ITEM 1. BUSINESS
I.R.E. PENSION INVESTORS, LTD., a limited partnership organized under the laws of the State of Florida as of January 17, 1985, is primarily engaged in the business of operating and holding for investment an income producing real property. The Partnership commenced a public offering of its units of limited partnership interest in February 1985, broke escrow in April 1985 and closed the offering in October 1985, having raised $15,960,250 in capital and issued 63,837 units of limited partnership interest at $250 per unit. The Partnership initially acquired two properties, Independence Tower in Charlotte, North Carolina and One West Nine Mile in Hazel Park, Michigan for cash. The One West Nine Mile Holiday Inn was sold in December 1991. The Partnership currently holds one property, Independence Tower which is currently being marketed for sale. The property is 98% leased and is generating a positive cash flow
Uninvested cash of the Registrant is deposited in demand accounts with commercial banks and may be invested temporarily in U.S. Treasury Bills, certificates of deposit or other interest bearing accounts or investments.
Alan B. Levan and I.R.E. Pension Advisors, Corp. are the general partners of the Registrant. I.R.E. Pension Advisors, Corp., as Managing General Partner, manages and controls the Registrant's affairs and has general responsibility and the ultimate authority in all matters affecting the Registrant's business.
Affiliates of the general partners of the Registrant also own and operate their own improved real estate and may have investment objectives and policies similar to those of the Registrant. Registrant may be in competition with other limited partnerships served by affiliates of the Managing General Partner or by other companies wherein the individual general partner is a controlling stockholder.
On December 31, 1995, Registrant had 2 employees. The balance of information required in Item 1 is either inapplicable or not material to an understanding of the Registrant's business.
ITEM 2.

ITEM 2. PROPERTIES
The property listed below is not utilized by Registrant but is held for investment. This property is zoned for its current use.
Independence Tower 107,236 square feet owned Charlotte, NC leasable office space
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
Kugler et. al, (formerly Martha Hess, et. al.), on behalf of themselves and all others similarly situated, v. Gordon, Boula, Financial Concepts, Ltd., KFB Securities, Inc., et al. In the Circuit Court of Cook County, Illinois. On or about May 20, 1988, an individual investor filed the above referenced action against two individual defendants, who allegedly sold securities without being registered as securities brokers, two corporations organized and controlled by such individuals, and against approximately sixteen publicly offered limited partnerships, including Registrant, interests in which were sold by the individual and corporate defendants.
Plaintiff alleged that the sale of limited partnership interests in Registrant (among other affiliated and unaffiliated partnerships) by persons and corporations not registered as securities brokers under the Illinois Securities Act constituted a violation of such Act, and that the Plaintiff, and all others who purchased securities through the individual or corporate defendants, should be permitted to rescind their purchases and recover their principal plus 10% interest per year, less any amounts received. The Partnership's securities were properly registered in Illinois and the basis of the action relates solely to the alleged failure of the Broker Dealer to be properly registered.
In November 1988, Plaintiff's class action claims were dismissed by the Court. Amended complaints, including additional named plaintiffs, were filed subsequent to the dismissal of the class action claims. Motions to dismiss were filed on behalf of the Partnership and the other co-defendants. In December 1989, the Court ordered that the Partnership and the other co-defendants rescind sales of any plaintiff that brought suit within three years of the date of sale. Under the Court's order of December 1989, the Partnership would not be required to rescind any sales. Plaintiffs appealed, among other items, the Court's order with respect to plaintiffs that brought suit after three years of the date of sale. While there has been no formal dismissal of the claims against the Partnership, it has been determined that none of the sales made to investors of the Partnership occurred during the time periods which are still being considered in this case and therefore, there is no longer any ongoing claims against the Partnership in this matter.
Knight Communications, Inc. v. I.R.E. Pension Investors, Ltd., In the North Carolina Superior Court Division 95-CVS-7381. I.R.E. Pension Investors, Ltd. v. Knight Communications, Inc. North Carolina District Court Division - 95-CVD-9645. I.R.E. Pension Investors, Ltd. v. Randall Knight in the North Carolina Superior Court Division 96-CVS-1383. In May 1995, the lease of a tenant occupying approximately 5,000 square feet at Independence Tower expired. Prior to expiration, the Partnership attempted to negotiate a renewal with the tenant, however, the parties were never able to reach agreement. The tenant contends that a lease extension was agreed to by the parties. The tenant brought an action against the Partnership seeking specific performance under the lease the tenant claims exists, or in the alternative, damages that would be sustained by tenant if it was forced to move, an injunction to keep the Partnership from seeking an order for eviction, damages caused by the Partnership's unfair and deceptive trade practices and for attorneys' fees. Subsequently, the Partnership brought an action for possession of the premises. The tenant also had a note due to the Partnership for prior delinquent rent and when a default occurred under the terms of the note, the Partnership filed suit against the tenant and the co-maker under the note. A trial is scheduled in June 1996 regarding the possession portion of the above.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP INTEREST AND RELATED SECURITY HOLDER MATTERS
(a) There is no established public trading market for Registrant's units of limited partnership interest.
