CARLYLE REAL ESTATE LTD PARTNERSHIP XI, 10-Q, 1995-08-14

CARLYLE REAL ESTATE LTD PARTNERSHIP XI
10-Q, 1995-08-14
REAL ESTATE

Previous: TECO ENERGY INC, 10-Q, 1995-08-14

Next: REPUBLIC WASTE INDUSTRIES INC, SC 13D/A, 1995-08-14

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter ended June 30, 1995 Commission file number 0-10494

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(Exact name of registrant as specified in its charter)

Illinois 36-3102608
(State of organization) (IRS Employer Identification No.)

900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code 312/915-1987

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

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1. Financial Statements. . . . . . . . . . . . . . . . . . . 3

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 17

PART II OTHER INFORMATION

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 23

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 24

<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 1995 AND DECEMBER 31, 1994

(UNAUDITED)

ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . $ 2,151,171 2,102,788
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . 1,013,092 1,392,755
Rents and other receivables (net of allowance for
doubtful accounts of $1,556,064 and $1,627,151 at
June 30, 1995 and December 31, 1994, respectively) . . . . . . . . . . . . . . 1,865,051 1,337,171
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,193,115 1,298,981
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 965,506 1,231,494
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 7,187,935 7,363,189
------------ -----------

Mortgage notes receivable (net of reserve for
uncollectibility of $527,774, note 5(a)). . . . . . . . . . . . . . . . . . . . . 2,067,695 2,067,695
Investment properties, at cost:
Land and leasehold interests . . . . . . . . . . . . . . . . . . . . . . . . . 16,428,011 16,428,011
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . 182,504,878 181,221,236
------------ -----------
198,932,889 197,649,247
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . 78,681,574 75,428,110
------------ -----------
Total investment properties, net
of accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . 120,251,315 122,221,137
Investment in unconsolidated venture,
at equity (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484,981 479,811
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,420,864 4,806,743
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,389,516 3,520,761
Venture partners' deficits in ventures . . . . . . . . . . . . . . . . . . . . . . 11,660,972 10,890,573
------------ -----------
$149,463,278 151,349,909
============ ===========

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
JUNE 30, DECEMBER 31,
1995 1994
------------ -----------
Current liabilities:
Current portion of long-term debt
(notes 3(c), 3(d) and 3(f)). . . . . . . . . . . . . . . . . . . . . . . . . . $ 62,254,803 34,720,167
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,126,706 1,490,437
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,487,594 640,109
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,268,756 8,266,609
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,136,250 1,475,804
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 75,274,109 46,593,126
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,819 145,221
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . 80,919,127 108,263,135
------------ -----------
Commitments and contingencies (notes 1, 3, 4, 5, 6 and 7)

Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,339,055 155,001,482
Deferred gain on sale of investment property
(note 5(a)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,067,695 2,067,695
Venture partners' subordinated equity in ventures. . . . . . . . . . . . . . . . . 4,010,854 4,751,737
Partners' capital accounts (deficits) (note 1):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,409,969) (12,310,636)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (1,116,446) (1,116,446)
------------ -----------
(13,525,415) (13,426,082)
------------ -----------
Limited partners:
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . 121,935,233 121,935,233
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (76,296,169) (73,912,181)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (45,067,975) (45,067,975)
------------ -----------
571,089 2,955,077
------------ -----------
Total partners' capital accounts (deficits). . . . . . . . . . . . . . . . (12,954,326) (10,471,005)
------------ -----------
$149,463,278 151,349,909
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994

(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $ 8,165,086 8,540,319 16,554,465 17,466,140
Interest income. . . . . . . . . . . . . . . . . . . . 52,293 44,292 89,223 89,458
----------- ---------- ----------- ----------
8,217,379 8,584,611 16,643,688 17,555,598
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . 4,259,866 4,840,631 8,193,189 9,569,391
Depreciation . . . . . . . . . . . . . . . . . . . . . 1,659,155 1,761,253 3,253,464 3,434,689
Property operating expenses. . . . . . . . . . . . . . 4,455,205 4,953,142 8,536,618 9,694,753
Professional services. . . . . . . . . . . . . . . . . 83,467 87,914 168,567 153,124
Amortization of deferred expenses. . . . . . . . . . . 247,890 239,497 494,859 476,883
General and administrative . . . . . . . . . . . . . . 87,446 81,255 159,264 103,379
----------- ---------- ----------- ----------
10,793,029 11,963,692 20,805,961 23,432,219
----------- ---------- ----------- ----------
Operating loss . . . . . . . . . . . . . . . . . (2,575,650) (3,379,081) (4,162,273) (5,876,621)

Partnership's share of operations of
unconsolidated venture (note 1). . . . . . . . . . . . 56,024 (209,609) 5,170 (331,370)
Venture partners' share of ventures'
operations . . . . . . . . . . . . . . . . . . . . . . 967,246 1,069,398 1,673,782 1,754,049
----------- ---------- ----------- ----------
Net loss . . . . . . . . . . . . . . . . . . . . $(1,552,380) (2,519,292) (2,483,321) (4,453,942)
=========== ========== =========== ==========
Net loss per limited partnership
interest. . . . . . . . . . . . . . . . . . . . $ (10.84) (17.59) (17.34) (31.11)
=========== ========== =========== ==========
Cash distributions per limited
partnership interest . . . . . . . . . . . . . $ -- -- -- --
=========== ========== =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 1995 AND 1994

(UNAUDITED)

<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (2,483,321) (4,453,942)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,253,464 3,434,689
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . 494,859 476,883
Long-term debt - deferred accrued interest . . . . . . . . . . . . . . . . . . . . 396,353 1,002,806
Partnership's share of operations of unconsolidated
ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,170) 331,370
Venture partner's share of venture's operations. . . . . . . . . . . . . . . . . . (1,673,782) (1,754,049)
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . (527,880) 1,026,322
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,866 405,668
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265,988 100,130
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,245 (202,382)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (363,731) (46,133)
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847,485 (404,626)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,002,147 2,061,278
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (339,554) (314,755)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 598 (29,317)
------------ -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . 1,104,567 1,633,942
------------ -----------
Cash flows from investing activities:
Net sales and maturities of short-term investments . . . . . . . . . . . . . . . . . 379,663 2,155,879
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . . . . (1,283,642) (2,514,891)
Partnership's contributions to unconsolidated
ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (159,518)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (108,980) (474,723)
------------ -----------
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . (1,012,959) (993,253)
------------ -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

