - UNAUDITED

	Three Months Ended March 31,
	Three Months Ended September 30,					Nine Months Ended September 30,
	2003			2002
	2004			2003		2004		2003
Revenue:
Rental revenue	$	——		$	54,139
Rental income	$	—		$	13,462	$	—	$	68,965
Interest and other income	2,011			17,722
Recovery of bad debts	—			—		48,644		—
Total revenue	2,011			71,861
Interest income	325			216		2,663		48,190
Operating Expenses:
Total revenue	325			13,678		51,307		117,155
Accounting and legal	32,046			23,458
Expenses:
Depreciation	—			8,773
Administrative	2,700			2,700		8,100		8,100
Administrative	2,700			2,700
Accounting and legal	2,152			3,052		35,818		30,232
Office expenses	2,339			1,839
Other property and office expenses	779			1,814		4,712		7,094
Management fees	—			504
Depreciation	—			3,000		—		17,734
Total operating expenses	37,085			37,274
Management fees	—			90		—		773
Net income (loss) before real estate sales	$	(35,074	)	$	34,587
Total expenses	5,631			10,656		48,630		63,933
Gain – sale of real estate	—			30,505
Net (loss) income before real estate sales	(5,306		)	3,022		2,677		53,222
Net income(loss)	$	(35,074	)	$	65,092
Gain on sale of real estate	—			199,117		—		229,622
Net income (loss) allocated to:
Net (loss) income	$	(5,306	)	$	202,139	$	2,677	$	282,844
General partner	$	(350	)	$	738
Net (loss) income allocated to:
Limited partners	(34,724		)	64,354
General partner	$	(53	)	$	2,052	$	27	$	3,006
Total	$	(35,074	)	$	65,092
Limited partners	(5,253		)	200,087		2,650		279,838
Net income(loss) per weighted average limited partnership unit	$	(0.26	)	$	0.32
Total	$	(5,306	)	$	202,139	$	2,677	$	282,844
Net (loss) income per weighted average limited partnership unit	$	(0.04	)	$	1.48	$	0.02	$	2.07

The accompanying notes are an integral part
of the financial statements

EXCEL PROPERTIES, LTD.

STATEMENTS OF CHANGES IN PARTNERS’ EQUITY - UNAUDITED

	Three Months Ended March 31,
	Nine Months Ended September 30
	2004			2003
Balance at January 1	$	1,107,352		$	3,263,675
Net income (loss)	(35,074		)	65,092
Net income	2,677			282,844
Partner distributions	(~~850~~849,~~058~~859		)	(~~900~~2,~~000~~434,851		)
Balance at March 31	$	222,220		$	2,428,767
Balance at September 30	$	260,170		$	1,111,668

The accompanying notes are an integral part
of the financial statements.

EXCEL PROPERTIES, LTD.

STATEMENTS OF CASH FLOWS - UNAUDITED

	Three Months Ended March 31,
	Nine Months Ended September 30
	2004			2003
Cash flows from operating activities:
Net income (loss)	$	(35,074	)	$	65,092
Net income	$	2,677		$	282,844
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	—			8,773
Recovery of bad debts	(48,644		)	—
Gain on sale of real estate	—			(30,505		)
Depreciation	—			17,734
Gain on sale of real estate	—			(229,622		)
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Decrease in accounts receivable and other assets	111			14,097
Accounts receivable	—			(8,305		)
(Decrease) increase in accounts payable	(1		)	15,262
Interest receivable and other assets	407			488
Net cash provided by operating activities	(45,857		)	100,315
Increase in liabilities:
Accounts payable	8,232			7,927
Net cash provided (used) by operating activities	(26,435		)	43,470
Cash flows from investing activities:
Proceeds from sale of real estate	—			543,893
Collection of notes receivable	48,644			691,067
Collection of notes receivable	—			5,850
Proceeds from real estate sales	—			1,423,900
Net cash provided by investing activities	—48,644			~~549~~2,~~743~~114,967
Cash flows from financing activities:
Cash distributions	(~~850~~849,~~058~~859		)	(~~900~~2,~~000~~434,851		)
Net cash used by financing activities	(~~850~~849,~~058~~859		)	(~~900~~2,~~000~~434,851		)
Net decrease in cash	(~~876~~847,~~493~~072		)	(~~306~~219,~~787~~569		)
Cash at January 1	941,198			1,181,015
Cash at March 31	$	64,705		$	874,228
Cash at September 30	$	94,126		$	961,446

The accompanying notes are an integral part
of the financial statements

EXCEL PROPERTIES, LTD.

NOTES TO FINANCIAL STATEMENTS - UNAUDITED

1. Summary of Significant ~~Accounting~~ Accounting Policies:

The financial statements reflect all adjustments of a recurring nature which are, in the opinion of management, necessary for a fair presentation of the financial statements. No adjustments were necessary which were not of a recurring nature. These financial statements should be read in conjunction with the financial statements and accompanying footnotes included in the December 31, 2003 Form 10-K.