(b) There are approximately 2,740 holders of units of limited partnership interest as of December 31, 1995.
(c) See Item 6.

ITEM 6. SELECTED FINANCIAL DATA
For the five years ended December 31, 1995.
1991 1992 1993 1994 1995 ---- ---- ---- ---- ----
Revenues $ 1,440,418 1,109,557 1,146,293 1,266,818 1,527,208 ========== ========== ========== ========== ========== Net income (loss) $ (1,796,743) 61,421 (24,174) 42,284 (438,316) ========== ========== ========== ========== ========== Net income (loss) per weighted average limited partnership unit outstanding (27.89) .95 (.38) .66 (6.80)
========== ========== ========== ========== ========== Total assets $ 9,620,472 7,739,318 7,826,907 7,268,449 6,810,550 ========== ========== ========== ========== ========== Partners' capital $ 9,490,863 7,552,523 7,528,349 7,070,371 6,632,055 ========== ========== ========== ========== ========== Distributions per weighted average limited partnership unit outstanding $ - - 31.36 7.84 - ========== ========== ========== ========== ==========
TEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF I.R.E. PENSION INVESTORS, LTD.
A description of the Partnership's original investment properties follows:
* Independence Tower - A 107,000 square foot office building located in Charlotte, North Carolina.
* One West Nine Mile Holiday Inn Hotel ("Holiday Inn") - A 211 room hotel located in Hazel Park, Michigan through a joint venture in which the Partnership had 91.3% interest. This property was sold in December 1991.
The Partnership was organized on January 17, 1985, to engage in acquiring, improving, operating and holding for investment, income producing real properties. The Partnership's objectives were to invest in properties which would: 1) Preserve and protect the Partnership's original capital; 2) Provide long-term appreciation in the value of the Partnership's properties; and 3) Provide cash distributions to the Limited Partners.
On April 1, 1985, sufficient capital had been raised to allow funds to be released from escrow to the Partnership. The Partnership closed the offering in October 1985, having raised $15,960,250 in capital and issued 63,837 units of limited partnership interest at $250 per unit.
During August 1985, the Partnership acquired an office building in Charlotte, North Carolina. In December 1986, the Partnership acquired a majority interest in a joint venture with an affiliate. This joint venture acquired a hotel in Hazel Park, Michigan. The hotel building was net leased to Holiday Inn. During 1991, the hotel was sold and the joint venture was liquidated.
Rental income increased for the year ended December 31, 1995 as compared with prior years primarily due to additional rents received as a consequence of an increase in occupancy at Independence Tower. Occupancy at Independence Tower increased from 88% in December 1994 to 95% in December 1995.
Interest income increased for the year ended December 31, 1995 as compared to the comparable period in 1994 primarily due to increases in funds available for investment and yield on those investments. Interest income increased for the year ended December 31, 1994 as compared to the comparable period in 1993 primarily due to an increase in yields on the investment of funds.
Other income increased for the year ended December 31, 1995 as compared with the same period in 1994 as a result of late fees charged to delinquent tenants at Independence Tower. Other income decreased for the year ended December 31, 1994 as compared to the comparable period in 1993 due principally to decreased fees resulting from investor transfers of partnership units.
Depreciation expense increased for the year ended December 31, 1995 as compared to the comparable periods in 1994 and 1993 due to additional property improvements at Independence Tower.
During the fourth quarter of 1995, the carrying value of Independence Tower was reduced approximately $665,000 to its estimated fair value. This was based upon an agreement to sell the property to an unaffiliated third party for a sales price of approximately $4.0 million. (See note 6 (c)). This $665,000 reduced net income for the 1995 fiscal year.
Insurance increased for the year ended December 31, 1995 as compared to the comparable periods in 1994 and 1993 primarily due to an increase in Independence Tower property insurance premium.
Utilities expense increased for the year ended December 31, 1995 as compared to the comparable periods in 1994 and 1993 primarily due to an increase in electrical consumption at Independence Tower.
The net increase in rental income in 1995 was the causal factor for the increase in property management fees to affiliate for the year ended December 31, 1995 as compared to the comparable periods in 1994 and 1993.
Repairs and maintenance increased for the year ended December 31, 1995 as compared to the comparable periods in 1994 and 1993 primarily due to increases in HVAC cost, janitorial cost, windows maintenance and general repair and maintenance cost at Independence Tower.
Other property expenses increased for the year ended December 31, 1995 as compared to the same period in 1994 primarily due to an increase in legal fees as a result of a litigation with a tenant at Independence Tower.
Other general and administrative expenses decreased for the year ended December 31, 1995 as compared to the prior year comparable period in 1994 primarily due to the elimination of interest accruals, during the third quarter of 1995, relating to the Hess litigation. During the quarter ended September 30, 1995, the interest that had been accrued through June 30, 1995 of approximately $69,000 related to the Hess litigation was reversed based upon determination that the Partnership had no ongoing claims against it.
