UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the year ended December 31, 2014

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

For the transition period from ____ to

Commission file number: 0-16467

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

California

(State or other jurisdiction

Of incorporation or organization)

33-0098488

(I.R.S. Employer

Identification No.)

400 South El Camino Real, Suite 1100

San Mateo, California

(Address of principal executive offices)

94402-1708

(Zip Code)

Partnership’s telephone number, including area code (650) 343-9300

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

Securities registered pursuant to Section 12(g) of the Act:

Units of Limited Partnership Interest

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933, as amended. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act of 1934, as amended. Yes ¨ No x

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

No market for the Limited Partnership units exists and therefore a market value for such units cannot be determined.

DOCUMENTS INCORPORATED BY REFERENCE:

INDEX

RANCON REALTY FUND V,

A CALIFORNIA LIMITED PARTNERSHIP

		Page No.
	PART I

Item 1.	Business	3
Item 1A.	Risk Factors	4
Item 1B.	Unresolved Staff Comments	4
Item 2.	Properties	5-6
Item 3.	Legal Proceedings	6
Item 4.	Mine Safety Disclosures	6

	PART II

Item 5.	Market for Partnership’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	7
Item 6.	Selected Financial Data	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7-10
Item 7A.	Qualitative and Quantitative Disclosures about Market Risk	10
Item 8.	Financial Statements and Supplementary Data	10
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	10
Item 9A.	Controls and Procedures	11
Item 9B.	Other Information	11

	PART III

Item 10.	Directors, Executive Officers, and Corporate Governance	11
Item 11.	Executive Compensation	11
Item 12.	Security Ownership of Certain Beneficial Owners and Management and related Stockholder Matters	11
Item 13.	Certain Relationships, Related Transactions, and Director Independence	12
Item 14.	Principal Accountant Fees and Services	12

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	13-14

	SIGNATURES	15

Part I

Item 1.

Business

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.

The Partnership’s initial acquisition of property in 1985 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 approximately 153 acres known as Tri-City Corporate Centre (“Tri-City”) and is zoned for mixed commercial, office, hotel, transportation-related, and light industrial uses. Other than two properties which were sold in 2005 and one property which was sold in 2013 to third parties by the Partnership and Rancon Realty Fund IV (“Fund IV”), a limited partnership sponsored by the General Partner of the Partnership, all of the parcels thereof are separately owned either by the Partnership or Fund IV. As of December 31, 2014, the Partnership has twelve properties consisting of eight office properties, and four retail buildings. The Partnership’s properties are more fully described in Item 2.

In November 2005, in connection with a refinancing, the Partnership formed Rancon Realty Fund V Subsidiary LLC (“RRF V SUB”), a Delaware limited liability company, which is wholly owned by the Partnership. The new entity was formed to satisfy certain lender requirements for a loan obtained in the fourth quarter of 2005. The loan is collateralized by seven properties (as discussed in Item 2) which have been contributed to RRF V SUB by the Partnership. Since RRF V SUB is wholly owned by the Partnership, the financial statements of RRF V SUB have been consolidated with those of the Partnership.

In April 2006, the Partnership formed Rancon Realty Fund V Subsidiary Two LLC (“RRF V SUB2”), a Delaware limited liability company which is wholly owned by the Partnership. The new entity was formed to satisfy certain lender requirements for a loan obtained in the second quarter of 2006. The loan is collateralized by four properties (as discussed in Item 2) which have been contributed to RRF V SUB2 by the Partnership. Since RRF V SUB2 is wholly owned by the Partnership, the financial statements of RRF V SUB2 have been consolidated with those of the Partnership.

As of December 31, 2014, there were 83,898 limited partnership units (“Units”) outstanding.

The Partnership commenced on May 8, 1985 and had a term which was set to expire on December 31, 2015 in accordance with the provisions of the Partnership Agreement. On April 21, 2014, the Partnership sent a Consent Solicitation Statement to its Limited Partners seeking their consent to the dissolution of the Partnership prior to December 31, 2015, in accordance with the terms of the Partnership Agreement and as detailed by a Plan of Liquidation and Dissolution adopted by the General Partner on April 10, 2014. The dissolution required the approval of Limited Partners holding 50% of the outstanding units. On May 8, 2014, the dissolution was approved by Limited Partners holding 50% of the outstanding units, and the Plan of Liquidation and Dissolution became effective. Consequently the General Partner began an orderly sale of the Partnership’s assets and on March 20, 2015, the last property was sold. With the sale of all of the properties, dissolution will continue but can be a complex process that may depend on a number of factors, most of which are beyond the Partnership’s control. There can be no assurance that the dissolution will be completed within a specific time frame.

Competition Within the Market

The Partnership competes in the leasing of its properties primarily with other available properties in the local real estate market. Other than Fund IV, management is not aware of any specific competitors of the Partnership’s properties doing business on a significant scale in the local market. Management believes that characteristics influencing the competitiveness of a real estate project are the geographic location of the property, the professionalism of the property manager, the maintenance and appearance of the property and rental rates, in addition to external factors such as general economic circumstances, trends, and the existence of new competing properties in the vicinity. Additional competitive factors with respect to commercial and industrial properties include the ease of access to the property, the adequacy of related facilities, such as parking, and the ability to provide rent concessions and tenant improvements commensurate with local market conditions. Although management believes the Partnership’s properties are competitive with comparable properties as to those factors within the Partnership’s control, over-building and other external factors could adversely affect the ability of the Partnership to attract and retain tenants. The marketability of the properties may also be affected (either positively or negatively) by these factors as well as by changes in general or local economic conditions, including prevailing interest rates. Depending on market and economic conditions, the Partnership may be required to retain ownership of its properties for periods longer than anticipated, or may need to sell earlier than anticipated or refinance a property at a time or under terms and conditions that are less advantageous than would be the case if unfavorable economic or market conditions did not exist.

Working Capital

The Partnership’s practice is to maintain cash reserves for normal repairs, replacements, working capital and other contingencies.

Item 1A.

Risk Factors

Risks of the Current Economic Environment

Financial markets have experienced unusual volatility and uncertainty over the past few years. Liquidity has tightened in all financial markets, including the debt and equity markets. The Partnership’s ability to fund normal recurring expenses and capital expenditures as well as its ability to repay or refinance debt maturities could be adversely affected by an inability to secure financing at reasonable terms, if at all. If economic conditions persist or deteriorate, the Partnership may experience increases in past due accounts, defaults, lower occupancy and reduced effective rents. These conditions could negatively affect the Partnership’s future net income and cash flows and could adversely affect its ability to fund distributions, debt service payments and tenant improvements.

Potential Liability Due to Environmental Matters

Under federal, state and local laws relating to protection of the environment (“Environmental Laws”) a current or previous owner or operator of real estate may be liable for contamination resulting from the presence or discharge of petroleum products or other hazardous or toxic substances on the property. These owners may be required to investigate and clean-up the contamination on the property as well as the contamination which has migrated from the property. Environmental Laws typically impose liability and clean-up responsibility without regard to whether the owner or operator knew of, or was responsible for, the presence of the contamination. This liability may be joint and several unless the harm is divisible and there is a reasonable basis for allocation of responsibility. In addition, the owner or operator of a property may be subject to claims by third parties based on personal injury, property damage and/or other costs, including investigation and clean-up costs, resulting from environmental contamination. Environmental Laws may also impose restrictions on the manner in which a property may be used or transferred or in which businesses may be operated. These restrictions may require expenditures. Under the Environmental Laws, any person who arranges for the transportation, disposal or treatment of hazardous or toxic substances may also be liable for the costs of investigation or clean-up of those substances at the disposal or treatment facility, whether or not the facility is or ever was owned or operated by that person.

