CARLYLE REAL ESTATE LTD PARTNERSHIP XI, 10-Q, 1995-11-13

CARLYLE REAL ESTATE LTD PARTNERSHIP XI
10-Q, 1995-11-13
REAL ESTATE

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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 September 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 3. Defaults Upon Senior Securities . . . . . . . . . . . . . 24

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 25

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 26

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

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 1995 AND DECEMBER 31, 1994

(UNAUDITED)

ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . $ 3,975,999 2,102,788
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . 239,212 1,392,755
Rents and other receivables (net of allowance for
doubtful accounts of $1,442,159 and $1,627,151 at
September 30, 1995 and December 31, 1994, respectively). . . . . . . . . . . . 483,994 1,337,171
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,394,393 1,298,981
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,003,496 1,231,494
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 7,097,094 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 . . . . . . . . . . . . . . . . . . . . . . . . . . 192,867,567 181,221,236
------------ -----------
209,295,578 197,649,247
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . 80,472,867 75,428,110
------------ -----------
Total investment properties, net
of accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . 128,822,711 122,221,137
Investment in unconsolidated venture,
at equity (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498,502 479,811
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,382,048 4,806,743
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,313,291 3,520,761
Venture partners' deficits in ventures . . . . . . . . . . . . . . . . . . . . . . 8,346,308 10,890,573
------------ -----------
$154,527,649 151,349,909
============ ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
Current liabilities:
Current portion of long-term debt
(notes 3(d) and 3(f)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 62,592,450 34,720,167
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,385,070 1,368,672
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457,140 640,109
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,068,398 8,266,609
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,280,580 1,475,804
Due to affiliates (note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,492 121,765
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 76,034,130 46,593,126
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373,142 145,221
Note payable (note 4(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 --
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . 80,801,278 108,263,135
------------ -----------
Commitments and contingencies (notes 1, 3, 4, 5, 6 and 7)

Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162,208,550 155,001,482
Deferred gain on sale of investment property (note 5(a)) . . . . . . . . . . . . . 2,067,695 2,067,695
Venture partners' subordinated equity in ventures. . . . . . . . . . . . . . . . . 4,238,325 4,751,737
Partners' capital accounts (deficits) (note 1):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,451,273) (12,310,636)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (1,116,446) (1,116,446)
------------ -----------
(13,566,719) (13,426,082)
------------ -----------
Limited partners:
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . 121,935,233 121,935,233
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (77,287,460) (73,912,181)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (45,067,975) (45,067,975)
------------ -----------
(420,202) 2,955,077
------------ -----------
Total partners' capital accounts (deficits). . . . . . . . . . . . . . . . (13,986,921) (10,471,005)
------------ -----------
$154,527,649 151,349,909
============ ===========
<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 NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $ 9,918,707 8,470,405 26,473,172 25,936,545
Interest income. . . . . . . . . . . . . . . . . . . . 43,710 36,503 132,933 125,961
----------- ---------- ----------- ----------
9,962,417 8,506,908 26,606,105 26,062,506
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . 4,474,623 5,206,719 12,667,812 14,776,110
Depreciation . . . . . . . . . . . . . . . . . . . . . 1,791,293 1,717,347 5,044,757 5,152,036
Property operating expenses. . . . . . . . . . . . . . 4,635,547 5,495,282 13,172,165 15,190,035
Professional services. . . . . . . . . . . . . . . . . 23,327 5,578 191,894 158,702
Amortization of deferred expenses. . . . . . . . . . . 247,839 236,555 742,698 713,438
General and administrative . . . . . . . . . . . . . . 125,041 41,398 284,305 144,777
----------- ---------- ----------- ----------
11,297,670 12,702,879 32,103,631 36,135,098
----------- ---------- ----------- ----------
Operating loss . . . . . . . . . . . . . . . . . (1,335,253) (4,195,971) (5,497,526) (10,072,592)

Partnership's share of operations of
unconsolidated venture (note 1). . . . . . . . . . . . 13,521 (10,873) 18,691 (342,343)
Venture partners' share of ventures'
operations . . . . . . . . . . . . . . . . . . . . . . 289,137 1,110,722 1,962,919 2,864,771
----------- ---------- ----------- ----------
Net loss . . . . . . . . . . . . . . . . . . . . $(1,032,595) (3,096,122) (3,515,916) (7,550,164)
=========== ========== =========== ==========
Net loss per limited partnership
interest. . . . . . . . . . . . . . . . . . . . $ (7.21) (21.62) (24.55) (52.73)
=========== ========== =========== ==========
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

NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

(UNAUDITED)

<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (3,515,916) (7,550,164)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,044,757 5,152,036
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . 742,698 713,438
Long-term debt - deferred accrued interest . . . . . . . . . . . . . . . . . . . . 723,000 1,956,758
Partnership's share of operations of unconsolidated
venture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,691) 342,343
Venture partner's share of venture's operations. . . . . . . . . . . . . . . . . . (1,962,919) (2,864,771)
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . 853,177 1,745,693
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (95,412) 332,694
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227,998 (8,209)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207,470 (231,844)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,771 990,758
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (182,969) (137,097)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,801,789 2,965,726
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (195,224) 119,407
Due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (116,979) (238,763)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227,921 (38,201)
------------ -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . 3,769,471 3,249,804
------------ -----------
Cash flows from investing activities:
Net sales and maturities of short-term investments . . . . . . . . . . . . . . . . . 1,153,543 440,958
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . . . . (2,164,308) (3,301,553)
Partnership's contributions to unconsolidated
venture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (159,518)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (318,003) (587,895)
Cash paid for venture partner's interest (note 4(c)) . . . . . . . . . . . . . . . . (506,418) --
------------ -----------
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . (1,835,186) (3,608,008)
------------ -----------

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 . . . . . . . . . . . . . . . . . . . . . . . . (312,574) (251,011)
Venture partners' contributions to venture . . . . . . . . . . . . . . . . . . . . . 251,500 505,000
------------ -----------
Net cash provided by (used in) financing activities. . . . . . . . . . . . . (61,074) 253,989
------------ -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,873,211 (104,215)

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

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . $ 3,975,999 2,208,326
============ ===========

Supplemental disclosure of cash flow information:

Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . $ 10,143,023 9,853,626
============ ===========
Non-cash investing and financing activities:
Purchase of venture partner's interest (note 4(c)):
Addition to basis in investment property . . . . . . . . . . . . . . . . . . . . $ 9,482,023 --
Note payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,000,000) --
Increased in venture partner's deficit in venture. . . . . . . . . . . . . . . . (3,742,272) --
Deferred management fee income . . . . . . . . . . . . . . . . . . . . . . . . . (233,333) --
------------ -----------
Cash paid for venture partner's interest in venture. . . . . . . . . . . . . $ 506,418 --
============ ===========

<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

SEPTEMBER 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") (note 4(c)), 767 Third
Avenue Associates ("767 Third Avenue"), Riverfront Office Park Joint
Venture ("Riverfront") and Excelsior Associates, LP ("824 Market Street")
(the property owned by 824 Market Street was transferred to the 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 nine months
ended September 30:
1995 1994
----------------------- -------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------

Net loss . . . . . . . $3,515,916 5,323,389 7,550,164 5,302,448
Net loss per
limited
partnership
interest. . . . . . . $ 24.55 37.18 52.73 37.03
========== ========= ========== =========

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.

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 such amounts held with original
maturities of three months or less ($622,685 and $1,932,366 at September
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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 to be held and used (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. Any long-lived assets identified "to be
disposed of" would no longer be depreciated but adjustments for impairment
loss would be made in each period as necessary to report those assets at
the lower of historical cost and fair value less costs to sell. In certain
situations, such estimated fair value could be less than the existing non-
recourse debt which is secured by the property.

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 finalized its assessment
of the full impact of adopting SFAS 121, it is likely that an additional
provision for value impairment would be required for the properties owned
by the Partnership and its consolidated ventures, or by the Partnership's
unconsolidated ventures. Such provisions, including the Partnership's
share of such unconsolidated venture provisions, are currently estimated to
total approximately $8,500,000 in the first period of implementation of
SFAS 121. 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
financing 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

In May 1992, the 767 Third Avenue venture obtained from the existing
lender a mortgage loan which replaced a previous loan with such lender.
Such loan replacement matures in May 1998 and bears a substantially lower
interest rate (10%) than the original loan (12-3/8%). In connection,
therewith, 767 Third Avenue was required to fund approximately $5,400,000
into an escrow account for future leasing costs and debt service shortfalls
resulting from anticipated tenant turnover. The Partnership's venture
partner loaned $5,000,000 to the venture in order to supplement the
venture's cash payment to fund the 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 September 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.

Competition had risen significantly for the 824 Market Street venture
due to new office building development in the area over the last few years
and to the contraction of tenants in the financial services industry,
resulting in lower effective rental rates. In order to reduce debt service
payments, the venture had negotiated with the first mortgage lender for a
possible modification to the first mortgage note. Such negotiations were
unsuccessful and the first mortgage lender was the successful bidder at a
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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(d) 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 which are not expected to
exceed the holdback amount. As a result of a reduction in effective rental
rates, the property began operating at a deficit. In connection with the
letter of intent discussed below, commencing January 1993, the lender has
accepted payments of partial debt service based on the terms stipulated in
such letter of intent. At September 30, 1995, the scheduled debt service
payments are delinquent by approximately $8,000,000. Accordingly, the loan
balance of approximately $34,298,000 has been reflected as a current
liability in the consolidated financial statements at September 30, 1995
and December 31, 1994, respectively. In order to reduce debt service
payments, the joint venture had 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. The proposed terms of the loan restructure would
retroactively reduce the interest rate payable on the loans and reduce the
terms of the loans from their 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, as participating interest, taking
into account the annual interest payable as set forth above, 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 future
operating shortfalls, principal payments and costs associated with
additional leasing as approved by the lender. There can be no assurances
that any restructure will be obtained. 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 September 30, 1995, the total amount of
ground lease payments in arrears is approximately $478,000. In this
regard, the proposed loan restructure discussed above would provide for the
deferral 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. However, 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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(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, in the form of a third
mortgage loan, additional financing of $7,600,000 for ten years at a rate
of 10% per annum. 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.

(f) Refinancings

In December 1990, the Partnership obtained replacement mortgage loans
from an institutional lender to retire the 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. The loans provide for payment of contingent
interest equal to 35% of the amount by which gross receipts attributable to
a calendar year (all as defined) exceed a base amount. For 1994,
contingent interest was approximately $257,000. As of September 30, 1995,
the Partnership has recorded additional interest expense of approximately
$213,000 based on an estimate of the contingent interest due for 1995. In
the event that these properties are sold 90 days or earlier 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 calendar years preceding the sale (all as defined). The
lender is also entitled to additional contingent interest if such
prepayment penalty, as calculated above, is less than certain internal
rates of return (13.25%-14.00%) as defined in the note. The Partnership
has recorded an accrual for such additional contingent interest of
$4,328,840 and $3,605,840 as deferred accrued interest included in the
balance of such debt in the accompanying consolidated financial statements
at September 30, 1995 and December 31, 1994, respectively. The lender has
the right (with 120 days prior notification) to call the remaining loans
(at par) at any time after January 1, 1996. Although no such notification
has been received as of the date of this report, 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 the lender exercising its right to call the
loans, the Partnership expects that it would be able to fully refinance or
sell such properties within the required 120 day notification period.
However, there can be no assurances that the Partnership would be able to
fully refinance or sell such properties within the required 120 day
notification or at any other time. 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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 had fully depleted the escrow account. Due to the rights
of the lender as described above, the Partnership has classified the loans,
including accrued additional contingent interest, (with an outstanding
balance of $27,838,840) as current liabilities in the accompanying
consolidated balance sheet at September 30, 1995.

(4) VENTURE AGREEMENTS

(a) General

The Partnership at September 30, 1995 is a party to three 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.

There are certain risks associated with the Partnership's investments
made through joint 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 previously 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. In addition, Carlyle/National City paid a prepayment penalty of
$580,586 based upon the outstanding loan balance at the time of
refinancing. The lender required an escrow account of $612,000 to be
established at the time of the refinancing for future tenant improvement

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

costs at the property. The escrowed funds are to be released to the
venture upon lender approval of such costs. The lender also requires the
projected tenant improvements costs related to a major tenant lease (Baker
& Hostetler) to be escrowed. The venture is required to escrow
approximately $313,000 per year in 1994 through 1996 (approximately
$1,200,000 at September 30, 1995) and approximately $236,000 per year in
1997 and 1998. As of September 30, 1995, no funds have been released from
the tenant improvement escrow. Real estate taxes payable in 1994 increased
due to the expiration of a 25% reduction of a real estate tax abatement
that was received when the property was purchased. The remaining 25%
abatement expires in 1998 for taxes payable in 1999.