General and administrative expense to affiliates decreased for the year ended December 31, 1995 as compared to the 1994 and 1993 comparable periods as a result of decreased costs associated with administrative and accounting service reimbursements. These cost reimbursements are associated with filing requirements to regulatory agencies, tax return preparation, general accounting services and monitoring of pending litigation.
A summary of the Partnership's cash flows is as follows:
1993 1994 1995 ---- ---- ---- Net cash provided (used) by: Operating activities $ 541,869 413,945 693,434 Investing activities (274,819) (2,553,170) (371,656) Financing activities - (500,262) - --------- ---------- -------- $ 267,050 (2,639,487) 321,778 ========= =========== ========
The changes in operating activities were impacted by the changes in net income (loss) described above, a provision in 1995 to state real estate at fair value for Independence Tower and the changes in operating assets and liabilities between the periods. Investing activities include an increase and a decrease in securities available for sale related to the redemption and purchase of treasury bills and property improvements related to Independence Tower in 1995, 1994 and 1993. Such improvements normally are incurred in connection with the obtaining or renewal of tenant leases. Although there are no other significant improvements contemplated for the property, improvement costs will be incurred in connection with the obtaining or renewal of tenant leases. Any costs related to the asbestos removal and replacement issue discussed below would be considered property improvements subject to an impairment test for the property. Present costs of implementing an operations and maintenance program for the asbestos issue are considered a cost of operations. Financing activities for 1994 reflect a cash distribution to limited partners.
Because of a decline in revenue from the hotel property and growth being less than originally anticipated for Independence Tower, distributions paid to limited partners were reduced in 1988 to 3.5% of original capital from the 7% level paid in prior years and no distributions were paid in 1989, 1990, 1991, 1993 or 1995. Future distributions, if any, are anticipated to be paid on an annual basis and will be commensurate with actual prior year operations, cash reserves and anticipated operating requirements. During March 1992, a distribution of approximately $2,000,000 ($31.36 per limited partnership unit) was made to all limited partners. In September 1994, a distribution of approximately $500,000 ($7.84 per limited partnership unit) was paid to all limited partners.
At December 31, 1995, the Partnership had cash and cash equivalents of approximately $624,850 and approximately $2.5 million in Treasury Bills included in securities available for sale. Management is of the opinion that the Partnership's liquidity, based on its current activities is adequate to meet anticipated, normal operating requirements during the near term. The costs of asbestos removal at Independence Tower is estimated at from $1.6 million to $2.2 million and the Partnership has retained funds for such removal if it becomes necessary. Should the cost of removal exceed the above estimates, it may need to be funded through financing of this property. Implementation of an operations and maintenance program has been initiated; however, in the future it may be necessary for the Partnership to remove any asbestos in order to sell or refinance the property.
In addition to the items discussed above, the Partnership's long term prospects will be primarily effected by future occupancy levels and rental rates achieved at Independence Tower. Due to the uncertain economic climate in general and the real estate market in particular, management cannot reasonably determine the Partnership's long term liquidity position.
On November 6, 1995, the Partnership entered into an agreement to sell Independence Tower to an unaffiliated third party for a sales price of $4,000,000 with a closing scheduled to take place during the first half of 1996. Consummation of this sale pursuant to its contract is subject to a number of conditions and there is no assurance that the conditions will be met or that the property will be sold pursuant to the agreement. Upon sale of the property and resolution of outstanding issues, the Board of Directors of the Managing General Partner will consider the possible liquidation of the Partnership.
ITEM 8.

ITEM 8. INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report
Financial Statements:
Balance Sheets - December 31, 1994 and 1995
Statements of Operations - For each of the Years in the Three Year Period ended December 31, 1995
Statements of Partners' Capital - For each of the Years in the Three Year Period ended December 31, 1995
Statements of Cash Flows - For each of the Years in the Three Year Period ended December 31, 1995
Notes to Financial Statements
ITEM 14. FINANCIAL STATEMENT SCHEDULE
III. Properties and Accumulated Depreciation - December 31, 1995.
All other schedules are omitted as the required information is either not applicable or is presented in the financial statements and related notes.
INDEPENDENT AUDITORS' REPORT
The Partners I.R.E. Pension Investors, Ltd.:
We have audited the financial statements of I.R.E. Pension Investors, Ltd. (a Florida Limited Partnership), as listed in the accompanying index. In connection with our audits of the financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These financial statements and financial statement schedule are the responsibility of I.R.E. Pension Investors, Ltd.'s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of I.R.E. Pension Investors, Ltd., at December 31, 1995 and 1994, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 1995, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
KPMG PEAT MARWICK LLP
Fort Lauderdale, Florida March 26, 1996
I.R.E. PENSION INVESTORS, LTD. (A Florida Limited Partnership)
Balance Sheets December 31, 1994 and 1995
Assets
1994 1995 -------- ------
Cash and cash equivalents $ 303,072 624,850
Securities available for sale 2,361,081 2,517,404
Investment in real estate: Office building 7,562,066 7,129,075 Less accumulated depreciation (2,999,846) (3,529,452) ----------- ----------- Net investment in real estate 4,562,220 3,599,623
Other assets, net 42,076 68,673 ---------- ----------
$ 7,268,449 6,810,550 ========== ==========
Liabilities and Partners' Capital
Accrued expenses 72,640 1,987 Accounts payable and other liabilities 114,639 164,293 Due to affiliates 10,799 12,215 ---------- ---------- Total liabilities 198,078 178,495
Partners' capital: 63,776 limited partnership units issued and outstanding 7,070,371 6,632,055 ---------- ----------
$ 7,268,449 6,810,550 ========== ==========
See accompanying notes to financial statements.