Our tenants generally are required by their leases to operate in compliance with all applicable Environmental Laws, and to indemnify us against any environmental liability arising from their activities on the properties. However, we could be subject to strict liability by virtue of our ownership interest in the properties. Also, tenants may not satisfy their indemnification obligations under the leases. We are also subject to the risk that:

●

any environmental assessments of our properties may not have revealed all potential environmental liabilities,

●

any prior owner or prior or current operator of these properties may have created an environmental condition not known to us, or

●

an environmental condition may otherwise exist as to any one or more of these properties.

Any one of these conditions could have an adverse effect on our results of operations and financial condition. Moreover, future environmental laws, ordinances or regulations may have an adverse effect on our results of operations and financial condition. Also, the current environmental condition of those properties may be affected by tenants and occupants of the properties, by the condition of land or operations in the vicinity of the properties (such as the presence of underground storage tanks), or by third parties unrelated to us.

We are not aware of any current liabilities related to environmental matters that are material to us. However, the foregoing risk factor is provided because such risks are inherent to real estate ownership.

Uninsured Losses May Adversely Affect Operations

We, or in certain instances, tenants of our properties, carry property and liability insurance policies with respect to the properties. This coverage has policy specifications 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. Further, certain properties are located in areas that are subject to earthquake activity and floods. Should a property sustain damage as a result of an earthquake or flood, we may incur losses due to insurance deductibles, co-payments on insured losses or uninsured losses. Additionally, we have elected to obtain insurance coverage for "certified acts of terrorism" as defined in the Terrorism Risk Insurance Act of 2002, as amended and reauthorized to date; 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, we could lose some or all of our capital investment, cash flow and anticipated profits related to one or more properties. This could have an adverse effect on our results of operations and financial condition.

Potential Liability Under the Americans With Disabilities Act

All of our properties are required to be in compliance with the Americans With Disabilities Act. The Americans With Disabilities Act generally requires that places of public accommodation be made accessible to people with disabilities to the extent readily achievable. Compliance with the Americans With Disabilities Act requirements could require removal of access barriers. Non-compliance could result in imposition of fines by the federal government, an award of damages to private litigants and/or a court order to remove access barriers. Pursuant to lease agreements with tenants in certain of the “single-tenant” properties, the tenants are obligated to comply with the Americans With Disabilities Act provisions. If our costs are greater than anticipated or tenants are unable to meet their obligations, our results of operations and financial condition could be adversely affected.

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 1B.

Unresolved Staff Comments

None.

Item 2.

Properties

In 1985, the Partnership acquired a total of 76.21 acres of partially developed land in Tri-City for an aggregate purchase price of $14,118,000. In 1984 and 1985, a total of 76.56 acres within Tri-City were acquired by Fund IV.

Tri-City is located at the northeastern quadrant of the intersection of Interstate 10 (San Bernardino Freeway) and Waterman Avenue in the southernmost part of the City of San Bernardino, and is in the heart of the Inland Empire, the most densely populated area of San Bernardino and Riverside counties.

The Inland Empire consists of approximately 24.5 million square feet of office space and is generally broken down into two major markets, Inland Empire East and Inland Empire West. Tri-City is located within the Inland Empire East market. According to a fourth quarter 2014 market view report from an independent broker the overall vacancy rate was 17% within the Inland Empire market as of December 31, 2014.

As of December 31, 2014, the Partnership owned twelve rental properties and approximately 4.4 acres of unimproved land.

Properties

The Partnership’s improved properties, all of which are held for sale as of December 31, 2014, are as follows:

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		118,090
One Parkside	Four-story office building		70,068
784 East Hospitality	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
690 East Hospitality	Restaurant		7,118
Brier Corporate Center	Three-story office building		104,501
Three Parkside	Two-story office building		29,076
Total			675,496

The office buildings total approximately 630,000 square feet with occupancy of 63%, and the retail buildings total approximately 45,000 square feet with an occupancy rate of 100%, as of December 31, 2014.

On March 7, 2013, the Partnership sold the Three Carnegie property. The sale to an unrelated party for a gross sale price of $8,000,000 included $3,200,000 paid in consideration and the buyer’s issuance of a promissory note to the Partnership in the amount of $4,800,000 bearing interest at the rate of 5.5% per annum, with a 60-day maturity and an election to extend the maturity date for an additional sixty days. The note was repaid during the second quarter of 2013.

As of December 31, 2014, no tenant accounts for more than 10% of the rental income generated by the Partnership’s properties for the year.

Weighted average occupancy rates for the Partnership’s buildings for each of the five years ended December 31, 2014 were as follows:

	2014			2013			2012			2011			2010

One Carnegie Plaza		68	%		77	%		78	%		68	%		70	%
Two Carnegie Plaza		52	%		66	%		67	%		65	%		77	%
Carnegie Business Center II		39	%		36	%		36	%		36	%		92	%
Lakeside Tower		85	%		80	%		83	%		84	%		85	%
One Parkside		70	%		80	%		73	%		61	%		61	%
784 East Hospitality		100	%		100	%		100	%		100	%		100	%
Outback Steakhouse		100	%		100	%		100	%		100	%		100	%
Palm Court Retail III		100	%		100	%		100	%		100	%		100	%
Two Parkside		71	%		95	%		100	%		100	%		71	%
690 East Hospitality		67	%		42	%		100	%		100	%		100	%
Brier Corporate Center		45	%		45	%		45	%		84	%		84	%
Three Parkside		28	%		28	%		28	%		28	%		28	%

Weighted average occupancy		64	%		70	%		70	%		73	%		76	%

Management is actively marketing for lease the vacant space in all of the buildings.

The annual effective rents per square foot for each of the five years ended December 31, 2014 were as follows:

	2014		2013		2012		2011		2010

One Carnegie Plaza	$	20.89	$	18.32	$	21.60	$	21.27	$	21.02
Two Carnegie Plaza	$	18.43	$	8.27	$	19.11	$	20.81	$	18.81
Carnegie Business Center II	$	13.14	$	14.88	$	15.43	$	14.98	$	16.56
Lakeside Tower	$	21.16	$	14.83	$	18.82	$	22.64	$	20.50
One Parkside	$	17.34	$	15.89	$	21.77	$	15.44	$	14.98
784 East Hospitality	$	15.64	$	15.64	$	15.64	$	15.64	$	18.19
Outback Steakhouse	$	18.43	$	18.43	$	18.43	$	18.43	$	16.75
Palm Court Retail III	$	22.52	$	21.85	$	20.65	$	21.41	$	24.23
Two Parkside	$	24.87	$	17.50	$	21.89	$	20.47	$	20.55
690 East Hospitality	$	23.26	$	0.00	$	19.41	$	19.41	$	19.41
Brier Corporate Center	$	25.94	$	25.34	$	24.74	$	24.26	$	23.67
Three Parkside	$	26.41	$	30.83	$	29.93	$	29.06	$	28.22

Annual effective rent is calculated by dividing the aggregate of annualized December rental income by the respective total square feet occupied at the property as of December 31.

The Partnership’s properties are owned by the Partnership subject to the following first deeds of trust as of December 31, 2014:

Collateral

Outstanding
balance

Mortgage

Fixed
Interest rate

Monthly
payment

Maturity
date

Note payable #1

Principal &

Seven properties (listed below)

22,690

Note

5.46

Interest

1/1/2016

Note payable #2

Principal &

Four properties (listed below)

25,705

Note

5.61

Interest

5/1/2016

Land

As of December 31, 2014, the Partnership owned approximately 4.4 acres of land, a portion of which is undeveloped and the remainder is used as parking lots. As of December 31, 2014, the land is held for sale.

Item 3.

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 in the future have a material adverse effect on the Partnership’s financial position, cash flow or results of operations.

Item 4.

Mine Safety Disclosures

Not Applicable.

Part II

Item 5.

Market for Partnership’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

There is no established trading market for the Units issued by the Partnership.

Holders

As of December 31, 2014, there were 7,156 holders of Units.