In August 1995, the Partnership purchased the venture partner's 36.94%
interest in Mall of Memphis and concurrently admitted the General Partner
of the Partnership to the venture with a .1% interest. Accordingly, the
Partnership has accounted for its investment in Mall of Memphis as wholly-
owned as of August 1995. The purchase price was $5,500,000, of which
$500,000 (less certain closing costs) was paid in cash with the balance
represented by a $5,000,000 promissory note. The purchase price exceeded
the venture partner's capital account balance for financial reporting
purposes by $9,482,023. This difference was accounted for as additional
basis in the investment property for financial reporting purposes.
Correspondingly, the venture partner's deficit in ventures was reduced by
$3,742,272. Interest accrues on the unpaid balance of the promissory note
at a rate of 8.0% per annum from the acquisition date and is payable June 1
of each year solely to the extent of 36.94% of the venture's annual cash
flow (as defined) for the preceding calendar year, with any unpaid interest
also accruing interest at 8.0% per annum. Any amounts required to be paid
in excess of the interest accrued to date is applied to the outstanding
principal balance of the note. The note is nonrecourse and is secured only
by the purchased partnership's interest. However, the Partnership has
guaranteed the venture partner (seller), on a recourse basis, that the
interest payment paid on June 1, 1996 shall be no less than $300,000 and
that the interest payment paid on June 1, 1997 shall be no less than the
excess of $600,000 over the amount actually paid by the Partnership on June
1, 1996. The promissory note requires repayment of principal and all
accrued interest at maturity (subject to reduction under certain
circumstances related to the property's market value) which is the earlier
of August 2002 or upon sale of the property.

In May 1994, an affiliate of the General Partners had assumed management
of the property. Such affiliate had agreed at such time to pay the former
manager (an affiliate of the venture partner) an annual fee of $50,000 as
compensation for the assumption of the management contract. In conjunction
with the August 1995 transfer of the venture partner's interest, the
venture partner's rights to this annual management contract assumption fee
were assigned to the Partnership and settled for a total net payment of
$233,333 by such affiliate (subject to ratable refund by the Partnership
should the management agreement be terminated prior to January 1, 2001).

(5) SALES OF INVESTMENT PROPERTIES

Pavillion Towers

During April 1986, the Partnership sold its interest in the venture
which then owned the Pavillion Towers office complex located in Aurora,
Colorado to its venture partners for $1,000,000 in cash, promissory notes

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

aggregating $3,750,000 (due in April 1996) and the venture partners'
assumption of the Partnership's share of the debt encumbering the property.

As of the date of this report, the Partnership has not received the
scheduled interest payments aggregating $105,000 on the $750,000 note and
has not received scheduled interest payments aggregating $300,000 on the
$3,000,000 note. As these notes are unsecured and it is not believed that
the borrowers have significant assets against which a judgment may be
easily executed, collection of all past due and future amounts from these
notes are considered unlikely. However, the Partnership 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. No gain has been recognized in 1995 or 1994.

(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 September
30, 1995 and for the nine months ended September 30, 1995 and 1994 were as
follows:
<TABLE>
<CAPTION>

Unpaid at
September 30,
1995 1994 1995
-------- ------ -------------
<S> <C> <C> <C>
Property management
and leasing fees. . . . . . . . . $165,854 207,651 4,866
Insurance commissions. . . . . . . 35,461 14,525 --
Management fees to
corporate general
partner . . . . . . . . . . . . . -- -- 11,936
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . . . . . . 4,593 359 250
-------- ------- ------

$205,908 222,535 17,052
======== ======= ======
</TABLE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

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 $110,299 for the nine months
ended September 30, 1995 and $125,655 for fiscal 1994, of which $12,373 was
unpaid at September 30, 1995.

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.

The Corporate General Partner of the Partnership has determined to use
independent third parties to perform certain administrative services
beginning in the fourth quarter of 1995. Use of such third parties is not
expected to have a material effect on the operations of the Partnership.

In connection with the Partnership's purchase in August 1995 of the
venture partner's interest in the Mall of Memphis, the Partnership was
assigned the venture partner's rights to an annual management contract
assumption fee payable by an affiliate of the General Partners of the
Partnership. Such annual fee was settled for a total net payment of
$233,333 by such affiliate (subject to ratable refund by the Partnership
should the management agreement be terminated prior to January 1, 2001) and
is reflected in due to affiliates (net of amortization) in the consolidated
financial statements at September 30, 1995. Reference is made to note
4(c).

(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 September 30,
1995 and for the three and nine months ended September 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 September 30, 1995, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $3,976,000. Such funds and
short-term investments of approximately $239,000 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
Scotland Yard - Phase I and II apartment complexes. The Partnership and
its consolidated ventures have currently budgeted in 1995 approximately
$2,909,000 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 $2,266,000. 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.

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 financing 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
had fully depleted the escrow account. Additionally, the lender has the
right (with 120 days prior notification) to call the remaining loans (at
par) at any time after January 1, 1996. Although no such notification has
been received as of the date of this report, 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 remains 95% at September 30, 1995. The 767
Third Avenue venture is aggressively marketing the remaining 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 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. 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 May 1992, the 767 Third Avenue
joint venture obtained, from the existing lender, a mortgage loan which
replaced a previous loan with such lender bearing a substantially lower
interest rate than the original loan. In connection therewith, 767 Third
Avenue was required to fund approximately $5,400,000 into an escrow account
in order to fund any future leasing costs and debt service shortfalls
resulting from anticipated tenant turnover. The Partnership's joint
venture partner loaned $5,000,000 to the joint venture in order to
supplement the venture's cash payment to fund 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.

824 Market Street

Competition had risen significantly for the 824 Market Street venture
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, the venture had negotiated with the first mortgage lender for a
possible modification to the first mortgage note. Such negotiations were
unsuccessful and the first mortgage lender was the successful bidder at a
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. 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,
the property began operating at a deficit. In connection with the letter
of intent discussed below, commencing January 1993, the lender has accepted
payments of partial debt service based on the terms stipulated in such
letter of intent. At September 30, 1995, scheduled debt service payments
are delinquent by approximately $8,000,000. Accordingly, the loan balance
of approximately $34,298,000 has been reflected as a current liability in
the consolidated financial statements at September 30, 1995 and December
31, 1994, respectively. In order to reduce debt service payments, the
joint venture had 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. The proposed terms of the loan restructure would retroactively
reduce the interest rate payable on the loans and reduce the terms of the
loans from their 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, as participating interest, taking into
account the annual interest payable as set forth above, 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 future
operating shortfalls, principal payments 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 September 30, 1995, the total
amount of ground lease payments in arrears is approximately $478,000. In
this regard, the proposed loan restructure discussed above would provide
for the deferral 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. However, 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

In March 1993, the venture finalized, in the form of a third mortgage
loan, additional financing of $7,600,000 for ten years at a rate of 10% per
annum. 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 August 1995, the Partnership purchased the venture partner's 36.94%
interest in Mall of Memphis and concurrently admitted the General Partner
of the Partnership to the venture with a .1% interest. Accordingly, the
Partnership has accounted for its investment in Mall of Memphis as wholly-
owned as of August 1995. The purchase price was $5,500,000, of which
$500,000 (less certain closing costs) was paid in cash with the balance
represented by a $5,000,000 promissory note. The purchase price exceeded
the venture partner's capital account balance for financial reporting
purposes by $9,482,023. This difference was accounted for as additional
basis in the investment property for financial reporting purposes.
Correspondingly, the venture partner's deficit in ventures was reduced by
$3,742,272. Interest accrues on the unpaid balance of the promissory note
at a rate of 8.0% per annum from the acquisition date and is payable June 1
of each year solely to the extent of 36.94% of the venture's annual cash
flow (as defined) for the preceding calendar year, with any unpaid interest
also accruing interest at 8.0% per annum. Any amounts required to be paid
in excess of the interest accrued to date is applied to the outstanding
principal balance of the note. The note is non-recourse and is secured
only by the purchased partnership interest. However, the Partnership has
guaranteed the venture partner (seller), on a recourse basis, that the
interest payment paid on June 1, 1996 shall be no less than $300,000 and
that the interest payment paid on June 1, 1997 shall be no less than the
excess of $600,000 over the amount actually paid by the Partnership on June
1, 1996. The promissory note requires repayment of principal and all
accrued interest at maturity (subject to reduction under certain
circumstances related to the property's market value) which is the earlier
of August 2002 or upon sale of the property.

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 generally 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. After reviewing the remaining properties and their
competitive marketplace, the General Partners of the Partnership expect to
be able to liquidate the remaining assets as quickly as practicable.
Therefore, the affairs of the Partnership are expected to be wound up no
later than 1999 (sooner if the properties are sold in the nearer term),
barring unforeseen economic developments.

RESULTS OF OPERATIONS

The aggregate increase in cash and cash equivalents and short-term
investments at September 30, 1995 as compared to December 31, 1994 is due
primarily to 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)) and cash generated from operations at the Mall of
Memphis, partially offset by operating deficits at Scotland Yard I & II.

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

The increase in prepaid expenses at September 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, El Dorado View and the Mall of Memphis.

The decrease in escrow deposits and the corresponding decrease in
accrued real estate taxes at September 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 September 30, 1995 as
compared to December 31, 1994 is primarily due to a $9,482,023 increase in
basis of the Mall of Memphis investment property as a result of the
Partnership's purchase of the venture partner's interest in the Mall of
Memphis in August 1995 as more fully described in Note 4(c), 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
September 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 nine months ended September 30, 1995 as compared to the three and nine
months ended September 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 decrease in accrued rents receivable at September 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 decrease in venture partners' deficit in venture at September 30,
1995 as compared to December 31, 1994 is primarily due to the Partnership's
purchase of the venture partner's interest in the Mall of Memphis in August
1995 as more fully described in Note 4(c), partially offset by operations
at 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 September
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 unearned rents at September 30, 1995 as compared to
December 31, 1994 is primarily due to the timing of receipt of rental
income at the Partnership's investment properties.

The increase in accrued interest at September 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 for the Riverfront
office building, as more fully described in Note 3(d).

The increase in tenant security deposits at September 30, 1995 as
compared to December 31, 1994 is primarily due to an increase in security
deposits held at the 767 Third Avenue and Riverfront office buildings as a
result of an increase in average occupancy in 1995 at the properties.

The increase in note payable at September 30, 1995 as compared to
December 31, 1994 is due to the Partnership's purchase of the venture
partner's interest in the Mall of Memphis in August 1995 as more fully
described in Note 4(c).

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

The increase in rental income for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 is primarily due to increased average occupancy at the Riverfront
and 767 Third Avenue office buildings in 1995, partially offset by the
lender realizing upon its security in the 824 Market Street office building
in December 1994, as more fully described in Note 3(c).

The increase in interest income for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 is due primarily to an increase in the average balance of U.S.
Government obligations in 1995 due to the receipt of a $288,000
reimbursement from the lender-required escrow account for recent capital
projects at Scotland Yard I and II and cash generated from operations at
the Mall of Memphis during 1995.

The decrease in mortgage and other interest expense and property
operating expenses for the three and nine months ended September 30, 1995
as compared to the three and nine months ended September 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 nine months ended September 30, 1995 as compared to the three and nine
months ended September 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 depreciation expense for the nine months ended
September 30, 1995 as compared to the nine months ended September 30, 1994
is primarily due to the lender realizing upon its security in the 824
Market Street office building in December 31, 1994, as more fully described
in Note 3(c), partially offset by depreciation expense related to the
increase in basis of Mall of Memphis related to the Partnership's purchase
of the venture partner's interest in the property in August 1995. The
increase in depreciation expense for the three months ended September 30,
1995 as compared to the three months ended September 30, 1994 is primarily
due to the increase in basis of Mall of Memphis related to the
Partnership's purchase of the venture partner's interest in the property in
August 1995. Reference is made to Note 4(c).

The increase in amortization of deferred expenses for the three and
nine months ended September 30, 1995 as compared to the three and nine
months ended September 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.

The increase in general and administrative expenses for the three and
nine months ended September 30, 1995 as compared to the three and nine
months ended September 30, 1994 is attributable primarily to an increase in
reimbursable costs to affiliates of the General Partners in 1995 and the
recognition of certain additional prior year reimbursable costs to such
affiliates. Reference is made to Note 6.

PART II. OTHER INFORMATION

ITEM 3. DEFAULT UPON SENIOR SECURITIES

Reference is made to Note 3(d) of Notes to Consolidated Financial
Statements and the Liquidity and Capital Resources section of Management's
Discussion and Analysis of Financial Condition included with this Report
for a discussion of technical defaults, and current attempts to obtain
modifications of, mortgage loans secured by the Riverfront Office Building.

<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% 95%
2. 824 Market Street
Wilmington, Delaware. . . . . . 42% 56% 56% N/A N/A N/A N/A
3. Mall of Memphis
Memphis, Tennessee. . . . . . . 88% 85% 87% 85% 82% 82% 82%
4. Riverfront Office
Building
Cambridge,
Massachusetts . . . . . . . . . 89% 90% 91% 95% 95% 95% 99%
5. Scotland Yard Apartments
-Phase I
Houston, Texas. . . . . . . . . 92% 91% 92% 92% 93% 93% 93%
6. El Dorado View Apartments
Houston, Texas. . . . . . . . . 93% 94% 93% 91% 94% 95% 90%
7. 767 Third Ave.
Office Building
New York, New York. . . . . . . 86% 87% 86% 89% 92% 95% 95%
8. National City Center
Office Building
Cleveland, Ohio . . . . . . . . 94% 94% 94% 94% 97% 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. 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.

10-E. Acquisition documents relating to the purchase by the
Partnership of the venture partner's interest in the Mall of Memphis in
Memphis, Tennessee, copies of which are filed herewith.