I.R.E. PENSION INVESTORS, LTD. (A Florida Limited Partnership)
Statements of Operations For each of the Years in the Three Year Period ended December 31, 1995
1993 1994 1995 ---- ---- ----
Revenues: Rental income $ 1,068,273 1,159,262 1,357,241 Tenant reimbursements 1,226 - - Interest income 70,711 103,995 161,775 Other income 6,083 3,561 8,192 ---------- --------- --------- Total revenues 1,146,293 1,266,818 1,527,208 ---------- --------- ---------
Costs and expenses: Depreciation 430,330 490,817 529,606 Provision to state real estate at fair value - - 665,000 Property operations: Taxes 71,445 68,692 68,686 Insurance 17,424 35,383 44,404 Utilities 195,997 184,917 201,415 Property management fees to affiliate 64,170 69,769 81,934 Repairs and maintenance 199,131 196,349 255,770 Other 83,285 84,363 108,707 General and administrative: To affiliates 63,987 51,582 41,424 Other 44,698 42,662 37,998 Reversal of interest accrued related to the Hess litigation - - (69,420) --------- --------- --------- Total costs and expenses 1,170,467 1,224,534 1,965,524 --------- --------- ---------
Net income (loss) $ (24,174) 42,284 (438,316) ======== ========= =========
Net income (loss) per weighted average limited partnership unit outstanding $ (.38) .66 (6.80) ========== ========= =========
See accompanying notes to financial statements.
I.R.E. PENSION INVESTORS, LTD. (A Florida Limited Partnership)
Statements of Partners' Capital For each of the Years in the Three Year Period ended December 31, 1995
Limited General Partners Partners Total -------- -------- --------- Balance at December 31, 1992 $ 7,566,570 (14,047) 7,552,523
Net (Loss) (23,932) (242) (24,174) --------- ------- ---------
Balance at December 31, 1993 7,542,638 (14,289) 7,528,349
Limited partner distribution (500,262) - (500,262)
Net income 41,861 423 42,284 --------- ------- ---------
Balance at December 31, 1994 7,084,237 (13,866) 7,070,371
Net loss (433,932) (4,384) (438,316) --------- ------- ---------
Balance at December 31, 1995 $ 6,650,305 (18,250) 6,632,055 ========= ======== =========
See accompanying notes to financial statements.
I.R.E. PENSION INVESTORS, LTD. (A Florida Limited Partnership)
Statements of Cash Flows For each of the Years in the Three Year Period ended December 31, 1995
1993 1994 1995 --------- ---------- -------- Operating Activities: Net income (loss) $ (24,174) 42,284 (438,316) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 430,330 490,817 529,606 Non-cash portion of rental income 715 1,574 2,480 Provision to state real estate at fair value - - 665,000 Changes in operating assets and liabilities: Increase (decrease) in accrued expenses, accounts payable, other liabilities, and due to affiliates 111,763 (100,480) (19,583)
(Increase) decrease in other assets, net 23,235 (20,250) (45,753) ---------- ---------- ----------
Net cash provided by operating activities 541,869 413,945 693,434 ---------- ---------- ----------
Investing Activities: Purchase of securities available for sale - (2,361,081) (4,930,459)
Maturities and redemptions of securities available for sale - - 4,790,812 Property improvements (274,819) (192,089) (232,009) ---------- ---------- ----------
Net cash (used) in investing activities (274,819) (2,553,170) (371,656) ---------- ---------- ----------
Financing Activities: Limited partner distribution - (500,262) - ---------- ---------- ---------- Net cash (used) in financing activities - (500,262) - ---------- ---------- ---------- Increase (decrease)in cash and cash equivalents 267,050 (2,639,487) 321,778
Cash and cash equivalents at beginning of year 2,675,509 2,942,559 303,072 ---------- ---------- ----------
Cash and cash equivalents at end of year $ 2,942,559 303,072 624,850 ========== ========== ==========
See accompanying notes to financial statements.
I.R.E. PENSION INVESTORS, LTD. (A Florida Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies
General
I.R.E. Pension Investors, Ltd. (the "Partnership") was organized on January 17, 1985 in accordance with the provisions of the Florida Uniform Limited Partnership Act to invest in, hold and manage income producing real estate. A sufficient amount of capital was raised to allow funds to be released from escrow to the Partnership on April 1, 1985. The Partnership closed its offering of limited partnership units in October 1985 after having raised $15,960,250.
