SOUTHWEST REALTY &lt;SWL> HAS LIQUIDITY PROBLEMS

  Southwest Realty Ltd said it believes it
  could make all of its scheduled montly debt service payments
  for 1987 despite the falloff in its rental operations, but
  making the payments would probably severely impair its
  liquidity and restrict its ability to maintain the quality of
  its properties.
      The company today reported a 1986 loss of 1,544,000 dlrs
  compared with a 1985 profit of 3,912,000 dlrs.
      Southwest said in addition to its monthly scheduyled debt
  service payments, a 1,743,000 dlr loan on one of its Houston
  properties is due to mature on April One.
      Southwest said a commitment to reduce the interest rate and
  extend the Houston loan for one year has been accepted.
      It said talks are underway with lenders on other Houston
  properties to obtain partial debt service moratoriums which, if
  granted, would cut 1987 cash deficits from 1986 levels.  The
  loan renegotiations could involve bankruptcy or other
  litigation connected with the specific properties involved and
  could involve the suspension of interest and principal payments
  to some of the lenders.  Southwest said if the attempts to
  restructure debt do not succeed, it could lose one or more of
  the properties.
      Southwest said the Houston properties made up about 10 pct
  of its current value equity as of December 31 of 14.20 dlrs per
  share, down from 16.68 dlrs a year before.
      The company said depending on the success of the talks and
  operating results for 1987, one or two more properties could
  become subject to similar negotiations.  The two additional
  properties comprised about 11 pct of its current value equity
  at year-end, Southwest said.
  

