10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2012

OR

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

Commission file number: 0-16467

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

California	33-0098488
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

400 South El Camino Real, Suite 1100
San Mateo, California	94402-1708
(Address of principal executive offices)	(Zip Code)

(650) 343-9300

(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.    Yes  x    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  x    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 definition of “accelerated filer, large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

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

INDEX

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

PART I	FINANCIAL INFORMATION	Page No.
Item 1.	Consolidated Financial Statements of Rancon Realty Fund V (Unaudited):
	Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011		3
	Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011		4
	Consolidated Statement of Partners’ Equity for the nine months ended September 30, 2012		5
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011		6
	Notes to Consolidated Financial Statements		7-14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15-18
Item 3.	Qualitative and Quantitative Disclosures About Market Risk		18
Item 4.	Controls and Procedures		18
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings		19
Item 1A.	Risk Factors		19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3.	Defaults Upon Senior Securities		19
Item 4.	Mine Safety Disclosures		19
Item 5.	Other Information		19
Item 6.	Exhibits		19
SIGNATURES			20

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Balance Sheets

(in thousands, except units outstanding)

(Unaudited)

	September 30,			December 31,
	2012			2011
Assets
Investments in real estate:
Rental properties	$	77,827		$	78,666
Accumulated depreciation		(31,136	)		(29,775	)
Rental properties, net		46,691			48,891
Land held for development		1,494			1,494
Total investments in real estate		48,185			50,385
Cash and cash equivalents		4,990			5,773
Accounts receivable, net		126			125
Deferred costs, net of accumulated amortization of $2,115 and $1,938 as of September 30, 2012 and December 31, 2011, respectively		2,329			1,917
Prepaid expenses and other assets		3,010			2,540
Total assets	$	58,640		$	60,740
Liabilities and Partners’ Equity (Deficit)
Liabilities:
Notes payable	$	50,940		$	51,721
Accounts payable and other liabilities		1,134			723
Prepaid rent		212			76
Total liabilities		52,286			52,520
Commitments and contingent liabilities (Note 7)
Partners’ Equity (Deficit):
General Partner		(2,381	)		(2,170	)
Limited partners, 83,898 limited partnership units outstanding as of September 30, 2012 and December 31, 2011		8,735			10,390
Total partners’ equity		6,354			8,220
Total liabilities and partners’ equity	$	58,640		$	60,740

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

3

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Operations

(in thousands, except per unit amounts and units outstanding)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Operating revenue
Rental revenue and other	$	2,733		$	2,876		$	8,102		$	8,731
Tenant reimbursements		235			205			557			485
Total operating revenue		2,968			3,081			8,659			9,216
Operating expenses
Property operating expenses		1,943			1,898			4,869			4,918
Depreciation and amortization		1,064			1,247			3,278			3,641
General and administrative		198			225			692			708
Total operating expenses		3,205			3,370			8,839			9,267
Operating loss		(237	)		(289	)		(180	)		(51	)
Interest and other income		23			—			23			9
Interest expense (including amortization of loan fees)		(728	)		(742	)		(2,195	)		(2,237	)
Loss before gain on sale of property		(942	)		(1,031	)		(2,352	)		(2,279	)
Net gain on sale of property		486			—			486			—
Net loss	$	(456	)	$	(1,031	)	$	(1,866	)	$	(2,279	)
Basic and diluted net loss per limited partnership unit	$	(4.60	)	$	(11.06	)	$	(19.73	)	$	(24.45	)

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

4

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statement of Partners’ Equity

For the nine months ended September 30, 2012

(in thousands)

(Unaudited)

	General Partner			Limited Partners			Total
Balance (deficit) at December 31, 2011	$	(2,170	)	$	10,390		$	8,220
Net loss		(211	)		(1,655	)		(1,866	)
Balance (deficit) at September 30, 2012	$	(2,381	)	$	8,735		$	6,354

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

5

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2012			2011
Cash flows from operating activities:
Net loss	$	(1,866	)	$	(2,279	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain on sale of property		(486	)		—
Depreciation and amortization		3,278			3,641
Amortization of loan fees, included in interest expense		60			61
Changes in certain assets and liabilities:
Accounts receivable		(1	)		(9	)
Deferred costs		(872	)		(473	)
Prepaid expenses and other assets		(470	)		(418	)
Accounts payable and other liabilities		411			312
Prepaid rent		136			(13	)
Net cash provided by operating activities		190			822
Cash flows from investing activities:
Additions to real estate investments		(768	)		(832	)
Proceeds from sale of land		576			—
Net cash used in investing activities		(192	)		(832	)
Cash flows from financing activities:
Notes payable principal payments		(781	)		(739	)
Net cash used in financing activities		(781	)		(739	)
Net decrease in cash and cash equivalents		(783	)		(749	)
Cash and cash equivalents at beginning of period		5,773			6,335
Cash and cash equivalents at end of period	$	4,990		$	5,586
Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,135		$	2,177
Supplemental disclosure of non-cash operating activities:
Write-off of fully depreciated rental property assets	$	1,517		$	2,549
Write-off of fully amortized deferred costs	$	283		$	784

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

6

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. ORGANIZATION

Rancon Realty Fund V, a California Limited Partnership (“the Partnership”), was organized in accordance with the provisions of the California Revised Limited Partnership Act for the purpose of acquiring, developing, operating and disposing of real property. The Partnership was organized in 1985 and reached final funding in February 1989. The general partners of the Partnership are Daniel L. Stephenson and Rancon Financial Corporation (“RFC”), hereinafter collectively referred to as the General Partner. RFC is wholly owned by Daniel L. Stephenson. The Partnership has no employees.

As of September 30, 2012, there were 83,898 Units (“Units”) outstanding.

The Partnership commenced on May 8, 1985 and shall continue until December 31, 2015, unless previously terminated in accordance with the provisions of the Partnership Agreement.

Allocation of Net Income and Net Loss

Allocation of net income and net loss is made pursuant to the terms of the Partnership Agreement. Generally, net income and net losses from operations are allocated 90% to the limited partners and 10% to the General Partner; however, if the limited partners or the General Partner would have, as a result of an allocation of cumulative net losses, a deficit balance in their capital accounts, then net losses shall not be allocated to the limited partners or General Partner, as the case may be, so as to create a capital account deficit, but such losses shall be allocated to the limited partners or General Partner with positive capital account balances until the positive capital account balances of such other partners are reduced to zero. However, if deficits are the result of cumulative distributions in excess of earnings, losses will continue to be allocated to the General Partner. Capital accounts shall be determined after taking into account all other allocations and distributions for the fiscal year.

Net income other than net income from operations shall be allocated as follows: (i) first, to the partners who have a deficit balance in their capital account, provided that, in no event shall the General Partner be allocated more than 5% of the net income other than net income from operations until the earlier of sale or disposition of substantially all of the assets or the distribution of cash (other than cash from operations) equal to the Unitholder’s original invested capital; (ii) second, to the limited partners in proportion to and to the extent of the amounts required to increase their capital accounts to an amount equal to the sum of the adjusted invested capital of their units plus an additional cumulative non-compounded 12% return per annum (plus additional amounts depending on the date Units were purchased); (iii) third, to the partners in the minimum amount required to first equalize their capital accounts in proportion to the number of units owned, and then, to bring the sum of the balances of the capital accounts of the limited partners and the General Partner into the ratio of 4 to 1; and (iv) the balance, if any, 80% to the limited partners and 20% to the General Partner. In no event shall the General Partner be allocated less than 1% of the net income other than net income from operations for any period.

Net losses other than net losses from operations are allocated 99% to the limited partners and 1% to the General Partner. Such net losses will be allocated among limited partners as necessary to equalize their capital accounts in proportion to their Units, and thereafter will be allocated in proportion to their Units.

The terms of the Partnership Agreement call for the General Partner to restore any deficits that may exist in its capital account after allocation of gains and losses from the sale of the final property owned by the Partnership, but prior to any liquidating distributions being made to the partners.

Distribution of Cash

The Partnership shall make annual or more frequent distributions of substantially all cash available to be distributed to partners as determined by the General Partner, subject to the following: (i) distributions may be restricted or suspended for limited periods when the General Partner determines in their absolute discretion that it is in the best interests of the Partnership; and (ii) all distributions are subject to the payment of Partnership expenses and maintenance of reasonable reserves for debt service, alterations and improvements, maintenance, replacement of furniture and fixtures, working capital and contingent liabilities.

All excess cash from operations shall be distributed 90% to the limited partners and 10 % to the General Partner.

All cash from sales or refinancing and any other cash determined by the General Partner to be available for distribution other than cash from operations shall be distributed in the following order of priority: (i) first, 1% to the General Partner and 99% to the limited partners in proportion to the outstanding positive amounts of Adjusted Invested Capital (as defined in the Partnership Agreement) for each of their Units until Adjusted Invested Capital (as defined in the Partnership Agreement) for each Unit is reduced to zero; (ii) second, 1% to the General Partner and 99% to the limited partners until each of the limited partners has received an amount which, including cash from operations previously distributed to the limited partners equals a 12% annual cumulative non-compounded return on the Adjusted Invested Capital (as defined in the Partnership Agreement) of their Units plus such limited partners’ Limited Incremental Preferential Return (as defined in the Partnership Agreement), if any, with respect to each such Unit, on the Adjusted Investment Capital (as defined in the Partnership Agreement) of such Units for the

7

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)

twelve month period following the date upon which such Unit was purchased from the Partnership and following the admission of such limited partner (iii) third, 99% to the General Partner and 1% to the limited partners, until the General Partner has received an amount equal to 20% of all distributions of cash from sales or refinancing: (iv) the balance, 80% to the limited partners, pro rata in proportion to the number of Units held by each, and 20% to the General Partner.