The Managing General Partner has complete authority in the management and control of the Partnership. I.R.E. Pension Advisors, Corp. is the Managing General Partner and Alan B. Levan is the individual General Partner of the Partnership. The General Partners may serve in the same capacity for other entities having similar investment objectives. Should any conflicts of interest arise among these entities, the management of the managing general partners will, at their sole discretion, resolve such conflicts.
Basis of Financial Statement Presentation - The financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP"). In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and income and expenses for the periods presented. Actual results could differ significantly from those estimates. A material estimate that is susceptible to significant change in the next year relates to the determination of the allowance to state real estate at fair value.
Compensation to General Partners and Affiliates
The General Partners and/or their affiliates are entitled to receive compensation only as specified by the Partnership Agreement. The determination of amount and timing of payment is subject to certain limitations and to cash distribution preferences of limited partners. Following is a brief description of such compensation and the services to be rendered:
Underwriting Commissions:
Due upon the sale of Partnership units of interest.
Non-recurring Acquisition Fees:
Principally for evaluating and selecting real property for potential purchase by the Partnership.
Property Management Fee:
Due for services in connection with the continuing professional property management of the Partnership properties.
Partnership Management Fee:
Due for services rendered in evaluating and selecting properties for the Partnership, reviewing cash requirements, including the determination of the amount and timing of distributions, if any, making decisions as to the nature and terms of the acquisition and disposition of such properties, selecting, retaining and supervising consultants, contractors, architects, engineers, lenders, borrowers, agents and others and otherwise generally managing the day-to-day operations of the Partnership.
Mortgage Servicing Fees:
Due for mortgage servicing on notes held by the Partnership.
Subordinated Real Estate Commissions:
Related to sales of Partnership properties.
Interest in Cash from Sales or Financing:
Due also for services as listed under "Partnership Management Fee".
Interest in Net Income and Net Loss as Determined for Federal Income TaxPurposes:
1% of net losses and the greater of (a) 1% of net income or (b) an amount of such net income which is in proportion to the percentage of cash distributed to the General Partners as a Partnership Management Fee or for their Interest in Cash From Sales or Financing.
Cash and cash equivalents
Cash equivalents include liquid investments with a maturity of three months or less.
Securities Available for Sale
The Partnership's securities are available for sale. In accordance with Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities ("FAS 115") issued in May 1993 by the Financial Accounting Standards Board ("FASB"), these securities are carried at fair value, with any related unrealized appreciation or and depreciation reported as a separate component of partners capital. At December 31, 1994, the Partnership owned one treasury bill that matured in May 1995 for which cost approximated fair value. At December 31, 1995 the Partnership owned one treasury bill that matures in February 1996 for which cost approximated fair value.
Properties
Properties are stated at the lower of cost or fair value in the accompanying statements of financial condition. The office building is depreciated using the straight-line method over an estimated useful life of 20 years. Tenant improvements are capitalized and depreciated using the straight-line method over an estimated useful life of five years.
Income Taxes
The payment of income taxes is the obligation of the individual partners; therefore, there is no provision for income taxes in the accompanying financial statements. The Partnership's tax returns have not been examined by Federal or state taxing authorities.
Net income or loss reported for income tax purposes involves, among other things, various determinations relating to properties purchased. Although management of the Partnership believes that such determinations are appropriate, there can be no assurance that the Internal Revenue Service will not contest the Partnership's tax treatment of various items or, if contested, such treatment will be sustained by the Courts. Further, there is a possibility that the Treasury will amend existing regulations or promulgate new regulations, and such action may be retroactive. Accordingly, the tax status of the Partnership and the availability of prior and future income tax benefits to limited partners may be adversely affected.
Financial Reporting
The Partnership maintains its accounting records on a modified cash basis. The accompanying financial statements are presented on an accrual basis
Reclassifications
For comparative purposes, certain prior year balances have been reclassified to conform with the 1995 financial statement presentation.
Rental Income
Rental income is recognized under the operating method whereby aggregate rentals are reported as income over the life of the lease and the costs and expenses are charged against such revenue. Leasing commissions, when significant, are capitalized and amortized over the term of the lease. Rental income, from leases with periods of rent abatement and/or graduated payments, is recognized ratably over the term of the lease when the credit worthiness of the tenant can be verified to assure collectibility. When this policy is followed a receivable is created in the early years of the lease.
New Accounting Standards
In 1995, the FASB issued Statement of Financial Accounting Standard No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." ("FAS 121"). FAS 121 requires that long-lived assets, assets held for sale and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In performing the review for recoverability, the entity should estimate the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized. Measurement of an impairment loss for long-lived assets and identifiable intangibles that an entity expects to hold and use should be based on the fair value of the asset. FAS 121 is effective for financial statements for fiscal years beginning after December 15, 1995. Earlier application is encouraged. Management is of the opinion that adoption of FAS 121 did not have a material effect on financial position or results of operations, upon adoption on January 1, 1996.
(2) Properties
Following is a brief description of the property investments made by the Partnership.
Independence Tower
On August 19, 1985, the Partnership purchased a twelve story office building containing 103,512 square feet of net leasable area in Charlotte, North Carolina. See note 6(a)and (c).
