UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to _________

Commission file number 0-15656

U.S. REALTY PARTNERS LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Its Charter)

Delaware	57-0814502
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

55 Beattie Place, P.O. Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)

(864) 239-1000

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [ ] No

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

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

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

(Do not check if a smaller reporting company)

Smaller reporting company [X]

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. Certain information included in this Quarterly Report contains or may contain information that is forward-looking, including, without limitation, statements regarding the effect of redevelopments, the Partnership’s future financial performance, including the Partnership’s ability to maintain current or meet projected occupancy and rent levels, and the effect of government regulations. Actual results may differ materially from those described in these forward-looking statements and , in addition, will be affected by a variety of risks and factors some of which are beyond the Partnership’s control including, without limitation: financing risks, including the availability and cost of financing and the risk that the Partnership’s cash flows from operations may be insufficient to meet required payments of principal and interest; natural disasters and severe weather such as hurricanes; national and local economic conditions; the general level of interest rates; energy costs; the terms of governmental regulations that affect the Partnership’s property and interpretations of those regulations; the competitive environment in which the Partnership operates; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets ; insurance risk; development risks; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by the Partnership. Readers should carefully review the Partnership’s financial statements and the notes thereto, as well as the risk factors described in the documents the Partnership files from time to time with the Securities and Exchange Commission.

The Partnership's investment property consists of one apartment complex. The following table sets forth the average occupancy of the property for the six months ended June 30, 2009 and 2008:

	Average
	Occupancy
Property	2009	2008

Twin Lakes Apartments
Palm Harbor, Florida	92%	95%

The Corporate General Partner attributes the decrease in occupancy to the tight economy in the Palm Harbor, Florida region which has resulted in a loss of tenants as tenants move out to live with their extended families. The Corporate General Partner also attributes the decrease in occupancy to an increase in home purchases by residents with leases up for renewal.

The Partnership’s financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment property, interest rates on mortgage loans, costs incurred to operate the investment property, general economic conditions and weather. As part of the ongoing business plan of the Partnership, the Corporate General Partner monitors the rental market environment of its investment property to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Corporate General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, the Corporate General Partner may use rental concessions and rental rate reductions to offset softening market conditions, accordingly, there is no guarantee that the Corporate General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnership’s financial results.

Results of Operations

The Partnership’s net loss was approximately $148,000 and $297,000 for the three and six months ended June 30, 2009, respectively, compared to net loss of approximately $138,000 and $257,000 for the three and six months ended June 30, 2008, respectively. The increase in net loss for the three months ended June 30, 2009 is due to an increase in total expenses. The increase in net loss for the six months ended June 30, 2009 is due to an increase in total expenses and a decrease in total revenues, partially offset by a decrease in the recognition of a casualty loss.

Total revenues remained relatively constant for the three month period ended June 30, 2009 due to a decrease in rental income being offset by an increase in other income. Total revenues for the six month period decreased as a decrease in rental income was partially offset by an increase in other income. Rental income decreased for both periods due to a decrease in average rental rates and a decrease in occupancy at Twin Lake Apartments. Other income increased for both periods primarily due to an increase in utility reimbursements, ancillary services and pet and administrative fee income.

Total expenses increased for both periods due to increases in depreciation, interest and property tax expenses, partially offset by decreases in operating and general and administrative expenses. Depreciation expense increased for both periods due to capital improvements and replacements placed into service during the year. Interest expense increased due to an increase in interest on advances from AIMCO Properties, L.P., an affiliate of the Corporate General Partner, due to an increase in the amount advanced, partially offset by a decrease in interest on the mortgages encumbering the Partnership’s investment property due to scheduled principal payments. Property tax expense increased due to an increase in the tax rate and assessed value at Twin Lakes Apartments. The decrease in operating expense for the three month period is due to decreases in advertising and maintenance expenses. The decrease in operating expense for the six month period is due to decreases in advertising, insurance and maintenance expenses. Advertising expense decreased for both periods due to a decrease in web and print advertising at Twin Lakes Apartments. Maintenance expense decreased for both periods primarily due to decreases in contract services and repair costs incurred in 2008 for water damage from leaking pipes at Twin Lakes Apartments. Insurance expense decreased for the six month period due to a decrease in hazard insurance premiums at Twin Lakes Apartments.

During the six months ended June 30, 2008, Twin Lakes Apartments suffered water damage as a result of water pipe breaks in several of the Partnership’s apartment units. As of June 30, 2008, the Partnership incurred $60,000 in capitalizable costs and $17,000 in clean up costs to repair the water damage. The Partnership recognized a casualty loss of approximately $14,000 during the six months ended June 30, 2008 as a result of the write off of approximately $14,000 of undepreciated property improvements and replacements.