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: November 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: November 9, 1995

SALE AGREEMENT
MALL OF MEMPHIS
MEMPHIS, TENNESSEE

A G R E E M E N T

THIS AGREEMENT made as of the 8th day of August, 1995, by and between
MALL OF MEMPHIS ASSOCIATES, a Tennessee limited partnership
("Selling Partner"), and CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XI, an
Illinois limited partnership ("Buyer").
W I T N E S S E T H, T H A T:
WHEREAS, Mall of Memphis Associates, an Illinois general partnership
(the
"Partnership") is the owner of the "Business Property" (as hereinafter
defined), which consists principally of a regional shopping mall located in
Memphis, Tennessee, known as the Mall of Memphis;
WHEREAS, in accordance with that certain agreement captioned
"Articles of General Partnership of Mall of Memphis Associates (An Illinois
General Partnership)" made and entered into as of August 3, 1981, by and
between Selling Partner and Buyer (as amended, the "Partnership
Agreement"), Selling Partner is presently a general partner in the
Partnership, owning a thirty-six and ninety-four one hundredths percent
(36.94%) partnership interest therein;
WHEREAS, Buyer desires to purchase Selling Partner's partnership
interest on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, it is
hereby agreed:
ARTICLE I - AGREEMENT TO SELL
Section 1.1. Sale of Partnership Interest. On the terms and
conditions hereinafter set forth, Selling Partner shall sell to Buyer, and
Buyer shall purchase from Selling Partner the entire 36.94% partnership
interest of Selling Partner in the Partnership including the entire 36.94%
interest of Selling Partner in the capital and the profits and losses of
the Partnership, and any other interests, rights or benefits that Selling
Partner may have in the Partnership (the Partnership interest and any other
interests, rights or benefits of Selling Partner in the Partnership to be
purchased by Buyer as aforesaid being herein collectively called the
"Subject Partnership Interest").
Section 1.2. Certain Definitions. As used herein, the following
terms shall have the following meanings:
A. "Business Property" means, collectively, the "Land", the
"Improvements", the "Personal Property" and the "Intangible Property".
(1) "Land" means that certain real property described in
Exhibit "A", together with all and singular the tenements, hereditaments,
easements, rights-of-way and appurtenances belonging or in anywise
appertaining to the same.
(2) "Improvements" means all improvements, structures and fixtures
now or on the "Closing Date" (as hereinafter defined) located on the Land;
that portion of the Improvements consisting of tenant improvements (i.e.,
improvements consisting of finish work to interior space of the
Improvements to suit the proposed occupant of such space) is herein called
"Tenant Improvements"; the balance of the Improvements is herein called the
"Buildings".
(3) "Personal Property" means all tangible personal property now or
on the Closing Date located on or about the Land or Improvements or
attached or appurtenant thereto or used in connection with the operation
thereof, but excluding tangible personal property owned by tenants of the
Buildings under "Tenant Leases" (as hereinafter defined) in their capacity
as tenants.
(4) "Intangible Property" means all intangible property now or on
the Closing Date owned or held in connection with the Land, the
Improvements or the Personal Property, or any business or businesses now or
hereafter conducted thereon or with the use thereof (other than those
businesses conducted by tenants of the Buildings under Tenant Leases in
their capacity as tenants), including all leases, contract rights and
agreements (including the Tenant Leases and the "Continuing Contracts" (as
hereinafter defined)), building and trade names (including the name "Mall
of Memphis"), business licenses, warranties (including those relating to
construction or fabrication), utility contracts, telephone exchange
numbers, advertising materials, plans and specifications, governmental
approvals and development rights, related to the Land, the Improvements or
the Personal Property or any part thereof.
(5) "Tenant Leases" means the leases described in the rent roll
(the "Rent Roll") attached as Exhibit "B" hereto.
(6) "Continuing Contracts" means the service and equipment leasing
contracts listed and described in Exhibit "C" hereto.
B. "Business Agreement" means any lease, rental agreement, loan
agreement, mortgage, easement, covenant, restriction or other agreement or
instrument at any time or times affecting all or a portion of the Business
Property.
C. "Funds" shall have the meaning ascribed to such term in the
"Closing Procedure Letter" (as hereinafter defined).
D. "Original Partners" means Associates and Carlyle, collectively.
E. "Title Company" means Ticor Title Insurance Company, located at
203 North LaSalle, Suite 1400, Chicago, Illinois 60601.
ARTICLE II - PURCHASE PRICE
Section 2.1. Amount. The purchase price (the "Purchase Price")
of the Subject Partnership Interest shall be $5,500,000. Additionally,
Seller and Buyer have agreed that Seller is entitled to a proration credit
of $251,030.
Section 2.2. Manner of Payment. The Purchase Price shall be
paid as follows:
A. Down Payment. An amount equal to $500,000 plus the proration
credit of $251,030 for a total amount due of $751,030 shall be paid by
cashier's or certified check or wire transfer on the Closing Date.
B. Purchase Price Financing. An amount equal to $5,000,000 shall
be paid to Selling Partner by Buyer in accordance with the terms of a
promissory note by Buyer in favor of Selling Partner in the form of Exhibit
"D" attached hereto (the "Note"). Buyer's obligations under the Note shall
be secured by a pledge of the Subject Partnership Interest (but no other
portion of Buyer's interest in the Partnership) in the form of Exhibit "E"
attached hereto (the "Security Agreement"). The Note shall be non-recourse
to Buyer; provided, however, that the minimum payments in 1996 and 1997
required under Section 2(a)(ii) (y) and (z) of the Note (as more
particularly set forth in the Note), shall be recourse to Buyer, but not
the to partners of Buyer or in any partnership which is a partner in
Borrower.
ARTICLE III - FINANCING
Section 3.1. Existing Financing.
A. Existing Encumbrances. The Business Property is presently
encumbered by the following mortgages and other security instruments
(individually and collectively, the "Existing Encumbrances"):
(1) that certain deed of trust captioned "DEED OF TRUST, ASSIGNMENT
OF RENTS AND SECURITY AGREEMENT" dated as of December 23, 1982, by the
Partnership, as trustor, in favor of Francis P. Gunning and John A. Somers,
as trustee, for the benefit of Teachers Insurance and Annuity Association
of America, a New York corporation ("Teachers"), and recorded in the Land
Records of Shelby County, Tennessee (the "Recorder's Office") on December
29, 1982 under Recorder's No. T7 9982, as amended or supplemented by that
certain document captioned "FIRST SUPPLEMENT TO DEED OF TRUST, ASSIGNMENT
OR RENTS AND SECURITY AGREEMENT, MODIFICATION OF NOTES AND OF ASSIGNMENT OF
LESSOR'S INTEREST IN LEASES" (the "Amendment"), by the Partnership, as
trustor, in favor of Betty B. Robbins and John A. Somers, as trustees, for
the benefit of Teachers; and
(2) that certain assignment captioned "ASSIGNMENT OF LESSOR'S
INTEREST IN LEASES" dated as of December 23, 1982, by and between the
Partnership and Teachers and recorded in the Recorder's Office on December
29, 1982 under Recorder's No. T7 9983, as amended by the Amendment.
B. Existing Notes. The Existing Encumbrances secure the following
promissory notes (the "Existing Notes"):
(1) that certain note captioned "DEED OF TRUST NOTE NO. 1" dated as
of December 23, 1982 in the original principal amount of $32,550,000, made
by the Partnership in favor of Teachers, as amended by the Amendment;
(2) that certain note captioned "DEED OF TRUST NOTE NO. 2" dated as
of December 23, 1982 in the original principal amount of $3,450,000, made
by the Partnership in favor of Teachers, as amended by the Amendment; and
(3) that certain note captioned "TENNESSEE DEED OF TRUST NOTE NO.
3" in the original principal amount of $9,625,000, made by the Partnership
in favor of Teachers.
C. Existing Loan Documents. As used herein, the "Existing Loan
Documents" means, collectively, the Existing Encumbrances and the Existing
Notes.
ARTICLE IV INTENTIONALLY DELETED
ARTICLE V - CLOSING CONFERENCE
The consummation (the "Closing") of the sale and purchase herein
provided shall be conducted by mail on the Closing Date, in accordance with
procedures which shall be mutually agreed upon by the parties hereto.
"Closing Date" means August 8, 1995, or such earlier or later date as shall
be hereafter agreed upon by the parties hereto for the conveyances herein
provided.
Section 5.1. Delivery to Title Company.
A. Items to Be Delivered by Buyer. On or before the Closing Date,
Buyer shall deliver to Title Company:
(1) Down Payment. $751,030 (i.e., $500,000, which amount
constitutes the cash portion of the Purchase Price to be paid on the
Closing Date plus $251,030 as the proration adjustment).
(2) Note. The Note, dated as of the Closing Date and duly executed
by Buyer.
(3) Assignment of Partnership Interest. A counterpart of an
assignment of the Subject Partnership Interest (the "Assignment of
Partnership Interest") in favor of Buyer, dated as of the Closing Date,
duly executed by Buyer and in the form of Exhibit "F" attached hereto.
B. Item to Be Delivered by Selling Partner. On or before the
Closing Date, Selling Partner shall deliver to Title Company a counterpart
of the Assignment of Partnership Interest, dated as of the Closing Date and
duly executed by Selling Partner.
Section 5.2. Instructions to Title Company. The deliveries to
be made under Section 5.1 above shall be made in accordance with and
subject to the letter (the "Closing Procedure Letter") from Buyer and
Selling Partner to Title Company which is being executed concurrently
herewith.
Section 5.3. Delivery to Parties. Upon satisfaction of all the
conditions in the Closing Procedure Letter for delivery of the Funds (other
than the delivery of Buyer's written authorization to close the escrow
under the Closing Procedure Letter) and receipt of written advice by Title
Company that such conditions have been satisfied and that Title Company is
prepared to close the escrow, the following items are to be delivered:
A. Items To Be Delivered by Selling Partner. Selling Partner
shall deliver (or cause to be delivered) to Buyer:
(1) Certification of Non-Foreign Status. A certificate dated as of
the Closing Date, addressed to Buyer, duly executed by Selling Partner
under penalty of perjury, regarding Selling Partner's non-foreign status,
in the form of Exhibit "G" attached hereto.