Distributions

Distributions are paid from either Cash From Operations or Cash From Sales or Refinancing (as such terms are defined in the Partnership Agreement).

Cash From Operations includes all cash receipts from operations in the ordinary course of business (except for the sale, exchange or other disposition of real property in the ordinary course of business) after deducting payments for operating expenses. All distributions of Cash From Operations are paid in the ratio of 90% to the limited partners and 10% to the General Partner.

Cash From Sales or Refinancing is the net cash realized by the Partnership from the sale, disposition or refinancing of any property after redemption of applicable mortgage debt and all expenses related to the transaction, together with interest on any notes taken back by the Partnership upon the sale of a property. All distributions of Cash From Sales or Refinancing are generally allocated as follows: (i) first, 1% to the General Partner and 99% to the limited partners until the limited partners have received an amount equal to their capital contributions; (ii) second, 1% to the General Partner and 99% to the limited partners until the limited partners have received a 12% return on their unreturned capital contributions including prior distributions of Cash From Operations; plus their Limited Incremental Preferred Return for the twelve month period following the purchase date of each Unit and following admission as a 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 previously made under clauses (ii) and (iii) above, reduced by the amount of prior distributions made to the General Partner under clauses (ii) and (iii); and (iv) fourth, the balance 20% to the General Partner and 80% to the limited partners. A more detailed statement of the distribution policies is set forth in the Partnership Agreement.

There were no distributions during 2014 or 2013.

Item 6.

Selected Financial Data

Not Applicable.

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our results of operations, liquidity and capital resources, and financial condition should be read in conjunction with the selected financial data in Item 6 and the Consolidated Financial Statements, including the notes thereto, included in Item 15 of Part IV.

Background

The Partnership’s initial acquisition of property in 1985 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. Substantially all of the balance of Tri-City is owned by Rancon Realty Fund IV (“Fund IV”), a limited partnership sponsored by the General Partner of the Partnership. As of December 31, 2014, the Partnership has twelve properties which consisted of nine office buildings and four retail buildings, all of which are classified as held for sale.

The Partnership commenced on May 8, 1985 and had a term which was set to expire on December 31, 2015 in accordance with the provisions of the Partnership Agreement. On April 21, 2014, the Partnership sent a Consent Solicitation Statement to its Limited Partners seeking their consent to the dissolution of the Partnership prior to December 15, 2015, in accordance with the terms of the Partnership Agreement and as detailed by a Plan of Liquidation and Dissolution adopted by the General Partner on April 10, 2014. The dissolution required the approval of Limited Partners holding 50% of the outstanding units. On May 8, 2014, the dissolution was approved by Limited Partners holding 50% of the outstanding units, and the Plan of Liquidation and Dissolution became effective. Consequently the General Partner began an orderly sale of the Partnership’s assets and on March 20, 2015, the last property was sold. With the sale of all of the properties, dissolution will continue but can be a complex process that may depend on a number of factors, most of which are beyond the Partnership’s control. There can be no assurance that the dissolution will be completed within a specific time frame.

Overview

Leasing activities

During 2014, management executed nine new leases totaling 50,412 square feet of space and renewed four leases totaling 16,960 square feet.

Results of Operations

Comparison of the year ended December 31, 2014 to the year ended December 31, 2013

Revenue

Rental revenue and other decreased by $1,191,000, or 12%, for the year ended December 31, 2014 compared to the year ended December 31, 2013. This decrease is primarily due to a decrease in occupancy and the March 2013 sale of Three Carnegie. Tenant reimbursements increased by $28,000, or 5%, due primarily to increased billings for operating expenses due to older base years and increased expenses at some properties, offset by lower billings for overtime HVAC.

No interest income was recognized for the year ended December 31, 2014, as compared to $51,000 in interest income for the year ended December 31, 2013. The 2013 interest income is a result of the note receivable from the buyer of Three Carnegie. The note was fully repaid during the second quarter of 2013.

Expenses

Property operating expenses were flat for the year ended December 31, 2014 compared to the year ended December 31, 2013. Property operating expenses for properties operated throughout both twelve month periods increased by approximately $100,000, or 2%, for the year ended December 31, 2014 compared to the year ended December 31, 2013 due to increased utility costs.

Depreciation and amortization decreased $1,260,000, or 34%, for the year ended December 31, 2014 compared to the year ended December 31, 2013 due to previously fully depreciated assets as well as no depreciation or amortization being recorded on assets held for sale.

General and administrative expenses increased $281,000, or 32%, for the year ended December 31, 2014 compared to the year ended December 31, 2013 due to expenses related to the pending dissolution of the Partnership.

Non-operating income / expenses

Interest expense decreased $63,000, or 2%, for the year ended December 31, 2014 compared to the year ended December 31, 2013 due to principle amortization.

Liquidity and Capital Resources

As of December 31, 2014, the Partnership had cash and cash equivalents of $7,125,000.

The Partnership’s liabilities at December 31, 2014, include two notes payable. The borrowings totaled approximately $48,395,000, collateralized by properties with an aggregate net carrying value of approximately $34,868,000.

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the amount of $102,000 as of December 31, 2014 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 considered remote, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes probable.

Following the sale of the final properties on March 20, 2015, management will continue with dissolution of the Partnership and distribute any remaining net proceeds to the partners.

Contractual Obligations

At December 31, 2014, we had contractual obligations as follows (in thousands):

	Less than 1 year		1 to 3 years		Total
Collateralized mortgage loans	$	1,132	$	47,263	$	48,395
Interest on indebtedness		2,650		467		3,117
Total	$	3,782	$	47,730	$	51,512

The Partnership knows of no demands, commitments, events or uncertainties, which might affect its capital resources in any material respect. In addition, the Partnership is not subject to any covenants pursuant to its secured debt that would constrain its ability to obtain additional capital.

Cash flows

For the year ended December 31, 2014, cash used in operating activities was $805,000 as compared to cash provided by operating activities of $415,000 for the year ended December 31, 2013. This decrease was primarily due to a decrease in revenues combined with changes in certain assets and liabilities, notably deferred costs. For the year ended December 31, 2014, cash used in investing activities was $1,223,000, representing capital and tenant improvement costs, as compared to cash provided by investing activities of $6,603,000 for the year ended December 31, 2013, due to the proceeds of the sale from the Three Carnegie property in 2013, net of capital and tenant improvement costs. For the year ended December 31, 2014, cash used in financing activities was $1,170,000 which compares to $1,108,000 for the year ended December 31, 2013.

Operationally, our primary source of funds consists of cash provided by rental activities. In March 2013, the Partnership sold the Three Carnegie property. Net cash provided to the Partnership from this transaction was $7,620,000.

Critical Accounting Policies

Revenue recognized on a straight-line basis

The Partnership recognizes rental revenue on a straight-line basis over the term of its 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.

Carrying value of rental properties and land held for development

The Partnership’s rental properties, including the related land, are stated at depreciated cost unless events or circumstances indicate that such amount cannot be recovered based on undiscounted cash flows, excluding interest, in which case the carrying value of the property is reduced to its estimated fair value. The valuation of impaired real estate assets is determined using widely accepted valuation techniques including income capitalization approach or discounted cash flow analysis on the expected cash flows of each asset considering prevailing market capitalization rates, analysis of recent comparable sales transactions, actual sales negotiations, bona fide purchase offers received from third parties and/or consideration of the amount that would be required to replace the asset, as adjusted for obsolescence. In general, the Partnership considers multiple valuation techniques when measuring fair value of an investment. However, in certain circumstances, a single valuation technique may be appropriate.

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.

The pre-development costs for a new project 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.

The actual value of the Partnership’s portfolio of properties and land held for development could be different from their carrying amounts.

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.

Inflation

Leases at the office properties typically provide for rent adjustment and pass-through of certain operating expenses during the term of the lease. Substantially all of the leases at the office and retail properties provide for pass-through to tenants of certain operating costs, including real estate taxes, common area maintenance expenses, and insurance. 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-K 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.