Organization

Excel Properties, Ltd. (“the Partnership”) was formed in the State of California on September 19, 1985, for the purpose of, but not limited to, acquiring real property and syndicating such property.

Real Estate

Land and buildings ~~are~~were recorded at cost. Buildings ~~are~~were depreciated using the straight-line method over the tax life of 31.5 years. Management estimates that the tax life ~~does~~ did not differ materially from the economic useful life. Expenditures for maintenance and repairs ~~are~~were charged to expense as incurred. Significant renovations are capitalized. The cost and related accumulated depreciation of real estate ~~are~~were removed from the accounts upon disposition. Gains and losses arising from dispositions are reported as income or expense.

The Partnership ~~assesses~~assessed whether there ~~has~~was ~~been~~ an impairment in the value of its real estate by considering factors such as expected future operating income, trends, and prospects, as well as the effects of the demand, competition and other economic factors. Such factors include a a lessee’s ability to pay rent under the terms of the lease. If a property iswas leased at a significantly lower rent, the Partnership ~~may~~recognized ~~recognize~~ a permanent impairment loss if the income stream iswas not sufficient to recover its investment.

Cash Deposits

At ~~March~~September 3130, 2004, the carrying amount of the Partnership’s cash deposits ~~totaled $64,705, which~~ was all covered by federal depository insurance.

~~Statement of Cash Flows - Supplemental Disclosure~~7

~~There~~Statement ~~was~~of noCash ~~interest~~Flows ~~or income taxes paid for the three months ended March 31, 2004 or 2003. The Partnership also had no significant non~~-~~cash investing~~ orSupplemental ~~financing transactions for the three months ended March 31, 2004 or 2003.~~Disclosure

7There was no interest or income taxes paid for the nine months ended September 30, 2004 or 2003. The Partnership also had no significant non-cash investing or financing transactions for the nine months ended September 30, 2004 or 2003.

Income Taxes

The Partnership is not liable for payment of any income taxes because as a partnership, it is not subject to income taxes. The tax effects of its activities accrue directly to the partners.

~~Accounts~~Notes Receivable

All ~~net~~notes ~~accounts~~ receivable are deemed to be collectible within the next 12 months. ~~A note receivable of $50,000 was deemed uncollectible during the year ended December 31, 2002, as the debtor filed for bankruptcy. An allowance for bad debts of $50,000 has been established.~~

Asset Disposal

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses financial accounting for the impairment or disposal of long-lived assets and is effective in fiscal years beginning after December 15, 2001. As the Partnership is is attempting to sell all of its assets, it has not reclassed any operations related to its asset sales as discontinued operations.

Financial Statement Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

2. Fees Paid to General Partner

The Partnership has paid the General Partner or its affiliates the following fees for the ~~three~~nine months ended September ~~March 31~~30, 2004 and 2003:

	2004		2003
Administrative fees	$	28,~~700~~100	$	28,~~700~~100
Accounting	14,~~620~~860		14,~~620~~860
Management fees	—		~~336~~773

8The accompanying notes are an integral part of the financial statements

~~3. Notes Receivable~~8

~~The~~3. Notes ~~Partnership had the following notes receivable at March 31, 2004 and December 31, 2003:~~Receivable

	2004			2003
Note from the sale of land, interest at 10%. Secured by land sold. Currently due.	$	165,750		$	165,750
Note from sale of building. Due December 2002. Interest at 10% interest.	50,000			50,000
Total notes receivable	$	215,750		$	215,750
Allowance for bad debts	(50,000		)	(50,000		)
	$	165,750		$	165,750

The Partnership had the following notes receivable at September 30, 2004 and December 31, 2003:

4. Sale of Property

	2004		2003

Note from the sale of land, interest at 10%. Secured by land. Currently due.	$	165,750	$	165,750

Note from sale of building.	—		50,000

Total notes receivable	$	165,750	$	215,750

Allowance for bad debts	—		(50,000		)

	$	165,750	$	165,750

~~The Partnership sold its remaining operating properties in 2003~~4. ~~The~~ Sale ~~following unaudited Pro Forma Condensed Statements~~ of Income have been presented for the three months ended March 31, 2003 as if all the property dispositions that occurred in 2003, had occurred on January 1, 2003. This information is presented for comparative purposes only and may not be indicative of the actual results had the property dispositions occurred on January 1, 2002.Property

	Three Months Ended
	March 31, 2003			March 31, 2003
	Actual			Proforma
Rental Revenue:	$	54,139		$	—
Other revenue:	17,722			17,722
Operating expenses:	(37,274		)	(27,997		)
Net income (loss) before real estate sales:	$	34,587		$	(10,275	)

The Partnership sold its remaining operating properties in 2003. The following unaudited Pro Forma Condensed Statements of Income have been presented for the periods ended September 30, 2003 as if all the property dispositions that occurred in 2003, had occurred on January 1, 2003. This information is presented for comparative purposes only and may not be indicative of the actual results had the property dispositions occurred on January 1, 2003.