(2) Closing Certificate. If the Closing Date occurs after the date
of this Agreement, a certificate (the "Closing Certificate"), dated as of
the Closing Date and duly executed by Selling Partner, representing that
the representations and warranties of Selling Partner contained in this
Agreement are true and correct without exception as of the Closing Date as
if made on and as of the Closing Date (or, specifying in reasonable detail
such exceptions, if any, which then exist). Selling Partner shall not take
any action or omit to take any action, which action or omission would
result in any such exception.
(3) Opinion of Selling Partner's Counsel. A due
execution/authority opinion of Selling Partner's counsel, addressed to
Buyer, from the general counsel of Selling Partner, in form and substance
reasonably satisfactory to Buyer, and dated as of the Closing Date.
(4) Right of First Opportunity. A counterpart of an agreement (the
"Right of First Opportunity") in the form of Exhibit "H" attached hereto,
dated as of the Closing Date and duly executed Selling Partner.
(5) Letter Agreement and Exhibits Thereto.
a. A counterpart of a letter agreement (the "Letter
Agreement") in the form of Exhibit "I" attached hereto, dated as of the
Closing Date and duly executed by Selling Partner, Urban Retail Properties,
Co. ("Urban Retail"),"Hahn Management", "Hahn Inc." (as such quoted terms
are hereinafter defined) and Buyer, regarding, among other things, certain
environmental matters as set forth in the "Mutual Indemnity Agreement" and
"Environmental Indemnity Agreement" (as such quoted terms are defined
therein), the confirmation on May 1, 1994 of Hahn Management's management
of the Business Property, the reaffirmation of Hahn Inc.'s indemnity
obligations under its agreement to manage the Business Property, and
certain assignments by partners of the Selling Partner.
b. A counterpart of an assignment of any and all rights of
Hahn Property Management Corporation, a California corporation ("Hahn
Management") under the management agreement for the Property to Urban
Retail, duly executed by Hahn Management, dated as of the Closing Date, and
in the form of the assignment agreed to in connection with the Letter
Agreement (the "Assignment of Management Agreement").
c. A counterpart of an assignment of any and all rights of
Hahn Management to receive certain management termination payments to
Buyer, duly executed by Hahn Management, dated as of the Closing Date, and
in the form of the assignment agreed to in connection with the Letter
Agreement (the "Assignment of Management Termination Payments").
(6) Security Agreement. A counterpart of the Security Agreement,
duly executed by Selling Partner and dated as of the Closing Date.
B. Items To Be Delivered by Buyer. Buyer shall deliver to Selling
Partner:
(1) Authorization for Closing. The authorization of Buyer
specified in the Closing Procedure Letter.
(2) Opinion of Buyer's Counsel. A due execution/authority opinion
of Buyer's counsel, from a law firm reasonably satisfactory to Selling
Partner, addressed to Selling Partner, in form and substance reasonably
satisfactory to Selling Partner, and dated as of the Closing Date.
(3) Right of First Opportunity. A counterpart of the Right of
First Opportunity, dated as of the Closing Date and duly executed by Buyer.
(4) Letter Agreement. A counterpart of the Letter Agreement, dated
as of the Closing Date and duly executed by Buyer.
(5) UCC Financing Statements. UCC-1 financing statements with
respect to the security pledged under the Security Agreement dated as of
the Closing Date and duly executed by Buyer.
(6) Security Agreement. A counterpart of the Security Agreement,
dated as of the Closing Date and duly executed by Buyer.
(7) Assignment of Management Agreement. A counterpart of the
Assignment of Management Agreement, dated as of the Closing Date and duly
executed by Buyer.
(8) Assignment of Management Termination Payments. A counterpart
of the Assignment of Management Termination Payments, dated as of the
Closing Date and duly executed by Buyer.
Section 5.4. Closing Costs.
A. Selling Partner's Costs. Selling Partner shall pay (1) 50% of
(a) any documentary or transfer tax payable in connection with the delivery
of any instrument or document provided in or contemplated by this Agreement
or any agreement or commitment described or referred to herein, (b) all
expenses of or related to the issuance of the title insurance
endorsement(s) herein provided, however, that in no event shall Selling
Partner collectively pay more than $6,000 as its portion of the expenses
set forth in Sections 5.4A(1)(a) - (b) hereof, (c) the charges for or in
connection with the recording of any instrument or document provided herein
or contemplated by this Agreement or any agreement or document described or
referred to herein, (d) any sales or use taxes applicable to the
transactions contemplated by this Agreement; and (2) Selling Partner's
legal fees and expenses and the cost of all opinions, certificates,
instruments, documents and papers required to be delivered, or to cause to
be delivered, by Selling Partner hereunder, and, without limitation, the
cost of all performances by Selling Partner of its obligations hereunder.
B. Buyer's Costs. Buyer shall pay (1) 50% of (a) any documentary
or transfer tax payable in connection with the delivery of any instrument
or document provided in or contemplated by this Agreement or any agreement
or commitment described or referred to herein, (b) all expenses of or
related to the issuance of the title insurance endorsement(s) herein
provided, (c) the charges for or in connection with the recording of any
instrument or document provided herein or contemplated by this Agreement or
any agreement or document described or referred to herein, (d) any sales or
use taxes applicable to the transactions contemplated by this Agreement,
(e) plus any amount in excess of the amount payable by Selling Partner
pursuant to Sections 5.4A(1)(a) and (b) above, and (2) Buyer's legal fees
and expenses and the cost of all opinions, certificates, instruments,
documents and papers required to be delivered, or to cause to be delivered,
by Buyer hereunder, and, without limitation, the cost of all performances
by Buyer of its obligations hereunder.
Section 5.5. Prorations. Except as otherwise agreed to by the
parties, the prorations and adjustments to the Purchase Price are final
and, accordingly, subject to no post closing corrections or adjustments.
Section 5.6. Title Insurance. The Title Company shall issue
such endorsements, as reasonably requested by Buyer, to the existing policy
of title insurance (the "Title Policy") insuring the Partnership's
ownership, as of the Closing Date, of the Business Property, subject only
to the "Permitted Exceptions." As used herein, "Permitted Exceptions"
means real property taxes not yet due and payable (as of the Closing Date)
and the exceptions set forth on the Title Policy. Selling Partner shall
deliver to Title Company such instruments, documents, payments,
indemnities, releases and agreements and shall perform such other acts as
Title Company shall require in order to issue such title insurance
endorsements.
ARTICLE VI - REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties of Selling Partner.
Selling Partner represents and warrants to Buyer and the Partnership, and
each of them, the following:
A. Consents. Selling Partner has obtained all consents and
permissions related to the transactions herein contemplated and required
under any covenant, agreement, encumbrance, law or regulation.
B. Due Authorization, Execution, Organization, etc. This
Agreement and all agreements, instruments and documents herein provided to
be executed or to be caused to be executed by Selling Partner are and on
the Closing Date will be duly authorized, executed and delivered by and are
binding upon the same. Selling Partner is a limited partnership, duly
organized, validly existing and in good standing under the laws of the
State of Tennessee and duly authorized and qualified to do all things
required of it under this Agreement. Selling Partner has the capacity and
authority to enter into this Agreement and consummate the transactions
herein provided and nothing prohibits or restricts the right or ability of
Selling Partner to close the transactions contemplated hereunder and carry
out the terms hereof. The Partnership is a general partnership, duly
organized and validly existing under the laws of the Illinois, is duly
authorized, qualified and licensed under any and all applicable laws,
regulations, ordinances and orders to do all things required of it, under
or in connection with this Agreement and the agreements heretofore executed
by it. Neither this Agreement nor any agreement, document or instrument
executed or to be executed in connection with the same, nor anything
provided in or contemplated by this Agreement or any such other agreement,
document or instrument, does now or shall hereafter breach, invalidate,
cancel, make inoperative or interfere with, or result in the acceleration
of maturity of, any contract, agreement, lease, easement, right or
interest, entered into by Selling Partner (or its affiliates) affecting or
relating to the Partnership or the Business Property.
C. Subject Partnership Interest. The Subject Partnership Interest
is free and clear of any liens, encumbrances, claims or liabilities of any
kind or nature except as created by this Agreement and the transactions
contemplated hereby. Selling Partner has no claim or liability against the
Partnership except as provided herein. As of the Closing Date, Buyer will
acquire hereunder good title to, and the entire right, title and interest
in, the Subject Partnership Interest, free and clear of all liens,
encumbrances, liabilities, claims, rights, demands, exceptions, agreements,
covenants and restrictions of any kind or character, including any security
interests or any restriction on the sale, creation or assignment of all or
any part of such partnership interest, or, except for the rights created by
the Right of First Opportunity, any option, right or agreement for the
purchase or acquisition of the same or any interest in the same.
D. Existing Agreements. Neither Selling Partner, Hahn Inc.,
Associates, nor any "affiliate" (as defined in Section 9.7 hereof) of any
of the foregoing (individually and collectively, the "Hahn Entities") have
entered into or have caused the Partnership to enter into, either in the
name of any of the foregoing or in the name of the Partnership, any
agreements or understandings relating to the Business Property, except for
the Permitted Exceptions, the Existing Loan Documents, the Tenant Leases
and the Continuing Contracts. No alterations, amendments or waivers
pertaining to the foregoing will be made prior to the Closing Date. A
full, true and correct copy of the Partnership Agreement and all amendments
thereto that will be in effect on the Closing Date is attached as
Exhibit "J".
E. Default. With respect to the period prior to May 1, 1994,
Selling Partner represents and warrants to Buyer and the Partnership, and
each of them, the following: To Selling Partner's actual knowledge, the
Partnership is not in any material default in respect of any of its
obligations or liabilities pertaining to the Business Property. Without
limitation on the foregoing, to the Selling Partner's actual knowledge, the
Continuing Contracts, the Permitted Exceptions, the Existing Loan Documents
and the Tenant Leases are in full force and effect and free from material
default by the Partnership and, by any other party thereto; and to Selling
Partner's actual knowledge, there does not exist any state of facts or
circumstances or conditions or event which, after notice or lapse of time
or both, would constitute or result in any such default by the Partnership
or, by any other party.
F. Litigation. Except for the lawsuits ("Pending Disputes")
described in Exhibit "K" attached hereto, there are no actions, suits or
proceedings pending or, to the Selling Partner's actual knowledge,
threatened, before or by any judicial, administrative or union body, any
arbiter or any governmental authority, against Selling Partner.
G. Recitals. The statements contained in the recitals on page 1
of this Agreement are true and correct.
As used herein, "to Selling Partner's actual knowledge" means
the knowledge of David J. Hirsch, Stephen M. Bowers and Douglas L. Hageman,
which will be deemed to include the information contained in any desk or
personal file of such individual but without any other independent
investigation or inquiry.
Section 6.2Representations and Warranties of Buyer. Buyer
represents and warrants to Selling Partner the following:
A. Consents. Buyer has obtained all consents and permissions
related to the transactions herein contemplated and required under any
covenant, agreement, encumbrance, law or regulation.
B. Due Authorization, Execution, Organization, etc. This
Agreement and all agreements, instruments and documents herein provided to
be executed or to be caused to be executed by Buyer are and on the Closing
Date will be duly authorized, executed and delivered by and are binding
upon the same. Buyer is a limited partnership, duly organized, validly
existing and in good standing under the laws of the State of Illinois and
duly authorized and qualified to do all things required of it under this
Agreement. Buyer has the capacity and authority to enter into this
Agreement and consummate the transactions herein provided and nothing
prohibits or restricts the right or ability of Buyer to close the
transactions contemplated hereunder and carry out the terms hereof. The
Partnership is a general partnership, duly organized and validly existing
under the laws of the State of Illinois, is duly authorized, qualified and
licensed under any and all applicable laws, regulations, ordinances and
orders to do all things required of it, under or in connection with this
Agreement and the agreements heretofore executed by it. Neither this
Agreement nor any agreement, document or instrument executed or to be
executed in connection with the same, nor anything provided in or
contemplated by this Agreement or any such other agreement, document or
instrument, does now or shall hereafter breach, invalidate, cancel, make
inoperative or interfere with, or result in the acceleration of maturity
of, any contract, agreement, lease, easement, right or interest, entered
into by Urban Retail or any affiliate of Buyer affecting or relating to the
Partnership or the Business Property.
C. Existing Agreements. From and after May 1, 1994, neither
Carlyle, Retail, nor any Affiliate of any of the foregoing (individually
and collectively, the "JMB Entities") have entered into or caused the
Partnership to enter into either in the name of the foregoing or in the
name of the Partnership any agreements or understandings related to the
Business Property, except for certain (1) Tenant Leases and Continuing
Contracts, (2) other documents or agreements for new leases, lease
terminations or amendments or other agreements related to leasing, (3)
certain maintenance contracts and (4) certain other documents described on
Exhibit "L" attached hereto and made a part hereof. A full, true and
correct copy of the Partnership Agreement, and all amendments thereto that
will be in effect on the Closing Date is attached as Exhibit "J".
ARTICLE VII - ADDITIONAL CONDITIONS
Section 7.1. Additional Conditions to Buyer's Obligations. In
addition to the conditions provided in other provisions of this Agreement,
Buyer's obligations to perform its undertakings provided in this Agreement
(including its obligation to purchase the Subject Partnership Interest) are
conditioned on the following:
A. Performance by Selling Partner. The due performance by each of
the Original Partners of each and every undertaking and agreement to be
performed by it under this Agreement (including the delivery to Buyer of
the items specified in Section 5 hereof) and the truth of each
representation and warranty made by Selling Partner in this Agreement at
the time as of which the same is made and as of the Closing Date as if made
on and as of the Closing Date (where such undertakings, agreements,
representations and warranties shall not, insofar as the same constitute
conditions under this subsection A, be limited by the diligent efforts or
best knowledge of Selling Partner or any other limitation which may
otherwise apply). Without limitation on the foregoing, there shall be no
exceptions noted in the Closing Certificate.
B. No Bankruptcy or Dissolution. That at no time on or before the
Closing Date shall any of the following ("Bankruptcy/Dissolution Event")
have been done by, against or with respect to any Selling Partner: (1) the
commencement of a case under Title 11 of the U.S. Code, as now constituted
or hereafter amended, or under any other applicable federal or state
bankruptcy law or other similar law; (2) the appointment of a trustee or
receiver of any property interest; (3) an assignment for the benefit of
creditors; (4) an attachment, execution or other judicial seizure of a
substantial property interest; (5) the taking of, failure to take, or
submission to any action indicating an inability to meet its financial
obligations as they accrue; or (6) a dissolution, liquidation, death or
incapacity.
C. No Taking. That there shall not have occurred at any time or
times on or before the Closing Date any taking or threatened taking (or
consideration by a governmental authority of a taking) of the Business
Property or any part thereof by eminent domain.
D. Consents. That as of the Closing Date, the parties to the
Existing Loan Documents shall have consented to the transactions
contemplated by this Agreement.
E. Delivery of Books and Records. That, on or before the Closing
Date, Selling Partner shall have delivered to Carlyle all books and records
of the Partnership in the Selling Partner's possession, including, but not
limited to, the tax returns of the Partnership and the backup information
related thereto.
Section 7.2.
Additional Conditions to Selling Partner's Obligation
To Close. In addition to the conditions provided in other provisions of
this Agreement, Selling Partner's obligation to sell the Subject
Partnership Interest is conditioned on the following:
A. Performance by Buyer. The due performance by Buyer of each and
every undertaking and agreement to be performed by it hereunder (including
the delivery to Selling Partner of the items to be delivered to it under
Section 5 hereof) and the truth of each representation and warranty made in
this Agreement by Buyer at the time as of which the same is made and as of
the Closing Date as if made on and as of the Closing Date (where, for
purposes of this subsection A, all representations and warranties and
undertakings and agreements made in this Agreement by Buyer shall be deemed
not to be limited by the diligent efforts or knowledge of Buyer or any
other limitation which might otherwise apply).
B. Absence of Bankruptcy/Dissolution Event. That at no time on or
before the Closing Date shall any Bankruptcy/Dissolution Event have been
done by, against or with respect to Buyer.
Section 7.3. Waiver. Any party may at any time or times, at its
election, waive any of the conditions to its obligations hereunder, but any
such waiver shall be effective only if contained in a writing signed by
such party. No such waiver shall reduce the rights or remedies of a party
by reason of any breach by the other party. Without limitation on the