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.

Risks of Litigation

Item 7A.

Qualitative and Quantitative Disclosures about Market Risk

Interest Rates

The Partnership expects that changes in market interest rates will not have a material impact on the performance or fair value of its portfolio due to their fixed nature.

For debt obligations, the table below presents principal cash flows by expected maturity dates.

	Expected Maturity Date
	2015		2016
	(in thousands)
Collateralized fixed rate debt at 5.46%	$	489	$	22,201
Collateralized fixed rate debt at 5.61%		643		25,062

The Partnership does not own any derivative instruments.

Item 8.

Financial Statements and Supplementary Data

For information with respect to this item, see Financial Statements and Financial Statement Schedule as listed in Item 15.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.

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 annual 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 annual 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.

The report called for by Item 308(a) of Regulation S-K is incorporated herein by reference to “Management’s Annual Report on Internal Control Over Financial Reporting” (“Management’s Report”), included in the financial statements included as an exhibit to this report.

There have not been any changes in the Partnership’s internal control over financial reporting identified in connection with Management’s Report that occurred during the Partnership’s fourth fiscal quarter ended December 31, 2014 that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

Item 9B.

Other Information

None.

Part III

Item 10.

Directors, Executive Officers and Corporate Governance

Daniel L. Stephenson and Rancon Financial Corporation (“RFC”) are the general partners of the Partnership. Mr. Stephenson is the Director, President, Chief Executive Officer and Chief Financial Officer of RFC.

Mr. Stephenson, age 71, founded RFC (formerly known as Rancon Corporation) in 1971 for the purpose of establishing a commercial, industrial and residential property syndication, development and brokerage concern. Mr. Stephenson has, from RFC’s inception, held the position of Director. In addition, Mr. Stephenson was President, Chief Executive Officer and Chief Financial Officer of RFC from 1971 to 1986, from August 1991 to September 1992, and from March 31, 1995 to present. Mr. Stephenson is Chairman of the Board of PacWest Group, Inc., a real estate firm which acquired a portfolio of assets from the Resolution Trust Corporation.

Section 16(a) Beneficial Ownership Reporting Compliance

Based on a review of the copies of beneficial ownership reports filed pursuant to Section 16(a) of the Exchange Act received by the Partnership, the Partnership believes that, during the fiscal year ended December 31, 2014, all such ownership reports were filed on a timely basis.

Code of Ethics

The Partnership has not adopted a "code of ethics" as defined in rules adopted by the SEC. Because neither the Partnership nor the General Partner has any employees other than Daniel L. Stephenson, the Partnership has determined that adopting a code of ethics would not appreciably improve the Partnership's ability to deter wrongdoing or promote the conduct set forth in such SEC rules.

Item 11.

Executive Compensation

The Partnership has no executive officers. For information relating to fees, compensation, reimbursement and distributions paid to related parties, reference is made to Item 13 below.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The table below sets forth beneficial holdings of Units by (i) the General Partners and (ii) all those known by us to be beneficial owners of more than 5% of the Units. The Partnership does not have any executive officers.

Security Ownership of Certain Beneficial Owners

Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class

Units	Glenborough Property Partners, LLC 400 South El Camino Real, Suite 1100 San Mateo, CA 94402	11,565 Units		13.78	%

Units	Mackenzie Capital Management, LP 1640 School Street Moraga, CA 94566	8,605 Units (indirect ownership)*		10.25	%

Security Ownership of Management

*Title* *of Class*	*Name of Beneficial Owner*	*Amount and Nature of* *Beneficial Ownership*	*Percent* *of Class*

Units	Daniel L. Stephenson (IRA) 41391 Kalmia, Suite 200, Murrieta, CA 92562	3 Units (direct)	**

Units	Daniel L. Stephenson (IRA) 41391 Kalmia, Suite 200, Murrieta, CA 92562	100 Units (direct)***	**

* Based on a review of the Partnership’s records, 24 entities that appear to be controlled by MacKenzie Capital Management, LP or its affiliates are the record owners of 8,605 Units in the aggregate.

** Less than 1 percent

*** These Units are held by Streamside Investors, LP, of which Mr. Stephenson is the general partner.

Changes in Control

The limited partners have no right, power or authority to act for or bind the Partnership. However, the limited partners generally have the power to vote upon the following matters affecting the basic structure of the Partnership, passage of each of which requires the approval of limited partners holding a majority of the outstanding Units: (i) amendment of the Partnership Agreement; (ii) termination and dissolution of the Partnership; (iii) sale, exchange or pledge of all or substantially all of the assets of the Partnership; (iv) removal of the General Partner or any successor General Partner; (v) election of a new General Partner upon the removal, redemption, death, insanity, insolvency, bankruptcy or dissolution of the General Partner or any successor General Partner; (vi) modification of the terms of any agreement between the Partnership and the General Partner or an affiliate of the General Partner; and (vii) extension of the term of the Partnership.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

During the years ended December 31, 2014 and 2013 no distributions were made to the General Partner. In both 2014 and 2013, the Partnership paid fees, as described in more detail in Note 6 to the consolidated financial statements attached hereto as an exhibit, to Glenborough LLC, an affiliate of Glenborough Property Partners, LLC, which holds 13.78% of the Units. Other than the fees paid to Glenborough LLC in 2014 and 2013, the Partnership did not incur any expenses or costs reimbursable to any related person of the Partnership during the fiscal years ended December 31, 2014 and 2013.

Director Independence

The Partnership has no officers or directors. Information on Mr. Stephenson, one of the general partners of the Partnership and Director, President, Chief Executive Officer and Chief Financial Officer of the other general partner of the Partnership, is provided in the first paragraph of Item 10. Mr. Stephenson is not “independent” within the meaning of relevant SEC and stock exchange definitions of the term.

The Partnership has no “parents” within the meaning of the Exchange Act and the SEC’s rules. See also Item 12 herein, “Security Ownership of Certain Beneficial Owners.”

Item 14.

Principal Accountant Fees and Services

Audit Fees

The Partnership was billed $141,000 and $137,000 for audit services rendered by its registered public accounting firm for the years ended December 31, 2014 and 2013, respectively.

Audit-Related Fees

The Partnership did not incur audit-related fees for services provided by its registered public accounting firm for the years ended December 31, 2014 and 2013.

Tax Fees

The Partnership did not incur tax fees for services provided by its registered public accounting firm for the years ended December 31, 2014 and 2013.

All Other Fees

The Partnership did not incur any other fees for services provided by its registered public accounting firm for the years ended December 31, 2014 and 2013.

Part IV

Item 15.

Exhibits and Financial Statement Schedules

(a)

The following documents are filed as part of the report:

Management’s Annual Report on Internal Control over Financial Reporting

(1)

Financial Statements:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2014 and 2013

Consolidated Statements of Discontinued Operations for the years ended December 31, 2014 and 2013

Consolidated Statements of Partners’ Equity for the years ended December 31, 2014 and 2013

Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013

Notes to Consolidated Financial Statements

(2)

Financial Statement Schedule:

Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2014 and Notes thereto

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto

(3)

Exhibits:

(2.1)

Plan of Liquidation of the Partnership, dated April 10, 2014 (included as Appendix A to Schedule 14A dated April 21, 2014, file number 0-16467, is incorporated herein by reference).

(3.1)

Amended and Restated Agreement of Limited Partnership of the Partnership (included as Exhibit B to the Prospectus dated March 3, 1988, filed pursuant to Rule 424(b), File Number 2-97837, is incorporated herein by reference).

(3.2)

Third Amendment to the Amended and Restated Agreement of Limited Partnership of the Partnership, dated April 1, 1989 (filed as Exhibit 3.2 to the Partnership’s annual report on Form 10-K for the fiscal year ended November 30, 1991, file number 0-16467, is incorporated herein by reference).