1995 1994
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . (205,725) (206,485)
Venture partners' contributions to venture . . . . . . . . . . . . . . . . . . . . . 162,500 373,000
------------ -----------
Net cash provided by (used in) financing activities. . . . . . . . . . . . . (43,225) 166,515
------------ -----------
Net increase in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,383 807,204

Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . . 2,102,788 2,312,541
------------ -----------

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . $ 2,151,171 3,119,745
============ ===========

Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . $ 6,794,689 6,505,307
============ ===========
Non-cash investing and financing activities. . . . . . . . . . . . . . . . . . . . . $ -- --
============ ===========

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1995 AND 1994

(UNAUDITED)

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1994, which
are included in the Partnership's 1994 Annual Report, as certain footnote
disclosures which would substantially duplicate those contained in such
audited financial statements have been omitted from this report.

(1) BASIS OF ACCOUNTING

The accompanying consolidated financial statements include the
accounts of the Partnership and the following of its ventures (see note 4),
Mall of Memphis Associates ("Mall of Memphis"), 767 Third Avenue Associates
("767 Third Avenue"), Riverfront Office Park Joint Venture ("Riverfront")
and Excelsior Associates, LP ("824 Market Street") (property transferred to
lender in December 1994, see note 3(c)). The effect of all transactions
between the Partnership and the ventures has been eliminated. The equity
method of accounting has been applied in the accompanying consolidated
financial statements with respect to the Partnership's interest in
Carlyle/National City Associates ("Carlyle/National City"). Accordingly,
the accompanying consolidated financial statements do not include the
accounts of Carlyle/National City.

The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to reflect the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the ventures described above.
Such adjustments are not recorded on the records of the Partnership. The
net effect of these items is summarized as follows for the six months ended
June 30:
1995 1994
----------------------- -------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------

Net loss . . . . . . . $2,483,321 2,776,559 4,453,942 3,004,063
Net loss per
limited
partnership
interest. . . . . . . $ 17.34 19.39 31.11 20.97
========== ========= ========== =========

The net loss per limited partnership interest ("Interest") is based
upon the Limited Partnership Interests outstanding at the end of each
period. Deficit capital accounts will result, through the duration of the
Partnership, in net gain for financial reporting and Federal income tax
purposes.

Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. The Partnership records amounts held in
U.S. Government obligations at cost, which approximates market. For the
purposes of these statements, the Partnership's policy is to consider all

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

such amounts held with original maturities of three months or less
($542,852 and $1,932,366 at June 30, 1995 and December 31, 1994,
respectively) as cash equivalents with any remaining amounts (generally
with original maturities of one year or less) reflected as short-term
investments being held to maturity.

During March 1995, Statement of Financial Accounting Standards No. 121
("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued. SFAS 121, when effective,
will require that the Partnership record an impairment loss on its long-
lived assets (primarily its consolidated investments in land, buildings and
improvements) whenever their carrying value cannot be fully recovered
through estimated undiscounted future cash flows from operations and sale.
The amount of the impairment loss to be recognized would be the difference
between the long-lived asset's carrying value and the asset's estimated
fair value less costs to sell.

The amount of any impairment loss recognized by the Partnership under
its current accounting policy has been limited to the excess, if any, of
the property's carrying value over the outstanding balance of the
property's non-recourse indebtedness. An impairment loss under SFAS 121
would be determined without regard to the nature or the balance of such
non-recourse indebtedness. Upon the disposition of a property for which an
impairment loss has been recognized under SFAS 121, the Partnership would
recognize, at a minimum, a net gain for financial reporting purposes to the
extent of any excess of the then outstanding balance of the property's non-
recourse indebtedness over the then carrying value of the property,
including the effect of any reduction for impairment loss under SFAS 121.

The Partnership expects to adopt SFAS 121 no later than the first
quarter of 1996. Although the Partnership has not currently assessed the
full impact of adopting SFAS 121, the amount of any such required
impairment loss could be materially higher than the amounts that have been
recorded in the past or may be recorded in 1995 under the Partnership's
current impairment policy. In addition, upon the disposition of an
impaired property, the Partnership would generally recognize more net gain
for financial reporting purposes under SFAS 121 than it would have under
the Partnership's current impairment policy, without regard to the amount,
if any, of cash proceeds received by the Partnership in connection with the
disposition. Although implementation of this new accounting statement
could significantly impact the Partnership's reported earnings, there would
be no impact on cash flows. Further, any such impairment loss would not be
recognized for Federal income tax purposes.

Certain reclassifications have been made to the 1994 consolidated
financial statements to conform with the 1995 presentation.

(2) INVESTMENT PROPERTIES

All investment properties are pledged as security for long-term debt,
all of which are non-recourse to the Partnership. The Partnership
continues to make the scheduled payments on its existing mortgage
indebtedness related to its remaining investment properties, except as
described in note 3 below.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(3) LONG-TERM DEBT MODIFICATIONS AND REFINANCINGS

(a) General

As described below, the Partnership is seeking or has received
mortgage note modifications on certain properties. Upon expiration of such
modifications, should the Partnership not seek or be unable to secure new
or additional modifications to the loans, based upon current and
anticipated future market conditions, the Partnership may not commit any
significant additional amounts to these properties. This would likely
result in the Partnership no longer having an ownership (or security)
interest in such properties. Such decisions will be made on a property-by-
property basis and could result in a gain for financial reporting and
Federal income tax purposes to the Partnership with no corresponding
distributable proceeds.