foregoing, in the event that for any reason any item required to be
delivered hereunder shall not be delivered when required, then the party
obligated to deliver the same shall nevertheless remain obligated to
deliver the same, and nothing (including the closing of the transaction
hereunder) shall be deemed a waiver of any such requirement (except an
express written waiver)
Section 7.4. Outside Date. In the event that for any reason the
sale and purchase herein provided shall not be consummated on or before the
Closing Date, then (unless Buyer has commenced an action to specifically
enforce this Agreement within 30 days thereafter) either party may at any
time after the Closing Date, by written notice to the other party,
terminate this Agreement and the obligations of the parties hereunder;
provided, however, that such termination shall not release any party from
liability for any breach of this Agreement occurring prior to such
termination.
ARTICLE VIII - INDEMNIFICATION
Section 8.1. Indemnification by Selling Partner. Selling
Partner shall hold harmless, indemnify and defend Buyer, the Partnership
and the Business Property from and against: (l) Selling Partner's portion
(i.e., 36.94%) of any and all "Claims" (as hereinafter defined) whether
direct, contingent or consequential and no matter how arising, in any way
related to the Business Property and arising or accruing before the
Closing, including the Pending Disputes (and the facts which form the basis
thereof), any Claim arising or accruing under any Tenant Lease or other
Business Agreement before the Closing, any Claim arising from the
placement, creation or migration of hazardous materials on or onto the
Business Property prior to the Closing provided, however nothing herein
shall limit the obligations of Ernst W. Hahn, Inc. ("Hahn Inc.") under the
Mutual Indemnity Agreement or the Environmental Indemnity Agreement; and
(2) any Claim that (a) is inconsistent with (or results from any actual or
alleged fact that is inconsistent with) any representation or warranty of
Selling Partner or (b) results from any breach or default by Selling
Partner under this Agreement.
Section 8.2. Indemnification by Buyer. Buyer shall hold
harmless, indemnify and defend Selling Partner from and against: 36.94% of
any and all Claims, whether direct, contingent or consequential and no
matter how arising, in any way related to the Business Property and arising
or accruing on or after the Closing, any claim arising or accruing under
any tenant lease or Business Agreement on or after the Closing, any claim
from the placement, creation or migration of hazardous materials on or onto
the Business Property after the termination of the Environmental Indemnity
Agreement and Mutual Indemnity Agreement except to the extent arising out
of a breach of Seller's representations or warranties hereunder; and any
Claim that (a) is inconsistent with (or results from an actual or alleged
fact that is inconsistent with) any representation or warranty of Buyer or
(b) that results from any breach or default by Buyer under this Agreement.
Section 8.3. General Indemnity Provisions. Each indemnity
provided for under this Agreement shall be subject to the following
provisions:
A. The indemnity shall cover the costs and expenses of the
indemnitee, including reasonable attorneys' fees, related to any actions,
suits or judgments incident to any of the matters covered by such
indemnity.
B. The indemnitee shall notify the indemnitor of any Claim against
the indemnitee covered by the indemnity within 45 days after it has notice
of such Claim, but failure to notify the indemnitor shall in no case
prejudice the rights of the indemnitee under this Agreement unless the
indemnitor shall be prejudiced by such failure and then only to the extent
the indemnitor shall be prejudiced by such failure. Should the indemnitor
fail to discharge or undertake to defend the indemnitee against such
liability upon learning of the same, then the indemnitee may settle such
liability, and the liability of the indemnitor hereunder shall be
conclusively established by such settlement, the amount of such liability
to include both the settlement consideration and the reasonable costs and
expenses, including attorneys' fees, incurred by the indemnitee in
effecting such settlement.
C. Each party's indemnification obligations under this Agreement
shall also extend to any present or future advisor, trustee, director,
officer, partner, employee, beneficiary, shareholder, participant or agent
of or in the indemnitee or any entity now or hereafter having a direct or
indirect ownership interest in the indemnitee.
Section 8.4. Definition. "Claim" means any obligation,
liability, claim (including any claim for damage to property or injury to
or death of any persons), lien or encumbrance, loss, damage, cost or
expense.
ARTICLE IX - MISCELLANEOUS
Section 9.1. Brokers. Selling Partner represents and warrants
to Buyer, and Buyer represents and warrants to Selling Partner, that no
broker or finder has been engaged by it, respectively, in connection with
any of the transactions contemplated by this Agreement or to its knowledge
is in any way connected with any of such transactions. In the event of a
claim for broker's or finder's fee or commissions in connection herewith,
then Selling Partner shall indemnify and defend Buyer and the Partnership
from the same if it shall be based upon any statement or agreement alleged
to have been made by Selling Partner, and Buyer shall indemnify and defend
Selling Partner and the Partnership from the same if it shall be based upon
any statement or agreement alleged to have been made by Buyer.
Section 9.2. Survival. All warranties, representations,
covenants, obligations and agreements contained in this Agreement shall
survive the closing hereunder and the transfer and conveyance of the
Subject Partnership Interest hereunder and any and all performances
hereunder; provided, however, the representations and warranties contained
in Sections 6.1D, 6.1E, 6.1F, 6.1G and 6.2C hereof shall terminate on the
date which is six months after the Closing and all other representation and
warranties set forth in Section 6 hereof shall terminate on the date which
is seven years after the Closing, except to the extent a claim under any of
the foregoing has been made by the benefitting party prior to such
termination date. All warranties and representations shall be effective
regardless of any investigation made or which could have been made except
as provided herein.
Section 9.3. Further Instruments. Each party will, whenever and
as often as it shall be requested so to do by the other, cause to be
executed, acknowledged or delivered any and all such further instruments
and documents as may be necessary or proper, in the reasonable opinion of
the requesting party, in order to carry out the intent and purpose of this
Agreement.
Section 9.4. Limitation of Liability.
A. No present or future advisor, trustee, director, officer,
partner, employee, beneficiary, shareholder, participant or agent of or in
Buyer or any entity now or hereafter having a direct or indirect ownership
interest in Buyer shall have any personal liability, directly or
indirectly, under or in connection with this Agreement or any agreement
made or entered into under or pursuant to the provisions of this Agreement,
or any amendment or amendments to any of the foregoing made at any time or
times, heretofore or hereafter, and Selling Partner and its successors and
assigns and, without limitation, all other persons and entities, shall look
solely to Buyer's assets for the payment of any claim or for any
performance, and Selling Partner hereby waives any and all such personal
liability. Without limitation on the foregoing, neither the negative
capital account of any constituent partner in Selling Partner nor any
obligation of any constituent partner in Selling Partner, to restore a
negative capital account or to contribute capital to Selling Partner or any
other constituent partner in Selling Partner, at any time, shall be deemed
to be the property or asset of Selling Partner or any such other
constituent partner (and neither Buyer nor any of its successors and
assigns shall have any right to collect, enforce or proceed against or with
respect to any such negative capital account or such partner's obligation
to restore or contribute). In addition, neither Buyer nor any successor or
assign of Buyer is assuming any personal liability, directly or
indirectly, under or in connection with any agreement, lease, instrument,
claim or right constituting a part of the Business Property or to which the
Business Property is now or hereafter subject. The limitations of
liability provided in this Section are in addition to, and not in
limitation of, any limitation on liability applicable to Buyer provided by
law or by any other contract, agreement or instrument.
B. No present or future advisor, trustee, director, officer,
employee, beneficiary, shareholder, participant or agent of or in Selling
Partner or any entity now or hereafter having a direct or indirect
ownership interest in Selling Partner shall have any personal liability,
directly or indirectly, under or in connection with this Agreement or any
amendment or amendments to any of the foregoing made at any time or times,
heretofore or hereafter and Buyer and its successors and assigns and,
without limitation, all other persons and entities, shall look solely to
Selling Partner's assets for the payment of any claim or for any
performance, and Buyer hereby waives any and all such personal liability.
Without limitation on the foregoing, neither the negative capital account
of any constituent partner in Selling Partner nor any obligation of any
constituent partner in Selling Partner, to restore a negative capital
account or to contribute capital to Selling Partner or any other
constituent partner in Selling Partner, at any time, shall be deemed to be
the property or asset of Selling Partner or any such other constituent
partner (and neither Buyer nor any of its successors and assigns shall have
any right to collect, enforce or proceed against or with respect to any
such negative capital account or such partner's obligation to restore or
contribute). The limitations of liability provided in this Section are in
addition to, and not in limitation of, any limitation and liability
applicable to Buyer provided by law or by any other contract, agreement or
instrument.
Section 9.5. Matters of Construction.
A. Incorporation of Exhibits. All exhibits attached and referred
to in this Agreement are hereby incorporated herein as fully set forth in
(and shall be deemed to be a part of) this Agreement.
B. Entire Agreement. This Agreement contains the entire agreement
between the parties respecting the matters herein set forth and supersedes
all prior agreements between the parties hereto respecting such matters.
C. Time of the Essence. Subject to subsection D below, time is of
the essence of this Agreement.
D. Non-Business Days. Whenever action must be taken (including
the giving of notice or the delivery of documents) under this Agreement
during a certain period of time (or by a particular date) that ends (or
occurs) on a non-business day, then such period (or date) shall be extended
until the immediately following business day. As used herein, "business
day" means any day other than a Saturday, Sunday or federal or Illinois
State holiday.
E. Severability. If any term or provision of this Agreement or
the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each such term and provision of this Agreement shall
be valid and be enforced to the fullest extent permitted by law.
F. Captions. Article and section headings shall not be used in
construing this Agreement.
G. Cumulative Remedies. No remedy conferred upon a party in this
Agreement is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law, in equity or by statute (except as otherwise expressly herein
provided). Any party shall be entitled to maintain, on its own behalf or
on behalf of the Partnership, any action or proceeding against the other
parties or the Partnership (including any action for damages, specific
performance or declaratory relief) for or by reason of breach by such party
of this Agreement or any agreement entered into in connection herewith,
notwithstanding the fact that any one or more of the parties to such
proceeding may then be partners in the Partnership, and without dissolving
the Partnership as a partnership.
H. No Waiver. No waiver by a party of any breach of this
Agreement or of any warranty or representation hereunder by the other party
shall be deemed to be a waiver of any other breach by such other party
(whether preceding or succeeding and whether or not of the same or similar
nature), and no acceptance of payment or performance by a party after any
breach by the other party shall be deemed to be a waiver of any breach of
this Agreement or of any representation or warranty hereunder by such other
party, whether or not the first party knows of such breach at the time it
accepts such payment or performance. No failure or delay by a party to
exercise any right it may have by reason of the default of the other party
shall operate as a waiver of default or modification of this Agreement or
shall prevent the exercise of any right by the first party while the other
party continues to be so in default.
I. Consents and Approvals. Except as otherwise expressly provided
herein, any approval or consent provided to be given by a party hereunder
may be given or withheld in the absolute discretion of such party.
J. Governing Law. This Agreement shall be construed and enforced
in accordance with the internal laws of the State of Illinois (without
regard to conflicts of law).
K. No Third Party Beneficiaries. Except as provided in
Section 8.3C, nothing in this Agreement, expressed or implied, is intended
to confer any rights or remedies upon any person, other than the parties
hereto and, subject to the restrictions on assignment herein contained,
their respective successors and assigns.
L. Certain Terminology.
(1) Whenever the words "including", "include" or "includes"
are used in this Agreement, they shall be interpreted in a non-exclusive
manner as though the words ", without limitation," immediately followed the
same.
(2) Except as otherwise indicated, all Exhibit, Article and
Section references in this Agreement shall be deemed to refer to the
Exhibits, Articles and Sections in this Agreement.
M. Amendments. This Agreement may be amended by written agreement
of amendment executed by all parties, but not otherwise.
Section 9.6. Attorneys' Fees. If any party obtains a judgment
against any other party by reason of breach of this Agreement, a reasonable
attorneys' fee as fixed by the court shall be included in such judgment.
Section 9.7. Successors and Assigns.
A. Seller. Seller may not assign or transfer its rights or
obligations under this Agreement prior to the Closing Date without the
prior written consent of Buyer (which Buyer agrees not to unreasonably
withhold), except to any of the following (collectively referred to as a
"Seller Permitted Transferee") (a) Hahn Inc., (b) an "affiliate" or
subsidiary of Hahn Inc., (c) a general or limited partnership in which
Selling Partner, Hahn or an affiliate or subsidiary of Hahn Inc. is a
general partner, (d) a real estate investment trust in which Hahn or an
affiliate or subsidiary of Hahn Inc. is a manager, or (e) any trust or
common fund of which Hahn or an affiliate or subsidiary of Hahn Inc. is an
advisor. As used herein, an "affiliate" of Hahn Inc. includes any
corporation in which Hahn Inc. or its shareholders, individually or
collectively, own or control, directly or indirectly, more than 50% of the
common stock. Subject to the foregoing, this Agreement and the terms and
provisions hereof shall inure to the benefit of and be binding upon the
successors and assigns of the parties. In the event the rights and
obligations of Selling Partner shall be transferred and assigned as
aforesaid, then such assignor shall be released from any obligation or
liability hereunder, and such transferee and assignee ("Selling Partner
Assignee") will be substituted in place of such assignor in the
above-provided-for documents and it shall be entitled to the benefit of and
may enforce Buyer's covenants, representations and warranties hereunder.
Upon any such assignment by Buyer or any successor or assign of Selling
Partner, then the assignor's liabilities and obligations hereunder or under
any instruments, documents or agreements made pursuant hereto shall be
binding upon Selling Partner Assignee; provided, however, that Selling
Partner Assignee shall have the benefit of any limitations of such
liabilities and obligations applicable to either the assignor or Selling
Partner Assignee, provided by law or by the terms hereof or such
instruments, documents or agreements.
B. Buyer. Buyer may not assign or transfer its rights or
obligations under this Agreement prior to the Closing Date without the
prior written consent of Selling Partner (which Selling Partner agrees not
to unreasonably withhold), except to any of the following (collectively
referred to herein as the "Buyer Permitted Transferees"): (a) JMB Realty
Corporation, a Delaware corporation ("JMB"), (b) an "affiliate" or
subsidiary of JMB, (c) JMB Realty Trust, a real estate investment trust
("Trust"), (d) a general or limited partnership in which Buyer, Trust, JMB
or an affiliate or subsidiary of JMB is a general partner, (e) a real
estate investment trust in which JMB or an affiliate or subsidiary of JMB
is a manager, or (f) any entity created in connection with a "roll up" of
Buyer, Trust, JMB or an affiliate or subsidiary of JMB. As used herein, an
"affiliate" of JMB includes any corporation in which JMB or its
shareholders, individually or collectively, own or control, directly or
indirectly, more than 50% of the common stock.
C. General. Subject to the foregoing, this Agreement and the
terms and provisions hereof shall inure to the benefit of and be binding
upon the successors and assigns of the parties. In the event the rights
and obligations of Buyer shall be transferred and assigned as aforesaid,
then such assignor shall be released from any obligation or liability
hereunder, and such transferee and assignee ("Buyer Assignee") will be
substituted in place of such assignor in the above-provided-for documents
and it shall be entitled to the benefit of and may enforce Selling
Partner's covenants, representations and warranties hereunder. Upon any
such assignment by Buyer or any successor or assign of Buyer, then the
assignor's liabilities and obligations hereunder or under any instruments,
documents or agreements made pursuant hereto shall be binding upon Buyer
Assignee; provided, however, that Buyer Assignee shall have the benefit of
any limitations of such liabilities and obligations applicable to either
the assignor or Buyer Assignee, provided by law or by the terms hereof or
such instruments, documents or agreements.
Section 9.8. Notices. Any notice which a party is required or
may desire to give the other shall be in writing and may be sent by
personal delivery or by mail (either [i] by United States registered or
certified mail, return receipt requested, postage prepaid, or [ii] by
Federal Express or similar generally recognized overnight carrier regularly
providing proof of delivery), addressed as follows (subject to the right of
a party to designate a different address for itself by notice similarly
given at least fifteen (15) days in advance):