(3.3)

Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of the Partnership, dated March 11, 1992 (filed as Exhibit 3.3 to the Partnership’s annual report on Form 10-K for the fiscal year ended November 30, 1991, file number 0-16467, is incorporated herein by reference).

(3.4)

Sixth Amendment to the Amended and Restated Agreement of the Limited Partnership of the Partnership dated March 27, 2014 (included as exhibit 3.1 to the Form 8K dated March 27, 2014, file number 0-16467, is incorporated herein by reference).

(3.5)

Limited Partnership Agreement of RRF V Tri-City Limited Partnership, A Delaware limited partnership of which Rancon Realty Fund V, A California Limited Partnership is the limited partner (filed as Exhibit 3.4 to the Partnership’s annual report on Form 10-K for the year ended December 31, 1996, file number 0-16467, is incorporated herein by reference).

(10.1)

First Amendment to the Second Amended Management, administration and consulting agreement for services rendered by Glenborough Corporation dated August 31, 1998 (filed as Exhibit 10.1 to the Partnership’s annual report on Form 10-K for the year ended December 31, 1998, file number 0-16467, is incorporated herein by reference).

(10.2)

Promissory note in the amount of $9,600,000 dated May 9, 1996 secured by Deeds of Trust on three of the Partnership Properties (filed as Exhibit 10.3 to the Partnership’s annual report on Form 10-K for the year ended December 31, 1996, file number 0-16467, is incorporated herein by reference).

(10.3)

Agreement for Acquisition of Management Interests, dated December 20, 1994 (filed as Exhibit 10.3 to the Partnership’s quarterly report on Form 10-Q for the period ended September 30, 2003, file number 0-16467, is incorporated herein by reference).

(10.4)

Property Management and Services Agreement dated July 30, 2004 (filed as Exhibit 10.4 to the Partnership’s quarterly report on Form 10-Q for the period ended September 30, 2004, is incorporated herein by reference).

(10.5)

First Amendment to Property Management and Services Agreement dated March 30, 2005 (filed as Exhibit 10.7 to the Partnership’s current report on Form 8-K filed with the SEC on February 27, 2009, is incorporated herein by reference).

(10.6)

Second Amendment to Property Management and Services Agreement dated December 1, 2005 (filed as Exhibit 10.7 to the Partnership’s current report on Form 8-K filed with the SEC on February 27, 2009, is incorporated herein by reference).

(10.7)

Third Amendment to Property Management and Services Agreement dated May 1, 2006 (filed as Exhibit 10.7 to the Partnership’s current report on Form 8-K filed with the SEC on February 27, 2009, is incorporated herein by reference).

(10.8)

Fourth Amendment to Property Management and Services Agreement dated March 1, 2009 (filed as Exhibit 10.7 to the Partnership’s current report on Form 8-K filed with the SEC on February 27, 2009, is incorporated herein by reference).

(10.9)

Promissory note in the amount of $26,800,000 dated November 15, 2005 secured by Deeds of Trust on seven of the Partnership’s Properties (filed as Exhibit 10.5 to the Partnership’s report on Form 10-K for the year ended December 31, 2005, is incorporated herein by reference).

(10.10)

Promissory note in the amount of $30,000,000 dated April 13, 2006 secured by Deeds of Trust on four of the Partnership’s Properties (filed as Exhibit 10.6 to the Partnership’s report on Form 10-Q for the quarter ended June 30, 2006, is incorporated herein by reference).

(31)

Section 302 Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of the General Partner of the Partnership.

(32)

Section 906 Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of the General Partner of the Partnership.*

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.

* 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 SEC or subject to the rules and regulations promulgated by the SEC under the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of said Act.

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: March 24, 2015	By:	/s/ Daniel L. Stephenson
		Daniel L. Stephenson, President

Date: March 24, 2015	By:	/s/ Daniel L. Stephenson
		Daniel L. Stephenson,
		General Partner

INDEX TO FINANCIAL STATEMENTS

AND SCHEDULE

	Page No.

Management’s Annual Report on Internal Control over Financial Reporting	17

Report of Independent Registered Public Accounting Firm	18

Consolidated Balance Sheets as of December 31, 2014 and 2013	19

Consolidated Statements of Discontinued Operations for the years ended December 31, 2014 and 2013	20

Consolidated Statements of Partners’ Equity for the years ended December 31, 2014 and 2013	21

Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013	22

Notes to Consolidated Financial Statements	23-33

Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2014 and Notes thereto	34-35

All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

Management’s Annual Report on Internal Control over Financial Reporting

The Partnership, as such, has no officers or directors, but is managed by the General Partner. The General Partner’s principal officer is responsible for establishing and maintaining adequate internal control over financial reporting for the Partnership. The Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Partnership’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of the management and directors of the General Partner; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets of the Partnership that could have a material effect on the financial statements of the Partnership.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Partnership’s internal control over financial reporting as of December 31, 2014. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (1992). Based on its assessment, management determined that the Partnership maintained effective internal control over financial reporting as of December 31, 2014.

March 24, 2015

Report of Independent Registered Public Accounting Firm

To The General Partner of

Rancon Realty Fund V, a California Limited Partnership:

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Rancon Realty Fund V, a California Limited Partnership, and its subsidiaries (the “Partnership”) at December 31, 2014 and 2013 and the results of their operations and their cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, in accordance with the terms of the Partnership Agreement the Partnership has entered into a process of dissolution. Our opinion is not modified with respect to this matter.

/s/ PricewaterhouseCoopers LLP

San Francisco, CA

March 24, 2015

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Consolidated Balance Sheets

December 31, 2014 and 2013

(in thousands, except units outstanding)

	2014			2013
Assets
Investments in real estate:
Rental properties	$	-		$	65,417
Accumulated depreciation		-			(29,608	)
Rental properties, net		-			35,809

Land held for development		-			1,487

Total investments in real estate		-			37,296

Cash and cash equivalents		7,125			10,323
Note and accounts receivable, net		-			101
Deferred costs, net of accumulated amortization of $719 and $1,800 December 31, 2014 and 2013, respectively		88			1,667
Prepaid expenses and other assets		162			2,618
Assets held for sale		40,621			-
Total assets	$	47,996		$	52,005

Liabilities and Partners’ Equity (Deficit)
Liabilities:
Notes payable	$	48,395		$	49,565
Accounts payable and other liabilities		194			591
Tenant and building improvements payable		-			-
Prepaid rent		-			165
Liabilities related to assets held for sale		651			-
Total liabilities		49,240			50,321

Commitments and contingent liabilities (Note 7)

Partners’ Equity (Deficit):
General Partner		(2,434	)		(2,434	)
Limited partners, 83,898 limited partnership units outstanding as of December 31, 2014 and 2013		1,190			4,118

Total partners’ equity		(1,244	)		1,684

Total liabilities and partners’ equity	$	47,996		$	52,005

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

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Consolidated Statements of Discontinued Operations

For the years ended December 31, 2014 and 2013

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

	2014			2013

Revenue
Rental revenue and other	$	8,754		$	9,945
Tenant reimbursements		572			544
Total revenue		9,326			10,489

Expenses
Property operating expenses		5,808			5,808
Depreciation and amortization		2,491			3,751
General and administrative		1,158			877
Total expenses		9,457			10,436

Loss		(131	)		53

Interest and other income		-			51
Interest expense (including amortization of loan fees)		(2,797	)		(2,860	)

Loss from discontinued operations		(2,928	)		(2,756	)

Loss on sale of property		-			(20	)
Net Loss	$	(2,928	)	$	(2,776	)

Basic and diluted net loss per limited partnership unit	$	(34.90	)	$	(33.09	)

Weighted average number of limited partnership units outstanding		83,898			83,898

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

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Consolidated Statements of Partners’ Equity

For the years ended December 31, 2014 and 2013

(in thousands)