One West Nine Mile Holiday Inn Hotel
On December 18, 1986, the Partnership acquired a 91.3% interest in a Joint Venture with an affiliate. This joint venture purchased a 211-room hotel in Hazel Park, Michigan. In December 1991, One West Nine Mile Holiday Inn Hotel was sold and the joint venture was liquidated.
Leases
The aggregate sum of the minimum lease rental payments to be received for Independence Tower over the five succeeding years is approximately as follows:
Year ending December 31, ----------------------------------- 1996 1997 1998 1999 2000 --------- -------- ------- ------- -----
$1,180,000 1,015,000 514,000 259,000 187,000 ========= ========= ======= ======= =======
The above table does not consider exercise of renewal options by existing tenants, leasing premises that were not leased as of December 31, 1995 or renewal of leases expiring during the above periods.
(3) Compensation To General Partners And Affiliates
During the year ending December 31, 1993, 1994 and 1995 compensation and reimbursements to general partners and affiliates were as follows:
1993 1994 1995 ---- ---- ---- Reimbursements for administrative and accounting services $ 63,987 51,582 41,424 Property management fees 64,170 69,769 81,934 ------- ------- -------
Total $ 128,157 121,351 123,358 ======= ======= =======
(4) Reconciliation of Net Income (Loss) and Partners' Capital
The following reconciliation provides details of the nature and amount of differences between net income (loss) and partners' capital per the accompanying financial statements and the Partnership's tax return.
1993 1994 1995 -------- -------- ------ Net income (loss): Amount reported for financial statement purposes $ (24,174) 42,284 (438,316) Difference in financial statement/tax depreciation expense 241,740 294,467 328,430 Adjustment to the carrying value of real estate for financial statement purposes - - 665,000 Difference between accrual basis of accounting used for financial statements and the method used for income tax purposes (9,834) 8,100 (62,736) -------- -------- -------- Amount reported for income tax purposes $ 207,732 344,851 492,378 ======== ======== ========
1993 1994 1995 -------- -------- ------ Partners' capital: Amount reported for financial statement purposes $ 7,528,349 7,070,371 6,632,055
Difference in financial statement/tax depreciation expense 1,125,261 1,419,728 1,748,158 Difference due to fair value considerations in the carrying value of real estate for financial statement purposes - - 665,000
Difference between accrual basis of accounting used for financial statements and the method used for income tax purposes 56,115 64,214 1,478 Cost of raising capital, deducted from partners' capital for financial statements and included in other assets for income tax purposes, net 1,751,049 1,751,049 1,751,049 ---------- ---------- ---------- Amount reported for income tax purposes $10,460,774 10,305,362 10,797,740 ========== ========== ==========
(5) Litigation
During May 1988, an individual investor filed an action against two individual defendants who allegedly sold securities without being registered as securities brokers, two corporations organized and controlled by such individuals, and against approximately sixteen publicly offered limited partnerships, including the Partnership, interests in which were sold by the individual and corporate defendants.
Plaintiff alleged that the sale of limited partnership interests in the Partnership (among other affiliated and unaffiliated partnerships) by persons and corporations not registered as securities brokers under the Illinois Securities Act constituted a violation of such Act, and that the Plaintiff, and all others who purchased securities through the individual or corporate defendants, should be permitted to rescind their purchases and recover their principal plus 10% interest per year, less any amounts received. The Partnership's securities were properly registered in Illinois and the basis of the action relates solely to the alleged failure of the Broker Dealer to be properly registered.
In November 1988, Plaintiff's class action claims were dismissed by the Court. Amended complaints, including additional named plaintiffs, were filed subsequent to the dismissal of the class action claims. Motions to dismiss were filed on behalf of the Partnership and the other co-defendants. In December 1989, the Court ordered that the Partnership and the other co-defendants rescind sales of any plaintiff that brought suit within three years of the date of sale. Under the Court's order of December 1989, the Partnership was not required to rescind any sales. Plaintiffs appealed, among other items, the Court's order with respect to plaintiffs that brought suit after three years of the date of sale. While there has been no formal dismissal of the claims against the Partnership, it has been determined that none of the sales made to investors of the Partnership occurred during the time periods which are still being considered in this case and therefore, there is no longer any ongoing claims against the Partnership in this matter.
Through June 20, 1995, an accrual of $69,000 for interest on amounts that would be due upon rescission had been made. Based upon the determination that the Partnership had no ongoing claims against it, the accrual was reversed during the quarter ended September 30, 1995.
In May 1995, the lease of a tenant occupying approximately 5,000 square feet at Independence Tower expired. Prior to expiration, the Partnership attempted to negotiate a renewal with the tenant, however, the parties were never able to reach agreement. The tenant contends that a lease extension was agreed to by the parties. The tenant brought an action against the Partnership seeking specific performance under the lease the tenant claims exists, or in the alternative, damages that would be sustained by tenant if it was forced to move, an injunction to keep the Partnership from seeking an order for eviction, damages caused by the Partnership's unfair and deceptive trade practices and for attorneys' fees. Subsequently, the Partnership brought an action for possession of the premises. The tenant also had a note due to the Partnership for prior delinquent rent and when a default occurred under the terms of the note, the Partnership filed suit against the tenant and the co-maker under the note. A trial is scheduled in June 1996 regarding the possession portion of the above.