To Selling Partner:

Mall of Memphis Associates
4350 La Jolla Village Drive
Suite 440
San Diego, California 92122-1233
Attention: President and CEO

With Copy To:

Plaza Properties of America, Inc.
4350 La Jolla Village Drive
Suite 440
San Diego, California 92122-1233
Attention: Vice President and General Counsel

To Buyer:

Carlyle Real Estate Limited Partnership-XI
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attention: Mr. Glenn Emig

With Copy To:

Pircher, Nichols & Meeks
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
Attention: Real Estate Notices (DSB)

Any notice so given by mail shall be deemed to have been given as of the
date of delivery (whether accepted or refused) established by U.S. Post
Office return receipt or the overnight carrier's proof of delivery or
refusal, as the case may be. Any such notice not so given shall be deemed
given upon receipt of the same by the party to whom the same is to be
given.
Section 9.9. Counterparts. This Agreement may be executed in
any number of counterparts, provided each of the parties hereto executes at
least one counterpart; each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute
but one agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.

SELLING PARTNER:

MALL OF MEMPHIS ASSOCIATES,
a Tennessee limited partnership

By: Plaza Properties of America, Inc.,
a Delaware corporation
as general partner

By: ____________________________
Name: ____________________
Title: ___________________

BUYER:

CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XI,
an Illinois limited partnership

By: JMB Realty Corporation,
a Delaware corporation,
General Partner

By: ____________________________
Name: ____________________
Title: ___________________

EXHIBIT LIST

EXHIBIT A - Description of Real Property
EXHIBIT B - Rent Roll
EXHIBIT C - Continuing Contracts
EXHIBIT D - Form of Note
EXHIBIT E - Form of Security Agreement
EXHIBIT F - Form of Assignment of Partnership Interest
EXHIBIT G - Form of Certification of Non-Foreign Status
EXHIBIT H - Form of Right of First Opportunity
EXHIBIT I - Form of Letter Agreement
EXHIBIT J - Partnership Agreement
EXHIBIT K - Pending Disputes
EXHIBIT L - List of Certain Agreements Signed by JMB or
Affiliates

EXHIBIT A

DESCRIPTION OF REAL PROPERTY

EXHIBIT K

PENDING DISPUTES

None.

THIS DOCUMENT PREPARED BY,
AND WHEN RECORDED RETURN TO:

PIRCHER, NICHOLS & MEEKS
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
Attention: Robert D. Jaffe, Esq.

________________________________________________________________________
(SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY)

ASSIGNMENT OF PARTNERSHIP INTEREST
(Mall of Memphis; Memphis, Tennessee)

THIS ASSIGNMENT OF PARTNERSHIP INTEREST (this "Assignment") is made
as of the 8th day of August, 1995, by MALL OF MEMPHIS ASSOCIATES,
a Tennessee limited partnership (hereinafter called "Assignor"), in favor
of CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XI, an Illinois limited
partnership (hereinafter called "Assignee").
WITNESSETH:

WHEREAS, Assignor is a general partner of that certain Illinois
general partnership known as "Mall of Memphis Associates" (the
"Partnership"), which has heretofore been governed in accordance with that
certain agreement captioned "ARTICLES OF GENERAL PARTNERSHIP OF MALL OF
MEMPHIS ASSOCIATES (AN ILLINOIS GENERAL PARTNERSHIP)" made and entered into
as of August 3, 1981 (as heretofore or herewith amended, the "Partnership
Agreement");
WHEREAS, the principal asset owned by the Partnership is that certain
regional shopping mall commonly known as "Mall of Memphis" and located in
the City Memphis, State of Tennessee;
WHEREAS, Assignor owns a thirty-six and ninety-four one hundredths
percent (36.94%) interest in the Partnership and Assignee desires to
acquire from Assignor such 36.94% interest in the Partnership, including
the entire 36.94% interest of Assignor in the capital and profits and
losses of the Partnership, and any other interests, rights or benefits of
Assignor in the Partnership (such 36.94% Partnership interest and any other
interests, rights or benefits of Assignor in the Partnership being herein
collectively called the "Partnership Interest");
WHEREAS, Assignor and Assignee are concurrently herewith entering
into an agreement captioned "PURCHASE AGREEMENT", dated as of the date
hereof (the "Purchase Agreement"), providing for, among other things, the
purchase by Assignee from Assignor of the Partnership Interest; and
WHEREAS, Assignor desires unconditionally to assign the Partnership
Interest to Assignee as required by the terms and provisions of the
Purchase Agreement.
WHEREAS, Assignee desires to unconditionally accept the Partnership
Interest, subject to the terms of the Purchase Agreement.
WHEREAS, no prior instrument was recorded in the County Register of
Shelby County, Tennessee relating to the Partnership Interest.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Assignor, Assignor hereby
unconditionally assigns, transfers and sets over unto Assignee the
Partnership Interest and Assignee hereby unconditionally accepts, subject
to the terms of the Purchase Agreement, the assignment of the Partnership
Interest.
All the covenants, terms and conditions set forth or incorporated
herein shall be binding upon Assignor and its successors and assigns and
shall inure to the benefit of Assignee and its successors and assigns.

IN WITNESS WHEREOF, the Assignor has executed this Assignment as of
the day, month, and year first above written.

MALL OF MEMPHIS ASSOCIATES,
a Tennessee limited partnership

By: Plaza Properties of America, Inc.,
a Delaware corporation
as general partner

By: ____________________________
Name: ______________________
Title: _____________________

ACCEPTED AND AGREED TO AS
OF THE DATE WRITTEN ABOVE:

CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XI,
an Illinois limited partnership

By: JMB Realty Corporation,
a Delaware corporation,
General Partner

By: _________________________
Name: _______________________
Title: ______________________

STATE OF CALIFORNIA )
COUNTY OF )

On ___________________ before me, a notary public in and for said
state, personally appeared _______________________________________________
and _______________________________________________ personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged
to me that he or she executed the same in the capacity(ies) indicated at
the signature point.

WITNESS my hand and official seal.

Signature __________________________________ (Seal)
Capacity of Signatory ______________________

STATE OF CALIFORNIA )
COUNTY OF )

On ___________________ before me, a notary public in and for said
state, personally appeared __________________________________________
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he or she executed the same in the
capacity(ies) indicated at the signature point.

WITNESS my hand and official seal.

Signature __________________________________ (Seal)
Capacity of Signatory ______________________

<PAGE>
STATE OF CALIFORNIA )
COUNTY OF )

On _____________________ before me, a notary public in and for said
state, personally appeared __________________________________________
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he or she executed the same in the
capacity(ies) indicated at the signature point.

WITNESS my hand and official seal.

Signature __________________________________ (Seal)
Capacity of Signatory ______________________

SECURED PROMISSORY NOTE

$5,000,000.00 Chicago, Illinois As of August 8, 1995

FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to
MALL OF MEMPHIS ASSOCIATES, a Tennessee limited partnership ("Lender"), at
the address set forth in Section 11.7 hereof, or at such other place as
Lender may from time to time designate by written notice to Borrower, the
sum of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) subject to the
provisions set forth below, together with interest on the balance of unpaid
principal from the date hereof at the rate of eight percent (8.0%) per
annum (the "Interest Rate"), computed on the basis of a 360-day year
consisting of twelve equal 30-day months, upon and subject to the terms and
conditions set forth below.

1. Definitions. The following terms shall have the following
meanings:

"Borrower" means Carlyle Real Estate Limited Partnership-XI, an
Illinois limited partnership, and its successors and assigns as permitted
hereunder.

"Business Day" means any day that is not a Saturday, Sunday or
holiday as defined in the Illinois Government Code or any other day when
commercial banks in Illinois are authorized or obligated by law or
executive order to be closed.

"Business Property" shall have the meaning ascribed to such
term in the Purchase Agreement.

"Collateral" shall have the meaning ascribed to such term in
the Security Agreement.

"Fixed Interest" means interest on the principal amount of this
Note from time to time outstanding calculated at the Interest Rate.

"Lender" means Mall of Memphis Associates, a Tennessee limited
partnership, or any future owner or holder of this Note permitted under the
terms hereof.

"Maturity Date" means the Natural Maturity Date or the Sale
Maturity Date, as the case may be.

"Natural Maturity Date" means the date which is August 8, 2002
subject to extension as set forth in Section 3A hereof and to acceleration
as set forth herein including upon prepayment; provided, however, that if
such date is not a Business Day, then the Maturity Date shall be the next
Business Day following such date.

"Net Cash Flow" based on the assumption that Lender is still a
partner in the Partnership and the transactions contemplated by the
Purchase Agreement have not occurred, Net Cash Flow, as used herein means
Lender's share of "Net Cash Flow", "Percentage Rent" and "Net Financing
Proceeds" (as such quoted terms are defined in the Partnership Agreement
but subject to the modifications thereto described on Exhibit "A" attached
hereto and made a part hereof) for the particular calendar year that Lender
would have received for such year as a distribution under (and taking into
consideration the distribution levels under) the Partnership Agreement.

"Partnership" means Mall of Memphis Associates, an Illinois
general partnership.

"Partnership Agreement" means that certain agreement captioned
"Articles of General Partnership of Mall of Memphis Associates (An Illinois
General Partnership)" made and entered into as of August 3, 1981, by and
between Borrower and Lender, as amended by that certain amendment captioned
"First Amendment to Articles of General Partnership of Mall of Memphis
Associates (An Illinois General Partnership)" dated as of August 3, 1981,
by and between Borrower and Lender, and that certain letter agreement dated
as of December 10, 1982, by and between Borrower and Lender, and as the
same may be herewith or hereafter amended.

"Purchase Agreement" means that certain agreement captioned
"Agreement" of even date herewith, by and between Lender and Borrower,
providing for, among other things, the sale of the Subject Partnership
Interest from Lender to Borrower.

"Sale Maturity Date" means the date on which the Partnership
sells the Business Property or Borrower sells all or a portion of the
Subject Partnership Interest, provided, however, that if such date is not a
Business Day, then the Sale Maturity Date shall be the next Business Day
following such date.

"Security Agreement" means the Partnership Pledge and Security
Agreement of even date herewith by Borrower in favor of Lender.

"Security Documents" mean the Security Agreement and any other
documents or instruments now or hereafter securing this Note, or evidencing
or securing the obligations secured by the Security Agreement. As of the
date hereof, the Security Agreement and any UCC financing statements filed
in connection therewith collectively constitute all of the Security
Documents.

"Subject Partnership Interest" shall have the meaning ascribed
to such term in the Purchase Agreement.

2. Yearly Payments.

(a) Payment Date.

(i) Commencing on June 1, 1996 and continuing on the
first (1st) day of June of each year thereafter until this Note is repaid
in full (each such June 1 being referred to herein as a "Payment Date"),
Borrower shall pay Fixed Interest on the outstanding principal amount of
this Note.

(ii) Notwithstanding the foregoing, Fixed Interest due
on any Payment Date shall be payable solely to the extent of Net Cash Flow
for the preceding calendar year from the Business Property provided,
however, Borrower shall be obligated to make the following two payments
even if there is insufficient Net Cash Flow to make such payment: (y) on
the June 1, 1996 Payment Date, an amount equal to $300,000; and (z) on the
June 1, 1997 Payment Date, an amount, if any, equal to the excess of
$600,000 over the amounts actually paid by Borrower on or with respect to
the June 1, 1996 Payment Date. For example, assume that (1) the Net Cash
Flow for calendar year 1995 was $400,000, and, accordingly, Borrower paid
Lender $400,000 on the 1996 Payment Date (i.e., $100,000 in excess of the
required minimum payment) and (2) the 1996 Net Cash Flow was $100,000, then
Borrower would be obligated to pay Lender $200,000 on the 1997 Payment Date
(i.e., the excess of $600,000 over $400,000).

