SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

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

For the Quarter Ended:	Commission File Number:
June  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 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 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 b-2).

(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:
		Balance Sheets
		June 30, 2004 (Unaudited) December 31, 2003
		Statements of Income
		Three Months Ended June 30, 2004 (Unaudited)
		Three Months Ended June 30, 2003 (Unaudited)
		Six Months Ended June 30, 2004 (Unaudited)
		Six Months Ended June 30, 2003 (Unaudited)
		Statements of Changes in Partners’ Equity
		Six Months Ended June 30, 2004 (Unaudited)
		Six Months Ended June 30, 2003 (Unaudited)
		Statements of Cash Flows
		Six Months Ended June 30, 2004 (Unaudited)
		Six Months Ended June 30, 2003 (Unaudited)
		Notes to Financial Statements
	Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
PART II.  OTHER INFORMATION

EXCEL PROPERTIES, LTD.

BALANCE SHEETS

	June 30, 2004		December 31, 2003
	(Unaudited)
ASSETS
Cash	99,436		941,148
Notes receivable, net of allowance of $50,000 in 2003	165,750		165,750
Other assets	296		407
Total assets	$	265,482	$	1,107,355
LIABILITIES AND PARTNERS’ EQUITY
Liabilities:
Accounts payable:	$	6	$	3
Total liabilities	6		3
Partners’ equity:
General partner’s equity	229		150
Limited partners’ equity, 235,308 units authorized, 135,199 units issued and outstanding in 2004 and 2003, respectively.	265,247		1,107,202
Total partners’ equity	265,476		1,107,352
Total liabilities and partners’ equity	$	265,482	$	1,107,355

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

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EXCEL PROPERTIES, LTD.

STATEMENTS OF INCOME - UNAUDITED

	Three Months Ended June 30,				Six Months Ended June 30,
	2004		2003		2004		2003
Revenue:
Rental income	$	—	$	14,610	$	—	$	68,749
Recovery of bad debts	48,644		—		48,644		—
Interest income	327		17,006		2,338		34,728
Total revenue	48,971		31,616		50,982		103,477
Expenses:
Administrative	2,700		2,700		5,400		5,400
Accounting and legal	1,620		3,722		33,666		27,180
Other property and office expenses	1,594		3,441		3,933		5,280
Depreciation	—		5,961		—		14,734
Management fees	—		179		—		683
Total expenses	5,914		16,003		42,999		53,277
Net income before real estate sales	43,057		15,613		7,983		50,200
Gain on sale of real estate	—		—		—		30,505
Net income	$	43,057	$	15,613	$	7,983	$	80,705
Net income allocated to:
General partner	$	430	$	216	$	80	$	954
Limited partners	42,627		15,397		7,903		79,751
Total	$	43,057	$	15,613	$	7,983	$	80,705
Net income per weighted average limited partnership unit	$	0.32	$	0.11	$	0.06	$	0.59

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

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EXCEL PROPERTIES, LTD.

STATEMENTS OF CHANGES IN PARTNERS’ EQUITY - UNAUDITED

	Six Months Ended June 30
	2004			2003
Balance at January 1	$	1,107,352		$	3,263,675
Net income	7,983			80,705
Partner distributions	(849,859		)	(1,434,562		)
Balance at June 30	$	265,476		$	1,909,818

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

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EXCEL PROPERTIES, LTD.

STATEMENTS OF CASH FLOWS - UNAUDITED

	Six Months Ended June 30
	2004			2003
Cash flows from operating activities:
Net income	$	7,983		$	80,705
Adjustments to reconcile net income to net cash
provided by operations:
Recovery of bad debts	(48,644		)	—
Depreciation	—			14,734
Gain on sale of real estate	—			(30,505		)
Changes in operating assets and liabilities:
Decrease in assets:
Other assets	111			247
Increase (decrease) in liabilities:
Accounts payable	3			(61		)
Net cash provided by operating activities	(40,547		)	65,120
Cash flows from investing activities:
Collection of notes receivable	48,644			11,655
Proceeds from real estate sales	—			543,893
Net cash provided by investing activities	48,644			555,548
Cash flows from financing activities:
Cash distributions	(849,859		)	(1,434,562		)
Net cash used by financing activities	(849,859		)	(1,434,562		)
Net decrease in cash	(841,762		)	(813,894		)
Cash at January 1	941,198			1,181,015
Cash at June 30	$	99,436		$	367,121

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

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EXCEL PROPERTIES, LTD.