(6) Other Matters
(a) A preliminary environmental site assessment and asbestos survey of Independence Tower has revealed the presence of asbestos containing materials. The estimated cost to remove and replace the asbestos items is approximately a range of $1.6 to $2.2 million. Implementation of an operations and maintenance program has been initiated, however, in the future, it may be necessary for the Partnership to remove any asbestos in order to sell or refinance this property.
(b) An affiliate earned a real estate brokerage commission of approximately $97,000 in connection with the sale of One West Nine Mile Holiday Inn. However, in accordance with the terms of the Partnership Agreement, payment of such commission is subordinated to the limited partners receipt of their original capital plus a specified return thereon. The Partnership has not reflected its portion of this commission in its financial statements, because payment of such commission is remote.
(c) On November 6, 1995, the Partnership entered into an agreement to sell Independence Tower to an unaffiliated third party for a sales price of $4,000,000 with a closing scheduled to take place during the first half of 1996. Consummation of this sale pursuant to its contract is subject to a number of conditions and there is no assurance that the conditions will be met or that the property will be sold pursuant to the agreement. Upon sale of the property and resolution of outstanding issues, the Board of Directors of the Managing General Partner will consider the possible liquidation of the Partnership. Based upon the estimated sales price, an allowance of $665,000 was established during the fourth quarter to state the carrying value of Independence Tower at fair value.
SCHEDULE III
Properties and Accumulated Depreciation December 31, 1995
Independence Tower Office Building Charlotte North Carolina -------------- Acquisition Date 8/85
Encumbrances $ - =====
Initial Costs: Land 823,161 Building and Improvements 4,628,240 --------- 5,451,401 ---------
Improvements: Costs capitalized subsequent to acquisition: Land - Building and Improvements 2,342,674 --------- 2,342,674 ---------
Allowance to state real estate at fair value (665,000) -------- (665,000) --------
Gross Amount: Land 823,161 Building and Improvements 6,305,914 --------- Total $ 7,129,075 =========
Accumulated Depreciation $ 3,529,452 =========
Life on which depreciation is computed 20 years ========
Reconciliation of Cost and Accumulated Depreciation For each of the Years in the Three Year Period ended December 31, 1995
1993 1994 1995 ---- ---- ----
Cost:
Balance at beginning of period $ 7,095,158 7,369,977 7,562,066 Allowance to state real estate at fair value - - (665,000) Additions: Improvements 274,819 192,089 232,009 --------- --------- ---------
Balance at end of period $ 7,369,977 7,562,066 7,129,075 ========= ========= =========
Accumulated Depreciation:
Balance at beginning of period $ 2,078,699 2,509,029 2,999,846 Addition: Depreciation 430,330 490,817 529,606 --------- --------- ---------
Balance at end of period $ 2,509,029 2,999,846 3,529,452 ========= ========= =========
The aggregate basis (not reduced by accumulated depreciation) for Federal income tax purposes of the above property was approximately $7,794,000 at December 31, 1995.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Registrant has no directors or officers.
a) Directors.
Listed below are the directors of I.R.E. Pension Advisors Corp., Managing General Partner of Registrant, all of whom are to serve until the election and qualification of their respective successors unless sooner removed from office: NAME AGE POSITIONS HELD -------------- --- ------------------- Alan B. Levan 51 Director since 1985
Earl Pertnoy 69 Director since 1985
Carl E. B. McKenry, Jr. 67 Director since 1985
b) Executive Officers.
Listed below are the executive officers of I.R.E . Pension Advisors Corp., all of whom are to serve until they resign or are replaced by the Board of Directors: NAME AGE POSITIONS HELD -------------- --- ------------------- Alan B. Levan 51 President since 1985
Glen R. Gilbert 51 Senior Vice President since 1985; Chief Financial Officer since 1987; Secretary since c) Certain Significant Employees.
Not applicable.
d) Family Relationships.
Not applicable.
e) Business Experience.
ALAN B. LEVAN formed the I.R.E. Group in 1972. Since 1978, he has been the Chairman of the Board, President, and Chief Executive Officer of BFC Financial Corporation (or its predecessor companies), a financial services and savings bank holding company. He is also Chairman of the Board and President of I.R.E. Realty Advisors, Inc., I.R.E. Properties, Inc., I.R.E. Realty Advisory Group, Inc., U.S. Capital Securities, Inc., and Florida Partners Corporation. Mr. Levan is also Chairman of the Board and Chief Executive Officer of BankAtlantic, Bancorp, Inc. Mr. Levan is also an individual general partner and an officer and a director of the corporate general partners of various public limited partnerships (including the Registrant), all of which are affiliated with BFC Financial Corporation.