(b) 767 Third Avenue Office Building

During 1991 and 1992, the leases for approximately 67% of the space at
the 767 Third Avenue office building located in New York, New York expired
(substantially all of which have been released as of March 1995 but at
lower effective rents). In order to reduce debt service payments during
the tenant turnover period, the 767 Third Avenue venture obtained from the
existing lender, in May 1992, a replacement mortgage loan which matures in
May 1998 and bears a substantially lower interest rate (10%) than the
original loan (12-3/8%). In connection with the replacement mortgage loan,
767 Third Avenue was required to fund $8,000,000 into an escrow account for
future leasing costs and debt service shortfalls resulting from anticipated
tenant turnover. At the inception of the escrow agreement, the venture was
allowed to reduce the required escrow contributions by approximately
$2,600,000 to reflect that certain leasing costs (described above) had
already been incurred. 767 Third Avenue had been reserving the property's
cash flow beginning with the second quarter of 1990; however, such amounts
were less than the net required reserve. The Partnership's venture partner
loaned $5,000,000 to the venture in order to fund the net escrow reserve
account. In 1993, the reserve account was depleted and the venture (by way
of partner contributions) continues to fund required leasing costs and debt
service shortfalls. The loan funded by the Partnership's venture partner
earns interest at an adjustable rate (approximately 10.5% at June 30, 1995)
and provides for repayment of principal and interest out of the available
cash flow from property operations and sale or refinancing proceeds. In
June 1993, the Partnership purchased a 50% interest in the venture
partner's loan including the related accrued interest. Accordingly, the
Partnership's 50% interest in the principal portion of the loan
($2,500,000) and the related interest has been eliminated in the
consolidated financial statements. In conjunction with the agreement with
the venture partner to loan the amounts necessary to fund the escrow
account, because the Partnership did not purchase its share of the
$5,000,000 loan by December 31, 1992, the Partnership's preferential return
was removed from the calculation of the allocation of venture sale or
refinancing proceeds. In addition, during 1994, the venture partner
approached the Partnership regarding purchasing the Partnership's 50%
interest in 767 Third Avenue; however, upon review of the proposed terms,
the Partnership did not believe the offer to be in its best interest and
the offer was rejected.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In order to reduce debt service payments during the tenant turnover period,
the venture had negotiated with the first mortgage lender for a possible
modification to the first mortgage note. Such negotiations were
unsuccessful and the venture received notice of default. The first
mortgage lender commenced proceedings to realize upon its security and was
the successful bidder at the foreclosure sale held in October 1994. The
deed was conveyed to the first mortgage lender on December 12, 1994. As a
result of the disposition of the property, the Partnership recognized a
gain in 1994 of $3,689,195 and $6,805,134 for financial reporting and
Federal income tax purposes, respectively, with no corresponding
distributable proceeds.

(d) Riverfront Office Building

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

total amount of ground lease payments in arrears is approximately $433,000.

In this regard, the proposed loan restructure discussed above would provide
for the waiver of any and all ground lease payments since the first missed
payment in February 1993 until the earlier of any future mortgage loan
prepayment date (resulting from a sale or refinancing of the property) or
December 31, 2007. The proposed loan restructure also provides that if,
during calendar year 1997, projections of gross rental revenue approved by
the lender during the year are not less than $9 million per year for each
of the next five calendar years, annual payments of ground rent would
resume, but in a reduced amount (as defined). If the joint venture is
unable to secure any modifications to the mortgage notes, the joint venture
would likely decide, based upon current and anticipated future market
conditions, not to commit any significant additional amounts to this
property. This would result in the Partnership no longer having an
ownership interest in this property and would result in a gain for
financial reporting and Federal income tax purposes to the Partnership with
no corresponding distributable proceeds.

(e) Mall of Memphis

In March 1993, the Mall of Memphis venture finalized additional
financing from the existing mortgage lender to repay renovation costs
funded by the venture. The venture received additional financing of a
$7,600,000 ten year loan at a rate of 10%. The Partnership's share of the
funding was $4,719,095 (net of closing costs), of which $1,000,000 was
required to be deposited in an escrow account as security against any
currently undiscovered environmental issues. In addition, a portion of
these funds were used to purchase the Partnership's share of a loan funded
by the Partnership's venture partner in the 767 Third Avenue venture, as
further discussed in note 3(b). The remaining funds may be used to fund
current and future Partnership obligations. The venture would have been
entitled to additional proceeds of $2,025,000 if the property had achieved
certain occupancy levels and debt coverage ratios by September 30, 1994;
however, the venture did not qualify for such additional proceeds as
leasing did not achieve budgeted goals. In May, 1994, an affiliate of the
General Partners assumed property management and leasing services.
Property management fees are calculated as 3% of base rent (as defined) and
leasing commissions are calculated at a rate, which approximates market,
based on the terms of the related lease. In addition, the venture partner
has an agreement in principle with the Partnership to sell its 36.94%
interest in the Mall of Memphis to the Partnership. If such purchase is
consummated, the Partnership would buy the venture partner's interest for
$5,500,000. Of such amount, $500,000 would be paid in cash at closing and
$5,000,000 would be paid in a note maturing in seven years that is secured
by the venture partner's interest. Interest would accrue on the note at a
rate of 8.0% per annum and would be payable at the lesser of a) 8.0% per
annum or b) 36.94% of the annual cash flow, with the difference accruing at
8.0%. For fiscal years 1996 and 1997, the Partnership would guarantee the
venture partner (seller) interest payments of $300,000 per annum. There
can be no assurance that such transaction will be consummated.

(f) Refinancings

In December 1990, the Partnership obtained replacement mortgage loans
from an institutional lender to retire in full satisfaction, at an
aggregate discount, the previously modified existing long-term mortgage
notes secured by the Scotland Yard - Phase I and II, South Point and El
Dorado View apartment complexes. The Partnership sold the South Point
Apartments in July 1993. Commencing April 1, 1992, the loans provide for