(iii) Interest for any partial year shall be computed on
the basis of a 360-day year and shall be equal to the sum of a per diem
interest charge (for each day the principal balance hereof is outstanding
during such period) equal to the product of (a) 1/360 and (b) the Interest
Rate and (c) the outstanding principal balance hereunder for the day in
question.

(b) Deferred Interest. The accrued Fixed Interest which has
not been paid to Lender under subsection (a) above shall constitute
"Deferred Interest". The Deferred Interest from time to time outstanding
under this Note shall bear interest at the Interest Rate. To the extent
that Net Cash Flow shall exceed Fixed Interest for any given calendar year,
such excess shall be payable by Borrower to Lender and shall be applied to
reduce the then outstanding principal balance of this Note. All Deferred
Interest which has not been paid prior to the Maturity Date, together with
interest thereon at the Interest Rate, shall be due and payable on the
Maturity Date, subject, however, to Section 3 hereof.

(i) On each Payment Date, Borrower shall cause to be
submitted to Lender an accounting ("Net Cash Flow Accounting") of the
computation of Net Cash Flow for the preceding calendar year, including an
itemization of all expenditures incurred and all operating revenues
received during such year.

(ii) In the event Lender should dispute any Net Cash
Flow Accounting, the items of dispute shall be submitted to KPMG Peat
Marwick or, if unavailable, such other certified public accountant mutually
selected by Lender and Borrower for audit and verification, and the finding
and determination of such accountant shall be conclusive. The cost of such
audit and verification shall be paid by Lender, except that Borrower shall
bear the cost of such audit if, in the aggregate, the disputed items which
benefitted Borrower (and resulted in any underpayment hereunder) are found
by the audit to differ from such items as stated in the Net Cash Flow
Accounting by more than five percent (5%), or if there is a discrepancy of
more than fifty thousand dollars ($50,000). Notwithstanding which party is
responsible for the cost of such audit, the amount of any such discrepancy
which benefitted Borrower (and resulted in an underpayment hereunder) which
is revealed by any audit shall be paid by Borrower within ten (10) days
after conclusion of the audit together with interest thereon at the
Interest Rate.

(d) Books and Records. Borrower shall keep, or cause to be
kept, adequate records and books of account with respect to its business
activities at the Business Property, in which proper entries, reflecting
all of its financial transactions, are made in accordance with accrual
basis accounting principles as adjusted for federal income tax purposes.
Lender and any of its officers, employees and agents shall have the right,
exercisable once per calendar year upon at least 30 days' advance written
notice to Borrower (or upon the occurrence and during the continuance of an
"Event of Default", as hereinafter defined), during normal business hours
(or at such other times as may reasonably be requested by Lender), to
inspect, audit and make extracts from all of Borrower's records, files and
books of account.

3. Maturity Date.

A. Natural Maturity Date.

In the event the Natural Maturity Date occurs (which includes
Borrower's prepayment of this Note), an amount equal to the lesser of
(a) the outstanding principal balance and any accrued Fixed Interest and
Deferred Interest as of such date (the "Accrued Balance"), or (b) "Lender's
Market Share" (as defined in Exhibit "B" attached hereto and made a part
hereof) shall be due on the Natural Maturity Date; provided, however, if
Lender is not in material default under the Purchase Agreement, Lender
shall have two five year options to extend the maturity date (i.e., to
August 8, 2007 and August 8, 2012 respectively) under either of the
following provisions:

(i) if the Fair Market Value has been determined by
appraisal under Exhibit "B" hereto and such Fair Market Value is less than
the Accrued Balance as of the date of such determination, then Lender may
exercise the foregoing option by delivery notice thereof to Borrower within
10 business days of such date of determination; or

(ii) at any time during the period which is 30 days
prior to the then Natural Maturity Date, provided that Lender delivers
written notice thereof to Borrower no later than 10 business days prior to
such Natural Maturity Date.

B. Sale Maturity Date.

In the event the Sale Maturity Date occurs, an amount equal to
the lesser of (a) the outstanding principal balance and any accrued Fixed
Interest and Deferred Interest as of such date, or (b) the "Lender's Sale
Share" (as defined in Exhibit "C" attached hereto and made a part hereof)
shall be due on the Sale Maturity Date, subject, however, to full discharge
at a discount as more particularly described in the "Right Of First
Opportunity" (as defined in the Purchase Agreement).

4. Application of Payments.

Each payment hereunder shall be applied when received first to
the payment of any Deferred Interest and interest accrued thereon, then to
the payment of accrued interest on the principal balance from time to time
remaining unpaid and then to the unpaid principal balance, except that if
any amounts due under the terms of Section 8 hereof or any Security
Document have not been repaid, then any monies received, at the option of
Lender, may first be applied to repay such amounts and interest thereon and
the balance, if any, be applied as herein specified. No application by
Lender of any amounts hereunder shall constitute a cure or waiver of any
default by Borrower under the Security Documents or under this Note.

5. Secured Note.

This Note is secured by the Security Agreement and the other
Security Documents.

6. Default; Acceleration.

6.1. Default. The following shall constitute events of
default ("Events of Default") hereunder:

(a) The failure to make any payment of interest on this
Note, or to make any payment of an installment of principal, within fifteen
(15) days after the same is due and payable, or the failure to make any
other payments required under this Note within fifteen (15) days after the
same is due and payable, whether at maturity or by acceleration or as part
of any prepayment or otherwise, in each case, as is provided in this Note.

(b) An Event of Default (as defined in the Security
Agreement) occurs under the Security Agreement or under any obligation
secured thereby.

6.2. Acceleration. Upon the occurrence and during the
continuance of an Event of Default, then the whole of the unpaid principal
hereof, together with accrued and outstanding interest and all other sums
required to be paid under this Note or any Security Document shall, at the
election of Lender and without notice of such election, become immediately
due and payable. Lender's election may be exercised at any time after any
such event, and the acceptance of one or more payments hereon from any
person thereafter shall not constitute a waiver of Lender's election, or of
its option to make such election, unless following such payment or
payments, the Event of Default shall no longer be continuing.

7. Prepayment.

Borrower may prepay the unpaid balance of principal under this
Note in whole or in part at any time or times, without fee, charge,
premium, penalty or additional interest.
8. Costs.

Borrower agrees to pay all reasonable out of pocket costs of
collection, including reasonable attorneys' fees (whether or not for
salaried attorneys regularly employed by Lender) and all reasonable out of
pocket costs of any action or proceeding, in case any payment is not paid
when due, or in case it becomes necessary to enforce any other obligation
of Borrower hereunder or to protect the security for the indebtedness
evidence hereby, or for the enforcement by Lender of its remedies under the
Security Agreement or any other Security Document. All such costs are
secured by the Security Agreement and the other Security Documents.

9. Remedies Cumulative.

Subject to Section 11.8 hereof, the rights and remedies of
Lender as provided in this Note and in the Security Documents shall be
cumulative. Failure to exercise any such right or remedy shall in no event
be construed as a waiver or release of such rights or remedies, or the
right to exercise them at any later time.

10. Security Agreement Provisions Regarding Transfers; Successors.

Lender may not assign this Note without the prior written
consent of Borrower, which may be withheld in Borrower's sole discretion;
provided, however, Lender may freely assign this Note to any "Seller
Permitted Transferee" (as such term is defined in the Purchase Agreement)
so long as Lender has provided prior written notice thereof (accompanied by
a reasonably detailed explanation of the relationship between any such
assignee and Lender which satisfies such definition). Subject to the
limitations on transfer, if any, specified in the Security Agreement and
herein, the provisions hereof shall be binding and inure to the benefit of
the heirs, legal representatives, successors and assigns of the parties
hereto.

11. Miscellaneous.

11.1.Manner of Payment. All payments due hereunder shall be
made in lawful money of the United States of America. Such payments shall
be made by check or, upon maturity, by transferring the payment in federal
or immediately available funds by bank wire or interbank transfer for the
account of Lender without presentment or surrender of this Note provided,
however, that any payment of principal or interest received after 2:00
p.m., Central time, shall be deemed to have been received by Lender on the
next Business Day and shall bear interest accordingly.

11.2.No Amendment or Waiver Except in Writing. This Note may
be amended or modified only by a writing duly executed by Borrower and
Lender, which expressly refers to this Note and the intent of the parties
so to amend this Note. No provision of this Note will be deemed waived by
Lender, unless waived in a writing executed by Lender, which expressly
refers to this Note, and no such waiver shall be implied from any act or
conduct of Lender, or any omission by Lender to take action with respect to
any provision of this Note or any Security Document. No such express
written waiver shall affect any other provision of this Note, or cover any
default or time period or event, other than the matter as to which an
express written waiver has been given.

11.3.No Intent of Usury. None of the terms and provisions
contained in this Note, or in any Security Documents, or in other documents
or instruments related hereto, shall ever be construed to create a contract
for the use, forbearance or detention of money requiring payment of
interest at a rate in excess of the maximum interest permitted to be
charged by applicable laws or regulation governing this Note ("Usury
Laws"). Borrower shall never be required to pay interest on this Note in
excess of the maximum interest that may be lawfully charged under such
Usury Laws, as made applicable by the final judgment of a court of
competent jurisdiction, and the provisions of this Section shall control
over all other provisions hereof and of any other instrument executed in
connection herewith or executed to secure the indebtedness evidenced
hereby, which may be in apparent conflict with this Section. If Lender
collects monies which are deemed to constitute interest which would
otherwise increase the effective interest rate on this Note to a rate in
excess of that permitted to be charged by such Usury Laws, all such sums
deemed to constitute interest in excess of the maximum rate shall, at the
option of Lender, either be credited to the payment of principal or
returned to Borrower.

11.4.Governing Law. This Note shall be governed by and
construed and enforced in accordance with the laws of the State of Illinois
(without regard to conflicts of laws), except where federal law is
applicable (including, without limitation, any applicable federal usury
ceiling or other federal law preempting state usury laws).

11.5.Certain Rules of Construction. The headings of each
Section of this Note are for convenience only and do not define or limit
any provision of this Note. The provisions of this Note shall be construed
as a whole according to their common meaning, not strictly for or against
any party, or any person or entity, who is or may become liable for the
payment of this Note, and to achieve the objectives of the parties
unconditionally to impose on Borrower the indebtedness evidenced by this
Note. Whenever the words "including", "includes" or "include" are used in
this Note (including any Exhibit hereto), they shall be read
non-exclusively as though the phrase," without limitation," immediately
followed the same.

11.6.Severability. If any term of this Note, or the
application thereof to any person or circumstances, shall be invalid or
unenforceable, the remainder of this Note, or the application of such term
to persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term of this Note
shall be valid and enforceable to the fullest extent permitted by law.

11.7.Notices. Any notice which a party is required or may
desire to give the other shall be in writing and may be sent by personal
delivery or by mail (either [i] by United States registered or certified
mail, return receipt requested, postage prepaid, or [ii] by Federal Express
or similar generally recognized overnight carrier regularly providing proof
of delivery), addressed as follows (subject to the right of a party to
designate a different address for itself by notice similarly given at least
15 days in advance):

To Borrower:

c/o JMB Realty Corporation
900 N. Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. Glenn Emig

With Copy To:

Pircher, Nichols & Meeks
1999 Avenue of the Stars
26th Floor
Los Angeles, California 90067
Attention: Real Estate Notices (DSB)

To Lender:

Mall of Memphis Associates
4350 La Jolla Village Drive
Suite 440
San Diego, California 92122-1233
Attention: President and CEO

With Copy To:

Plaza Properties of America, Inc.
4350 La Jolla Village Drive
Suite 440
San Diego, California 92122-1233
Attention: Vice President and General Counsel

11.8 Limitations on Recourse. Anything herein to the contrary
notwithstanding, it is understood and agreed that neither Borrower nor any
present or future advisor, trustee, director, officer, partner, employee,
beneficiary, shareholder, participant or agent of or in Borrower or any
entity now or hereafter having a direct or indirect ownership interest in
Borrower shall have any personal liability, directly or indirectly, under
or in connection with this Note or any agreement made or entered into under
or pursuant to the provisions of this Note, or any amendment or amendments
to any of the foregoing made at any time or times, heretofore or hereafter,
and Lender and its successors and assigns and, without limitation, all
other persons and entities, shall look solely to that portion of Borrower's
interest in the Partnership equal to the "Transferred Percentage" (as
defined in the Security Agreement) for the payment of any claim or for any
performance, and Lender hereby waives any and all such personal liability;
provided, however, Lender may look to all the assets of Borrower (but of no
partners in Borrower or in any partnership which is a partner in Borrower)
for the payments under Section 2(a)(ii)(y) and (z) hereof. Without
limitation on the foregoing, neither the negative capital account of any
constituent partner in Borrower, nor any obligation of any constituent
partner in Borrower to restore a negative capital account or to contribute
capital to Borrower or to any other constituent partner in Borrower, shall
at any time be deemed to be the property or an asset of Borrower or any
such other constituent partner (and neither Lender nor any of its
successors or assignees shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account or partner's
obligation to restore or contribute). The limitations of liability
provided in this Section are in addition to, and not in limitation of, any
limitation on liability applicable to Borrower provided by law or by any
other contract, agreement or instrument.

11.9 Offset.

(a) General. This Note is given pursuant to the
Purchase Agreement and evidences part of the purchase price of the Subject
Partnership Interest purchased pursuant to the Purchase Agreement.