Note 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements present the consolidated financial position of the Partnership and its subsidiaries as of September 30, 2012 and December 31, 2011, and the consolidated results of operations of the Partnership and its subsidiaries for the three and nine months ended September 30, 2012 and 2011, the consolidated statement of partners’ equity for the nine months ended September 30, 2012, and cash flows of the Partnership for the nine months ended September 30, 2012 and 2011. All significant intercompany transactions, receivables and payables have been eliminated in consolidation.

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.

In the opinion of the General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated financial position of the Partnership as of September 30, 2012 and December 31, 2011, and the related consolidated statements of operations for the three and nine months ended September 30, 2012 and 2011, the consolidated statement of partners’ equity for the nine months ended September 30, 2012 and the consolidated statement of cash flows for the nine months ended September 30, 2012 and 2011.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) 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 results of operations during the reporting period. Actual results could differ from those estimates.

Rental Properties

Rental properties, including the related land, are stated at depreciated cost unless events or circumstances indicate that such amounts cannot be recovered, in which case, the carrying value of the property is reduced to its estimated fair value to the extent the carrying value is greater than the undiscounted future cash flows excluding interest. Estimated fair value is computed using estimated sales price, as determined by prevailing market values for comparable properties and/or the use of capitalization rates applied to annualized net operating income based upon the age, construction and use of the building. Due to uncertainties inherent in the valuation process and in the economy, it is reasonably possible that the actual results of operating and disposing of the Partnership’s properties could be materially different than current expectations. Rental properties are reviewed for impairment whenever there is a triggering event and at least annually.

Depreciation is provided using the straight-line method over the useful lives of the respective assets. The useful lives are as follows:

Building and improvements	5 to 40 years
Tenant improvements	Lesser of the initial term of the related lease, or the estimated useful life of the improvements
Furniture and equipment	5 to 7 years

Land Held for Development

Land held for development is stated at cost unless events or circumstances indicate that cost cannot be recovered, in which case, the carrying value is reduced to estimated fair value. Estimated fair value is computed using estimated sales price, based upon market values for comparable properties and considers the cost to complete and the estimated fair value of the completed project. Land held for development is reviewed for impairment whenever there is a triggering event and at least annually.

The pre-development costs for a new project are capitalized and include survey fees and consulting fees. Interest, property taxes and insurance related to the new project are capitalized during periods when activities that are necessary to get the project ready for its intended use are in progress. The capitalization ends when the construction is substantially completed and the project is ready for its intended use.

8

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)

Fair Value of Investments

The guidance related to accounting for fair value measurements defines fair value and establishes a framework for measuring fair value in order to meet disclosure requirements for fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This hierarchy describes three levels of inputs that may be used to measure fair value.

Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1. Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation using unobservable inputs. This category generally includes long-term derivative contracts, real estate and unconsolidated joint ventures.

Cash and Cash Equivalents

The Partnership considers short-term investments with an original maturity of ninety days or less at the time of investment to be cash and cash equivalents.

Deferred Costs

Deferred loan fees are capitalized and amortized on a straight-line basis, which approximates the effective interest method, over the life of the related loan. Deferred lease commissions are capitalized and amortized on a straight-line basis over the initial fixed term of the related lease agreements.

Revenues

The Partnership recognizes rental revenue on a straight-line basis over the term of the leases. Actual amounts collected could be lower than the amounts recognized on a straight-line basis if specific tenants are unable to pay rent that the Partnership has previously recognized as revenue. For tenants with percentage rent, the Partnership recognizes revenue when the tenants’ specified sales targets have been met. The reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as revenue on an estimated basis during the current year. The Partnership develops a revised estimate of the amount recoverable from tenants based on updated expenses for the year and amounts to be recovered and records adjustments to income in the current year financial statement accounts. Any final changes in estimate based on lease-by-lease reconciliations and tenant negotiations and collection are recorded in the period those negotiations are settled.

Net (Loss) Income Per Limited Partnership Unit

Net (loss) income per Unit is calculated using the weighted average number of Units outstanding during the period and the limited partners’ allocable share of the net (loss) income.

9

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)

Net income per Unit is as follows (in thousands, except for weighted average units and per unit amounts):

	For the three months ended												For the nine months ended
	September 30, 2012						September 30, 2011						September 30, 2012						September 30, 2011
	General Partner			Limited Partners			General Partner			Limited Partners			General Partner			Limited Partners			General Partner			Limited Partners
(Loss) Income allocation:
Net loss	$	(70	)	$	(386	)	$	(103	)	$	(928	)	$	(211	)	$	(1,655	)	$	(228	)	$	(2,051	)
Weighted average number of limited partnership units outstanding during each period					83,898						83,898						83,898						83,898
Basic and diluted loss per limited partnership unit				$	(4.60	)				$	(11.06	)				$	(19.73	)				$	(24.45	)

The calculation of net (loss) income per Unit assumes that the income (loss) otherwise allocable to the limited partners is first used to fund distributions to the General Partner. As discussed in Note 1, because distributions of available cash have exceeded cumulative earnings and the General Partner has a deficit, the General Partner would restore that deficit in liquidation.

Income Taxes

No provision for income taxes is included in the accompanying consolidated financial statements as the Partnership’s results of operations are allocated to the partners for inclusion in their respective income tax returns. Net (loss) income and partners’ equity (deficit) for financial reporting purposes will differ from the Partnership’s income tax return because of different accounting methods used for certain items, including depreciation expense, provisions for impairment of investments in real estate, capitalization of development period interest and property taxes and rental income and loss recognition.

Concentration Risk

No tenant represented more than 10% of rental revenue for the nine months ended September 30, 2012. One tenant, operating within the aerospace industry, represented 18% of rental revenue for the nine months ended September 30, 2011.

Reference to 2011 audited consolidated financial statements

These unaudited consolidated financial statements should be read in conjunction with the notes to audited consolidated financial statements included in the Partnership’s December 31, 2011 annual report on Form 10-K.

10

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)

Note 3. INVESTMENTS IN REAL ESTATE

Rental properties consist of the following (in thousands):

	September 30,			December 31,
	2012			2011
Land	$	6,854		$	6,944
Land and improvements		1,536			1,536
Buildings		56,253			56,253
Building and tenant improvements		13,184			13,933
		77,827			78,666
Less: accumulated depreciation		(31,136	)		(29,775	)
Total rental properties, net	$	46,691		$	48,891

As of September 30, 2012, the Partnership’s rental properties included nine office properties and four retail properties (see detailed listing of properties in Item 2. Properties).

In September 2012, the Partnership sold, in an all cash transaction, approximately 21,000 square feet of land adjacent to Hospitality Lane to the San Bernardino County Transportation Commission (SANBAG) for construction of an express bus service (SBX). The bus service will run along Hospitality Lane thru the Tri-City project. Land with a basis of $90,000 was sold for total consideration of $585,000. Costs related to the sale included $9,000 in sale fees. A gain on the sale of property of $486,000 was allocated to the affected properties on a prorata basis. In conjunction with the purchase of the land, SANBAG also received a temporary easement for approximately 27,000 square feet of land for six months starting in August 2012 to be used for construction staging with consideration of $3,500 per month.

Note 4. LAND HELD FOR DEVELOPMENT

Land held for development consists of the following (in thousands):

	September 30,		December 31,
	2012		2011
East Lake Restaurant Pad (includes approximately 0.3 acres of land with a cost basis of $166 as of September 30, 2012 and December 31, 2011)	$	451	$	451
Land held for development (approximately 4.1 acres of land as of September 30, 2012 and December 31, 2011)		1,043		1,043
Total land held for development	$	1,494	$	1,494

The book basis of the land held for development is shown net of an impairment provision of $820,000. The original cost of the land was $1,500,000 and subsequent improvements total $363,000.

11

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)

Note 5. NOTES PAYABLE

Notes payable consists of the following (in thousands):

	September 30,		December 31,
	2012		2011
Note payable #1 collateralized by first deeds of trust on seven properties. The note has a fixed interest rate of 5.46%, a maturity date of January 1, 2016 with a 30-year amortization requiring monthly principal and interest payments of $151.	$	23,913	$	24,289
Note payable #2 collateralized by first deeds of trust on four properties. The note has a fixed interest rate of 5.61%, a maturity date of May 1, 2016 with a 30-year amortization requiring monthly principal and interest payments of $173.		27,027		27,432
Total notes payable	$	50,940	$	51,721

Note payable #1 is collateralized by Bally’s Health Club, Carnegie Business Center II, Lakeside Tower, Outback Steakhouse, Pat & Oscars, Palm Court Retail III and One Carnegie Plaza and Note payable #2 is collateralized by Brier Corporate Center, One Parkside, Two Parkside and Two Carnegie Plaza.

