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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

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

EXCEL PROPERTIES, LTD.
(Exact name of registrant as specified in its charter)

17140 Bernardo Center Drive, Suite 300 San Diego, California 92128
(Address of principal executive offices and zip code)

Registrant's telephone number, including area code: (858) 675-9400

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

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

(1) Yes ý No o

(2) Yes ý No o

EXCEL PROPERTIES, LTD.
INDEX TO FINANCIAL STATEMENTS

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EXCEL PROPERTIES, LTD.
BALANCE SHEETS

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

3

EXCEL PROPERTIES, LTD.
STATEMENTS OF INCOME—UNAUDITED

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

4

EXCEL PROPERTIES, LTD.
STATEMENTS OF CHANGES IN PARTNERS' EQUITY—UNAUDITED

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

5

EXCEL PROPERTIES, LTD.
STATEMENTS OF CASH FLOWS—UNAUDITED

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NOTES TO FINANCIAL STATEMENTS—UNAUDITED
EXCEL PROPERTIES, LTD.

1.    Summary of Significant Accounting Policies:

        The financial statements reflect all adjustments of a recurring nature which are, in the opinion of management, necessary for a fair presentation of the financial statements. No adjustments were necessary which were not of a recurring nature. These financial statements should be read in conjunction with the financial statements and accompanying footnotes included in the Partnership's December 31, 2001 Form 10-K.

Organization

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

Real Estate

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

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

Cash Deposits

        At September 30, 2002, the carrying amount of the Partnership's cash deposits total $386,282. The bank balances are $815,750 of which $200,000 is covered by federal depository insurance.

Statement of Cash Flows—Supplemental Disclosure

        There was no interest or taxes paid for the nine months ended September 30, 2002 or 2001. The Partnership also had no noncash investing or financing transactions for the nine months ended September 30, 2002 or 2001.

Income Taxes

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

Accounts Receivable

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

Financial Statement Estimates

        The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements

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and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

        Recognition of revenue is dependent upon the quality and ability of the tenants to pay their rent in a timely manner. Rental revenues include minimum annual rentals, adjusted for the straight-line method for recognition of fixed future increases. Gain or loss on sale of real estate is recognized when the sales contract is executed, title has passed, payment is received, and the Partnership no longer has continuing involvement in the asset.

Derivative Instruments and Hedging Activities

        The Financial Accounting Standards Board (FASB) issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes a new model for accounting for derivatives and hedging activities, where all derivatives must be recognized as assets and liabilities and measured at fair value. The Partnership adopted this standard on January 1, 2001 and it did not have a significant impact on the financial statements.

Asset Disposal

        In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses financial accounting for the impairment or disposal of long-lived assets and is effective in fiscal years beginning after December 15, 2001. The Partnership adopted this statement but had no discontinued operations in 2002.

2.    Fees Paid to General Partner

        The Partnership has paid the General Partner or its affiliates the following fees for the nine months ended September 30, 2002 and 2001:

3.    Sale of Property

        In April 2001, the Partnership sold a building in West Carrollton, Ohio that was on lease to Kindercare. The sale price for the building was $283,333. The Partnership recognized a gain of $148,869 on the sale.

        In September 2001, the Partnership sold two properties. The building in Columbus, Ohio was on lease to Southeast Education. The sale price for the building was $253,000. The Partnership recognized a gain of $123,289 on the sale. The building in Middleburg, Ohio was on lease to Mountain Jack's. The sales price was $900,000. The Partnership recognized a loss of $163,754 on the sale.

        There were no property sales in the nine months ended September 30, 2002.

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4.    Notes Receivable

        The Company had the following notes receivable at September 30, 2002 and December 31, 2001:

5.    Minimum Future Rentals

        The Partnership leases single-tenant buildings to tenants under noncancelable operating leases requiring the greater of fixed or percentage rents. The leases are triple-net, requiring the tenant to pay all expenses of operating the property such as insurance, property taxes, repairs and utilities.

