CARLYLE REAL ESTATE LTD PARTNERSHIP XII, 10-K, 1994-03-30

CARLYLE REAL ESTATE LTD PARTNERSHIP XII
10-K, 1994-03-30
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the fiscal year
ended December 31, 1993 Commission file no. 0-12433

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

Illinois 36-3149589
(State of organization) (I.R.S. Employer Identification No.)

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

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

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

Name of each exchange on
Title of each class which registered
- ------------------- ------------------------

None None

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

LIMITED PARTNERSHIP INTERESTS
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No

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

State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Not applicable.

Certain pages of the prospectus of the registrant dated June 21, 1982, as
supplemented August 24, 1982, October 21, 1982, November 1, 1982, December 22,
1982 and February 18, 1983, and filed pursuant to Rules 424(b) and 424(c)
under the Securities Act of 1933 are incorporated by reference in Parts I and
III of this Annual Report on Form 10-K.

TABLE OF CONTENTS

Page
----

PART I

Item 1. Business. . . . . . . . . . . . . . . . . . . . 1

Item 2. Properties. . . . . . . . . . . . . . . . . . . 6

Item 3. Legal Proceedings . . . . . . . . . . . . . . . 8

Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . 8

PART II

Item 5. Market for the Partnership's Limited Partnership
Interests and Related Security Holder Matters . 8

Item 6. Selected Financial Data . . . . . . . . . . . . 9

Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations . 15

Item 8. Financial Statements and Supplementary Data . . 21

Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure. . . . . 54

PART III

Item 10. Directors and Executive Officers
of the Partnership. . . . . . . . . . . . . . . 54

Item 11. Executive Compensation. . . . . . . . . . . . . 57

Item 12. Security Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . 58

Item 13. Certain Relationships and Related Transactions. 59

PART IV

Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . 59

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 61

PART I

ITEM 1. BUSINESS

All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report.

The registrant, Carlyle Real Estate Limited Partnership - XII (the
"Partnership"), is a limited partnership formed in late 1981 and currently
governed by the Revised Uniform Limited Partnership Act of the State of
Illinois to invest in improved income-producing commercial and residential
real property. The Partnership sold $160,000,000 in Limited Partnership
Interests (the "Interests"), to the public pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933 (Registration No.
2-76443). A total of 160,000 Interests have been sold to the public at $1,000
per Interest. The offering closed on April 19, 1983. No Limited Partner has
made any additional capital contribution after such date. The Limited
Partners of the Partnership share in their portion of the benefits of
ownership of the Partnership's real property investments according to the
number of Interests held.

The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title, leasehold estates and/or through
joint venture partnership interests. The Partnership's real property
investments are located throughout the nation and it has no real estate
investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an understanding of
the Partnership's business taken as a whole. Pursuant to the Partnership
agreement, the Partnership is required to terminate on or before December 31,
2032. Accordingly, the Partnership intends to hold the real properties it
acquires for investment purposes until such time as sale or other disposition
appears to be advantageous. Unless otherwise described, the Partnership
expects to hold its properties for long-term investment where, due to current
market conditions, it is impossible to forecast the expected holding period.
At sale of a particular property, the proceeds, if any, are generally
distributed or reinvested in existing properties rather than invested in
acquiring additional properties.

The Partnership has made the real property investments set forth in the
following table:
<TABLE>
<CAPTION>
Sale or Disposal Date
or if Owned at
December 31, 1993,
Name, Type of Property Date of Original Invested
and Location (e) Size Purchase Capital Percentage (a) Type of Ownership (b)
- ---------------------- ---- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Country Square Apartments
Carrollton, Texas. . . . . . 434 units 9-30-82 2-2-93 fee ownership of land
and improvements
(through joint
venture partnership) (c)
2. Timberline Apartments
Denver, Colorado . . . . . . 200 units 11-1-82 7-25-90 fee ownership of land
and improvements
3. Summerfield/Oakridge Apartments
Aurora, Colorado . . . . . . 472 units 12-1-82 1-3-91 fee ownership of land
and improvements
(through joint
venture partnership) (c)
4. Arbor Town Apartments-I
Arlington, Texas . . . . . . 200 units 12-29-82 11-26-84 fee ownership of land
and improvements (c)(g)
5. Arbor Town Apartments-II
Arlington, Texas . . . . . . 202 units 11-1-82 11-26-84 fee ownership of land
and improvements (c)(g)
6. Sierra Pines Apartments
Houston, Texas . . . . . . . 404 units 3-31-82 7-29-93 fee ownership of land
and improvements (c)
7. Presidio West Apartments-II
Houston, Texas . . . . . . . 400 units 9-16-82 1-1-86 fee ownership of land
and improvements
8. Meadows Southwest Apartments
Houston, Texas . . . . . . . 384 units 4-1-82 12-28-90 fee ownership of land
and improvements
9. The Crossing Apartments
Houston, Texas . . . . . . . 366 units 8-1-82 7-29-93 fee ownership of land
and improvements (c)
10. Stonybrook Apartments-I & II
Tucson, Arizona . . . . . . 411 units 10-1-82 3% fee ownership of land
and improvements
(through joint venture
partnership)

or if Owned at
December 31, 1993,
Name, Type of Property Date of Original Invested
and Location (e) Size Purchase Capital Percentage (a) Type of Ownership (b)
- ---------------------- ---- -------- ---------------------- ---------------------