The annual maturities on the Partnership’s notes payable as of September 30, 2012, are as follows (in thousands):

2012	$	178
2013		1,103
2014		1,165
2015		1,231
2016		47,263
Total	$	50,940

12

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)

Note 6. RELATED PARTY TRANSACTIONS

Glenborough LLC earns fees from the Partnership as prescribed by the Property Management and Services Agreement (the “Agreement”). The Agreement is in effect until the earlier of December 31, 2015 or the completion of sale of all real property assets of the Partnership. The terms and conditions of the Agreement are to perform services for the following fees:

	Nine Months Ended
	September 30,		September 30,
	2012		2011
(i) property management fees of 2.5% of gross rental revenue which were included in property operating expenses in the accompanying consolidated statements of operations	$	229,000	$	272,000
(ii) construction services fees which were capitalized and included in rental properties on the accompanying consolidated balance sheets		32,000		49,000
(iii) an asset and Partnership management fee which was included in general and administrative expenses in the accompanying consolidated statements of operations		187,000		187,000
(iv) leasing services fees which were included in deferred costs on the accompanying consolidated balance sheets		330,000		159,000
(v) a sales fee of 1% for all properties, which were included in net gain on sale of property		6,000		—
(vi) a financing services fee of 1% of the gross loan amount which would be included in deferred costs on the accompanying consolidated balance sheets		—		—
(viii) a development fee equal to 5% of the hard costs of the development project, excluding the cost of the land, which would be included in construction in progress and/or rental properties on the accompanying consolidated balance sheets, the development fee and the general contractor’s fee shall not exceed 11.5%, in the aggregate, of the hard costs of the development fee project		—		—
(viii) data processing fees which were included in property operating expenses in the accompanying consolidated statements of operations		90,000		86,000
(ix) engineering fees which were included in property operating expenses in the accompanying consolidated statements of operations		29,000		28,000

On October 1, 2010, Glenborough Holdings, LLC (Glenborough Holdings) transferred all of its interest in the Partnership to Glenborough Investors, LLC, which currently holds those units in its subsidiary, Glenborough Property Partners, LLC (“Glenborough Property Partners”). As part of the same transaction, Glenborough Holdings transferred its ownership of Glenborough LLC to Glenborough Investors, LLC, which currently holds the ownership interests in that entity in its subsidiary, Glenborough Service, LP, the parent of Glenborough Property Partners. As of September 30, 2012, Glenborough Property Partners, an affiliate of Glenborough LLC, held 11,565 or 13.78% of the Units.

13

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Notes to Consolidated Financial Statements

(Unaudited)

Note 7. COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

The Partnership follows a policy of monitoring its properties for the presence of hazardous or toxic substances. The Partnership is not aware of any environmental liability with respect to the properties that would have a material adverse effect on the Partnership’s business, assets or results of operations. There can be no assurance that such a material environmental liability does not exist. The existence of any such material environmental liability could have an adverse effect on the Partnership’s consolidated results of operations and cash flows.

General Uninsured Losses

The Partnership carries property and liability insurance with respect to the properties. This coverage has policy specification and insured limits customarily carried for similar properties. However, certain types of losses (such as from earthquakes and floods) may be either uninsurable or not economically insurable. Should the properties sustain damage as a result of an earthquake or flood, the Partnership may incur losses due to insurance deductibles, co-payments on insured losses or uninsured losses. Additionally, the Partnership has elected to obtain insurance coverage for “certified acts of terrorism” as defined in the Terrorism Risk Insurance Act of 2002; however, our policies of insurance may not provide coverage for other acts of terrorism. Any losses from such other acts of terrorism might be uninsured. Should an uninsured loss occur, the Partnership could lose some or all of its capital investment, cash flow and anticipated profits related to the properties.

Other Matters

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the amount of $102,000 at September 30, 2012 for sales that occurred in previous years. The subordinated real estate commissions are payable only after the limited partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital. Since the circumstances under which these commissions would be payable are not currently met, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes payable.

14

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

The following discussion should be read in conjunction with our December 31, 2011 audited consolidated financial statements and the notes thereto included in our latest Annual Report on Form 10-K.

Background

In June 1985, our initial acquisition of property consisted of approximately 76.21 acres of partially developed and unimproved land located in San Bernardino, California. The property is part of a master-planned development of 153 acres known as Tri-City Corporate Centre (“Tri-City”) and is zoned for mixed commercial, office, hotel, transportation-related, and light industrial uses and all of the parcels thereof are separately owned by us and Rancon Realty Fund IV (“Fund IV”), a partnership sponsored by the General Partner.

Overview

Tri-City Properties

As of September 30, 2012, our rental properties consist of nine office and four retail properties, aggregating approximately 752,000 rentable square feet, of which 709,000 square feet are office space, and 43,000 square feet are retail space.

Property	Type	Square Footage
One Carnegie Plaza	Two two-story office buildings		107,276
Two Carnegie Plaza	Two-story office building		68,957
Carnegie Business Center II	Two two-story office buildings		50,867
Lakeside Tower	Six-story office building		112,716
One Parkside	Four-story office building		70,068
Bally’s Health Club (Bally’s)	Health club facility		25,000
Outback Steakhouse (Outback)	Restaurant		6,500
Palm Court Retail III	Retail		6,004
Two Parkside	Three-story office building		82,039
Pat & Oscars	Restaurant		5,100
Three Carnegie	Two-story office building		83,698
Brier Corporate Center	Three-story office building		104,501
Three Parkside	Two-story office building		29,076
Total			751,802

As of September 30, 2012, the weighted average occupancy of the thirteen properties was 69%.

Land

As of September 30, 2012, the Partnership owned approximately 4.4 acres of land. Although the current market environment is not conducive to office development, the market will continue to be monitored with the intent to position the land for future development.

Results of Operations

Comparison of the three and nine months ended September 30, 2012 to the three and nine months ended September 30, 2011

Revenue

Rental revenue and other decreased by $143,000, or 5%, and $629,000, or 7%, for the three and nine months ended September 30, 2012 compared to the three and nine months ended September 30, 2011, primarily due to a decline in occupancy at Brier Corporate Center. Occupancy for the nine months ended September 30, 2012 was 45%, compared to occupancy for the nine months ended September 30, 2011 of 84%. The downsize of a tenant at Brier Corporate Center on December 31, 2011 resulted in a reduction in rental revenue of $245,000 and $733,000 for the three and nine months ended September 30, 2012 compared to the three and nine months ended September 30, 2011. This reduction in rental revenue was partially offset by less significant increases in occupancy and rental rates at other properties.

Tenant reimbursements increased $30,000, or 15%, and $72,000, or 15%, for the three and nine months ended September 30, 2012 compared to the three and nine months ended September 30, 2011. The increase was primarily due to higher overtime HVAC billings and increased recovery billings resulting from higher budgeted expenses in 2012 compared to 2011, and fewer new base years.

15

In September 2012, the Partnership sold, in an all cash transaction, approximately 21,000 square feet of land adjacent to Hospitality Lane to the San Bernardino County Transportation Commission (SANBAG) for construction of an express bus service (SBX). The bus service will run along Hospitality Lane thru the Tri-City project. Total consideration for the land was $585,000. Costs related to the sale included $9,000 in fees. A gain on the sale of property of $486,000 was allocated to the affected properties on a prorata basis. In conjunction with the purchase of the land, SANBAG also received a temporary easement for approximately 27,000 square feet of land for six months starting in August 2012 to be used for construction staging with consideration of $3,500 per month.

Other income was $23,000 in the three and nine months ended September 30, 2012 compared to $9,000 of other income for the nine month period ended September 30, 2011. This other income was comprised of $23,000 in cost reimbursements to offset some of the Partnership’s expenses associated with the SBX transaction.

Expenses

Property operating expenses increased $45,000, or 2%, and decreased $49,000, or 1%, for the three and nine months ended September 30, 2012 compared to the three and nine months ended September 30, 2011. The increase for the three months ended September 30, 2012 compared to the same period ended September 30, 2011 was due to increases in utility costs. The decrease for the nine months ended September 30, 2012 compared to the same period ended September 30, 2011 was due to lower overall repairs and maintenance, lower utility costs early in the year, and prior year property tax refunds resulting from tax appeals.

Depreciation and amortization decreased $183,000, or 15%, and $363,000, or 10%, for the three and nine months ended September 30, 2012, compared to the three and nine months ended September 30, 2011. The decrease was primarily due to assets being written off as of December 31, 2011, most notably at Brier Corporate Center.

General and administrative expenses decreased by $27,000, or 12%, and $16,000, or 2%, for the three and nine months ended September 30, 2012, compared to the three and nine months ended September 30, 2011. The decrease is primarily due to lower legal fees paid in conjunction with the SBX project.

Interest expense decreased by $14,000, or 2%, and $42,000, or 2% for the three and nine months ended September 30, 2012 compared to the three and nine months ended September 30, 2011. The decrease is due to lower principle balances.

Liquidity and Capital Resources

As of September 30, 2012, we had cash and cash equivalents of $4,990,000.

As of September 30, 2012, our liabilities include two notes payable with total borrowing of $50,940,000. These notes are collateralized by properties with an aggregate net carrying value of approximately $39,290,000. Note payable #1 matures in January 2016, requires monthly principal and interest payments of $151,000 and bears interest at a fixed rate of 5.46% and is collateralized by Bally’s Health Club, Carnegie Business Center II, Lakeside Tower, Outback Steakhouse, Pat & Oscars, Palm Court Retail III and One Carnegie Plaza. Note payable #2 matures in May 2016, requires monthly principal and interest payments of $173,000 and bears interest at a fixed rate of 5.61% and is collateralized by Brier Corporate Center, One Parkside, Two Parkside and Two Carnegie Plaza.

We are contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $102,000 at September 30, 2011 for sales that transpired in previous years. The subordinated real estate commissions are payable only after the limited partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital. Since the conditions under which these commissions would be payable are not currently met, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes payable.

Cash flows

For the nine months ended September 30, 2012, cash provided by operating activities was $190,000, as compared to cash provided by operating activities of $822,000 for the same period in 2011. This decrease was primarily due to a decrease in revenues combined with changes in certain assets and liabilities, notably deferred costs. For the nine months ended September 30, 2012, cash used in investing activities was $192,000, as compared to cash used in investing activities of $832,000 for the same period in 2011, primarily due to the proceeds from the sale of land to SANBAG for the SBX bus line. For the nine months ended September 30, 2012, cash used for financing activities was $781,000, as compared to cash used for financing activities of $739,000 for the same period in 2011, related to the principal payments on notes payable.

Our expectation is that cash and cash equivalents as of September 30, 2012, together with cash from operations, sales and financing, will be adequate to meet our operating requirements on a short-term basis and for the reasonably foreseeable future. There can be no assurance that our results of operations will not fluctuate in the future and at times affect our ability to meet operating requirements.