(b) Collateral Agreement. As used herein, "Collateral
Agreement" means any agreement, instrument, document or covenant made or
entered into, under or pursuant to, or concurrently with, the Purchase
Agreement or in connection with any of the transactions therein provided,
and any amendment or amendments made at any time or times heretofore or
hereafter to any such agreement, instrument, document or covenant,
including, but not limited to the "Letter Agreement" (as defined in the
Purchase Agreement) and Right of First Opportunity, and all amendments to
any of the foregoing, made at any time or times heretofore or hereafter.

(c) Escrow/Final Judgment. Without limitation on and
in addition to any other right or remedy of Borrower during the pendency of
any claim made on Borrower against which Lender shall have agreed to
indemnify Borrower under the Purchase Agreement or any Collateral
Agreement, or following an occurrence or circumstance with Borrower regards
as a breach or default under the Purchase Agreement or any Collateral
Agreement or breach of any representation or warranty of Lender under the
Purchase Agreement or any Collateral Agreement, or following an occurrence
or condition which in Borrower's opinion entitles Borrower to payment
pursuant to the provisions of the Purchase Agreement or Collateral
Agreement, Borrower may, at its election, until the settlement or
disposition of such claim or the determination of Borrower's recovery by
reason of the Borrower's entitlement to such payment hereunder based on a
final non appealable judgment, deposit the payment of all payments or
installments to be made by Borrower pursuant to this Note into a third
party interest bearing escrow account reasonably satisfactory to Lender and
Borrower (the "Escrow"). Upon such settlement or disposition of such claim
or determination of the Borrower's recovery or determination of the
Borrower's entitlement to such payment, either credit the amount of the
same first against the installments and sums so withheld against any
installments or amounts first payable under this Note after such settlement
or disposition of such claim or determination of such recovery or
entitlement to payment and, based on such credit, adjust the amount, if
any, otherwise due Lender which is retained in the Escrow and release it to
Borrower or Lender, as appropriate, as a result of such adjustment.

11.10Counterparts. This Note may be executed in two or more
counterparts, each of which shall constitute an original, but all of which
shall constitute one and the same Note.

IN WITNESS WHEREOF, Borrower has executed this Note as of the
day and year first above written.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XI,
an Illinois limited partnership

By: JMB Realty Corporation,
a Delaware corporation,
General Partner

By: _________________________
Name: _______________________
Title: ________________________
THE TERMS OF THIS NOTE
ARE ACCEPTED AND AGREED
TO BY LENDER AS OF
AUGUST 8, 1995

MALL OF MEMPHIS ASSOCIATES,
a Tennessee limited partnership

By: Plaza Properties of America, Inc.,
a Delaware corporation
as general partner

By: ____________________________
Name: ____________________
Title: ___________________

EXHIBIT "A"

A. The definition of "Net Cash Flow" set forth in the Partnership
Agreement is modified, for purposes of the Note only, as follows:

1. The language commencing in the second line of such definition
which reads "plus the contributions for such period under Sections 2.2B and
2.2C hereof" is hereby deleted.

B. The definition of "Net Financing Proceeds" remains unchanged.

EXHIBIT "B"

"Lender's Market Share", based on the assumptions that (1) Lender is
still a partner in the Partnership and the transactions contemplated under
the Purchase Agreement have not occurred, and (2) proceeds equal to the
"Fair Market Value" (as hereinafter defined) were being distributed to the
partners thereunder, means that portion of the Fair Market Value that
Lender, as a partner in the Partnership would have received, as of the date
the Fair Market Value is determined in accordance with this Exhibit "B", as
a distribution of Net Sales Proceeds (as defined in the Partnership
Agreement) under (and taking into consideration the distribution levels
under) the Partnership Agreement, less $500,000.

(a) "Fair Market Value" means the fair market value, as of the
Natural Maturity Date of the buildings located on the real property which
shall be determined by valuing the rental space, assuming the then current
use of the Business Property as a shopping center without regard as to any
lease currently in effect and regardless of its potential highest and best
use. Such determination shall be made by Lender and Borrower in the
exercise of their sole discretion; provided, however, if such determination
is not reached within 15 days after the Natural Maturity Date (the "Outside
Date") then such amount shall be determined by the appraisal procedure set
forth in Subparagraph (b) below.

(b) Appraisal.

i. Procedure. In the event that Lender and Borrower do not
agree on the Fair Market Value of the Business Property on or before the
Outside Date, this Subparagraph (b) shall apply. The Fair Market Value
shall be determined by an appraisal made as herein provided by an
"Experienced Professional" (as hereinafter defined). As used in this
Lease, "Experienced Professional" means, individually and collectively, a
person or persons, as the case may be, who satisfy each of the following:
such person is either (aa) a real estate appraiser who is (I) a member of
the American Institute of Real Estate Appraisers or other successor body of
comparable function, (II) has at least ten (10) years of experience in the
appraisal of shopping centers of the size and nature equivalent to the
shopping center located on the demised premises; (III) at least five
(5) years of such person's 10-year experience is within the State of
Tennessee; (IV) within the two-year period ending on the date such person
is selected, such person shall have worked in the appraisal of shopping
centers in Shelby County or Davidson County in Tennessee, with respect to
shopping centers of the size and nature equivalent to the shopping center
located on the demised premises; and (V) such person shall have no direct
or indirect financial or other business interest in any party to the
Purchase Agreement, or (bb) either a leasing broker licensed in the State
of Tennessee, or a person selected from a list obtained from the chief
executive officer of the International Council of Shopping Centers or any
other successor body of comparable function who has (I) at least ten (10)
years of experience in the operation, management or leasing of space in
shopping centers of the size and nature equivalent to the shopping center
located on the Business Property; (II) at least five (5) years of such
person's 10-year experience is within the State of Tennessee; (III) within
the two-year period ending on the date such person is selected, such person
shall have worked in the operation, management or leasing of space in
Shelby County or Davidson County in Tennessee with respect to shopping
centers of the size and nature equivalent to the shopping center located on
the Business Property; and (IV) such person shall have no direct or
indirect financial or other business interest in any party to the Purchase
Agreement. The Experienced Professional shall be appointed in the manner
provided in Subparagraph (b)iii below.

ii. Basis. The Experienced Professional shall
determine the value of the buildings located on the Business Property as of
the Natural Maturity Date on the basis set forth in the definition of Fair
Market Value.

iii. Appointment of Appraisers. During the 15-day
period immediately following the Outside Date, Lender and Borrower will
endeavor to jointly select, approve and appoint one (1) Experienced
Professional to determine the Fair Market Value of the Business Property
for the purposes of this Subparagraph b(iii). If Lender and Borrower are
unable to agree on a single Experienced Professional on or before 15 days
after the Outside Date, Lender and Borrower shall each appoint an
Experienced Professional. Such appraisals shall be completed 45 days after
the Outside Date. If such appraisals are within five percent (5%) of each
other, the Fair Market Value shall be an amount equal to the sum of the two
(2) appraisals when added together, divided by two (2). If such appraisals
are not within five percent (5%) of each other, such Experienced
Professionals will appoint a third Experienced Professional. If by 10 days
after such decision the first two Experienced Professionals are unable to
agree on a third Experienced Professional, such third Experienced
Professional shall be appointed pursuant to the rules of the American
Arbitration Association (the "AAA"). The third Experienced Professional
shall make his or her appraisal on or before the date which is thirty (30)
days following his or her appointment, and the Fair Market Value shall be
determined by adding together those two (2) of the three (3) appraisals
which are closest together in appraised value and dividing the sum by two
(2). If each party appoints its own Experienced Professional, the cost of
Lender's Experienced Professional shall be borne by Lender, and the cost of
Borrower's Experienced Professional shall be borne by Borrower. If Lender
and Borrower agree as to a single Experienced Professional or if a third
Experienced Professional is appointed, the cost of either such Experienced
Professional shall be shared equally by Lender and Borrower. Failure of
any Experienced Professional or the AAA to act within any time period set
forth herein shall not prejudice any rights of Lender or Borrower herein.

iv. Conclusive Determination. The Fair Market Value of
the Business Property determined in accordance with the provisions of this
Subparagraph (b)(iv) shall be binding and conclusive on the parties.
Concurrently with rendering his or her decision, each Experienced
Professional shall submit to Lender and Borrower all reasonable information
which supports his or her Fair Market Value determination.

EXHIBIT "C"

"Lender's Sale Share", means (a) in the event of a sale of the
Business Property, based on the assumptions that (1) Lender is still a
partner in the Partnership and the transactions contemplated in the
Purchase Agreement have not occurred and (2) the Net Sale Proceeds (as
defined in the Partnership Agreement) from the sale of the Business
Property were being distributed to the partners thereunder, means that
portion of the Net Sale Proceeds that Lender, as a partner in the
Partnership, would have received, as of the date of such sale, as a
distribution under (and taking into consideration the distribution levels
under) the Partnership Agreement, less $500,000, and (b) in the event of a
sale of the Subject Partnership Interest, the net sale proceeds (i.e.,
after the payment of all costs associated with any such transfer) due to
Borrower from such sale, less $500,000.

ASSIGNMENT OF MANAGEMENT TERMINATION PAYMENTS
(Mall of Memphis; Memphis, Tennessee)

THIS ASSIGNMENT OF MANAGEMENT TERMINATION PAYMENTS (this
"Assignment") is made as of the 8th day of August, 1995, and effective as
of January 1, 1995, by HAHN PROPERTY MANAGEMENT CORPORATION, a California
corporation (hereinafter called "Assignor") in favor of CARLYLE REAL ESTATE
LIMITED PARTNERSHIP-XI, an Illinois limited partnership (hereinafter called
"Assignee").
WITNESSETH:
WHEREAS, prior to May 1, 1994, Assignor was the "Manager" of the
regional shopping mall commonly known as "Mall of Memphis", located in
Memphis, Tennessee under that certain agreement captioned "MANAGEMENT
AGREEMENT-MALL OF MEMPHIS", dated as of August 3, 1981, by and between the
Partnership and Assignor, as amended by that certain letter agreement dated
as of August 14, 1991, and that certain amendment captioned "SECOND
AMENDMENT TO MANAGEMENT AGREEMENT-MALL OF MEMPHIS" dated as of March 2,
1992 (as amended, the "Management Agreement");
WHEREAS, Assignor, pursuant to an assignment (the "Assignment of
Management") effective as of May 1, 1994, assigned its interest under the
Management Agreement to Urban Retail Properties, Co. ("Urban Retail");
WHEREAS, in connection with the Assignment of Management, and as
consideration to Assignor for relinquishing its management of the Property,
Urban Retail agreed to pay to Assignor certain annual payments as described
in that certain letter agreement captioned "Letter Agreement Re Management
Assignment, Environmental Indemnity and Miscellaneous" dated as of the date
hereof, by and among Assignor, Assignee and others (such annual payments
shall be collectively referred to herein as the "Termination Payments");
WHEREAS, Mall of Memphis Associates, a Tennessee limited partnership
("Associates"), and Assignee are concurrently herewith entering into an
agreement captioned "SALE AGREEMENT", dated as of the date hereof (the
"Purchase Agreement"), providing for, among other things, the purchase by
Assignee from Associates of the "Subject Partnership Interest" (as defined
in the Sale Agreement) and the execution of this Assignment;
WHEREAS, Assignor desires unconditionally to assign all of Assignor's
right, title and interest in and to the Termination Payments to Assignee
(including, without limitation, all of Assignor's right to receive any
accrued but unpaid Termination Payments), as required by the terms and
provisions of the Purchase Agreement.
WHEREAS, Assignee desires to unconditionally accept the assignment
hereunder, subject to the terms hereof.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Assignor, Assignor hereby
unconditionally assigns, transfers and sets over unto Assignee all of its
right, title and interest in and to the Termination Payments, including,
without limitation, all of Assignor's right to receive any accrued but
unpaid Termination Payments and Assignee hereby unconditionally accepts,
subject to the terms hereof, the assignment hereunder.
All the covenants, terms and conditions set forth or incorporated
herein shall be binding upon Assignor and its successors and assigns and
shall inure to the benefit of Assignee and its successors and assigns.
IN WITNESS WHEREOF, the Assignor has executed this Assignment as of
the day, month, and year first above written.

HAHN PROPERTY MANAGEMENT CORPORATION,
a California corporation

By: _______________________________
Name: _____________________________
Title: ______________________________

ACCEPTED AND AGREED TO AS
OF THE DATE WRITTEN ABOVE:

CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XI,
an Illinois limited partnership

By: JMB Realty Corporation,
a Delaware corporation,
General Partner

By: _________________________
Name: _______________________
Title: ______________________<PAGE>
State of California )
County of ___________ )

WITNESS my hand and official seal.

Signature __________________________________ (Seal)
Capacity of Signatory ______________________

State of California )

County of ___________ )

WITNESS my hand and official seal.

Signature __________________________________ (Seal)
Capacity of Signatory ______________________

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995

<CASH> 3,975,999
<SECURITIES> 239,212
<RECEIVABLES> 483,994
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,097,094
<PP&E> 209,295,578
<DEPRECIATION> 80,472,867
<TOTAL-ASSETS> 154,527,649
<CURRENT-LIABILITIES> 76,034,130
<BONDS> 80,801,278
<COMMON> 0
0
0
<OTHER-SE> (13,986,921)
<TOTAL-LIABILITY-AND-EQUITY> 154,527,649
<SALES> 26,473,172
<TOTAL-REVENUES> 26,606,105
<CGS> 0
<TOTAL-COSTS> 18,959,620
<OTHER-EXPENSES> 476,199
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,667,812
<INCOME-PRETAX> (5,497,526)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,515,916)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,515,916)
<EPS-PRIMARY> (24.55)
<EPS-DILUTED> (24.55)

</TABLE>