GLEN R. GILBERT has been Senior Vice President of BFC Financial Corporation since 1984, Chief Financial Officer since 1987 and Secretary since 1988. Mr. Gilbert has been a certified public accountant since 1970. Mr. Gilbert serves as an officer of Florida Partners Corporation and of the corporate general partners of various public limited partnerships (including the Registrant), all of which are affiliated with BFC Financial Corporation.
EARL PERTNOY has been for more than the past five years a real estate investor and developer. He has been a director of BFC Financial Corporation and its predecessor companies since 1978. He is a director of the corporate general partners of various public limited partnerships (including the Registrant), all of which are affiliated with BFC Financial Corporation.
CARL E. B. McKENRY, JR. is the Director of the Small Business Institute at the University of Miami in Coral Gables, Florida. He has been associated in various capacities with the University since 1955. He has been a director of BFC Financial Corporation since 1981 and is a director of the corporate general partners of various public limited partnerships (including the Registrant), all of which are affiliated with BFC Financial Corporation.
f) Certain Legal Proceedings.
None.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
a) Cash Compensation.
The Registrant has no officers or directors.
The Registrant did not pay salaries or expenses of the officers and directors of the general partner of the Registrant in 1995, except for travel and other expenses directly related to activities of the Registrant.
b) Compensation Pursuant to Plans.
Registrant has no annuity, pension or retirement plan for any director, officer or employee.
c) Other Compensation.
Not applicable.
d) Compensation of Directors.
Registrant has no directors.
e) Termination of Employment and Change of Control Arrangement.
Not applicable.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
a) No person owns 5% or more of Registrant's voting securities.
b) Registrant has no officers or directors. The following information is provided with respect to units owned by directors and officers of the managing general partner.
(3) AMOUNT AND (2) NATURE OF (4) (1) NAME AND ADDRESS OF BENEFICIAL PERCENT TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS ---------------- --------------------- ----------- ----------- (i) Units of Limited Alan B. Levan 28 Direct .0% (approx.) Partnership 1750 E. Sunrise Blvd. (ii) Interest Fort Lauderdale, FL 33304
All other directors and officers of the Managing General Partner as a group 0 Direct .0% - -- TOTAL 28 Direct .0% (approx.) ======== ===
(i) Alan B. Levan is a general partner of Registrant and is President and Director of the Managing General Partner.
(ii) Includes 8 units held by spouse.
c) Registrant knows of no contract or other arrangement that could result in a change in control of registrant.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
a) & b) During the year ending December 31, 1995, the following entities received the fees and payments indicated for services rendered with respect to the Registrant:
NAME AND RELATIONSHIP TO REGISTRANT TRANSACTION AMOUNT -------------------------- ------------------- -------- BFC Financial Corporation Reimbursement for and subsidiaries, administrative and Affiliates of the General accounting services $41,424 Partners Property management fees $81,934
c) Indebtedness of Management.
None.
d) Transactions with Promoters.
Not applicable.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
A-1. See Item 8. Financial Statements and Supplementary Data.
A-2. See Item 8. Financial Statements and Supplementary Data.
A-3. Exhibits:
(3) Articles of incorporation and by-laws. Limited Partnership Agreement set forth as Exhibit A to the Prospectus of the Partnership dated February 13, 1985, as filed with the Commission pursuant to Rule 424(c), is hereby incorporated herein by reference.
(4) Instruments defining the rights of security holders, including indentures - Not applicable.
(9) Voting trust agreement - Not applicable.
(10) Material contracts - Not applicable.
(11) Statement re computation of per share earnings - Not applicable.
(12) Statements re computation of ratios - Not applicable.
(13) Annual report to security holders, Form 10-Q or quarterly report to security holders - Not applicable.
(18) Letter re change in accounting principles - Not applicable.
(19) Previously unfiled documents - Not applicable.
(22) Subsidiaries of the Registrant - Not applicable.
(23) Published report regarding matters submitted to a vote of security holders - Not applicable.
(24) Consents of experts and counsel - Not applicable.
(25) Power of attorney - Not applicable.
(27) Financial Data schedule - Included as Exhibit 27.
(28) Additional exhibits - None.
(29) Information from reports furnished to state insurance regulatory authorities - Not applicable.
B. REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the last quarter of the period covered by this report.
No annual report or proxy material for the year 1995 has been sent to the Partners of the Partnership. An annual report will be sent to the Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
I.R.E. PENSION INVESTORS, LTD. Registrant By:I.R.E. Pension Advisors Corp., Managing General Partner
By:/S/ Alan B. Levan ---------------------------- Alan B. Levan, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Managing General Partner on behalf of the Registrant and in the capacities and on the dates indicated.
/S/ Alan B. Levan March 26 1996 - ------------------------------------------------------- Alan B. Levan, Director and Principal Executive Officer
/S/ Earl Pertnoy March 26, 1996 - ------------------------------------------------------- Earl Pertnoy, Director
/S/ Carl E.B. McKenry, Jr. March 26, 1996 - ------------------------------------------------------- Carl E. B. McKenry Jr., Director