Operationally, our primary source of funds consists of cash provided by rental activities. In September 2012, the Partnership sold approximately 21,000 square feet of land adjacent to Hospitality Lane to the San Bernardino County Transportation Commission (SANBAG) for construction of an express bus service (SBX). The bus service will run along Hospitality Lane thru the Tri-City project. Net cash provided to the Partnership from this transaction was $576,000, including a gain on the sale of land of $486,000. Cash generated from property sales is generally added to our cash reserves, pending use in leasing costs at the properties or distribution to the partners.

16

Contractual Obligations

As of September 30, 2012, our contractual obligations are as follows (in thousands):

	Less than
	1 year		1 to 3 years		3 to 5 years		Total
Collateralized mortgage loans	$	1,092	$	2,375	$	47,473	$	50,940
Interest on indebtedness		2,794		5,399		1,123		9,316
Total	$	3,886	$	7,774	$	48,596	$	60,256

We are unaware of any demands, commitments, events or uncertainties, which might affect capital resources in any material respect. In addition, we are not subject to any covenants pursuant to our collateralized debt that would constrain our ability to obtain additional capital.

Critical Accounting Policies

In the preparation of financial statements, we utilize certain critical accounting policies. There has been no change to our significant accounting policies included in the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011.

Inflation

Leases at the office properties typically provide for rent adjustment and pass-through of certain operating expenses during the term of the lease. We anticipate that these provisions may permit us to increase rental rates or other charges to tenants in response to rising prices and therefore, serve to reduce our exposure to the adverse effects of inflation.

Forward Looking Statements; Factors That May Affect Operating Results

This Report on Form 10-Q contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expectations, hopes, intentions, beliefs and strategies regarding the future. These forward looking statements include statements relating to:

• Our belief that cash and cash generated by operations, sales and financing will be sufficient to meet our operating requirements in both the short and the long-term;

• Our expectation that changes in market interest rates will not have a material impact on the performance or the fair value of our portfolio;

• Our belief that certain claims and lawsuits which have arisen against us in the normal course of business will not have a material adverse effect on our financial position, cash flow or results of operations;

• Our belief that properties are competitive within our market;

• Our expectation to achieve certain occupancy levels;

• Our estimation of market strength;

• Our knowledge of any material environmental matters; and

• Our expectation that lease provisions may permit us to increase rental rates or other charges to tenants in response to rising prices, and therefore serve to reduce exposure to the adverse effects of inflation.

All forward-looking statements included in this document are based on information available to us on the date hereof. Because these forward looking statements involve risk and uncertainty, there are important factors that could cause our actual results to differ materially from those stated or implied in the forward-looking statements. Those important factors include:

• market fluctuations in rental rates and occupancy;

• reduced demand for rental space;

• availability and creditworthiness of prospective tenants;

17

• defaults or non-renewal of leases by customers;

• differing interpretations of lease provisions regarding recovery of expenses;

• increased operating costs;

• changes in interest rates and availability of financing that may render the sale or financing of a property difficult or unattractive;

• failure to obtain necessary outside financing;

• risks and uncertainties affecting property development and construction (including construction delays, cost overruns, our inability to obtain necessary permits and public opposition to these activities); and

• the unpredictability of both the frequency and final outcome of litigation.

The forward-looking statements in this Quarterly Report on Form 10-Q are subject to additional risks and uncertainties further discussed under “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011. We assume no obligation to update or supplement any forward looking-statement.

Risks of Litigation

Certain claims and lawsuits have arisen against us in our normal course of business. We believe that such claims and lawsuits will not have a material adverse effect on our financial position, cash flow or results of operations.

Item 3. Qualitative and Quantitative Disclosures About Market Risk

Interest Rates

We are exposed to changes in interest rates obtainable on our borrowings. Our expectation is that changes in market interest rates will not have a material impact on the performance or fair value of our portfolio.

For debt obligations, the table below presents required principal payments and interest rates by expected maturity dates.

	Expected Maturity Date
	2012		2013		2014		2015		2016		Total
	(in thousands)
Collateralized fixed rate debt at 5.46%	$	85	$	530	$	560	$	591	$	22,147	$	23,913
Collateralized fixed rate debt at 5.61%	$	93	$	573	$	605	$	640	$	25,116	$	27,027

As of September 30, 2012, we had cash and cash equivalents of $4,990,000.

Item 4. Controls and Procedures

The principal executive officer and principal financial officer of the General Partner have evaluated the disclosure controls and procedures of the Partnership as of the end of the period covered by this quarterly report. As used herein, the term “disclosure controls and procedures” has the meaning given to the term by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and includes the controls and other procedures of the Partnership that are designed to ensure that information required to be disclosed by the Partnership in the reports that it files with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based upon his evaluation, the principal executive officer and principal financial officer of the General Partner has concluded that the Partnership’s disclosure controls and procedures were effective such that the information required to be disclosed by the Partnership in this quarterly report is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms applicable to the preparation of this report and is accumulated and communicated to the General Partner’s management, including the General Partner’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

There have not been any changes in the Partnership’s internal control over financial reporting that occurred during the Partnership’s fiscal quarter ended September 30, 2012 that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

18

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Certain claims and lawsuits have arisen against the Partnership in its normal course of business. The Partnership believes that such claims and lawsuits will not have a material adverse effect on the Partnership’s financial position, cash flow or results of operations.

Item 1A. Risk Factors

There are no material changes to any of the risk factors as previously disclosed in Item 1A. to Part I of the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6.	Exhibits
	31	Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of the General Partner Pursuant to Rule 13a-14(a) of the Exchange Act.
	32	Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of the General Partner Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as required by Section 906, is not to be deemed “filed” with the Commission or subject to the rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of said Act.
	101.INS	XBRL Instance Document.
	101.SCH	XBRL Taxonomy Extension Schema Document.
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
	101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

19

SIGNATURES

Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		RANCON REALTY FUND V, a California limited partnership
		By:	Rancon Financial Corporation a California corporation, its General Partner
Date:	November 14, 2012	By:	/s/ Daniel L. Stephenson
			Daniel L. Stephenson, President
Date:	November 14, 2012	By:	/s/ Daniel L. Stephenson
			Daniel L. Stephenson, General Partner

20

EXHIBIT INDEX

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

Exhibit 31	Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of the General Partner Pursuant to Rule 13a-14(a) of the Exchange Act.
Exhibit 32	Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of the General Partner Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as required by Section 906, is not to be deemed “filed” with the Commission or subject to the rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of said Act.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

21

EX-31

EXHIBIT 31

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

I, DANIEL L. STEPHENSON, certify that:

1. I have reviewed this quarterly report on Form 10-Q of RANCON REALTY FUND V;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and I have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s independent registered public accounting firm and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2012

/s/ Daniel L. Stephenson

Daniel L. Stephenson, General Partner

Rancon Realty Fund V

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the periodic report of Rancon Realty Fund V (“the Partnership”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Daniel L. Stephenson, General Partner of the Partnership, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that I perform the functions of chief executive officer and chief financial officer of the Partnership, and that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership at the dates and for the periods indicated.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form with the electronic version of this written statement required by Section 906, has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Date: November 14, 2012	/s/ Daniel L. Stephenson
	Daniel L. Stephenson, General Partner
	Rancon Realty Fund V

XML

Land Held for Development (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Land Held for Development
Land held for development	$ 1,494	$ 1,494
East Lake Restaurant Pad [Member]
Land Held for Development
Land held for development	451	451
Land Held for Development [Member]
Land Held for Development
Land held for development	$ 1,043	$ 1,043

XML

Investments in Real Estate

9 Months Ended

Sep. 30, 2012

Investments In Real Estate [Abstract]

INVESTMENTS IN REAL ESTATE

Note 3. INVESTMENTS IN REAL ESTATE

Rental properties consist of the following (in thousands):

	September 30,			December 31,
	2012			2011
Land	$	6,854		$	6,944
Land and improvements		1,536			1,536
Buildings		56,253			56,253
Building and tenant improvements		13,184			13,933
		77,827			78,666
Less: accumulated depreciation		(31,136	)		(29,775	)
Total rental properties, net	$	46,691		$	48,891

As of September 30, 2012, the Partnership’s rental properties included nine office properties and four retail properties (see detailed listing of properties in Item 2. Properties).

In September 2012, the Partnership sold, in an all cash transaction, approximately 21,000 square feet of land adjacent to Hospitality Lane to the San Bernardino County Transportation Commission (SANBAG) for construction of an express bus service (SBX). The bus service will run along Hospitality Lane thru the Tri-City project. Land with a basis of $90,000 was sold for total consideration of $585,000. Costs related to the sale included $9,000 in sale fees. A gain on the sale of property of $486,000 was allocated to the affected properties on a prorata basis. In conjunction with the purchase of the land, SANBAG also received a temporary easement for approximately 27,000 square feet of land for six months starting in August 2012 to be used for construction staging with consideration of $3,500 per month.