NOTES TO FINANCIAL STATEMENTS - UNAUDITED

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

The Partnership assessed whether there was 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 lessee’s ability to pay rent under the terms of the lease.  If a property was leased at a significantly lower rent, the Partnership recognized a permanent impairment loss if the income stream was not sufficient to recover its investment.

Cash Deposits

At June 30, 2004, the carrying amount of the Partnership’s cash deposits totaled $463,445, of which $100,000 was covered by federal depository insurance.

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Statement of Cash Flows - Supplemental Disclosure

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

Notes Receivable

All notes receivable are deemed to be collectible within the next 12 months.

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 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 six months ended June 30, 2004 and 2003:

	2004		2003
Administrative fees	$	5,400	$	5,400
Accounting	3,240		3,240
Management fees	—		683

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

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 3.Notes Receivable

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

	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

4.Sale of Property

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 June 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, 2002.

	Three Months Ended						Six Months Ended
	June 30, 2003 Actual			June 30, 2003 Proforma			June 30, 2003 Actual			June 30, 2003 Proforma
Rental Revenue:	$	14,610		$	—		$	68,749		$	—
Other revenue:	17,006			17,006			34,728			34,728
Operating expenses:	(16,003		)	(9,863		)	(53,277		)	(37,860		)
Net Income before real estate sales:	$	15,613		$	7,143		$	50,200		$	(3,132	)

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

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Certain Cautionary Statements

Certain 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 Partnership’s control that could cause actual results to differ materially from those forecast or anticipated in such forward-looking statements.  These factors include, but 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.

Nature of Business

Excel Properties, Ltd., a California limited partnership (the “Partnership”), was organized to purchase commercial real estate properties for cash and to hold these assets for investment.  The general partners of the Partnership are New Plan Excel Realty Trust, Inc., a Maryland corporation (“New Plan”), formerly known as Excel Realty Trust and Gary B. Sabin, an individual.  The Partnership was formed on September 19, 1985 and will continue in existence until December 31, 2015, unless dissolved earlier under certain circumstances.  In 1999, Excel Legacy Corporation, now known as Price Legacy Corporation,  (the “Company”) began managing the assets of the Partnership when certain officers of New Plan resigned.  The Company has indemnified New Plan of any general partner liability in exchange for an assignment of their partnership interest.  In 2003, Kausay Holdings, LLC began managing the assets of the Partnership.  Mr. Sabin is a principal in Kausay Holdings, LLC.

Properties 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.

The principal investment objectives of the Partnership were originally to provide to its limited partners: (1) preservation, protection and 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 June 30, 2004, the Partnership sold all of

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its real estate properties and has one remaining note receivable. The Partnership is attempting to collect this final note receivable.  This note is secured by land.

Critical Accounting Policies and Estimates

General

The financial 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.

Revenue Recognition

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.

Real Estate Assets

Real 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.

The 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.

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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.  The Partnership adopted this statement but no longer has any operating assets.  Since there are no remaining operating properties, operations from discontinued operations have not been separately identified.

Results of Operations

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

Comparison of the three months ended June 30, 2004 to the three months ended June 30, 2003

Rental revenue was $0 in the three months ended June 30, 2004 compared to $14,610 in the three months ended June 30, 2003.  There was no rental revenue in 2004 since the Partnership’s remaining operating properties were sold in 2003.  Interest income was $327 in the three months ended June 30, 2004 compared to $17,006 in the three months ended June 30, 2003.  This difference is primarily related to a note that was outstanding in the amount of $679,412 at June 30, 2003 and was paying interest at 8.5%.  This note was repaid in September 2003.