11. First Interstate Center
nterstate Center
Seattle, Washington . . . . 921,000 sq. ft. 3-10-82 22% fee ownership of
n.r.a. improvements and
and ground leasehold
interest (through joint
venture partnership)
(d)(f)
12. Carrara Place Office Building
Englewood, Colorado . . . . 233,000 sq. ft. 11-23-82 6% fee ownership of land
n.r.a. and improvements
(through joint venture
partnership)
13. San Mateo Fashion Island
San Mateo, California . . . 832,000 sq. ft. 9-10-82 12-31-86 fee ownership of land
g.l.a. and improvements and
ground leasehold
interest in land
(c)
14. Permian Mall
Odessa, Texas . . . . . . . 665,000 sq. ft. 12-28-82 6% fee ownership of land
g.l.a. and improvements
15. National City Center
Office Building
Cleveland, Ohio . . . . . . 786,400 sq. ft. 7-27-83 21% fee ownership of land
n.r.a. and improvements
(through joint
venture partnership)(f)
16. Yerba Buena West
Office Building
San Francisco, California . 268,000 sq. ft. 8-30-85 6-24-92 fee ownership of land
n.r.a. and improvements
(through joint venture
partnership) (c)(d)
<FN>
- ---------------

(a) The computation of this percentage for properties held at December 31,
1993 does not include amounts invested from sources other than the original
net proceeds of the public offering as described above and in Item 7.

(b) Reference is made to Note 4 and to Schedule XI filed with this annual
report for the current outstanding principal balances and a description of the
long-term mortgage indebtedness secured by the Partnership's real property
investments.

(c) This property has been sold or disposed. Reference is made to Notes 4
and 7 for a description of the sale or disposition of such real property
investment.

(d) Reference is made to Note 3 for a description of the joint venture
partnership through which the Partnership has made this real property
investment.

(e) Reference is made to Item 8 - Schedules X and XI filed with this
annual report for further information concerning real estate taxes and
depreciation.

(f) Reference is made to Item 6 - Selected Financial Data for additional
operating and lease expiration data concerning this investment property.

(g) The lender has concluded proceedings to realize upon its security and
took title to the property. Reference is made to Note 4(d).

</TABLE>
The Partnership's real property investments are subject to competition
from similar types of properties (including in certain areas properties owned
or advised by affiliates of the General Partners) in the respective vicinities
in which they are located. Such competition is generally for the retention of
existing tenants. Additionally, the Partnership is in competition for new
tenants in markets where significant vacancies are present. Reference is made
to Item 7 below for a discussion of competitive conditions and future
renovation and capital improvement plans of the Partnership and certain of its
significant investment properties. Approximate occupancy levels for the
properties are set forth in the table set forth in Item 2 below to which
reference is made. The Partnership maintains the suitability and
competitiveness of its properties in its markets primarily on the basis of
effective rents, tenant allowances and services provided to tenants. In the
opinion of the Corporate General Partner of the Partnership, all of the
investment properties held at December 31, 1993 are adequately insured.

Reference is made to Note 8(a) for a schedule of minimum lease payments
to be received in each of the next five years, and in the aggregate
thereafter, under leases in effect at the Partnership's properties as of
December 31, 1993.

On February 2, 1993, the second mortgage lender on The Country Square
Apartments realized upon its security and obtained title to the property and,
as a result, the Partnership no longer has a security interest in the
property. Reference is made to Note 4(b) and the Partnership's Report on Form
8-K (File No. 0-12433) for February 2, 1993, which description is incorporated
herein by reference.

On July 29, 1993, the Partnership sold the Sierra Pines and Crossing
Apartments. Reference is made to Note 7(c) and the Partnership's Report on
Form 8-K (File No. 0-12433) for July 29, 1993, which description is
incorporated by reference.

The Partnership has approximately 75 full-time personnel and 24 part-time
individuals performing on-site duties at certain of the Partnership's
properties, none of whom are officers or directors of the Corporate General
Partner of the Partnership.

The terms of transactions between the Partnership, the General Partners
and their affiliates are set forth in Item 11 below to which reference is
hereby made for a description of such terms and transactions.
<TABLE>
ITEM 2. PROPERTIES

The Partnership owns directly or through joint venture partnerships the properties or interests in the properties referred to
under Item 1 above to which reference is hereby made for a description of said properties.