	Three Months Ended September 30 2003						Nine Months Ended September 30, 2003
	Actual			Proforma			Actual			Proforma

Rental Revenue:	$	13,462		$	—		$	68,965		$	—
Other revenue:	216			216			48,190			48,190
Operating expenses:	(10,656		)	(7,566		)	(63,933		)	(45,426		)
Net Income (loss) before real estate sales:	$	3,022		$	(7,350	)	$	53,222		$	2,764

~~ITEM~~The ~~2. MANAGEMENT’S~~accompanying ~~DISCUSSION~~notes ~~AND~~are ~~ANALYSIS~~an OFintegral ~~FINANCIAL~~part ~~CONDITIONS~~of ~~AND~~the ~~RESULTS~~financial ~~OF OPERATIONS~~statements

~~Certain Cautionary Statements~~9

~~Certain~~ITEM ~~statements in this Quarterly Report on Form 10-Q, including, but not limited to, “Item~~ 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not historical facts, but rather reflect current expectations concerning future results and events. The words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “will” and similar expressions identify such forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors, some of which are beyond the PartnershipMANAGEMENT’sS ~~control~~DISCUSSION ~~that~~AND ~~could cause~~ANALYSIS ~~actual results to differ materially from those forecast or anticipated in~~OF ~~such~~FINANCIAL ~~forward-looking~~CONDITIONS ~~statements. These factors~~AND ~~include,~~RESULTS ~~but~~OF are not limited to, the Partnership’s market effect on property sales, reliance on tenants, and environmental risks. These factors are discussed in greater detail under the caption “Certain Cautionary Statements” in the Partnership’s annual Report on Form 10-K for the year ended December 31, 2003.OPERATIONS

~~Nature~~Certain ~~of Business~~Cautionary Statements

~~Excel~~Certain ~~Properties,~~statements ~~Ltd.,~~in athis ~~California limited~~Quarterly ~~partnership~~Report ~~(the~~on ~~“Partnership”)~~Form 10-Q, ~~was~~ ~~organized~~including, tobut ~~purchase~~not ~~commercial~~limited ~~real~~to, ~~estate~~“Item ~~properties~~2 ~~for~~– ~~cash~~Management’s Discussion and ~~to hold~~Analysis ~~these~~of ~~assets~~Financial ~~for~~Condition ~~investment. The general~~and ~~partners~~Results of ~~the~~Operations,” contain ~~Partnership~~forward-looking ~~are~~statements ~~New~~within ~~Plan~~the ~~Excel~~meaning ~~Realty~~of ~~Trust,~~Section ~~Inc.,~~27A aof the ~~Maryland~~Securities ~~corporation~~Act ~~(“New~~of ~~Plan”)~~1933, ~~formerly~~as ~~known~~amended, asand ~~Excel~~Section ~~Realty~~21E ~~Trust~~of ~~and~~the Securities Exchange ~~Gary~~Act B.of ~~Sabin~~1934, anas ~~individual. The Partnership~~amended, ~~was~~that ~~formed~~are onnot ~~September~~historical 19facts, ~~1985~~but rather reflect current expectations concerning future results and ~~will~~events. The ~~continue~~words in“believes,” ~~existence until~~“expects,” ~~December~~“intends,” 31“plans,” “anticipates,” ~~2015~~“likely,” ~~unless~~“will” ~~dissolved~~and ~~earlier~~similar ~~under~~expressions ~~certain~~identify such ~~circumstances~~forward-looking statements. InThese forward-looking ~~1999~~statements are subject to risks, ~~Excel~~uncertainties ~~Legacy~~and other ~~Corporation~~factors, ~~now~~some ~~known~~of aswhich ~~Price~~are ~~Legacy~~beyond ~~Corporation, (~~the ~~“Company”)~~Partnership’s ~~began~~control ~~managing~~that ~~the~~could ~~assets~~cause actual ofresults ~~the~~to ~~Partnership~~differ ~~when certain~~materially ~~officers~~from ofthose ~~New~~forecast ~~Plan~~or ~~resigned~~anticipated in such forward-looking statements. These ~~The~~factors ~~Company~~include, ~~has~~but ~~indemnified~~are ~~New~~not ~~Plan~~limited ofto, ~~any~~the ~~general~~Partnership’s ~~partner~~market ~~liability~~effect inon ~~exchange~~property ~~for~~sales, anreliance ~~assignment~~on oftenants, ~~their~~and ~~partnership~~environmental ~~interest~~risks. InThese ~~2003,~~factors ~~Kausay~~are ~~Holdings,~~discussed ~~LLC~~in ~~began~~greater ~~managing~~detail under the ~~assets~~caption of“Certain Cautionary Statements” in the Partnership’s annual Report on Form 10-K for the year ended December 31, 2003.