        Minimum future rental revenue for the next four years for the commercial real estate currently owned and subject to noncancelable operating leases is as follows:

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

Nature of Business

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

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

        The principal investment objectives of the Partnership were originally to provide to its limited partners: (1) preservation, protection and eventual return of the investment, (2) distributions of cash

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from operations, some of which may be a return of capital for tax purposes rather than taxable income, and (3) realization of long-term appreciation in value of properties. In recent years, the Partnership has been attempting to sell its properties. The selling of the properties remaining could take several years as the Partnership attempts to maximize the sales price of each property. There can be no assurance that the general partners will be successful in selling the remaining properties or what price they can obtain. Additionally, the plans of the Partnership may change.

Critical Accounting Policies and Estimates

General

        The financial statements including in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Preparation of our financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related notes. The Partnership believes that the following accounting policies are critical because they affect the more significant judgments and estimates used in the preparation of our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions. For a detailed discussion on the application of these and other accounting policies, see Note 1 in the Notes to the Financial Statements in the Form 10-K for 2001 and this Form 10-Q.

Revenue Recognition

        Recognition of revenue is dependent upon the quality and ability of the tenants to pay their rent in a timely manner. Rental revenues include minimum annual rentals, adjusted for the straight-line method for the recognition of fixed future increases. Gain or loss on sale of real estate is recognized when the sales contract is executed, title has passed, payment is received, and the Partnership no longer has continuing involvement in the asset.

Real Estate Assets

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

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

Asset Disposal

        In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses financial accounting for the impairment or disposal of long-lived assets and is effective in fiscal years beginning after December 15, 2001. The Partnership adopted this statement but had no discontinued operations in 2002.

Liquidity and Capital Resources

        The Partnership has $386,282 in cash at September 30, 2002, with no debt on any of the properties it owns. The Partnership currently recognizes approximately $23,543 a month from rental revenue.

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Management does not expect the Partnership to incur any significant operational expenses as the Partnership properties are subject to triple-net leases.

        At September 30, 2002, the Partnership had $912,873 outstanding in notes receivable. One note has a balance due of $165,750 and is secured by land. Although the note bears interest at 10%, the Partnership has not recognized any interest income from the note since no interest payments have been made and it is the intent of the Partnership is to take title of the land in lieu of a cash settlement. Another note has a balance outstanding of $50,000 Steakhouse Partners, Inc. The obligor has stopped making interest payments on this note and has filed bankruptcy. The Partnership has reserved against the collectibility of this note.

        The Partnership's primary source of cash is from rental of the three real estate properties currently owned. Management believes that rental revenue should cover the recurring operating expenses of the Partnership and allow for cash distributions to be made to the limited partners unless buildings become vacant. The Partnership may sell one or more of its properties which would provide cash for distribution. Prior to 2002, the Partnership has paid quarterly distributions to the limited partners of the actual cash earned by the Partnership in the preceding quarter. In 2002, the Partnership adopted a policy of paying distributions from operating cash flows annually instead of quarterly, as only three properties remain. The Partnership may pay additional distributions if it receives cash from a significant capital event. If expenses were to increase or revenue were to decrease, the Partnership would decrease the distributions to the limited partners.

        The Partnership has continued to distribute cash flows to the limited partners since 1989. The Partnership has been attempting to sell it properties and owns three remaining real estate properties. Although future distributions may be supplemented by proceeds from property sales or principal repayment of notes receivable, as additional properties are sold or notes receivable are repaid, proceeds will be distributed to the partners instead of reinvested, and future distributions are expected to decrease. Eventually, there may no longer be enough cash flows for distributions.

        Inflation is not expected to negatively impact the operations of the Partnership due to the structure of its investment portfolio. The leases all provide a minimum rental which the lessee is obligated to pay. Additionally, most leases contain some form of inflation hedge which provides for the rent to be increased. The rent increases may be in the form of scheduled fixed minimum rent increases, Consumer Price Index (CPI) adjustments or by participating in a percentage of the gross sales volume of the tenant. Since the triple-net leases require the lessees to pay for all property operating expenses, the net effect is that the revenue received will not be eroded away as operating expenses increase due to inflation. Should buildings become vacant, however, the Partnership may be responsible for certain expenses, including property taxes which are now being paid by tenants.

Results of Operations

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

Comparison of the three months ended September 30, 2002 to the three months ended September 30, 2001

        Base rent decreased $52,592 or 43% from the previous year. The net decrease was due to the property sales in 2001. These properties accounted for approximately $52,592 in rental revenue in 2001.