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

payment of contingent interest equal to 35% of the amount by which gross
receipts attributable to a fiscal year (all as defined) exceed a base
amount. For the fiscal years 1994, 1993 and 1992, contingent interest was
approximately $257,000, $293,000 and $281,000, respectively. As of June
30, 1995, the Partnership has recorded additional interest expense of
approximately $135,000 based on an estimate of the contingent interest due
for fiscal year 1995. In the event that these properties are sold before
the maturity date of the loan, the lender is entitled to a prepayment
penalty of 6% of the mortgage principal and, in general, the higher of 65%
of the sale proceeds or ten times the highest contingent interest amount in
any of the three full fiscal years preceding the sale (all as defined).
The lender has the right (with 120 days prior notification) to call the
remaining loans at any time after January 1, 1996. In this regard, the
Partnership is currently marketing the Scotland Yard Phase I and II and the
El Dorado View apartment complexes for sale. If the Partnership is
unsuccessful in selling the properties prior to January 1, 1996 and the
lender exercises its right to call the loans, the Partnership expects that
it would be able to fully refinance such properties within the required 120
day notification period. Only if the Partnership was unsuccessful in
negotiating a sale or refinancing within such period would title to the
properties be transferred to the lender in full satisfaction of the loans.
In such event, the Partnership would recognize a gain for financial
reporting and Federal income tax purposes with no corresponding
distributable proceeds. The lender required the establishment of an escrow
account, initially of approximately $980,000 in the aggregate, to be used
towards the purchase of major capital items at the apartment complexes.
Additionally, the lender required $150,000 of the sale proceeds from South
Point Apartments to be added to the escrow account. As of June 30, 1995,
the Partnership has fully depleted the escrow account to fund lender-
approved capital improvements at the above-referenced apartment complexes.
Finally, the modification provides for the lender to participate in the net
proceeds from the sale or refinancing of the properties in the form of
additional contingent interest. The Partnership has recorded an accrual
for such participation of $4,002,192 and $3,605,840 as deferred accrued
interest included in the balance of such debt in the accompanying
consolidated financial statements at June 30, 1995 and December 31, 1994,
respectively. Due to the rights of the lender as described above, the
Partnership has classified the loans, including accrued participation
interest, (with an outstanding balance of $27,512,192) as current
liabilities in the accompanying consolidated balance sheet at June 30,
1995.

(4) VENTURE AGREEMENTS

(a) General

The Partnership at June 30, 1995 is a party to four operating joint
venture agreements. In general, the Partnership's venture partners, who
are either the sellers (or their affiliates) of the property investments
being acquired or parties which have contributed an interest in the
property being developed, or were subsequently, admitted to the ventures,
make no cash contributions to the ventures, but their retention of an
interest in the property, through the joint venture, is taken into account
in determining the purchase price of the Partnership's interest, which is
determined by arm's-length negotiations. Under certain circumstances,
either pursuant to the venture agreements or due to the Partnership's
obligations as a general partner, the Partnership may be required to make
additional cash contributions to the ventures.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

There are certain risks associated with the Partnership's investments
made through ventures, including the possibility that the Partnership's
joint venture partners in an investment might become unable or unwilling to
fulfill their financial or other obligations, or that such venture partners
may have economic or business interests or goals that are inconsistent with
those of the Partnership.

(b) Carlyle/National City

In July 1983, the Partnership acquired, through Carlyle/National City
(a joint venture with Carlyle Real Estate Limited Partnership-XII), an
interest in an existing thirty-five story office building in Cleveland,
Ohio.

The Partnership made an initial contribution of $5,445,257 to
Carlyle/National City. The terms of the Carlyle/National City venture
agreement provide that the capital contributions, annual cash flow, net
proceeds from sale or refinancing and profit or loss will be allocated or
distributed 13.7255% to the Partnership. The Partnership's cash investment
in the property was $3,341,583 after distributions resulting from the
increase in the first mortgage loan.

In January 1994, the debt service payments under the existing mortgage
for the National City Center Office Building increased from 9-5/8% per
annum to 11-7/8% per annum until the scheduled maturity of the loan in
December 1995. Carlyle/National City reached an agreement with the current
mortgage lender to refinance the existing mortgage effective April 28,
1994, with an interest rate of 8.5% per annum. The loan will be amortized
over 22 years with a balloon payment due at maturity on April 10, 2001.
Carlyle/National City paid a refundable loan commitment fee of $1,163,524
in 1993 in conjunction with the refinancing. The fee was applied to
accrued interest and the prepayment penalty of $580,586 based on the
outstanding mortgage balance at the time of refinancing, with the balance
of $238,215 refunded to Carlyle/National City in 1994. In addition, the
lender required an escrow account of $612,000 to be established at the
inception of the refinancing for future tenant improvement costs at the
property. The lender also requires the tenant costs related to a major
tenant (Baker & Hostetler) lease to be escrowed. The venture is required
to escrow approximately $313,000 per year from 1994 through 1996 and
approximately $236,000 per year in 1997 and 1998. Release of the escrowed
funds (approximately $1,100,000 at June 30, 1995) requires lender approval
(as defined). As of June 30, 1995, no funds have been released from the
escrow.

(5) SALES OF INVESTMENT PROPERTIES

(a) Pavillion Towers

During April 1986, the Partnership sold its interest in Am-Car Real
Estate Partnership - I ("Am-Car") (which owns the Pavillion Towers office
complex located in Aurora, Colorado) to its venture partners for $1,000,000
in cash, promissory notes aggregating $3,750,000 and the venture partners'
assumption of the Partnership's share of the debt encumbering the property.

The two promissory notes of $3,000,000 and $750,000 bear interest at
various rates and are due in April 1996. Beginning in 1991, the
Partnership has not received the scheduled interest payments of $15,000 on
the $750,000 note and as of the date of this report, the Partnership has
not received the 1995, 1994 or 1993 scheduled interest payments of $60,000
per annum on the $3,000,000 note. Collection of all past due and future
amounts from these notes are considered unlikely; however, the Partnership

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

is evaluating all of its legal options, including the possibility of a
substantial discounted payment. Due to the uncertainty of collection of
all past due and future amounts from these notes, a $527,774 reserve was
established at September 30, 1993 to reduce the mortgage notes receivable
balance to an amount not to exceed the related deferred gain on sale.

The sale was accounted for by the installment method whereby the gain
on sale of $3,057,695 (net of discount on the promissory notes receivable
of $1,682,305) was recognized as collections of principal were received.
Effective January 1, 1990, the Partnership adopted the cost recovery method
of accounting. The interest received in 1992, 1991 and 1990 ($60,000,
$60,000 and $37,500, respectively) was applied against the outstanding
principal balance. No profit has been recognized in 1995, 1994, 1993, 1992
or 1991.

(6) TRANSACTIONS WITH AFFILIATES

Certain of the Partnership's properties are managed by affiliates of
the General Partners or their assignees for fees computed as a percentage
of certain rents received by the properties. In December 1994, one of the
affiliated property managers sold substantially all of its assets and
assigned its interest in its managements contracts to an unaffiliated third
party. In addition, certain of the management personnel of the property
manager became management personnel of the purchaser or its affiliates.
The successor to the affiliated property manager's assets is acting as the
property manager of Scotland Yard Phase I & II Apartments, El Dorado View
Apartments and Carlyle/National City Center after the sale on the same
terms that existed prior to the sale.

Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of June 30,
1995 and for the six months ended June 30, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
Unpaid at
June 30,
1995 1994 1995
-------- ------ -------------
<S> <C> <C> <C>
Property management
and leasing fees. . . . . . . . . $118,220 138,886 7,925
Insurance commissions. . . . . . . 34,756 12,717 --
Management fees to
corporate general
partner . . . . . . . . . . . . . -- -- 11,936
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . . . . . . 4,355 4,397 22
-------- ------- ------

$157,331 156,000 19,883
======== ======= ======
</TABLE>
The Corporate General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees of
the Corporate General Partner and its affiliates relating to the
administration of the Partnership and operation of the Partnership's
investment properties. Such costs aggregated $87,954 for the six months
ended June 30, 1995 and $125,655 for fiscal 1994, all of which has been
paid as of June 30, 1995.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

The Corporate General Partner has deferred payment of partnership
management fees as set forth in the above table. In addition,
distributions to the General Partners of the first quarter 1991 net cash
flow of the Partnership, aggregating $7,161, have also been deferred.
These amounts do not bear interest and are expected to be paid in future
periods.

Subsequent to June 30, 1995, the Corporate General Partner of the
Partnership has determined to use an independent third party or parties to
perform certain of these administrative services beginning in late 1995.
Use of a third party, (rather than reimbursement to the Corporate General
Partner and its affiliates), is not expected to have a material effect on
the operations of the Partnership.

(7) COMMITMENTS AND CONTINGENCIES

The Partnership is a defendant in several actions brought against it
arising in the ordinary course of business. It is the belief of the
Corporate General Partner, based on its knowledge of facts and advice of
counsel, that the claims made against the Partnership in such actions will
not result in a material adverse effect on the Partnership's consolidated
financial position or results of operations.

(8) ADJUSTMENTS

In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of June 30, 1995
and for the three and six months ended June 30, 1995 and 1994.

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

All references herein to "Notes" are to Notes to Consolidated
Financial Statements filed with this report.

At June 30, 1995, the Partnership and its consolidated ventures had
cash and cash equivalents of approximately $2,151,000. Such funds and
short-term investments of approximately $1,013,000 are available for future
distributions to partners and for working capital requirements including
the Partnership's portion of the anticipated net cash flow deficits at the
767 Third Avenue office building and the Scotland Yard - Phase I and II
apartment complexes. The Partnership and its consolidated ventures have
currently budgeted in 1995 approximately $3,887,000 for tenant improvements
and other capital expenditures. The Partnership's share of such items and
its share of such similar items for its unconsolidated ventures in 1995 is
currently budgeted to be approximately $2,734,000. Actual amounts expended
in 1995 may vary depending on a number of factors including actual leasing
activity, results of property operations, liquidity considerations and
other market conditions over the course of the year. Certain of the
Partnership's investment properties and properties in which the Partnership
has a security interest currently operate in overbuilt markets which are
characterized by lower than normal occupancies and/or reduced rent levels.
Such competitive conditions will contribute to the anticipated net cash
flow deficits described above. The sources of capital for such items and
for both short-term and long-term future liquidity and distributions to
partners are expected to be from net cash generated by the Partnership's
investment properties and through the sale of such investments. In such
regard, reference is made to the Partnership's property specific
discussions below. The Partnership does not consider the mortgage notes
receivable arising from the previous sale of the Partnership's investment
property to be a source of future liquidity as collection of any past due
or future payments on the Partnership's notes is considered unlikely.
Reference is made to Note 5(a). The Partnership's and its Ventures'
mortgage obligations are all non-recourse. Therefore, the Partnership and
its Ventures are not obligated to pay mortgage indebtedness unless the
related property produces sufficient net cash flow from operations or sale.

The Partnership currently has adequate cash and cash equivalents to
maintain the operations of the Partnership. However, based upon estimated
operations of certain of the Partnership's investment properties, the
Partnership decided to suspend distributions to the Limited and General
Partners effective as of the second quarter of 1991. In addition, the
Partnership has deferred cash distributions and partnership management fees
related to the first quarter of 1991 as discussed in Note 6. These
amounts, which do not bear interest, are approximately $19,000 and are
expected to be paid in future periods.

As described more fully in Note 3, the Partnership is seeking or has
received mortgage loan modifications on certain of its properties. If the
Partnership is unable to secure new or additional modifications to the
loans, based upon current market conditions, the Partnership may not commit
any significant additional amounts to any of the properties which are
incurring, or in the future do incur, operating deficits or deficits to
underlying mortgage holders. This would result in the Partnership no
longer having an ownership (or security) interest in such properties. Such
decisions will be made on a property-by-property basis and may result in a
gain to the Partnership for financial reporting and Federal income tax
purposes, with no corresponding distributable proceeds.

The lender of the long-term mortgage notes secured by the Scotland
Yard-Phase I and II, South Point, and El Dorado View apartment complexes
required the establishment of an escrow account, initially of approximately
$980,000 in the aggregate, to be used towards the purchase of major capital
items at the apartment complexes. Additionally, the lender required
$150,000 of the proceeds from the 1993 sale of the South Point Apartments
to be added to the escrow account. As of June 30, 1995, the Partnership
has fully depleted the escrow account to fund lender-approved capital
improvements at the above-referenced apartment complexes. Additionally,
the lender has the right to call the remaining loans at any time after
January 1, 1996. In this regard, the Partnership is currently marketing
the Scotland Yard Phase I and II and the El Dorado View apartment complexes
for sale. If the lender exercises its right to call the loans and the
Partnership is unsuccessful in selling or refinancing the properties prior
to the expiration of the notification period, the Partnership would assign
title to the properties to the lender in satisfaction of the loans and
recognize a gain for financial reporting and Federal income tax purposes
with no corresponding distributable proceeds. Reference is made to Note
3(f).