XML

Notes Payable (Details Textual) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 Properties
Notes Payable 1 [Member]
Notes Payable (Textual) [Abstract]
Number of properties used in trust of first deeds	7
Fixed interest rate	5.46%
Maturity date	Jan. 01, 2016
Amortization period	30 years
Monthly principal and interest payments	$ 151
Notes Payable 2 [Member]
Notes Payable (Textual) [Abstract]
Number of properties used in trust of first deeds	4
Fixed interest rate	5.61%
Maturity date	May 01, 2016
Amortization period	30 years
Monthly principal and interest payments	$ 173

XML

Notes Payable (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Annual maturities on the Partnership's notes payable
2012	$ 178
2013	1,103
2014	1,165
2015	1,231
2016	47,263
Total	$ 50,940

XML

Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Partnership continues to engage Glenborough LLC to perform services
Property management fees of 2.5% of gross rental revenue which were included in property operating expenses in the accompanying consolidated statements of operations	$ 229,000	$ 272,000
Construction services fees which were capitalized and included in rental properties on the accompanying consolidated balance sheets	32,000	49,000
An asset and Partnership management fee which was included in general and administrative expenses in the accompanying consolidated statements of operations	187,000	187,000
Leasing services fees which were included in the deferred costs on the accompanying consolidated balance sheets	330,000	159,000
A sales fee of 1% for all properties, which were included in net gain on sale of property	6,000
A financing services fee of 1% of the gross loan amount which would be included in the deferred costs on the accompanying consolidated balance sheets
A development fee equal to 5% of the hard costs of the development project, excluding the cost of the land, which would be included in construction in progress and/or rental properties on the accompanying consolidated balance sheets, the development fee and the general contractor's fee shall not exceed 11.5%, in the aggregate, of the hard costs of the development fee project
Data processing fees which were included in property operating expenses in the accompanying consolidated statements of operations	90,000	86,000
Engineering fees which were included in property operating expenses in the accompanying consolidated statements of operations	$ 29,000	$ 28,000

XML

Related Party Transactions (Details Textual)	9 Months Ended
	Sep. 30, 2012
Related Party Transactions (Textual) [Abstract]
Property management fees of gross rental revenue	2.50%
Sales fee for all properties	1.00%
Financing service fee for the gross loan amount	1.00%
Development fee of hard costs of development project	5.00%
Maximum limit for development fee and general contractors fee based on hard costs	11.50%
Glenborough Property Partners [Member]
Related Party Transaction [Line Items]
Units of partnership interest amount	11,565
Ownership percentage of noncontrolling interest	13.78%

XML

Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Significant Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

Note 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements present the consolidated financial position of the Partnership and its subsidiaries as of September 30, 2012 and December 31, 2011, and the consolidated results of operations of the Partnership and its subsidiaries for the three and nine months ended September 30, 2012 and 2011, the consolidated statement of partners’ equity for the nine months ended September 30, 2012, and cash flows of the Partnership for the nine months ended September 30, 2012 and 2011. All significant intercompany transactions, receivables and payables have been eliminated in consolidation.

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.

In the opinion of the General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated financial position of the Partnership as of September 30, 2012 and December 31, 2011, and the related consolidated statements of operations for the three and nine months ended September 30, 2012 and 2011, the consolidated statement of partners’ equity for the nine months ended September 30, 2012 and the consolidated statement of cash flows for the nine months ended September 30, 2012 and 2011.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) 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 results of operations during the reporting period. Actual results could differ from those estimates.

Rental Properties

Rental properties, including the related land, are stated at depreciated cost unless events or circumstances indicate that such amounts cannot be recovered, in which case, the carrying value of the property is reduced to its estimated fair value to the extent the carrying value is greater than the undiscounted future cash flows excluding interest. Estimated fair value is computed using estimated sales price, as determined by prevailing market values for comparable properties and/or the use of capitalization rates applied to annualized net operating income based upon the age, construction and use of the building. Due to uncertainties inherent in the valuation process and in the economy, it is reasonably possible that the actual results of operating and disposing of the Partnership’s properties could be materially different than current expectations. Rental properties are reviewed for impairment whenever there is a triggering event and at least annually.

Depreciation is provided using the straight-line method over the useful lives of the respective assets. The useful lives are as follows:

Building and improvements	5 to 40 years
Tenant improvements	Lesser of the initial term of the related lease, or the estimated useful life of the improvements
Furniture and equipment	5 to 7 years

Land Held for Development

Land held for development is stated at cost unless events or circumstances indicate that cost cannot be recovered, in which case, the carrying value is reduced to estimated fair value. Estimated fair value is computed using estimated sales price, based upon market values for comparable properties and considers the cost to complete and the estimated fair value of the completed project. Land held for development is reviewed for impairment whenever there is a triggering event and at least annually.

The pre-development costs for a new project are capitalized and include survey fees and consulting fees. Interest, property taxes and insurance related to the new project are capitalized during periods when activities that are necessary to get the project ready for its intended use are in progress. The capitalization ends when the construction is substantially completed and the project is ready for its intended use.

Fair Value of Investments

The guidance related to accounting for fair value measurements defines fair value and establishes a framework for measuring fair value in order to meet disclosure requirements for fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This hierarchy describes three levels of inputs that may be used to measure fair value.

Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1. Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation using unobservable inputs. This category generally includes long-term derivative contracts, real estate and unconsolidated joint ventures.

Cash and Cash Equivalents

The Partnership considers short-term investments with an original maturity of ninety days or less at the time of investment to be cash and cash equivalents.

Deferred Costs

Deferred loan fees are capitalized and amortized on a straight-line basis, which approximates the effective interest method, over the life of the related loan. Deferred lease commissions are capitalized and amortized on a straight-line basis over the initial fixed term of the related lease agreements.

Revenues

The Partnership recognizes rental revenue on a straight-line basis over the term of the leases. Actual amounts collected could be lower than the amounts recognized on a straight-line basis if specific tenants are unable to pay rent that the Partnership has previously recognized as revenue. For tenants with percentage rent, the Partnership recognizes revenue when the tenants’ specified sales targets have been met. The reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as revenue on an estimated basis during the current year. The Partnership develops a revised estimate of the amount recoverable from tenants based on updated expenses for the year and amounts to be recovered and records adjustments to income in the current year financial statement accounts. Any final changes in estimate based on lease-by-lease reconciliations and tenant negotiations and collection are recorded in the period those negotiations are settled.

Net (Loss) Income Per Limited Partnership Unit

Net (loss) income per Unit is calculated using the weighted average number of Units outstanding during the period and the limited partners’ allocable share of the net (loss) income.

Net income per Unit is as follows (in thousands, except for weighted average units and per unit amounts):

	For the three months ended												For the nine months ended
	September 30, 2012						September 30, 2011						September 30, 2012						September 30, 2011
	General Partner			Limited Partners			General Partner			Limited Partners			General Partner			Limited Partners			General Partner			Limited Partners
(Loss) Income allocation:
Net loss	$	(70	)	$	(386	)	$	(103	)	$	(928	)	$	(211	)	$	(1,655	)	$	(228	)	$	(2,051	)
Weighted average number of limited partnership units outstanding during each period					83,898						83,898						83,898						83,898
Basic and diluted loss per limited partnership unit				$	(4.60	)				$	(11.06	)				$	(19.73	)				$	(24.45	)

The calculation of net (loss) income per Unit assumes that the income (loss) otherwise allocable to the limited partners is first used to fund distributions to the General Partner. As discussed in Note 1, because distributions of available cash have exceeded cumulative earnings and the General Partner has a deficit, the General Partner would restore that deficit in liquidation.

Income Taxes

No provision for income taxes is included in the accompanying consolidated financial statements as the Partnership’s results of operations are allocated to the partners for inclusion in their respective income tax returns. Net (loss) income and partners’ equity (deficit) for financial reporting purposes will differ from the Partnership’s income tax return because of different accounting methods used for certain items, including depreciation expense, provisions for impairment of investments in real estate, capitalization of development period interest and property taxes and rental income and loss recognition.

Concentration Risk

No tenant represented more than 10% of rental revenue for the nine months ended September 30, 2012. One tenant, operating within the aerospace industry, represented 18% of rental revenue for the nine months ended September 30, 2011.

Reference to 2011 audited consolidated financial statements

These unaudited consolidated financial statements should be read in conjunction with the notes to audited consolidated financial statements included in the Partnership’s December 31, 2011 annual report on Form 10-K.

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Commitments and Contingent Liabilities (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
General Partner [Member]
Commitments And Contingent Liabilities (Textual) [Abstract]
Commissions payable to General Partner	102,000
Limited Partner [Member]
Commitments And Contingent Liabilities (Textual) [Abstract]
Percentage of cumulative non-compounded return on adjusted invested capital	12.00%

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Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Investments in real estate:
Rental properties	$ 77,827	$ 78,666
Accumulated depreciation	(31,136)	(29,775)
Rental properties, net	46,691	48,891
Land held for development	1,494	1,494
Total investments in real estate	48,185	50,385
Cash and cash equivalents	4,990	5,773
Accounts receivable, net	126	125
Deferred costs, net of accumulated amortization of $2,115 and $1,938 as of September 30, 2012 and December 31, 2011, respectively	2,329	1,917
Prepaid expenses and other assets	3,010	2,540
Total assets	58,640	60,740
Liabilities:
Notes payable	50,940	51,721
Accounts payable and other liabilities	1,134	723
Prepaid rent	212	76
Total liabilities	52,286	52,520
Commitments and contingent liabilities (Note 7)
Partners' Equity (Deficit):
General Partner	(2,381)	(2,170)
Limited partners, 83,898 limited partnership units outstanding as of September 30, 2012 and December 31, 2011	8,735	10,390
Total partners' equity	6,354	8,220
Total liabilities and partners' equity	$ 58,640	$ 60,740

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net loss	$ (1,866)	$ (2,279)
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain on sale of property	(486)
Depreciation and amortization	3,278	3,641
Amortization of loan fees, included in interest expense	60	61
Changes in certain assets and liabilities:
Accounts receivable	(1)	(9)
Deferred costs	(872)	(473)
Prepaid expenses and other assets	(470)	(418)
Accounts payable and other liabilities	411	312
Prepaid rent	136	(13)
Net cash provided by operating activities	190	822
Cash flows from investing activities:
Additions to real estate investments	(768)	(832)
Proceeds from sale of land	576
Net cash used in investing activities	(192)	(832)
Cash flows from financing activities:
Notes payable principal payments	(781)	(739)
Net cash used in financing activities	(781)	(739)
Net decrease in cash and cash equivalents	(783)	(749)
Cash and cash equivalents at beginning of period	5,773	6,335
Cash and cash equivalents at end of period	4,990	5,586
Supplemental disclosure of cash flow information:
Cash paid for interest	2,135	2,177
Supplemental disclosure of non-cash operating activities:
Write-off of fully depreciated rental property assets	1,517	2,549
Write-off of fully amortized deferred costs	$ 283	$ 784