PropertiesNature that have been acquired by the Partnership have been primarily subject to long-term triple-net leases. Such leases require the lessee to pay the prescribed minimum rental plus all costs and expenses associated with the operations and maintenance of the property. These expenses include real property taxes, property insurance, repairs and maintenance and similar expenses. Certain leases also provide some form of inflation hedge which calls for the minimum rent to be increased, based upon adjustments in the consumer price index, fixed rent escalation, or by receipt of a percentage of the gross sales of the tenant.Business

~~The~~Excel ~~principal~~Properties, ~~investment~~Ltd., ~~objectives~~a ofCalifornia limited partnership (the “Partnership”), was ~~were~~organized ~~originally~~ to ~~provide~~purchase tocommercial ~~its~~real ~~limited~~estate ~~partners:~~properties ~~(1) preservation,~~for ~~protection~~cash and ~~eventual~~to hold ~~return~~these ofassets ~~the~~for investment~~, (2)~~. The ~~distributions~~general partners of ~~cash~~the ~~from~~Partnership ~~operations,~~are ~~some~~New ofPlan ~~which~~Excel ~~may~~Realty beTrust, Inc., a Maryland ~~return~~corporation of(“New ~~capital for~~Plan”), ~~tax~~formerly ~~purposes~~known ~~rather~~as ~~than~~Excel ~~taxable~~Realty ~~income,~~Trust and Gary B. Sabin, an individual. ~~(3)~~The Partnership ~~realization~~was offormed ~~long-term~~on ~~appreciation~~September in19, ~~value~~1985 ofand ~~properties.~~will continue in existence Inuntil ~~recent~~December ~~years~~31, ~~the~~2015, ~~Partnership~~unless ~~has~~dissolved ~~been~~earlier ~~attempting~~under tocertain circumstances. In ~~sell~~1999, ~~all~~Excel ofLegacy Corporation, ~~its~~now ~~assets, including~~known ~~its~~as ~~real~~Price ~~estate~~Legacy ~~properties. As~~Corporation, (the “Company”) began ofmanaging ~~March~~the ~~31,~~assets ~~2004,~~of the Partnership ~~sold~~when ~~all~~certain officers of ~~its~~New ~~real~~Plan resigned. The ~~estate~~Company ~~properties~~has ~~and~~indemnified ~~has~~New ~~two~~Plan ~~remaining~~of ~~note~~any ~~receivables,~~general ~~one~~partner ofliability ~~which~~in isexchange ~~fully~~for ~~reserved~~an ~~for.~~assignment ~~The~~of ~~Partnership~~their ispartnership ~~attempting~~interest. In to2003, Kausay ~~collect~~Holdings, ~~the~~LLC ~~final~~began ~~note~~managing ~~receivable~~the ~~that~~assets isof ~~not fully~~the ~~reserved for~~Partnership. ~~This~~Mr. ~~note~~Sabin is ~~secured~~ bya ~~land~~principal in Kausay Holdings, LLC.

10Properties that have been acquired by the Partnership have been primarily subject to long-term triple-net leases. Such leases require the lessee to pay the prescribed minimum rental plus all costs and expenses associated with the operations and maintenance of the property. These expenses include real property taxes, property insurance, repairs and maintenance and similar expenses. Certain leases also provide some form of inflation hedge which calls for the minimum rent to be increased, based upon adjustments in the consumer price index, fixed rent escalation, or by receipt of a percentage of the gross sales of the tenant.

~~Critical~~The principal investment objectives of ~~Accounting~~the ~~Policies~~Partnership were originally to provide to its limited partners: (1) preservation, protection and ~~Estimates~~eventual return of the investment, (2) distributions of cash from operations, some of which may be a return of capital for tax purposes rather than taxable income, and (3) realization of long-term appreciation in value of properties. In recent years, the Partnership has been attempting to sell all of its assets, including its real estate properties. As of September 30, 2004, the Partnership sold

~~General~~10

~~The financial~~all ~~statements including in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States~~ of ~~America~~its ~~(GAAP). Preparation~~real ofestate ~~our financial~~properties ~~statements in accordance with GAAP requires management to make estimates~~ and ~~judgments that affect the reported amounts of assets,~~has ~~liabilities,~~one ~~revenues~~remaining ~~and~~note ~~expenses and the related notes~~receivable. The Partnership ~~believes~~is ~~that~~attempting ~~the~~to ~~following accounting~~collect ~~policies are critical because they affect the more significant~~this ~~judgments~~final ~~and~~note ~~estimates used in the preparation of our financial statements~~receivable. ~~Actual~~This ~~results~~note ~~may differ~~is ~~from~~secured ~~these~~by ~~estimates under different assumptions or conditions~~land. For a detailed discussion on the application of these and other accounting policies, see Note 1 in the Notes to Financial Statements in this Form 10-Q. Report on Form 10-K for the year ended December 31, 2003.