767 Third Avenue Office Building

Occupancy at the property is 95% at June 30, 1995, up from 92% at
March 31, 1995. The 767 Third Avenue venture is aggressively marketing the
vacant space. The Partnership is obligated to fund its share of the net
cash flow deficits resulting from costs associated with any leasing
activity at the property.

During 1992 and 1991, the leases for approximately 67% of the space at
the 767 Third Avenue office building expired (substantially all of which
have been released as of March 1995 but at lower effective rents). During
the first quarter of 1994, a tenant vacated a portion of its space
(approximately 6,450 square feet or 2% of the building's leasable space)
prior to its lease expiration of January 1997. The venture reached an
agreement with the tenant whereby the lease obligation was terminated in
return for a $800,000 payment to the venture. This space was subsequently
released to a new tenant. Vacancy rates in Midtown Manhattan (the sub-
market for this property) remain high and the increased competition for
tenants has resulted in lower effective rental rates (contract rates less
the amortization of tenant improvements and free rent concessions). The
adverse market conditions and the negative impact of effective rental rates
are expected to continue over the next few years. While this building is
in a premier location, it has been adversely impacted by the lower
effective rental rates on leasing and by releasing costs. In order to
reduce debt service payments during the tenant turnover period, the 767
Third Avenue joint venture obtained from the existing lender, in May 1992,
a replacement mortgage loan bearing a substantially lower interest rate
than the original loan. In connection with the replacement mortgage loan,
767 Third Avenue was required to fund $8,000,000 into an escrow account in
order to fund any future leasing costs and debt shortfalls resulting from
anticipated tenant turnover. At the inception of the escrow agreement, the
joint venture was allowed to reduce the required reserve contributions by
approximately $2,600,000 to reflect certain leasing costs that had already
been incurred. The Partnership's joint venture partner loaned $5,000,000
to the joint venture in order to fund the net escrow reserve account. The
Partnership purchased a 50% interest in this loan in June 1993. Reference
is made to Note 3(b). In 1993, the reserve account was depleted and the
venture (by way of partner contributions) continues to fund required
leasing costs and debt service shortfalls. During 1994, the joint venture
partner approached the Partnership regarding purchasing the Partnership's
50% interest in 767 Third Avenue. However, upon review of the proposed
terms, the Partnership did not believe the offer to be in its best interest
and the offer was rejected.

824 Market Street

Occupancy had risen to 56% during 1994. The 824 Market Street venture
was aggressively seeking replacement tenants for the vacant space; however,
competition had risen significantly due to new office building development
in the area over the last few years and the contraction of tenants in the
financial services industry, resulting in lower effective rental rates. In
order to reduce debt service payments during the tenant turnover period,
the venture had negotiated with the first mortgage lender for a possible
modification to the first mortgage note. Such negotiations were
unsuccessful and the venture received notice of default. The first
mortgage lender commenced proceedings to realize upon its security and was
the successful bidder at the foreclosure sale held in October. The deed
was conveyed to the first mortgage lender on December 12, 1994. As a
result of the disposition of the property, the Partnership recognized a
gain in 1994 of $3,689,195 and $6,805,134 for financial reporting and
Federal income tax purposes, respectively, with no corresponding
distributable proceeds. Reference is made to Note 3(c).

Riverfront Office Building

On August 28, 1990, the Riverfront joint venture acquired additional
financing by way of a $5,800,000 fourth mortgage note in order to fund the
costs associated with leasing vacant space. As of the date of this report,
the joint venture has received approximately $5,730,000 in proceeds. The
balance of the proceeds, a $70,000 engineering holdback, is payable to the
joint venture upon completion of certain structural repairs the extent of
which are being negotiated with the lender but are not expected to exceed
the holdback amount. As a result of a reduction in effective rental rates
upon the releasing of vacant space, the property began operating at a
deficit in 1992 and, as a result, debt service payments since July 1992
were made on a delayed basis. At June 30, 1995, the February 1993 through
March 1995 scheduled debt service payments are delinquent by approximately
$7,433,000. Accordingly, the loan balance of approximately $34,298,000 has
been reflected as a current liability in the consolidated financial
statements at June 30, 1995 and December 31, 1994, respectively. In order
to reduce debt service payments, the joint venture has initiated
discussions with the lender to negotiate possible modifications to the
mortgage notes. In this regard, the joint venture has entered into a non-
binding letter of intent with the existing lender for a restructure of its
mortgage loans. The proposed terms of the loan restructure would
retroactively reduce the interest rate payable on the loans and reduce the
term of the loan from its present maturity date of September 2018 to
December 2007. The loans (which currently bear interest at rates ranging
from 10% to 14% per annum) would bear interest at 6% per annum for the
period January 1, 1993 through December 31, 1997. Thereafter, the interest
rate per annum shall be the greater of the rate derived using the "Coverage
Formula" (as defined) or 7% from January 1, 1998 to December 31, 1999;
8.25% from January 1, 2000 to December 31, 2002; and 9% from January 1,
2003 to December 31, 2007. In addition, the lender is entitled to earn a
minimum internal rate of return of 10.5% per annum calculated over the
restructured loan term. The proposed loan restructure would also require
that net cash flow after debt service and capital be paid into an escrow
account controlled by the lender to be used for operating shortfalls and
costs associated with additional leasing as approved by the lender. In
addition, the property operates under a ground lease and the joint venture
has not made the scheduled ground lease payments since February 1993. The
ground lessor is a general partner of the venture partner. At June 30,
1995, the total amount of ground lease payments in arrears is approximately
$433,000. In this regard, the proposed loan restructure discussed above
would provide for the waiver of any and all ground lease payments since the
first missed payment in February 1993 until the earlier of any future
mortgage loan prepayment date (resulting from a sale or refinancing of the
property) or December 31, 2007. The proposed loan restructure also
provides that if, during calendar year 1997, projections of gross rental
revenue approved by the lender during the year are not less than $9 million
per year for each of the next five calendar years, annual payments of
ground rent would resume, but in a reduced amount (as defined). There can
be no assurances that the restructure will be obtained. If the joint
venture is unable to secure any modifications to the mortgage notes, the
joint venture would likely decide, based upon current and anticipated
future market conditions, not to commit any significant additional amounts
to this property. This would result in the Partnership no longer having an
ownership interest in this property and would result in a gain for
financial reporting and Federal income tax purposes to the Partnership with
no corresponding distributable proceeds. Reference is made to Note 3(d).