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Significant Accounting Policies (Details Textual)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Significant Accounting Policies (Textual) [Abstract]
Useful life of Tenant improvements	Lesser of the initial term of the related lease, or the estimated useful life of the improvements
Rental revenue from one major tenant	10.00%	18.00%
Building and tenant improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life of building and improvements (all)	40 years
Building and tenant improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life of building and improvements (all)	5 years
Furniture and equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life of building and improvements (all)	7 years
Furniture and equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life of building and improvements (all)	5 years

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Investments in Real Estate (Details Textual) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012 Properties	Sep. 30, 2012 Properties
Gain on the sale of property	$ 486,000	$ 486,000
Investments In Real Estate (Textual) [Abstract]
Number of office properties	9	9
Number of Retail properties	4	4
Sanbag [Member]
Area of land sold		21,000
Cost of land sold		90,000
Total consideration for the land		585,000
Sales fee		9,000
Gain on the sale of property		486,000
Temporary easement of land received for construction		27,000
Construction staging		$ 3,500

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Organization

9 Months Ended

Sep. 30, 2012

Organization [Abstract]

ORGANIZATION

Note 1. ORGANIZATION

Rancon Realty Fund V, a California Limited Partnership (“the Partnership”), was organized in accordance with the provisions of the California Revised Limited Partnership Act for the purpose of acquiring, developing, operating and disposing of real property. The Partnership was organized in 1985 and reached final funding in February 1989. The general partners of the Partnership are Daniel L. Stephenson and Rancon Financial Corporation (“RFC”), hereinafter collectively referred to as the General Partner. RFC is wholly owned by Daniel L. Stephenson. The Partnership has no employees.

As of September 30, 2012, there were 83,898 Units (“Units”) outstanding.

The Partnership commenced on May 8, 1985 and shall continue until December 31, 2015, unless previously terminated in accordance with the provisions of the Partnership Agreement.

Allocation of Net Income and Net Loss

Allocation of net income and net loss is made pursuant to the terms of the Partnership Agreement. Generally, net income and net losses from operations are allocated 90% to the limited partners and 10% to the General Partner; however, if the limited partners or the General Partner would have, as a result of an allocation of cumulative net losses, a deficit balance in their capital accounts, then net losses shall not be allocated to the limited partners or General Partner, as the case may be, so as to create a capital account deficit, but such losses shall be allocated to the limited partners or General Partner with positive capital account balances until the positive capital account balances of such other partners are reduced to zero. However, if deficits are the result of cumulative distributions in excess of earnings, losses will continue to be allocated to the General Partner. Capital accounts shall be determined after taking into account all other allocations and distributions for the fiscal year.

Net income other than net income from operations shall be allocated as follows: (i) first, to the partners who have a deficit balance in their capital account, provided that, in no event shall the General Partner be allocated more than 5% of the net income other than net income from operations until the earlier of sale or disposition of substantially all of the assets or the distribution of cash (other than cash from operations) equal to the Unitholder’s original invested capital; (ii) second, to the limited partners in proportion to and to the extent of the amounts required to increase their capital accounts to an amount equal to the sum of the adjusted invested capital of their units plus an additional cumulative non-compounded 12% return per annum (plus additional amounts depending on the date Units were purchased); (iii) third, to the partners in the minimum amount required to first equalize their capital accounts in proportion to the number of units owned, and then, to bring the sum of the balances of the capital accounts of the limited partners and the General Partner into the ratio of 4 to 1; and (iv) the balance, if any, 80% to the limited partners and 20% to the General Partner. In no event shall the General Partner be allocated less than 1% of the net income other than net income from operations for any period.

Net losses other than net losses from operations are allocated 99% to the limited partners and 1% to the General Partner. Such net losses will be allocated among limited partners as necessary to equalize their capital accounts in proportion to their Units, and thereafter will be allocated in proportion to their Units.

The terms of the Partnership Agreement call for the General Partner to restore any deficits that may exist in its capital account after allocation of gains and losses from the sale of the final property owned by the Partnership, but prior to any liquidating distributions being made to the partners.

Distribution of Cash

The Partnership shall make annual or more frequent distributions of substantially all cash available to be distributed to partners as determined by the General Partner, subject to the following: (i) distributions may be restricted or suspended for limited periods when the General Partner determines in their absolute discretion that it is in the best interests of the Partnership; and (ii) all distributions are subject to the payment of Partnership expenses and maintenance of reasonable reserves for debt service, alterations and improvements, maintenance, replacement of furniture and fixtures, working capital and contingent liabilities.

All excess cash from operations shall be distributed 90% to the limited partners and 10 % to the General Partner.

All cash from sales or refinancing and any other cash determined by the General Partner to be available for distribution other than cash from operations shall be distributed in the following order of priority: (i) first, 1% to the General Partner and 99% to the limited partners in proportion to the outstanding positive amounts of Adjusted Invested Capital (as defined in the Partnership Agreement) for each of their Units until Adjusted Invested Capital (as defined in the Partnership Agreement) for each Unit is reduced to zero; (ii) second, 1% to the General Partner and 99% to the limited partners until each of the limited partners has received an amount which, including cash from operations previously distributed to the limited partners equals a 12% annual cumulative non-compounded return on the Adjusted Invested Capital (as defined in the Partnership Agreement) of their Units plus such limited partners’ Limited Incremental Preferential Return (as defined in the Partnership Agreement), if any, with respect to each such Unit, on the Adjusted Investment Capital (as defined in the Partnership Agreement) of such Units for the twelve month period following the date upon which such Unit was purchased from the Partnership and following the admission of such limited partner (iii) third, 99% to the General Partner and 1% to the limited partners, until the General Partner has received an amount equal to 20% of all distributions of cash from sales or refinancing: (iv) the balance, 80% to the limited partners, pro rata in proportion to the number of Units held by each, and 20% to the General Partner.

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
Accumulated amortization on deferred costs	$ 2,115	$ 1,938
Limited partners, limited partnership units outstanding	83,898	83,898

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Land Held for Development (Tables)

9 Months Ended

Sep. 30, 2012

Land Held for Development [Abstract]

Land held for development

	September 30,		December 31,
	2012		2011
East Lake Restaurant Pad (includes approximately 0.3 acres of land with a cost basis of $166 as of September 30, 2012 and December 31, 2011)	$	451	$	451
Land held for development (approximately 4.1 acres of land as of September 30, 2012 and December 31, 2011)		1,043		1,043
Total land held for development	$	1,494	$	1,494

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	RANCON REALTY FUND V
Entity Central Index Key	0000769131
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	83,898

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Notes Payable (Tables)

9 Months Ended

Sep. 30, 2012

Notes Payable [Abstract]

Notes payable

	September 30,		December 31,
	2012		2011
Note payable #1 collateralized by first deeds of trust on seven properties. The note has a fixed interest rate of 5.46%, a maturity date of January 1, 2016 with a 30-year amortization requiring monthly principal and interest payments of $151.	$	23,913	$	24,289
Note payable #2 collateralized by first deeds of trust on four properties. The note has a fixed interest rate of 5.61%, a maturity date of May 1, 2016 with a 30-year amortization requiring monthly principal and interest payments of $173.		27,027		27,432
Total notes payable	$	50,940	$	51,721

Annual maturities on the Partnership's notes payable

The annual maturities on the Partnership’s notes payable as of September 30, 2012, are as follows (in thousands):

2012	$	178
2013		1,103
2014		1,165
2015		1,231
2016		47,263
Total	$	50,940

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Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Operating revenue
Rental revenue and other	$ 2,733	$ 2,876	$ 8,102	$ 8,731
Tenant reimbursements	235	205	557	485
Total operating revenue	2,968	3,081	8,659	9,216
Operating expenses
Property operating expenses	1,943	1,898	4,869	4,918
Depreciation and amortization	1,064	1,247	3,278	3,641
General and administrative	198	225	692	708
Total operating expenses	3,205	3,370	8,839	9,267
Operating loss	(237)	(289)	(180)	(51)
Interest and other income	23		23	9
Interest expense (including amortization of loan fees)	(728)	(742)	(2,195)	(2,237)
Loss before gain on sale of property	(942)	(1,031)	(2,352)	(2,279)
Net gain on sale of property	486		486
Net loss	$ (456)	$ (1,031)	$ (1,866)	$ (2,279)
Basic and diluted net loss per limited partnership unit	$ (4.60)	$ (11.06)	$ (19.73)	$ (24.45)

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Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Note 6. RELATED PARTY TRANSACTIONS

Glenborough LLC earns fees from the Partnership as prescribed by the Property Management and Services Agreement (the “Agreement”). The Agreement is in effect until the earlier of December 31, 2015 or the completion of sale of all real property assets of the Partnership. The terms and conditions of the Agreement are to perform services for the following fees:

	Nine Months Ended
	September 30,		September 30,
	2012		2011
(i) property management fees of 2.5% of gross rental revenue which were included in property operating expenses in the accompanying consolidated statements of operations	$	229,000	$	272,000
(ii) construction services fees which were capitalized and included in rental properties on the accompanying consolidated balance sheets		32,000		49,000
(iii) an asset and Partnership management fee which was included in general and administrative expenses in the accompanying consolidated statements of operations		187,000		187,000
(iv) leasing services fees which were included in deferred costs on the accompanying consolidated balance sheets		330,000		159,000
(v) a sales fee of 1% for all properties, which were included in net gain on sale of property		6,000		—
(vi) a financing services fee of 1% of the gross loan amount which would be included in deferred costs on the accompanying consolidated balance sheets		—		—
(viii) a development fee equal to 5% of the hard costs of the development project, excluding the cost of the land, which would be included in construction in progress and/or rental properties on the accompanying consolidated balance sheets, the development fee and the general contractor’s fee shall not exceed 11.5%, in the aggregate, of the hard costs of the development fee project		—		—
(viii) data processing fees which were included in property operating expenses in the accompanying consolidated statements of operations		90,000		86,000
(ix) engineering fees which were included in property operating expenses in the accompanying consolidated statements of operations		29,000		28,000

On October 1, 2010, Glenborough Holdings, LLC (Glenborough Holdings) transferred all of its interest in the Partnership to Glenborough Investors, LLC, which currently holds those units in its subsidiary, Glenborough Property Partners, LLC (“Glenborough Property Partners”). As part of the same transaction, Glenborough Holdings transferred its ownership of Glenborough LLC to Glenborough Investors, LLC, which currently holds the ownership interests in that entity in its subsidiary, Glenborough Service, LP, the parent of Glenborough Property Partners. As of September 30, 2012, Glenborough Property Partners, an affiliate of Glenborough LLC, held 11,565 or 13.78% of the Units.