Revenue RecognitionCritical Accounting Policies and Estimates

Recognition of revenue has been dependent upon the quality and ability of the tenants to pay their rent in a timely manner. Rental revenues include minimum annual rentals, adjusted for the straight-line method for the recognition of fixed future increases. Gain or loss on sale of real estate is recognized when the sales contract is executed, title has passed, payment is received, and the Partnership no longer has continuing involvement in the asset. The Partnership only has one remaining note receivable that is not fully reserved for. This note is secured by land. The Partnership does not recognize interest income on this note receivable since it does not receive interest payments and the land, which secures this note receivable, does not produce income.General

~~Real~~The ~~Estate~~financial ~~Assets~~statements including in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Preparation of our financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related notes. The Partnership believes that the following accounting policies are critical because they affect the more significant judgments and estimates used in the preparation of our financial statements. Actual results may differ from these estimates under different assumptions or conditions. For a detailed discussion on the application of these and other accounting policies, see Note 1 in the Notes to Financial Statements in this Form 10-Q. Report on Form 10-K for the year ended December 31, 2003.

~~Real~~Revenue estate assets were recorded at historical costs and adjusted for recognition of impairment losses. Buildings are depreciated using the straight-line method over the tax life of 31.5 years. The tax life does not differ materially from the economic useful life. Expenditures for maintenance and repairs were charged to expense as incurred. Significant renovations were capitalized. The cost and related accumulated depreciation of real estate were removed from the accounts upon disposition. Gains and losses arising from dispositions were reported as income or expense.Recognition

~~The~~Recognition ~~Partnership~~of revenue has been dependent ~~reviews~~upon ~~long~~the quality and ability of the tenants to pay their rent in a timely manner. Rental revenues include minimum annual rentals, adjusted for the straight-~~lived~~line ~~assets~~method for ~~impairment~~the ~~when~~recognition ~~events~~of fixed future increases. Gain or ~~changes~~loss on sale of real estate is recognized when the sales contract is executed, title has passed, payment is received, and the Partnership no longer has continuing involvement in ~~business~~the asset. The ~~conditions~~Partnership ~~indicate~~only ~~that~~has ~~their~~one ~~full~~remaining ~~carrying~~note ~~value~~receivable ~~may~~that is not befully ~~recovered~~reserved for. This note is secured by land. The Partnership ~~considers~~does ~~assets~~not torecognize beinterest ~~impaired~~income ~~and~~on ~~write~~this ~~them~~note ~~down~~receivable tosince ~~fair~~it ~~value~~does ifnot ~~their~~receive ~~expected~~interest ~~associated~~payments ~~future~~and ~~undiscounted~~the ~~cash~~land, ~~flows~~which ~~are~~secures ~~less~~this ~~than~~note ~~their~~receivable, ~~carrying~~does ~~amounts~~not produce income.

~~Asset Disposal~~Real Estate Assets

InReal estate ~~August~~assets ~~2001, the~~were ~~FASB~~recorded ~~issued~~at ~~SFAS~~historical ~~No.~~costs ~~144,~~and ~~Accounting~~adjusted for ~~the~~ ~~Impairment~~recognition ~~or Disposal~~ of impairment ~~Long-Lived Assets~~losses. ~~SFAS~~Buildings ~~No.~~are depreciated ~~144~~using ~~addresses~~the ~~financial~~straight-line ~~accounting for~~method over the ~~impairment~~tax orlife ~~disposal~~ of ~~long-lived~~31.5 years. The ~~assets~~tax ~~and~~life isdoes ~~effective~~not ~~in fiscal~~differ ~~years~~materially ~~beginning~~from ~~after~~the ~~December~~economic ~~15,~~useful ~~2001~~life. ~~The~~Expenditures ~~Partnership~~for ~~adopted~~maintenance ~~this~~and ~~statement~~repairs ~~but~~were nocharged ~~longer~~to ~~has~~expense ~~any operating~~as ~~assets~~incurred. ~~Since~~Significant ~~there~~renovations ~~are~~were capitalized. The nocost ~~remaining~~and related ~~operating~~accumulated ~~properties,~~depreciation ~~operations~~of real estate were removed from ~~discontinued~~the ~~operations~~accounts ~~have~~upon disposition. Gains ~~not~~and ~~been~~losses arising ~~separately~~from ~~identified~~dispositions were reported as income or expense.

11The Partnership reviews long-lived assets for impairment when events or changes in business conditions indicate that their full carrying value may not be recovered. The Partnership considers assets to be impaired and write them down to fair value if their expected associated future undiscounted cash flows are less than their carrying amounts.