	General			Limited
	Partner			Partners			Total

Balance (deficit) at December 31, 2012		(2,434	)		6,894			4,460

Net loss		-			(2,776	)		(2,776	)

Balance (deficit) at December 31, 2013		(2,434	)		4,118			1,684

Net loss		-			(2,928	)		(2,928	)

Balance (deficit) at December 31, 2014	$	(2,434	)	$	1,190		$	(1,244	)

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

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2014 and 2013

(in thousands)

	2014			2013
Cash flows from operating activities:
Net loss	$	(2,928	)	$	(2,776	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain (loss) on sale of property		-			20
Depreciation and amortization		2,491			3,751
Amortization of loan fees, included in interest expense		81			81
Changes in certain assets and liabilities:
Note and accounts receivable		(56	)		90
Deferred costs		(406	)		(299	)
Prepaid expenses and other assets		(75	)		(260	)
Accounts payable and other liabilities		90			(190	)
Prepaid rent		(1	)		(2	)

Net cash (used in) provided by operating activities		(804	)		415

Cash flows from investing activities:
Additions to real estate investments		(1,224	)		(1,017	)
Proceeds from sale of land and rental properties		-			7,620

Net cash (used in) provided by investing activities		(1,224	)		6,603

Cash flows from financing activities:
Note payable principal payments		(1,170	)		(1,108	)

Net cash used in financing activities		(1,170	)		(1,108	)

Net (decrease) increase in cash and cash equivalents		(3,198	)		5,910

Cash and cash equivalents at beginning of year		10,323			4,413

Cash and cash equivalents at end of year	$	7,125		$	10,323

Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,716		$	2,779

Supplemental disclosure of non-cash operating activities:

Write-off of fully depreciated rental property assets	$	1,391		$	2,333

Write-off of fully amortized deferred costs	$	349		$	941

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

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

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.

The Partnership’s initial acquisition of property in 1985 consisted of approximately 76.21 acres (unaudited) of partially developed and unimproved land located in San Bernardino, California. The property is part of a master-planned development of approximately 153 acres (unaudited) known as Tri-City Corporate Centre (“Tri-City”) and is zoned for mixed commercial, office, hotel, transportation-related, and light industrial uses. Substantially all of the balance of Tri-City is owned by Rancon Realty Fund IV (“Fund IV”), a limited partnership sponsored by the General Partner of the Partnership. As of December 31, 2013, the Partnership has twelve properties consisting of eight office properties, a 25,000 square foot health club, two restaurants and a retail space.

In November 2005, in connection with a refinancing, the Partnership formed Rancon Realty Fund V Subsidiary LLC (“RRF V SUB”), a Delaware limited liability company which is wholly owned by the Partnership. The new entity was formed to satisfy certain lender requirements for a note obtained in the fourth quarter of 2005. The note is collateralized by seven properties (see Note 6) which have been contributed to RRF V SUB by the Partnership. Since RRF V SUB is wholly owned by the Partnership, the financial statements of RRF V SUB have been consolidated with those of the Partnership.

In April 2006, the Partnership formed Rancon Realty Fund V Subsidiary Two LLC (“RRF V SUB2”), a Delaware limited liability company which is wholly owned by the Partnership. The new entity was formed to satisfy certain lender requirements for a note obtained in the second quarter of 2006. The note is collateralized by four properties (see Note 6) which have been contributed to RRF V SUB2 by the Partnership. Since RRF V SUB2 is wholly owned by the Partnership, the financial statements of RRF V SUB2 have been consolidated with those of the Partnership.

As of December 31, 2014, there were 83,898 limited partnership interest (“Units”) outstanding.

Any references to the number of buildings, square footage, customers and occupancy stated in the financial statement footnotes are unaudited.

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 the 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.

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

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.

Note 2.

Significant Accounting Policies

Basis of Accounting and Consolidation

The accompanying consolidated financial statements present the consolidated financial position of the Partnership and its wholly-owned subsidiaries as of December 31, 2014 and 2013, and the consolidated statements of operations, of partners’ equity and of cash flows of the Partnership and its wholly-owned subsidiaries for the years ended December 31, 2014 and 2013. All significant intercompany transactions and balances have been eliminated in consolidation.

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 based on undiscounted cash flows, excluding interest, in which case the carrying value of the property is reduced to its estimated fair value. 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. The Partnership recorded no impairment charges related to rental properties for the years ended December 31, 2014 and 2013, respectively.

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

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 improvement
Furniture and equipment	5 to 7 years

Construction In Progress and Land Held for Development

Construction in progress and land held for development are 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. Construction in progress and land held for development are reviewed for impairment whenever there is a triggering event and at least annually. At December 31, 2014, there was no impairment of the Partnership’s land held for development.

Real Estate Impairment Charges

The Partnership conducted a comprehensive review of all real estate assets in accordance with guidance related to accounting for the impairment or disposal of long lived assets, which indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. The process entails the analysis of each asset for instances where the book value exceeded the estimated fair value.

In order to comply with disclosure requirements as outlined in the guidance, the designation of the level of inputs used in the fair value models must be determined. Inputs used in establishing fair value for real estate assets generally fall within level three, which are characterized as requiring significant judgment as little or no current market activity may be available for validation. The main indicator used to establish the classification of the inputs was current market conditions that, in many instances, resulted in the use of significant estimates in establishing fair value measurements.

The estimated fair value of the rental properties was based on the Partnership’s current market information which was used to determine capitalization and rental growth rates. When market information was not readily available, the inputs were based on management’s understanding of market conditions and the experience of the management team, although actual results could differ significantly from management’s estimates. Additional impairments may be necessary in the future in the event that market conditions deteriorate and impact the drivers used to estimate fair value.

Sale of Real Estate

The Partnership periodically classified real estate as held for sale. An asset is classified as held for sale after the approval of Management and after an active program to sell the asset has commenced. Upon the classification of real estate as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its estimated fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying consolidated balance sheets. Upon a decision to no longer market an asset for sale, the asset is classified as an operating asset at the lower of fair value or the depreciated balance had the asset never been classified as held for sale and depreciation expense is reinstated. As of December 31, 2014, the Partnership had eight office properties and four retail properties classified as held for sale on the consolidated balance sheet.

Fair Value of Investments

The Partnership has adopted policies related to the accounting for fair value measurements. 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.

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

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:

Cash and Cash Equivalents

The Partnership considers short-term investments with an original maturity of three months 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 Per Limited Partnership Unit

Net loss 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.

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

Net loss per Unit is as follows (in thousands, except for weighted average shares and per share amounts):

	2014					2013
	General Partner		Limited Partners			General Partner		Limited Partners
Loss Allocation:

Net loss	$	-	$	(2,928	)	$	-	$	(2,776	)

Weighted average number of limited partnership units outstanding during each year				83,898					83,898

Basic and diluted net loss per limited partnership unit			$	(34.90	)			$	(33.09	)

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 on Partnership income are the responsibility of the individual Partners. Accordingly, no provision for income taxes is included in the accompanying consolidated financial statements. The Partnership determines whether a tax position of the Partnership is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement which could result in the Partnership recording a tax liability that would reduce partners’ capital. Based on its analysis, the Partnership has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2013. However, the Partnership’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, ongoing analysis of changes to tax laws, regulations and interpretations thereof. As of December 31, 2014, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are 2011, 2012, and 2013.

The Partnership files US Federal tax returns and state tax returns in California, Georgia, Indiana, Maine, Missouri, New Jersey, New York, Oregon, Pennsylvania and West Virginia.

Concentration risk

As of December 31, 2014 and 2013, no tenant accounted for more than 10% of the rental income generated by the Partnership properties for the year.