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Notes Payable

9 Months Ended

Sep. 30, 2012

Notes Payable [Abstract]

NOTES PAYABLE

Note 5. NOTES PAYABLE

Notes payable consists of the following (in thousands):

	September 30,		December 31,
	2012		2011
Note payable #1 collateralized by first deeds of trust on seven properties. The note has a fixed interest rate of 5.46%, a maturity date of January 1, 2016 with a 30-year amortization requiring monthly principal and interest payments of $151.	$	23,913	$	24,289
Note payable #2 collateralized by first deeds of trust on four properties. The note has a fixed interest rate of 5.61%, a maturity date of May 1, 2016 with a 30-year amortization requiring monthly principal and interest payments of $173.		27,027		27,432
Total notes payable	$	50,940	$	51,721

Note payable #1 is collateralized by Bally’s Health Club, Carnegie Business Center II, Lakeside Tower, Outback Steakhouse, Pat & Oscars, Palm Court Retail III and One Carnegie Plaza and Note payable #2 is collateralized by Brier Corporate Center, One Parkside, Two Parkside and Two Carnegie Plaza.

The annual maturities on the Partnership’s notes payable as of September 30, 2012, are as follows (in thousands):

2012	$	178
2013		1,103
2014		1,165
2015		1,231
2016		47,263
Total	$	50,940

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Investments in Real Estate (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Components of rental properties
Rental Properties	$ 77,827	$ 78,666
Accumulated depreciation	(31,136)	(29,775)
Rental properties, net	46,691	48,891
Land [Member]
Components of rental properties
Rental Properties	6,854	6,944
Land and improvements [Member]
Components of rental properties
Rental Properties	1,536	1,536
Buildings [Member]
Components of rental properties
Rental Properties	56,253	56,253
Building and tenant improvements [Member]
Components of rental properties
Rental Properties	$ 13,184	$ 13,933

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Partnership continues to engage Glenborough LLC to perform services

	Nine Months Ended
	September 30,		September 30,
	2012		2011
(i) property management fees of 2.5% of gross rental revenue which were included in property operating expenses in the accompanying consolidated statements of operations	$	229,000	$	272,000
(ii) construction services fees which were capitalized and included in rental properties on the accompanying consolidated balance sheets		32,000		49,000
(iii) an asset and Partnership management fee which was included in general and administrative expenses in the accompanying consolidated statements of operations		187,000		187,000
(iv) leasing services fees which were included in deferred costs on the accompanying consolidated balance sheets		330,000		159,000
(v) a sales fee of 1% for all properties, which were included in net gain on sale of property		6,000		—
(vi) a financing services fee of 1% of the gross loan amount which would be included in deferred costs on the accompanying consolidated balance sheets		—		—
(viii) a development fee equal to 5% of the hard costs of the development project, excluding the cost of the land, which would be included in construction in progress and/or rental properties on the accompanying consolidated balance sheets, the development fee and the general contractor’s fee shall not exceed 11.5%, in the aggregate, of the hard costs of the development fee project		—		—
(viii) data processing fees which were included in property operating expenses in the accompanying consolidated statements of operations		90,000		86,000
(ix) engineering fees which were included in property operating expenses in the accompanying consolidated statements of operations		29,000		28,000

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Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Significant Accounting Policies [Abstract]

Net income per Unit

	For the three months ended												For the nine months ended
	September 30, 2012						September 30, 2011						September 30, 2012						September 30, 2011
	General Partner			Limited Partners			General Partner			Limited Partners			General Partner			Limited Partners			General Partner			Limited Partners
(Loss) Income allocation:
Net loss	$	(70	)	$	(386	)	$	(103	)	$	(928	)	$	(211	)	$	(1,655	)	$	(228	)	$	(2,051	)
Weighted average number of limited partnership units outstanding during each period					83,898						83,898						83,898						83,898
Basic and diluted loss per limited partnership unit				$	(4.60	)				$	(11.06	)				$	(19.73	)				$	(24.45	)

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Commitments and Contingent Liabilities

9 Months Ended

Sep. 30, 2012

Commitments and Contingent Liabilities [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

Note 7. COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

The Partnership follows a policy of monitoring its properties for the presence of hazardous or toxic substances. The Partnership is not aware of any environmental liability with respect to the properties that would have a material adverse effect on the Partnership’s business, assets or results of operations. There can be no assurance that such a material environmental liability does not exist. The existence of any such material environmental liability could have an adverse effect on the Partnership’s consolidated results of operations and cash flows.

General Uninsured Losses

The Partnership carries property and liability insurance with respect to the properties. This coverage has policy specification and insured limits customarily carried for similar properties. However, certain types of losses (such as from earthquakes and floods) may be either uninsurable or not economically insurable. Should the properties sustain damage as a result of an earthquake or flood, the Partnership may incur losses due to insurance deductibles, co-payments on insured losses or uninsured losses. Additionally, the Partnership has elected to obtain insurance coverage for “certified acts of terrorism” as defined in the Terrorism Risk Insurance Act of 2002; however, our policies of insurance may not provide coverage for other acts of terrorism. Any losses from such other acts of terrorism might be uninsured. Should an uninsured loss occur, the Partnership could lose some or all of its capital investment, cash flow and anticipated profits related to the properties.

Other Matters

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the amount of $102,000 at September 30, 2012 for sales that occurred in previous years. The subordinated real estate commissions are payable only after the limited partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital. Since the circumstances under which these commissions would be payable are not currently met, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes payable.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying financial statements present the consolidated financial position of the Partnership and its subsidiaries as of September 30, 2012 and December 31, 2011, and the consolidated results of operations of the Partnership and its subsidiaries for the three and nine months ended September 30, 2012 and 2011, the consolidated statement of partners’ equity for the nine months ended September 30, 2012, and cash flows of the Partnership for the nine months ended September 30, 2012 and 2011. All significant intercompany transactions, receivables and payables have been eliminated in consolidation.

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.

In the opinion of the General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated financial position of the Partnership as of September 30, 2012 and December 31, 2011, and the related consolidated statements of operations for the three and nine months ended September 30, 2012 and 2011, the consolidated statement of partners’ equity for the nine months ended September 30, 2012 and the consolidated statement of cash flows for the nine months ended September 30, 2012 and 2011.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) 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 results of operations during the reporting period. Actual results could differ from those estimates.

Rental Properties

Rental Properties

Rental properties, including the related land, are stated at depreciated cost unless events or circumstances indicate that such amounts cannot be recovered, in which case, the carrying value of the property is reduced to its estimated fair value to the extent the carrying value is greater than the undiscounted future cash flows excluding interest. Estimated fair value is computed using estimated sales price, as determined by prevailing market values for comparable properties and/or the use of capitalization rates applied to annualized net operating income based upon the age, construction and use of the building. Due to uncertainties inherent in the valuation process and in the economy, it is reasonably possible that the actual results of operating and disposing of the Partnership’s properties could be materially different than current expectations. Rental properties are reviewed for impairment whenever there is a triggering event and at least annually.

Depreciation is provided using the straight-line method over the useful lives of the respective assets. The useful lives are as follows:

Building and improvements	5 to 40 years
Tenant improvements	Lesser of the initial term of the related lease, or the estimated useful life of the improvements
Furniture and equipment	5 to 7 years

Construction in Progress and Land Held for Development

Land Held for Development

Land held for development is stated at cost unless events or circumstances indicate that cost cannot be recovered, in which case, the carrying value is reduced to estimated fair value. Estimated fair value is computed using estimated sales price, based upon market values for comparable properties and considers the cost to complete and the estimated fair value of the completed project. Land held for development is reviewed for impairment whenever there is a triggering event and at least annually.

The pre-development costs for a new project are capitalized and include survey fees and consulting fees. Interest, property taxes and insurance related to the new project are capitalized during periods when activities that are necessary to get the project ready for its intended use are in progress. The capitalization ends when the construction is substantially completed and the project is ready for its intended use.

Fair Value of Investments

Fair Value of Investments

The guidance related to accounting for fair value measurements defines fair value and establishes a framework for measuring fair value in order to meet disclosure requirements for fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This hierarchy describes three levels of inputs that may be used to measure fair value.

Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1. Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation using unobservable inputs. This category generally includes long-term derivative contracts, real estate and unconsolidated joint ventures.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Partnership considers short-term investments with an original maturity of ninety days or less at the time of investment to be cash and cash equivalents.