Mall of Memphis

Although occupancy had been increasing, in order for the Mall of
Memphis to maintain its competitive position in the marketplace, the Mall
of Memphis venture completed a mall renovation in 1991. The renovation
costs had been funded by the venture until additional financing was in
place. The Partnership contributed approximately $2,252,000 in addition to
foregoing their share of 1990 and a portion of the 1991 distributable cash
flow from the property to cover their portion of the renovation costs. In
March 1993, the venture finalized additional financing of a $7,600,000 ten
year loan at a rate of 10%. The Partnership's share of the funding in 1993
was $4,719,095 (net of closing costs). Of the amount funded, the
Partnership was required to deposit $1,000,000 in an escrow account as
security against any currently undiscovered environmental issues. The
venture would have been entitled to additional proceeds of $2,025,000 if
the property had achieved certain occupancy levels and debt coverage ratios
by September 30, 1994; however, the venture did not qualify for such
additional proceeds as leasing did not achieve budgeted goals. In May,
1994, an affiliate of the General Partners assumed property management and
leasing services. Property management fees are calculated as 3% of base
rent (as defined) and leasing commissions are calculated at a rate, which
approximates market, based on the terms of the related lease. Reference is
made to Note 3(e). In addition, the venture partner has an agreement in
principle with the Partnership to sell its 36.94% interest in the Mall of
Memphis to the Partnership. If such purchase is consummated, the
Partnership would buy the venture partner's interest for $5,500,000. Of
such amount, $500,000 would be paid in cash and $5,000,000 would be paid in
a note maturing in seven years that is secured by the venture partner's
interest. Interest would accrue on the note at a rate of 8.0% per annum
and would be payable at the lesser of a) 8.0% per annum or b) 36.94% of the
annual cash flow, with the difference accruing at 8.0%. For fiscal years
1996 and 1997, the Partnership would guarantee the venture partner (seller)
interest payments of $300,000 per annum. There can be no assurance that
such transaction will be consummated.

General

There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the
Partnership's joint venture partner(s) in an investment might become unable
or unwilling to fulfill its (their) financial or other obligations, or that
such joint venture partner(s) may have economic or business interests or
goals that are inconsistent with those of the Partnership.

While the real estate markets are recuperating, highly competitive
market conditions continue to exist in most locations. The Partnership's
philosophy and approach has been to aggressively and creatively manage the
Partnership's real estate assets to attract and retain tenants. Net
effective rents to the landlord from renewal tenants are much more
favorable than lease terms which can be negotiated with new tenants.
However, the Partnership's capital resources must also be preserved and
allocated in such a manner as to maximize the total value of the portfolio.

As a result of the real estate market conditions discussed above, the
Partnership continues to conserve its working capital. All expenditures
are carefully analyzed and certain capital projects are deferred when
appropriate. The Partnership has also sought or is seeking additional loan
modifications where appropriate. By conserving working capital, the
Partnership will be in a better position to meet the future needs of its
properties since outside sources of capital may be limited.

Due to these factors, the Partnership has held certain of its
investment properties longer than originally anticipated in an effort to
maximize the return to the Limited Partners. Although the Partnership
expects to distribute sale proceeds from the disposition of certain of the
Partnership's remaining assets, without a dramatic improvement in market
conditions, the Limited Partners will receive significantly less than their
original investment.<PAGE>
RESULTS OF OPERATIONS

The aggregate decrease in cash and cash equivalents and short-term
investments at June 30, 1995 as compared to December 31, 1994 is due
primarily to operating deficits at 767 Third Avenue (funded equally with
the venture partner) and Scotland Yard I & II, partially offset by a
$288,000 reimbursement from the lender-required escrow account for recent
capital projects at Scotland Yard I and II. Reference is made to Note
3(f).

The increase in rents and other receivables at June 30, 1995 as
compared to December 31, 1994 is primarily due to an increase in certain
expense recoveries receivable related to 1994 from tenants at the Mall of
Memphis.

The decrease in prepaid expenses at June 30, 1995 as compared to
December 31, 1994 is primarily due to the timing of payment of insurance
premiums at Scotland Yard I and II and El Dorado View Apartments.

The decrease in escrow deposits and the corresponding decrease in
accrued real estate taxes at June 30, 1995 as compared to December 31, 1994
is primarily due to the timing of real estate tax payments at certain of
the Partnership's investment properties.

The increase in building and improvements at June 30, 1995 as compared
to December 31, 1994 is primarily due to capitalization of tenant leasehold
improvement costs at 767 Third Avenue office building and capital
improvement projects at the Scotland Yard I & II apartment complexes which
were partially funded from the lender-required escrow account, as described
above.

The increase in investment in unconsolidated venture, at equity at
June 30, 1995 as compared to December 31, 1994 and the increase in the
Partnership's share of operations of unconsolidated venture for the three
and six months ended June 30, 1995 as compared to the three and six months
ended June 30, 1994 is primarily due to higher average occupancy and lower
mortgage interest expense at the Carlyle/National City investment property.

(Reference is made to Note 4(b)).

The increase in accrued rents receivable at June 30, 1995 as compared
to December 31, 1994 is primarily due to the Partnership accruing rental
income for certain major tenant leases at certain investment properties
over the full period of occupancy rather than as due per the terms of their
respective leases.

The increase in venture partners' deficit in venture at June 30, 1995
as compared to December 31, 1994 is primarily due to operations at the Mall
of Memphis and the Riverfront office building.

The increase in the current portion of long-term debt and the
corresponding decrease in long-term debt, less current portion at June 30,
1995 as compared to December 31, 1994 is due to the debt at Scotland Yard
I, Scotland Yard II and El Dorado View apartments being reclassified to
current, as further discussed in Note 3(f).

The decrease in accounts payable at June 30, 1995 as compared to
December 31, 1994 is primarily due to the timing of payment of certain
recoverable operating expenses at certain of the Partnership's investment
properties.

The increase in unearned rents at June 30, 1995 as compared to
December 31, 1994 is primarily due to rent credits issued tenants at the
Mall of Memphis for certain expense recoveries related to 1994.