General and administrative expense decreased for both periods due to a reduction in management reimbursements as a result of a decrease in costs incurred by the Corporate General Partner included in the reimbursements charged to the Partnership. Included in general and administrative expense for both the three and six months ended June 30, 2009 and 2008 are management reimbursements to the Corporate General Partner as allowed under the Partnership Agreement. Also included in general and administrative expense are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.

Liquidity and Capital Resources

At June 30, 2009 the Partnership had cash and cash equivalents of approximately $132,000 compared to approximately $86,000 at June 30, 2008. For the six months ended June 30, 2009, cash and cash equivalents increased by approximately $88,000 from December 31, 2008 due to approximately $143,000 and $118,000 of cash provided by financing and operating activities, respectively, partially offset by approximately $173,000 of cash used in investing activities. Cash provided by financing activities consisted of advances from AIMCO Properties, L.P., an affiliate of the Corporate General Partner, partially offset by payments on the mortgages encumbering the investment property. Cash used in investing activities consisted of property improvements and replacements, partially offset by net withdrawals from restricted escrow. The Partnership invests its working capital reserves in interest bearing accounts.

The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the property to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state, and local legal and regulatory requirements. The Corporate General Partner monitors developments in the area of legal and regulatory compliance. Capital improvements planned for the Partnership’s property are detailed below.

Twin Lakes Apartments

During the six months ended June 30, 2009, the Partnership completed approximately $207,000 of capital expenditures at Twin Lakes Apartments, consisting primarily of floor covering replacements, water and sewer improvements and building improvements. These improvements were funded from operating cash flow and advances from AIMCO Properties, L.P., an affiliate of the Corporate General Partner. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during the remainder of 2009. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Additional capital expenditures will be incurred only if cash is available from operations, Partnership reserves or advances from AIMCO Properties, L.P., although AIMCO Properties, L.P. is not obligated to provide such advances . To the extent that capital improvements are completed, the Partnership’s distributable cash flow, if any, may be adversely affected at least in the short term.

The Partnership's assets are thought to be sufficient for any near term needs (exclusive of capital improvements and repayment of amounts accrued and payable to affiliates) of the Partnership. At June 30, 2009, the first, second and third mortgage indebtedness on Twin Lakes Apartments of approximately $6,148,000, $3,432,000 and $1,085,000, respectively, require monthly payments of principal and interest until December 1, 2015 when balloon payments of approximately $5,685,000, $3,025,000 and $963,000, respectively, are due. The Partnership has the option of extending the maturity date on both the first and second mortgages for one additional year, to December 1, 2016. With respect to the third mortgage, the maturity date will automatically be extended for one year, to December 1, 2016, if no event of default exists at its original maturity date of December 1, 2015.

The Partnership made no distributions during the six months ended June 30, 2009 or 2008.

Future cash distributions will depend on the levels of net cash generated from operations, the timing of the debt maturities, refinancings, and/or property sale. The Partnership's cash available for distribution is reviewed on a monthly basis. In light of the amounts accrued and payable to affiliates at June 30, 2009, it is unlikely that the Partnership will generate sufficient funds from operations, after capital improvement expenditures and repayment of amounts accrued and payable to affiliates, to permit distributions to its partners during 2009 or subsequent periods.

The Partnership Agreement provides for partners to receive distributions from the net proceeds of the sales of properties, the net proceeds from refinancings and net cash from operations as those terms are defined in the Partnership Agreement. The Partnership Agreement requires that the limited partners be furnished with a statement of Net Cash from Operations as such term is defined in the Partnership Agreement. Net Cash from Operations should not be considered an alternative to net (loss) income as an indicator of the Partnership's operating performance or to cash flows as a measure of liquidity. Below is a reconciliation of net cash provided by operating activities as disclosed in the statements of cash flows, included in “Item 1. Financial Statements”, to Net Cash from Operations as defined in the Partnership Agreement.

	For the Six months ended
	June 30,
	2009	2008
	(in thousands)

Net cash provided by operating activities	$ 118	$ 174
Payments on mortgage notes payable	(62)	(56)
Property improvements and replacements	(279)	(685)
Advances from affiliates	205	500
Net decrease in restricted escrows	106	48
Changes in reserves for net operating
liabilities	(7)	(93)

Net cash provided by (used in) operations	$ 81	$ (112)

Distributions made from reserves no longer considered necessary by the Corporate General Partner are considered net cash from operations for allocation purposes.

Other

In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 900,195 depository unit certificates (DUCs) in the Partnership representing 73.67% of the outstanding DUCs at June 30, 2009. A number of these DUCs were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional DUCs in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, DUC holders holding a majority of the DUCs are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Corporate General Partner. As a result of its ownership of 73.67% of the outstanding DUCs, AIMCO and its affiliates are in a position to control all voting decisions with respect to the Partnership. Although the Corporate General Partner owes fiduciary duties to the limited partners of the Partnership, the Corporate General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Corporate General Partner, as corporate general partner, to the Partnership and its limited partners may come into conflict with the duties of the Corporate General Partner to AIMCO as its sole stockholder.

Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.

Impairment of Long-Lived Assets

Investment property is recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of the property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnership’s estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.

Real property investment is subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of the Partnership’s investment property. These factors include, but are not limited to, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing. Any adverse changes in these factors could cause impairment of the Partnership’s asset.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less. The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease. The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.

ITEM 4T. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.

The Partnership’s management, with the participation of the principal executive officer and principal financial officer of the Corporate General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the Corporate General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

(b) Changes in Internal Control Over Financial Reporting.

There has been no change in the Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

		June 30,		December 31,
		2009		2008
		(Unaudited)		(Note)
Assets
Cash and cash equivalents	$ 132		$ 44
Receivables and deposits	94		94
Other assets	385		316
Restricted escrow	--		106
Investment property:
Land	1,700		1,700
Buildings and related personal property	13,865		13,658
	15,565		15,358
Less accumulated depreciation	(8,146)		(7,756)
	7,419		7,602
	$ 8,030		$ 8,162

Liabilities and Partners' Deficit
Liabilities
Accounts payable	$ 21		$ 110
Tenant security deposit liabilities	61		66
Accrued property taxes	138		--
Other liabilities	132		131
Due to affiliates (Note B)	1,828		1,646
Mortgage notes payable	10,665		10,727
	12,845		12,680

Partners' Deficit
General partners	(12)		(9)
Depositary unit certificate holders (2,440,000 units
authorized; 1,222,000 units issued and
outstanding)	(4,803)		(4,509)
	(4,815)		(4,518)
	$ 8,030		$ 8,162

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2009	2008	2009	2008
Revenues:
Rental income	$ 534	$ 566	$ 1,067	$ 1,149
Other income	95	65	181	126
Total revenues	629	631	1,248	1,275

Expenses:
Operating	261	302	526	604
General and administrative	22	30	45	54
Depreciation	200	157	390	306
Interest	225	217	446	429
Property taxes	69	63	138	125
Total expenses	777	769	1,545	1,518

Casualty loss (Note C)	--	--	--	(14)

Net loss	$ (148)	$ (138)	$ (297)	$ (257)

Net loss allocated to general
partners (1%)	$ (1)	$ (1)	$ (3)	$ (2)
Net loss allocated to depository
unit certificate holders (99%)	(147)	(137)	(294)	(255)
	$ (148)	$ (138)	$ (297)	$ (257)

Net loss per depository unit
certificate	$ (.12)	$ (.11)	$ (.24)	$ (.21)

			Depositary
	Depositary		Unit
	Unit	General	Certificate
	Certificates	Partners	Holders	Total

Original capital contributions	1,222,000	$ 2	$ 30,550	$ 30,552

Partners' deficit at
December 31, 2008	1,222,000	$ (9)	$(4,509)	$(4,518)

Net loss for the six months
ended June 30, 2009	--	(3)	(294)	(297)

Partners' deficit at
June 30, 2009	1,222,000	$ (12)	$ (4,803)	$ (4,815)

	Six Months Ended
	June 30,
	2009	2008
Cash flows from operating activities:
Net loss	$ (297)	$ (257)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation	390	306
Casualty loss	--	14
Amortization of loan costs	18	18
Change in accounts:
Receivables and deposits	--	13
Other assets	(87)	(51)
Accounts payable	(17)	(10)
Tenant security deposit liabilities	(5)	1
Accrued property taxes	138	125
Other liabilities	1	(28)
Due to affiliates	(23)	43
Net cash provided by operating activities	118	174

Cash flows from investing activities:
Net withdrawals from restricted escrow	106	48
Property improvements and replacements	(279)	(685)
Net cash used in investing activities	(173)	(637)

Cash flows from financing activities:
Payments on mortgage notes payable	(62)	(56)
Advances from affiliates	205	500
Net cash provided by financing activities	143	444

Net increase (decrease) in cash and cash equivalents	88	(19)

Cash and cash equivalents at beginning of period	44	105

Cash and cash equivalents at end of period	$ 132	$ 86

Supplemental disclosure of cash flow information:
Cash paid for interest	$ 401	$ 391
Supplemental disclosure of non-cash activity:
Property improvements and replacements in accounts
payable	$ 2	$ 170

	U.S. REALTY PARTNERS LIMITED PARTNERSHIP

	By: U.S. Realty I Corporation
	Corporate General Partner

Date: August 12, 2009	By: /s/Steven D. Cordes
	Steven D. Cordes
	Senior Vice President

Date: August 12, 2009	By: /s/Stephen B. Waters
	Stephen B. Waters
	Senior Director

Form 10-Q

U.S. REALTY PARTNERS LIMITED PARTNERSHIP

PART I – FINANCIAL INFORMATION

Certificates

Partners

Holders

Note A - Basis of Presentation

Note E – Contingencies