Recent accounting pronouncements

On April 10, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU No. 2014-08”). ASU No. 2014-08 clarifies that discontinued operations presentation applies only to disposals representing a strategic shift that has (or will have) a major effect on an entity’s operations and financial results (e.g. a disposal of a major geographical area, a major line of business, a major equity method investment of other major parts of an entity). ASU No. 2014-08 is effective prospectively for the reporting periods beginning after December 15, 2014. Early adoption is permitted, and the Partnership is currently assessing the impact, if any, that the adoption of this standard will have and will adopt the standard on January 1, 2015.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new guidance is effective for the Partnership the first quarter of 2017, with no early adoption permitted. The Partnership is currently evaluating the effect that ASU 2014-09 will have on the consolidated financial statements and related disclosures.

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

Note 3. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

In response to the Limited Partners May 8, 2014 approval of the dissolution of the Partnership, the General Partner began an orderly liquidation of the Partnership’s assets and all properties were sold as of March 20, 2015. In accordance with the guidance, the related assets and liabilities of the Partnership’s properties have been classified as held for sale on the accompanying balance sheet as follows:

Reconciliation of Total Assets and Liabilities

of the Properties Held for Sale

That are Presented Separately in the Consolidated Balance Sheet

(in thousands)

	December 31
	2014

Carrying amounts of major classes of assets included as part of assets held for sale:

Investments in real estate: Rental properties net	$	36,355

Accounts receivable, net		157
Deferred costs, net of accumulated amortization of		1,578
Prepaid expenses and other assets		2,531

Total assets classified as held for sale	$	40,621

Carrying amounts of major classes of liabilities included as part of assets held for sale:

Accounts payable and other liabilities	$	487
Prepaid rent		164

Total liabilities	$	651

Investments in real estate held for sale consist of the following (in thousands):

	December 31,
	2014
Land	$	7,893
Land improvements		1,536
Buildings		46,970
Building and tenant improvements		10,338
		66,737
Less: accumulated depreciation		(30,382	)
Total rental properties, net	$	36,355

As of December 31, 2014, the Partnership’s rental properties included eight office properties and four retail properties (see detailed listing of properties in Item 2. Properties).

The Partnership conducts a comprehensive review of all real estate assets in accordance with the guidance related to accounting for the impairment or disposal of long lived assets, which indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. The process entails the analysis of each asset for instances where book value exceeded the estimated fair value. There were no impairment provisions recorded in the years ended December 31, 2014 and 2013.

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

Note 4.

DISPOSITION OF RENTAL PROPERTY

During the first quarter of 2013, the Partnership received an unsolicited offer to sell the Three Carnegie property. The sale was concluded on March 7, 2013 to an unrelated third party for a gross sales price of $8,000,000. The buyer paid the Partnership $3,200,000 in consideration at the time of the sale and the balance was paid by the buyer’s issuance of a promissory note to the Partnership in the amount of $4,800,000 bearing interest at the rate of 5.5% per annum with a 60 day maturity and an election to extend the maturity date for an additional sixty days. The note was repaid during the second quarter of 2013.

Note 5.

NOTES PAYABLE

Notes payable as of December 31, 2014 and 2013, were as follows (in thousands):

	2014		2013
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.	$	22,690	$	23,252
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.		25,705		26,313
Total notes payable	$	48,395	$	49,565

Note payable #1 is collateralized by 784 East Hospitality, Carnegie Business Center II, Lakeside Tower, Outback Steakhouse, 690 East Hospitality, 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. Both loan documents provide that if a debt service coverage ratio of 1.2 to 1 (as calculated by the lender), is not maintained, the lender has the right to notify the Partnership that a triggering event has occurred. If a triggering event has occurred, the lender would have certain rights to retain revenues generated by the property in excess of property operating expenses, taxes, insurance, capital improvement costs and debt service as additional cash collateral, rather than returning such amounts to the Partnership. As of December 31, 2014, the Partnership has not been notified by the lender that a triggering event has occurred. As buildings were sold in 2015, the proceeds were applied to the notes payable and upon closing of the sale of the office buildings on March 20, 2015, the notes were completely repaid.

The annual maturities of the Partnership’s notes payable as of December 31, 2014, are as follows (in thousands):

2015		1,132
2016		47,263
Total	$	48,395

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

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 the sale of all real property assets of the Partnership. The terms and conditions of the Agreement are to perform services for the following fees:

		2014		2013

(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	$	232,000	$	255,000
(ii)	construction services fees which were capitalized and included in rental properties on the accompanying consolidated balance sheets	$	50,000		50,000
(iii)	an asset and Partnership management fee which was included in general and administrative expenses in the accompanying consolidated statements of operations	$	250,000		250,000
(iv)	leasing services fees which were included in deferred costs on the accompanying consolidated balance sheets	$	134,000		128,000
(v)	a sales fee of 1% for all properties, which was included in net gain on sale of property	$	-		80,000
(vi)	data processing fees which were included in property operating expenses in the accompanying consolidated statements of operations	$	119,000		113,000
(vii)	engineering fees which were included in property operating expenses in the accompanying consolidated statements of operations	$	20,000		34,000

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 December 31, 2014, Glenborough Property Partners, an affiliate of Glenborough LLC, held 11,565 or 13.78% of the Units.

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, as amended and reauthorized to date; 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.

RANCON REALTY FUND V

A California Limited Partnership, and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2014 and 2013

Other Matters

The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the amount of $102,000 at December 31, 2014, 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 considered remote, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes probable.

Note 8.

LEASES

The Partnership’s rental properties are leased under non-cancelable operating leases that expire at various dates through August 2023. In addition to monthly base rents, several of the leases provide for additional contingent rents based upon a percentage of sales levels attained by the tenants. Future minimum rents under non-cancelable operating leases as of December 31, 2014 are as follows (in thousands):

2015	$	8,291
2016		6,188
2017		4,967
2018		3,463
2019		1,976
Thereafter		4,159
Total	$	29,044

Note 9.

SUBSEQUENT EVENTS

Subsequent to December 31, 2014, the Partnership finalized the sale of four Retail buildings and all of the office properties. 690 E. Hospitality was sold on January 15, 2015 for $3,100,000, Outback was sold on January 23, 2015 for $2,024,000, Palm Retail 3 was sold on March 12, 2015 for $2,400,000. The remaining retail and all office properties were sold in one transaction on March 20, 2015 for $66,775,000. Net proceeds were used first to pay down the respective note payable and prepayment penalties. Any remaining proceeds will be distributed to the partners after deducting reserves for projected remaining dissolution costs of the partnership.

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2014

(In Thousands)

COLUMN A	COLUMN B		COLUMN C					COLUMN D					COLUMN E									COLUMN F		COLUMN G	COLUMN H	COLUMN I
			Initial Cost to					Cost Capitalized					Gross Amount Carried at
			Partnership					Subsequent to Acquisition					December 31, 2014
						Buildings										Buildings								Date		Life
						and					Carrying					and			(a)			Accumulated		Construction	Date	Depreciated
Description	Encumbrances		Land			Improvements		Improvements			Cost		Land			Improvements			Total			Depreciation		Began	Acquired	Over

Rental Properties:
Commercial Office -
One Carnegie Plaza		(b)	$	1,583		$	-	$	8,094		$	-	$	1,571		$	8,106		$	9,677		$	4,440	Aug-86	6/3/85	3-40 yrs.
Less: Provision for impairment of real estate				-			-		(1,657	)		-		(256	)		(1,401	)		(1,657	)		-
Two Carnegie Plaza		(c)		873			-		4,492			-		864			4,501			5,365			2,709	Jan-88	6/3/85	3-40 yrs.
Carnegie Business Center II		(b)		544			-		2,618			-		544			2,618			3,162			1,498	Oct-86	6/3/85	3-40 yrs.
Less: Provision for impairment of real estate				-			-		(299	)		-		(41	)		(258	)		(299	)		-
Lakeside Tower		(b)		834			-		10,017			-		824			10,027			10,851			5,791	Mar-88	6/3/85	3-40 yrs.
One Parkside		(c)		529			-		5,936			-		523			5,942			6,465			2,846	Feb-92	6/3/85	5-40 yrs.
Less: Provision for impairment of real estate				-			-		(700	)		-		(65	)		(635	)		(700	)		-
Two Parkside		(c)		330			-		7,661			-		1,315			6,676			7,991			3,338	Jan-96	6/3/85	5-40 yrs.
Less: Provision for impairment of real estate				(36	)		-		-			-		(36	)		-			(36	)		-
Brier Corporate Center		(c)		651			-		15,011			-		651			15,011			15,662			6,398	Jan-05	6/3/85	5-40 yrs.
Less: Provision for impairment of real estate				-			-		(436	)		-		-			(436	)		(436	)		-
Three Parkside				-			-		5,950			-		-			5,950			5,950			1,338	May-07	6/3/85	5-40 yrs.
Less: Provision for impairment of real estate				-			-		(2,300	)				-			(2,300	)		(2,300	)		-