The increase in accrued interest at June 30, 1995 as compared to
December 31, 1994 is primarily due to interest accruals associated with the
non-recourse mortgage loan secured by the Riverfront office building. The
Partnership is delinquent in debt service payments the Riverfront office
building, as more fully described in Note 3(d).

The decrease in venture partners' subordinated equity in ventures at
June 30, 1995 as compared to December 31, 1994 is primarily due to
operations at the 767 Third Avenue office building.

The decrease in rental income, mortgage and other interest expense,
depreciation and property operating expenses for the three and six months
ended June 30, 1995 as compared to the three and six months ended June 30,
1994 is due primarily to the lender realizing upon its security in the 824
Market Street office building in December 1994, as more fully discussed in
Note 3(c). The decrease in mortgage and other interest expense for the
three and six months ended June 30, 1995 as compared to the three and six
months ended June 30, 1994 is partially offset by interest accruals
associated with the non-recourse mortgage loan secured by the Riverfront
office building. The Partnership is delinquent in debt service payments
for the Riverfront office building, as more fully described in Note 3(d).

The decrease in interest income for the three and six months ended
June 30, 1995 as compared to the three and six months ended June 30, 1994
is due primarily to a decrease in the average balance of U.S. Government
obligations in 1995 due to the Partnership funding of operating deficits at
the Scotland Yard I & II apartment complexes and its share of operating
deficits at 767 Third Avenue.

The increase in amortization of deferred expenses for the three and
six months ended June 30, 1995 as compared to the three and six months
ended June 30, 1994 is primarily due to increased amortization relating to
capitalized leasing costs at the 767 Third Avenue Office Building, the
Riverfront Office Building and the Mall of Memphis.

<TABLE>
PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

OCCUPANCY

The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties.
<CAPTION>
1994 1995
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Scotland Yard Apartments
-Phase II
Houston, Texas. . . . . . . . . 92% 89% 95% 92% 93% 90%
2. 824 Market Street
Wilmington, Delaware. . . . . . 42% 56% 56% N/A N/A N/A
3. Mall of Memphis
Memphis, Tennessee. . . . . . . 88% 85% 87% 85% 82% 82%
4. Riverfront Office
Building
Cambridge,
Massachusetts . . . . . . . . . 89% 90% 91% 95% 95% 95%
5. Scotland Yard Apartments
-Phase I
Houston, Texas. . . . . . . . . 92% 91% 92% 92% 93% 93%
6. El Dorado View Apartments
Houston, Texas. . . . . . . . . 93% 94% 93% 91% 94% 95%
7. 767 Third Ave.
Office Building
New York, New York. . . . . . . 86% 87% 86% 89% 92% 95%
8. National City Center
Office Building
Cleveland, Ohio . . . . . . . . 94% 94% 94% 94% 97% 97%

<FN>
---------------

An "N/A" indicates that the Partnership's interest in the property was disposed and was not owned by the
Partnership at the end of the quarter.

</TABLE>

ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K

Response:

(a) Exhibits:

10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the 767 Third Avenue Office Building in New
York, New York are hereby incorporated by reference to the Partnership's
Registration Statement on Post-Effective Amendment No. 2 to Form S-11 (File
No. 2-70724) dated May 8, 1981.

10-B. Acquisition documents relating to the purchase by the
Partnership of an interest in the Mall of Memphis in Memphis, Tennessee are
hereby incorporated by reference to the Partnership's Registration
Statement on Post-Effective Amendment No. 2 to Form S-11 (File No. 2-70724)
dated May 8, 1981.

10-C. Acquisition documents relating to the purchase by the
Partnership of an interest in the Riverfront Office Building in Cambridge,
Massachusetts are hereby incorporated by reference to the Partnership's
Registration Statement on Post-Effective Amendment No. 3 to Form S-11 (File
No 2-70724) dated May 8, 1981.

10-D. Purchase and Sale Agreement between Carlyle Real Estate
Limited Partnership-XI and Centeq Acquisition Inc., dated April 14, 1993,
and exhibits thereto, and the First and Second Amendments to the Purchase
and Sale Agreement, dated May 24, 1993 and June 1, 1993, respectively, are
hereby incorporated by reference to the Partnership's Form 8-K (File No. 0-
10494) dated August 30, 1993.

10-E. Assignment of Purchase and Sale Agreement between Centeq
Acquisition Inc. and Camden Property Trust, dated July 9, 1993 is hereby
incorporated by reference to the Partnership's Form 8-K (File No. 0-10494)
dated August 30, 1993.

10-F. Third Amendment to Purchase and Sale Agreement between
Carlyle Real Estate Limited Partnership-XI and Camden Property Trust, dated
July 19, 1993 is hereby incorporated by reference to the Partnership's Form
8-K (File No. 0-10494) dated August 30, 1993.

10-G Amended and Restated Promissory Note, dated April 30, 1994
between Carlyle/National City Associates and New York Life Insurance
Company relating to the National City Center Office Building is hereby
incorporated by reference to the Partnership's report for June 30, 1994 on
Form 10-Q (File No. 0-10494) dated August 12, 1994.

27. Financial Data Schedule

(b) No Reports on Form 8-K has been filed for the quarter covered
by this report.

SIGNATURES

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI

BY: JMB Realty Corporation
(Corporate General Partner)

By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: August 9, 1995

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.

GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: August 9, 1995

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH
REPORT.
</LEGEND>

<CIK> 0000350667
<NAME> CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995

<CASH> 2,151,171
<SECURITIES> 1,013,092
<RECEIVABLES> 1,865,051
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,187,935
<PP&E> 198,932,889
<DEPRECIATION> 78,681,574
<TOTAL-ASSETS> 149,463,278
<CURRENT-LIABILITIES> 75,274,109
<BONDS> 80,919,127
<COMMON> 0
0
0
<OTHER-SE> (12,954,326)
<TOTAL-LIABILITY-AND-EQUITY> 149,463,278
<SALES> 16,554,465
<TOTAL-REVENUES> 16,643,688
<CGS> 0
<TOTAL-COSTS> 12,284,941
<OTHER-EXPENSES> 327,831
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,193,189
<INCOME-PRETAX> (4,162,273)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,483,321)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,483,321)
<EPS-PRIMARY> (17.34)
<EPS-DILUTED> (17.34)

</TABLE>