        In September 2001, the company recognized a gain of $123,289 relating to the sale of a building formerly leased to Southeast Education in Columbus, Ohio. Also, in September 2001 the company recognized a loss of $163,754 relating to a sale of a building leased to Mountain Jack's in Middleburg, Ohio. There were no sales in the three months ended September 30, 2002.

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        Overall operating expenses increased by $39,653 from the three months ended September 30, 2002 to the three months ended September 30, 2001. Depreciation expense decreased $7,899 or 39% and management fee expenses decreased $374 or 35%. These decreases are attributable to the property sales in 2001. Bad debt expense increased by $48,013 in 2002 (see Liquidity and Capital Resources). Other expenses and other income did not vary significantly between the two accounting periods.

Comparison of the nine months ended September 30, 2002 to the nine months ended September 30, 2001

        Base rent decreased $179,427 or 46% from the previous year. The net decrease was primarily due to the property sales in 2001. These properties accounted for approximately $175,280 in rental revenue in 2001.

        In April 2002, the company recognized a gain of $148,869 relating to the sale of a building formerly leased to Kindercare, in West Carrollton, Ohio. In June 2002, the Company received $20,289 for the holdback on the 1999 sale of Kindercare in Grove City, Ohio which was recognized as income in 2002. In September 2002, the company recognized a gain of $123,289 relating to the sale of a building formerly leased to Southeast Education in Columbus, Ohio. Also, in September 2002, the company recognized a loss of $163,754 relating to a sale of a building leased to Mountain Jack's in Middleburg, Ohio. There were no sales in the nine months end September 30, 2002.

        Operating expenses increased by $16,312 or 14%. Depreciation expense decreased $27,221 or 42% and management fee expenses decreased $1,692 or 44% from nine months ended September 30, 2002 to the nine months ended September 30, 2001. These decreases are attributable to the property sales in 2001. Overall, operating expense decreased; however, bad debt expense increased by $48,013 in 2002 as previously noted (see Liquidity and Capital Resources). Other expenses and other income did not vary significantly between the two accounting.

        Management does not expect inflation to significantly impact the operations of the Partnership due to the structure of its investment portfolio. The leases all provide a minimum rental which the lessee is obligated to pay. Additionally, most leases contain some form of inflation hedge which provides for the rent to be increased. The rent increases may be in the form of scheduled fixed minimum rent increases, Consumer Price Index adjustments, or by participating in a percentage of the gross sales volume of the tenant. Since the triple-net leases require the lessees to pay for all property operating expenses, the net effect is that the income should increase as operating expenses increase due to inflation.

Certain Cautionary Statements

        Certain statements in this Quarterly Report on Form 10-Q, including, but not limited to, "Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations," contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not historical facts, but rather reflect current expectations concerning future results and events. The words "believes," "expects," "intends," "plans," "anticipates," "likely," "will" and similar expressions identify such forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors, some of which are beyond the Partnership's control that could cause actual results to differ materially from those forecast or anticipated in such forward-looking statements. These factors include, but are not limited to, the Partnership's market effect on property sales, reliance on tenants, and environmental risks. These factors are discussed in greater detail under the caption "Certain Cautionary Statements" in the Partnership's annual Report on Form 10-K for the year ended December 31, 2001.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

        The Partnership's balance sheet contains financial instruments in the form of interest-earning notes receivable. The notes contain fixed interest rates and are thus not subject to changes in market interest rates. The Partnership estimates that the fair value of the notes approximates market value at September 30, 2002.

Item 4. Controls and Procedures

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

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

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

PART II. OTHER INFORMATION

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

        Item 6. Exhibits and Reports on Form 8-K

(a)

Reports on Form 8-K
The Partnership filed no reports on Form 8-K during the quarter ended September 30, 2002.

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SIGNATURES

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

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CERTIFICATIONS

I, Gary B. Sabin, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Excel Property Ltd.;

2.

Based on my knowledge, this quarterly 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 quarterly report;

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.

The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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I, James Y. Nakagawa, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Excel Properties, Ltd.;

2.

Based on my knowledge, this quarterly 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 quarterly report;

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.

The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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