Deferred Costs

Deferred Costs

Deferred loan fees are capitalized and amortized on a straight-line basis, which approximates the effective interest method, over the life of the related loan. Deferred lease commissions are capitalized and amortized on a straight-line basis over the initial fixed term of the related lease agreements.

Revenues

Revenues

The Partnership recognizes rental revenue on a straight-line basis over the term of the leases. Actual amounts collected could be lower than the amounts recognized on a straight-line basis if specific tenants are unable to pay rent that the Partnership has previously recognized as revenue. For tenants with percentage rent, the Partnership recognizes revenue when the tenants’ specified sales targets have been met. The reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as revenue on an estimated basis during the current year. The Partnership develops a revised estimate of the amount recoverable from tenants based on updated expenses for the year and amounts to be recovered and records adjustments to income in the current year financial statement accounts. Any final changes in estimate based on lease-by-lease reconciliations and tenant negotiations and collection are recorded in the period those negotiations are settled.

Net (Loss) Income Per Limited Partnership Unit

Net (Loss) Income Per Limited Partnership Unit

Net (loss) income per Unit is calculated using the weighted average number of Units outstanding during the period and the limited partners’ allocable share of the net (loss) income.

Net income per Unit is as follows (in thousands, except for weighted average units and per unit amounts):

	For the three months ended												For the nine months ended
	September 30, 2012						September 30, 2011						September 30, 2012						September 30, 2011
	General Partner			Limited Partners			General Partner			Limited Partners			General Partner			Limited Partners			General Partner			Limited Partners
(Loss) Income allocation:
Net loss	$	(70	)	$	(386	)	$	(103	)	$	(928	)	$	(211	)	$	(1,655	)	$	(228	)	$	(2,051	)
Weighted average number of limited partnership units outstanding during each period					83,898						83,898						83,898						83,898
Basic and diluted loss per limited partnership unit				$	(4.60	)				$	(11.06	)				$	(19.73	)				$	(24.45	)

The calculation of net (loss) income per Unit assumes that the income (loss) otherwise allocable to the limited partners is first used to fund distributions to the General Partner. As discussed in Note 1, because distributions of available cash have exceeded cumulative earnings and the General Partner has a deficit, the General Partner would restore that deficit in liquidation.

Income Taxes

Income Taxes

No provision for income taxes is included in the accompanying consolidated financial statements as the Partnership’s results of operations are allocated to the partners for inclusion in their respective income tax returns. Net (loss) income and partners’ equity (deficit) for financial reporting purposes will differ from the Partnership’s income tax return because of different accounting methods used for certain items, including depreciation expense, provisions for impairment of investments in real estate, capitalization of development period interest and property taxes and rental income and loss recognition.

Concentration Risk

Concentration Risk

No tenant represented more than 10% of rental revenue for the nine months ended September 30, 2012. One tenant, operating within the aerospace industry, represented 18% of rental revenue for the nine months ended September 30, 2011.

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Investments in Real Estate (Tables)

9 Months Ended

Sep. 30, 2012

Investments In Real Estate [Abstract]

Components of rental properties

	September 30,			December 31,
	2012			2011
Land	$	6,854		$	6,944
Land and improvements		1,536			1,536
Buildings		56,253			56,253
Building and tenant improvements		13,184			13,933
		77,827			78,666
Less: accumulated depreciation		(31,136	)		(29,775	)
Total rental properties, net	$	46,691		$	48,891

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Significant Accounting Policies (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
(Loss) Income allocation:
Net loss, General Partner	$ (70)	$ (103)	$ (211)	$ (228)
Net loss, Limited Partners	$ (386)	$ (928)	$ (1,655)	$ (2,051)
Weighted average number of limited partnership units outstanding during each period	83,898	83,898	83,898	83,898
Basic and diluted net loss per limited partnership unit	$ (4.60)	$ (11.06)	$ (19.73)	$ (24.45)

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Land Held for Development (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2012 acre	Dec. 31, 2011 acre
East Lake Restaurant Pad [Member]
Land Held For Development (Textual) [Abstract]
Cost of the land	$ 166,000	166,000
Area of land	0.3	0.3
Land Held for Development [Member]
Land Held For Development (Textual) [Abstract]
Provision for impairment	820,000
Cost of the land	1,500,000
Subsequent improvements to land held for development	$ 363,000
Area of land	4.1	4.1

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Consolidated Statement of Partners' Equity (Unaudited) (USD $) In Thousands	Total	General Partner	Limited Partners
Balance (deficit) at December 31, 2011 at Dec. 31, 2011	$ 8,220	$ (2,170)	$ 10,390
Net loss	(1,866)	(211)	(1,655)
Balance (deficit) at September 30, 2012 at Sep. 30, 2012	$ 6,354	$ (2,381)	$ 8,735

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Land Held for Development

9 Months Ended

Sep. 30, 2012

Land Held for Development [Abstract]

LAND HELD FOR DEVELOPMENT

Note 4. LAND HELD FOR DEVELOPMENT

Land held for development consists of the following (in thousands):

	September 30,		December 31,
	2012		2011
East Lake Restaurant Pad (includes approximately 0.3 acres of land with a cost basis of $166 as of September 30, 2012 and December 31, 2011)	$	451	$	451
Land held for development (approximately 4.1 acres of land as of September 30, 2012 and December 31, 2011)		1,043		1,043
Total land held for development	$	1,494	$	1,494

The book basis of the land held for development is shown net of an impairment provision of $820,000. The original cost of the land was $1,500,000 and subsequent improvements total $363,000.

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Notes Payable (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Notes payable
Notes payable	$ 50,940	$ 51,721
Notes Payable 1 [Member]
Notes payable
Notes payable	23,913	24,289
Notes Payable 2 [Member]
Notes payable
Notes payable	$ 27,027	$ 27,432

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Organization (Details)	9 Months Ended
	Sep. 30, 2012 Employees	Dec. 31, 2011
Organization (Textual) [Abstract]
Number of employees in the partnership	0
Units outstanding	83,898	83,898
Allocation of Net income other than net income from operations to partners	(i) first, to the partners who have a deficit balance in their capital account, provided that, in no event shall the General Partner be allocated more than 5% of the net income other than net income from operations until the earlier of sale or disposition of substantially all of the assets or the distribution of cash (other than cash from operations) equal to the Unitholder’s original invested capital; (ii) second, to the limited partners in proportion to and to the extent of the amounts required to increase their capital accounts to an amount equal to the sum of the adjusted invested capital of their units plus an additional cumulative non-compounded 12% return per annum (plus additional amounts depending on the date Units were purchased); (iii) third, to the partners in the minimum amount required to first equalize their capital accounts in proportion to the number of units owned, and then, to bring the sum of the balances of the capital accounts of the limited partners and the General Partner into the ratio of 4 to 1 and (iv) the balance, if any, 80% to the limited partners and 20% to the General Partner. In no event shall the General Partner be allocated less than 1% of the net income other than net income from operations for any period.
Distribution of cash from other sources	(i) first, 1 percent to the General Partner and 99 percent to the limited partners in proportion to the outstanding positive amounts of Adjusted Invested Capital (as defined in the Partnership Agreement) for each of their Units until Adjusted Invested Capital (as defined in the Partnership Agreement) for each Unit is reduced to zero; (ii) second, 1 percent to the General Partner and 99 percent to the limited partners until each of the limited partners has received an amount which, including cash from operations previously distributed to the limited partners equals a 12 percent annual cumulative non-compounded return on the Adjusted Invested Capital (as defined in the Partnership Agreement) of their Units plus such limited partners’ Limited Incremental Preferential Return (as defined in the Partnership Agreement), if any, with respect to each such Unit, on the Adjusted Investment Capital (as defined in the Partnership Agreement) of such Units for the twelve month period following the date upon which such Unit was purchased from the Partnership and following the admission of such limited partner (iii) third, 99 percent to the General Partner and 1 percent to the limited partners, until the General Partner has received an amount equal to 20 percent of all distributions of cash from sales or refinancing: (iv) the balance, 80 percent to the limited partners, pro rata in proportion to the number of Units held by each, and 20 percent to the General Partner
Ratio of limited partners to general partners	400.00%
Annual cumulative non-compounded return percentage on Adjusted Invested Capital	12.00%
General Partner [Member]
Organization [Line Items]
Allocation of net income and net losses from operations	10.00%
Maximum percentage allocation of net income other than net income from operations to partners in the deficit balance account under option one	5.00%
Percentage allocation of net losses other than net losses from operations to partners in the proportion of units	1.00%
Percentage distribution of all excess cash from operations to partners	10.00%
Percentage of balance amount to be allocated in net income other than net income from operations to partners under option four	20.00%
Minimum amount to be allocated to partners from net income other than net income from operations	1.00%
Percentage of cash other than cash from operations to be distributed to partner under option one	1.00%
Percentage of cash other than cash from operations to be distributed to partner under option two	1.00%
Percentage of cash other than cash from operations to be distributed to partner under option three	99.00%
Percentage of cash distribution from sales and refinancing to be considered under option three	20.00%
Percentage of cash other than cash from operations to be distributed to partner under option four	20.00%
Limited Partner [Member]
Organization [Line Items]
Allocation of net income and net losses from operations	90.00%
Additional cumulative non-compounded percentage return to be used under option two	12.00%
Percentage allocation of net losses other than net losses from operations to partners in the proportion of units	99.00%
Percentage distribution of all excess cash from operations to partners	90.00%
Percentage of balance amount to be allocated in net income other than net income from operations to partners under option four	80.00%
Percentage of cash other than cash from operations to be distributed to partner under option one	99.00%
Percentage of cash other than cash from operations to be distributed to partner under option two	99.00%
Percentage of cash other than cash from operations to be distributed to partner under option three	1.00%
Percentage of cash other than cash from operations to be distributed to partner under option four	80.00%