~~Results of Operations~~11

~~The~~Asset ~~following discussion should be read in conjunction with the financial statements and the notes thereto.~~Disposal

~~Comparison~~In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses financial accounting for the ~~three~~impairment ~~months~~or disposal of long-lived assets and is effective in fiscal ~~ended~~years ~~March~~beginning 31after December 15, ~~2004~~2001. The toPartnership ~~the~~adopted ~~three~~this ~~months~~statement ~~ended~~but ~~March~~no 31longer has any operating assets. Since there are no remaining operating properties, ~~2003~~operations from discontinued operations have not been separately identified.

~~Rental~~Results revenue was $0 in the three months ended March 31, 2004 compared to $54,139 in the three months ended March 31, 2003. There was no rental revenue in 2004 since the Partnership’s remaining operating properties were sold in 2003. Interest income was $2,011 in the three months ended March 31, 2004 compared to $17,722 in the three months ended March 31, 2003. This difference is primarily related to a note that was outstanding in the amount of ~~$685,217at March 31, 2003 and was paying interest at 8.5%. This note was repaid in September 2003.~~Operations

InThe ~~the~~following ~~three~~discussion ~~months~~should ~~ended~~be ~~March 31, 2004 accounting and legal expenses~~read ~~were $32,046 compared to $23,458~~ in ~~the~~conjunction ~~three~~with ~~months ended March 31, 2003. This increase was primarily due to expenses related to~~ the ~~preparation~~financial ofstatements ~~the~~and ~~2003 partner tax filings in 2004. Depreciation expense was $8,773 in 2003 compared to $0 in 2004 since~~ the ~~Partnership~~notes ~~no longer owned any depreciable real estate in 2004~~thereto. ~~The other expenses did not significantly vary between the two periods.~~

InComparison of the three months ended ~~March~~September 3130, ~~2003,~~2004 ~~there~~to ~~was~~the ~~gains~~three onmonths ~~sales~~ended ~~of real~~September ~~estate of $~~30,~~505. There~~ ~~were no real estate sales in 2004.~~2003

~~Liquidity~~Rental revenue ~~and~~was ~~Capital~~$0 ~~Resources~~in the three months ended September 30, 2004 compared to $13,462 in the three months ended September 30, 2003. There was no rental revenue in 2004 since the Partnership’s remaining operating properties were sold in 2003.

~~The~~Depreciation ~~Partnership has~~ expense was $643,~~705~~000 in ~~cash~~2003 compared atto ~~March~~$0 ~~31,~~in 2004~~. The~~ ~~Partnership~~since ~~has~~the Partnership no ~~remaining~~longer ~~operating~~owned ~~assets~~any ~~which~~depreciable real ~~generate~~estate ~~income~~in 2004. Accounting and ~~but~~legal ~~will~~expenses ~~have~~and ~~on-going~~Other ~~general~~property and ~~administrative~~office expenses ~~until~~decreased ~~the Partnership~~from is$3,052 ~~dissolved. The~~and ~~Partnership~~$1,814 ~~has~~in ~~one~~2003 ~~remaining~~to ~~note~~$2,152 ~~receivable~~and ~~(not~~$779 ~~fully~~in ~~reserved~~2004, ~~for). This~~respectively, ~~note~~due ~~does~~to ~~not~~the ~~require cash payments~~partnership ~~until~~not ~~the~~owning ~~asset~~any ~~securing~~more ~~the~~real ~~note,~~estate ~~which~~and isthus ~~land~~having ~~located~~less inoverall ~~Las Vegas, NV is sold~~expenses. ~~Once~~ ~~the~~The ~~Partnership collects on~~other ~~this~~expenses ~~note~~did ~~receivable,~~not itsignificantly ~~intends~~vary tobetween ~~distribute~~ the ~~remaining~~two ~~available cash and dissolve the Partnership~~periods.

~~The~~Comparison ~~balance~~ of the ~~Partnership’s remaining note~~nine ~~receivable~~months atended ~~March~~September 3130, 2004 was $165,750. Although the note bears interest at 10%, the Partnership has not recognized any interest income from the note since no interest payments have been made and the underlying asset does not produce any income. It is the intent of the Partnership to ~~cause~~ the ~~property~~nine tomonths beended ~~marketed~~September ~~for~~30, ~~sale in order to receive payment per the terms of the note.~~2003