In the three months ended June 30, 2004, the Partnership recovered  $48,644 related to a note receivable that was previously reserved for.  This receivable was from Steakhouse Partners, Inc.  The Parthership reserved against the receivable when the obligor stopped making its required monthly interest payments and filed bankruptcy.  In May 2004, the Partnership received $48,644 and recorded the amount as revenue.

Depreciation expense was $5,961 in 2003 compared to $0 in 2004 since the Partnership no longer owned any depreciable real estate in 2004.  Accounting and legal expenses and Other property and office expenses decreased from $3,722 and $3,441 in 2003 to $1,620 and $1,594 in 2004, respectively, due to the partnership not owning any more real estate. The other expenses did not significantly vary between the two periods.

Comparison of the six months ended June 30, 2004 to the six months ended June 30, 2003

Rental revenue was $0 in the six months ended June 30, 2004 compared to $68,749 in the six months ended June 30, 2003.  There was no rental revenue in 2004 since the Partnership’s remaining operating properties were sold in 2003.  Interest income was $2,338 in the six months ended June 30, 2004 compared to $34,728 in the six months ended June 30, 2003.  This difference is primarily related to a note that was outstanding in the amount of $679,412 at June 30, 2003 and was paying interest at 8.5%.  This note was repaid in September 2003.

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As discussed above, in the six months ended June 30, 2004, the Partnership recovered $48,644 related to a note receivable that was previously reserved for.  This receivable was from Steakhouse Partners, Inc.  The Parthership reserved against the receivable when the obligor stopped making its required monthly interest payments and filed bankruptcy.  In May 2004, the Partnership received $48,644 and recorded the amount as revenue.

In the six months ended June 30, 2004 accounting and legal expenses were $33,666 compared to $27,180 in the six months ended June 30, 2003.  This increase was primarily due to expenses related to the preparation of the 2003 partner tax filings in 2004.  Depreciation expense was $14,734 in 2003 compared to $0 in 2004 since the Partnership no longer owned any depreciable real estate in 2004.  The other expenses did not significantly vary between the two periods.

In the six months ended June 30, 2003, there were gains on sales of real estate of $30,505.  There were no real estate sales in 2004.

Liquidity and Capital Resources

The Partnership has  $99,436 in cash at June 30, 2004.  The Partnership has no remaining operating assets which generate income but will have on-going general and administrative expenses until the Partnership is dissolved.   The Partnership has one remaining note receivable which is secured by land located in Las Vegas, NV.  The obligor is attempting to sell or finance the property to repay the note. Once the Partnership collects this note receivable, it intends to distribute the remaining available cash and dissolve the Partnership.  There are no assurances when the Partnership will collect the note receivable or if the obligor will be successful in repaying the note.

The balance of the Partnership’s note receivable at June 30, 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.

Prior to 2002, the Partnership has paid quarterly distributions to the limited partners of the actual cash earned by the Partnership in the preceding quarter.  In 2002, the Partnership adopted a policy of paying distributions when it receives cash from a significant capital event.  Once the remaining note receivable is collected, the Partnership will make a final distribution.

Inflation is not expected to negatively impact the operations of the Partnership as there are minimal operational expenses.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership’s balance sheet contains a financial instruments in the form of interest-earning note receivable.  The Partnership estimates that the fair value of the note approximates market value at June 30, 2004.

ITEM 4.  CONTROLS AND PROCEDURES

The 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,

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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.

Within 90 days prior to the date of this quarterly report, we carried out an evaluation, under the supervision and with the participation of our management, including our General Partner and Principal Accounting Officer, of the effectiveness of the design and operation of the company’s disclosure controls and procedures.  Based on the foregoing, our General Partner and Principal Accounting Officer concluded that the company’s disclosure controls and procedures were effective.

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 June 30, 2004.

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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: July 16, 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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