Commercial Office -
784 East Hospitality		(b)		786			-		1,998			-		780			2,004			2,784			983	Jan-95	6/3/85	5-40 yrs.
Outback Steakhouse		(b)		-			-		837			-		157			680			837			299	Jan-96
Palm Court Retail #3		(b)		249			-		747			-		242			754			996			346	Jan-96	6/3/85	15-40 yrs.
Less: Provision for impairment of real estate				-			-		(131	)		-		-			(131	)		(131	)		-
690 East Hospitality		(b)		341			-		728			-		869			200			1,069			396	Nov-03	6/3/85	15-40 yrs.

		48,395		6,684			-		58,566			-		7,942			57,308			65,250			30,382
Land held for development:
0.3 acres		-		166			-		285			-		451			-			451			-	N/A	6/3/85	N/A
4.1 acres		-		1,500			-		356			-		1,856			-			1,856			-	Feb-07	6/3/85	N/A
Less: Provision for impairment of real estate		-		-			-		(820	)		-		(820	)		-			(820	)		-
		-		1,666			-		(179	)		-		1,487			-			1,487			-

TOTAL	$	48,395	$	8,350		$	-	$	58,387		$	-	$	9,429		$	57,308		$	66,737		$	30,382

(a)

The aggregate cost of land and buildings for federal income tax purposes is $113,714.

(b)

One Carnegie, Carnegie Business Center II, Lakeside Tower, 784 East Hospitality, Outback Steakhouse, Palm Court Retail III and 690 East Hospitality are collateral for debt in the aggregate amount of $22,690.

(c)

Brier Corporate Center, One Parkside, Two Parkside and Two Carnegie Plaza collateral for debt in the aggregate amount of $25,705.

continued

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

(in thousands)

Reconciliation of gross amount at which real estate was carried for the years ended December 31, 2014 and 2013:

	2014			2013
Investments in real estate:
Balance at beginning of year	$	66,904		$	78,237
Additions during year		1,224			1,017
Write-off of fully depreciated rental property		(1,391	)		(2,333	)
Sales of real estate		-			(10,017	)

Balance at end of year	$	66,737		$	66,904

Accumulated Depreciation:

Balance at beginning of year	$	29,608		$	31,673
Additions charged to expense		2,165			3,229
Write-off of fully depreciated rental property		(1,391	)		(2,333	)
Sales of real estate		-			(2,961	)

Balance at end of year	$	30,382		$	29,608

See accompanying independent registered public accounting firm’s report.

EXHIBIT INDEX

Exhibit No.		Exhibit Title

(2.1)		Plan of Liquidation of the Partnership, dated April 10, 2014 (included as Appendix A to Schedule 14A dated April 21, 2014, file number 0-16467, is incorporated herein by reference).

(3.1)		Amended and Restated Agreement of Limited Partnership of the Partnership (included as Exhibit B to the Prospectus dated March 3, 1988, filed pursuant to Rule 424(b), File Number 2-97837, is incorporated herein by reference).

(3.2)		Third Amendment to the Amended and Restated Agreement of Limited Partnership of the Partnership, dated April 1, 1989 (filed as Exhibit 3.2 to the Partnership’s annual report on Form 10-K for the fiscal year ended November 30, 1991, file number 0-16467, is incorporated herein by reference).

(3.3)		Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of the Partnership, dated March 11, 1992 (filed as Exhibit 3.3 to the Partnership’s annual report on Form 10-K for the fiscal year ended November 30, 1991, file number 0-16467, is incorporated herein by reference).

(3.4)		Sixth Amendment to the Amended and Restated Agreement of Limited Partnership of the Partnership dated March 27, 2014 (included as exhibit 3.1 to the Form 8-k dated March 27, 2014, file number 0-16467, is incorporated herein by reference).

(3.5)		Limited Partnership Agreement of RRF V Tri-City Limited Partnership, A Delaware limited partnership of which Rancon Realty Fund V, A California Limited Partnership is the limited partner (filed as Exhibit 3.4 to the Partnership’s annual report on Form 10-K for the year ended December 31, 1996, file number 0-16467, is incorporated herein by reference).

(10.1)		First Amendment to the Second Amended Management, administration and consulting agreement for services rendered by Glenborough Corporation dated August 31, 1998 (filed as Exhibit 10.1 to the Partnership’s annual report on Form 10-K for the year ended December 31, 1998, file number 0-16467, is incorporated herein by reference).

(10.2)		Promissory note in the amount of $9,600,000 dated May 9, 1996 secured by Deeds of Trust on three of the Partnership Properties (filed as Exhibit 10.3 to the Partnership’s annual report on Form 10-K for the year ended December 31, 1996, file number 0-16467, is incorporated herein by reference).

(10.3)		Agreement for Acquisition of Management Interests, dated December 20, 1994 (filed as Exhibit 10.3 to the Partnership’s quarterly report on Form 10-Q for the period ended September 30, 2003, file number 0-16467, is incorporated herein by reference).

(10.4)		Property Management and Services Agreement dated July 30, 2004 (filed as Exhibit 10.4 to the Partnership’s quarterly report on Form 10-Q for the period ended September 30, 2004, is incorporated herein by reference).

(10.5)		First Amendment to Property Management and Services Agreement dated March 30, 2005 (filed as Exhibit 10.7 to the Partnership’s current report on Form 8-K filed with the SEC on February 27, 2009, is incorporated herein by reference).

(10.6)		Second Amendment to Property Management and Services Agreement dated December 1, 2005 (filed as Exhibit 10.7 to the Partnership’s current report on Form 8-K filed with the SEC on February 27, 2009, is incorporated herein by reference).

(10.7)		Third Amendment to Property Management and Services Agreement dated May 1, 2006 (filed as Exhibit 10.7 to the Partnership’s current report on Form 8-K filed with the SEC on February 27, 2009, is incorporated herein by reference).

(10.8)		Fourth Amendment to Property Management and Services Agreement dated March 1, 2009 (filed as Exhibit 10.7 to the Partnership’s current report on Form 8-K filed with the SEC on February 27, 2009, is incorporated herein by reference).

(10.9)		Promissory note in the amount of $26,800,000 dated November 15, 2005 secured by Deeds of Trust on seven of the Partnership’s Properties (filed as Exhibit 10.5 to the Partnership’s report on Form 10-K for the year ended December 31, 2005, is incorporated herein by reference).

(10.10)		Promissory note in the amount of $30,000,000 dated April 13, 2006 secured by Deeds of Trust on four of the Partnership’s Properties (filed as Exhibit 10.6 to the Partnership’s report on Form 10-Q for the quarter ended June 30, 2006, is incorporated herein by reference).

(31)		Section 302 Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of the General Partner of the Partnership.

(32)		Section 906 Certification of Daniel L. Stephenson, Chief Executive Officer and Chief Financial Officer of the General Partner of the Partnership.*

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.

		* 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 SEC or subject to the rules and regulations promulgated by the SEC under the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of said Act.

RANCON REALTY FUND V 10-K