~~Prior~~Rental revenue towas ~~2002,~~$0 in the ~~Partnership~~ ~~has~~nine ~~paid~~months ~~quarterly~~ended ~~distributions~~September 30, 2004 compared to $68,965 in the ~~limited~~nine ~~partners~~months ofended ~~the~~September 30, 2003. ~~actual~~There ~~cash~~was ~~earned~~no byrental revenue in 2004 since the Partnership’s inremaining operating ~~the~~properties ~~preceding~~were ~~quarter~~sold in 2003. In Interest ~~2002~~income was $2,663 in the ~~Partnership~~nine ~~adopted~~months aended ~~policy~~September of30, 2004 ~~paying~~compared ~~distributions~~to ~~when~~$48,190 itin ~~receives~~the ~~cash~~nine ~~from~~months aended ~~significant~~September ~~capital event~~30, 2003. ~~Once~~This ~~the~~difference ~~remaining~~is ~~note~~primarily related to a ~~receivable~~note isthat ~~collected,~~was outstanding in the ~~Partnership~~amount ~~will~~of ~~make~~$691,067 aat ~~final~~December ~~distribution~~31, 2002 and was paying interest at 8.5%. This note was repaid in September 2003.

~~Inflation~~In the issecond ~~not~~quarter ~~expected~~of 2004, the Partnership recovered $48,644 related to a note ~~negatively~~receivable ~~impact~~that was previously reserved for. This receivable was from Steakhouse Partners, Inc. The Parthership reserved against the receivable ~~operations~~when ofthe obligor stopped making its required monthly interest payments and filed bankruptcy. In May 2004, the Partnership received $48,644 and recorded the amount as ~~there~~revenue. There ~~are~~was ~~minimal operational~~no ~~expenses~~such activity in 2003.

~~ITEM~~In 3the nine months ended September 30, 2004 accounting and legal expenses were $35,818 compared to $30,232 in the nine months ended September 30, 2003. ~~QUANTITATIVE~~This increase ~~AND~~was primarily due to expenses related to the preparation of the 2003 ~~QUALITATIVE~~partner ~~DISCLOSURES~~tax ~~ABOUT~~filings ~~MARKET~~in ~~RISK~~2004. Depreciation expense was $17,734 in 2003 compared to $0 in 2004 since the Partnership no longer owned any depreciable real estate in 2004.

The Partnership’s balance sheet contains financial instruments in the form of interest-earning notes receivable. The notes contain fixed interest rates and are thus not subject to changes in market12

12The other expenses did not significantly vary between the two periods.

~~interest rates. The~~In ~~Partnership~~the ~~estimates~~nine ~~that~~months ended September 30, ~~the~~2003, ~~fair~~there ~~value~~were gains on sales of ~~the~~real ~~notes~~estate ~~approximates~~of ~~market~~$229,622. There ~~value~~were atno ~~December~~real ~~31,~~estate ~~2003~~sales in 2004.

~~ITEM~~Liquidity ~~4. CONTROLS~~and ~~AND~~Capital ~~PROCEDURES~~Resources

~~We maintain~~The ~~disclosure~~Partnership ~~controls~~has ~~and~~$94,126 ~~procedures~~in ~~that~~cash ~~are~~at September ~~designed~~30, to2004. The ~~ensure~~Partnership ~~that~~has ~~information~~no ~~required~~remaining tooperating beassets ~~disclosed~~which ingenerate ~~our~~income ~~Exchange~~but ~~Act~~will ~~reports~~have ~~is recorded,~~on-going ~~processed,~~general ~~summarized~~ and ~~reported~~administrative ~~within~~expenses ~~the~~until ~~time periods specified in~~ the ~~rules~~ ~~and~~Partnership ~~forms~~is ofdissolved. The ~~the~~Partnership ~~Securities~~has ~~and~~one ~~Exchange~~remaining ~~Commission, and that such~~note ~~information~~receivable which is ~~accumulated~~secured ~~and~~by ~~communicated~~land tolocated ~~our~~in ~~management~~Las Vegas, ~~including~~NV. The ~~our General~~obligor ~~Partner~~is ~~and~~attempting ~~Chief~~to ~~Accounting~~sell ~~Officer,~~or asfinance the ~~appropriate,~~property to ~~allow~~repay ~~timely decisions~~the ~~regarding required disclosure~~note. In ~~designing and~~Once ~~evaluating~~ the ~~disclosure~~Partnership ~~controls~~collects ~~and~~this ~~procedures,~~note ~~management~~receivable, ~~recognized~~it ~~that~~intends ~~any~~to ~~controls~~distribute ~~and~~the ~~procedures,~~remaining noavailable ~~matter~~cash ~~how~~and ~~well~~dissolve ~~designed~~the ~~and~~Partnership. There ~~operated,~~are ~~can~~no ~~provide~~assurances when ~~only~~the ~~reasonable~~Partnership ~~assurance~~will ofcollect ~~achieving~~ the ~~desired~~ ~~control~~note ~~objectives,~~receivable ~~and~~or ~~management~~if ~~necessarily~~the ~~was~~obligor ~~required~~will ~~to apply~~be ~~its~~successful ~~judgment~~ in ~~evaluating~~repaying the ~~cost-benefit relationship of possible controls and procedures~~note.

~~Within~~The 90balance ~~days~~of ~~prior to~~ the ~~date~~Partnership’s ofnote ~~this~~receivable ~~quarterly~~at ~~report~~September 30, we2004 ~~carried out an~~was ~~evaluation~~$165,750. ~~under~~Although the ~~supervision~~note ~~and~~bears ~~with~~interest ~~the~~at ~~participation of our management~~10%, ~~including~~ ~~our~~the ~~General~~Partnership ~~Partner~~has ~~and Principal Accounting Officer, of the~~not ~~effectiveness~~recognized ofany ~~the~~interest ~~design~~income ~~and~~from ~~operation of~~ the ~~company’s~~note ~~disclosure~~since ~~controls and~~no ~~procedures. Based~~interest onpayments ~~the foregoing,~~have ~~our~~been ~~General~~made ~~Partner~~ and ~~Principal Accounting Officer concluded that~~ the ~~company’s~~ ~~disclosure~~underlying ~~controls~~asset ~~and~~does ~~procedures~~not ~~were~~produce ~~effective~~any income.

~~There~~Prior ~~have~~to ~~been~~2002, nothe ~~significant~~Partnership ~~changes~~has inpaid ~~our~~quarterly ~~internal~~distributions ~~controls~~to orthe limited partners of the actual cash earned by the Partnership in ~~other~~the ~~factors~~preceding ~~that~~quarter. In ~~could~~2002, ~~significantly~~the ~~affect~~Partnership adopted a policy of paying distributions when it receives cash from a significant capital event. Once the remaining ~~internal~~note ~~controls~~receivable ~~subsequent~~is tocollected, the ~~date~~Partnership ~~we completed~~will ~~our~~make ~~evaluation~~a final distribution.

~~PART~~Inflation ~~II. OTHER~~is not expected to negatively impact the ~~INFORMATION~~operations of the Partnership as there are minimal operational expenses.

~~Items~~ITEM 13. ~~through~~QUANTITATIVE 5AND ~~have~~QUALITATIVE ~~been~~DISCLOSURES ~~omitted~~ABOUT ~~since~~MARKET ~~no events occurred with respect to these items.~~RISK

~~Item~~The Partnership’s 6balance sheet contains a financial instruments in the form of interest-earning note receivable. The ~~Exhibits~~Partnership ~~and~~estimates ~~Reports~~that onthe ~~Form~~fair ~~8-K~~value of the note approximates market value at September 30, 2004.

(a)	Exhibits:
	Exhibit 31.1 and 31.2.	302 Officers’ Certifications
	Exhibit 32.1 and 32.2.	906 Officers’ Certifications
(b)	Reports on Form 8-K:
	The Partnership filed no reports on Form 8-K during the quarter ended March 31, 2004.

ITEM 4. CONTROLS AND PROCEDURES

13The Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our General Partner and Chief Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

~~SIGNATURES~~13

~~Pursuant~~Within 90 days prior to the ~~requirements~~date of ~~the~~this ~~Securities~~quarterly report, we carried out an ~~Exchange~~evaluation, ~~Act~~under the supervision and with the participation of ~~1934~~our management, including our General Partner and Principal Accounting Officer, of the effectiveness ~~Registrant~~of ~~has~~the ~~duly~~design ~~caused~~and ~~this~~operation ~~report~~of tothe becompany’s ~~signed~~disclosure controls and procedures. Based on ~~its~~the ~~behalf~~foregoing, our byGeneral Partner and Principal Accounting Officer concluded that the ~~undersigned~~company’s disclosure ~~thereunto~~controls ~~duly~~and ~~authorized~~procedures were effective.

Dated: April 20, 2004	EXCEL PROPERTIES, LTD.
	(Registrant)
	By:	/s/ Gary B. Sabin
		Gary B. Sabin
		General Partner
	By:	/s/ James Y. Nakagawa
		James Y. Nakagawa
		Principal Accounting Officer

There have been no significant changes in our internal controls or in other factors that could significantly affect the internal controls subsequent to the date we completed our evaluation.

PART II. OTHER INFORMATION

Items 1 through 5 have been omitted since no events occurred with respect to these items.

Item 6. Exhibits and Reports on Form 8-K

(a)	Exhibits:

	Exhibit 31.1 and 31.2.	302 Officers’ Certifications

	Exhibit 32.1 and 32.2.	906 Officers’ Certifications

(b)	Reports on Form 8-K:

	The Partnership filed no reports on Form 8-K during the quarter ended September 30, 2004.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: October 21, 2004	EXCEL PROPERTIES, LTD.
	(Registrant)


	By:	/s/ Gary B. Sabin
		Gary B. Sabin
		General Partner


	By:	/s/ James Y. Nakagawa
		James Y. Nakagawa
		Principal Accounting Officer

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