The following is a listing of principal businesses or occupations carried on in and approximate occupancy levels by quarter
during fiscal years 1993 and 1992 for the Partnership's investment properties owned during 1993:

<CAPTION>
1992 1993
-------------------------------- --------------------------------
Principal At At At At At At At At
Business 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> <C>
1. Carrara Place Office Building
Englewood, Colorado . . . . . . . Attorneys/
Graphic Design 92% 92% 89% 42% 44% 43% 43% 43%
2. The Crossing Apartments
Houston, Texas. . . . . . . . . . Apartments 93% 96% 94% 94% 93% 94% N/A N/A
3. Stonybrook Apartments - I & II
Tucson, Arizona . . . . . . . . . Apartments 96% 87% 90% 95% 93% 86% 97% 96%
4. Permian Mall
Odessa, Texas . . . . . . . . . . Retail 87% 87% 88% 91% 91% 90% 90% 90%
5. First Interstate Center
Seattle, Washington . . . . . . . Financial Institu-
tion/Railroad 95% 95% 95% 96% 96% 96% 97% 97%
6. Country Square Apartments
Carrollton, Texas . . . . . . . . Apartments 97% 93% 93% 95% N/A N/A N/A N/A
7. Sierra Pines Apartments
Houston, Texas. . . . . . . . . . Apartments 91% 88% 88% 87% 92% 92% N/A N/A
8. National City Center Office Building
Cleveland, Ohio . . . . . . . . . Banking 96% 96% 96% 96% 96% 94% 96% 96%

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

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

Reference is made to Item 6, Item 7 and Note 8 for further information
regarding property occupancy, competitive conditions and tenant leases at the
Partnership's investment properties.

</TABLE>
ITEM 3. LEGAL PROCEEDINGS

The Partnership is not subject to any pending material legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during 1992
and 1993.

PART II

ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS

As of December 31, 1993, there were 16,628 record holders of Interests of
the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. Upon request,
the Corporate General Partner may provide information relating to a
prospective transfer of Interests to an investor desiring to transfer his
Interests. The price to be paid for the Interests, as well as any other
economic aspects of the transaction, will be subject to negotiation by the
investor.

Reference is made to Item 6 below for a discussion of cash distributions
made to the Limited Partners.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
DECEMBER 31, 1993, 1992, 1991, 1990 AND 1989
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)

<CAPTION>
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . . . . . . . . . . $ 49,186,211 52,853,676 54,125,067 57,407,063 56,749,137
============ =========== =========== =========== ===========

Operating loss . . . . . . . . . . . . . . $ (7,086,550) (9,725,577) (9,950,730) (10,350,259) (9,658,449)
Partnership's share of operations of
unconsolidated venture. . . . . . . . . . -- (723,696) (1,447,179) (2,670,211) (1,011,691)
Venture partners' share of ventures'
operations. . . . . . . . . . . . . . . . 2,415,069 1,803,556 1,226,873 1,124,446 850,859
------------ ----------- ----------- ----------- -----------

Net operating loss . . . . . . . . . . . . (4,671,481) (8,645,717) (10,171,036) (11,896,024) (9,819,281)
Gain (loss) on sale or dispositions,
net of venture partners' interest . . . . 4,091,683 3,817,800 1,637,840 (1,263,999) --
Extraordinary items. . . . . . . . . . . . -- -- -- 20,904,051 472,887
------------ ----------- ----------- ----------- -----------

Net earnings (loss). . . . . . . . . . . . $ (579,798) (4,827,917) (8,533,196) 7,744,028 (9,346,394)
============ =========== =========== =========== ===========
Net earnings (loss) per limited
partnership interest (b):
Net operating loss . . . . . . . . . . . $ (28.03) (51.87) (61.02) (71.37) (58.91)
Gain (loss) on sale or dispositions
net of venture partners' interest . . . 25.32 23.62 10.13 (7.82) --
Extraordinary items. . . . . . . . . . . -- -- -- 126.63 2.84
------------ ----------- ----------- ----------- -----------
Net earnings (loss) . . . . . . . . $ (2.71) (28.25) (50.89) 47.44 (56.07)
============ =========== =========== =========== ===========

Total assets . . . . . . . . . . . . . . . $209,636,156 233,815,505 252,650,342 279,101,191 298,938,370
============ =========== =========== =========== ===========

Long-term debt . . . . . . . . . . . . . . $194,712,434 188,904,448 230,923,628 232,320,973 271,741,155
============ =========== =========== =========== ===========

Cash distributions per Interest (c). . . . $ -- 1.50 9.75 11.00 11.00
============ =========== =========== =========== ===========
<FN>
- -------------

(a) The above selected financial data should be read in conjunction with
the consolidated financial statements and the related notes appearing
elsewhere in this annual report.

(b) The net earnings (loss) per Interest is based upon the number of
Interests outstanding at the end of each year (160,005).

(c) Cash distributions to the Limited Partners since the inception of the
Partnership have not resulted in taxable income to such Limited Partners and
have therefore represented a return of capital. Each Partner's taxable income
(or loss) from the Partnership in each year is equal to his allocable share of
the taxable income (loss) of the Partnership, without regard to the cash
generated or distributed by the Partnership.

</TABLE>
<TABLE>

SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1993

Property
- --------

National City
Center Office
Building a) The GLA historical occupancy rate and average base rent per square foot for the last five years were as
follows:

Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>

1989 . . . . . 100% $10.97
1990 . . . . . 97% 11.22
1991 . . . . . 96% 11.41
1992 . . . . . 96% 11.47
1993 . . . . . 96% 11.86
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option
------------------- ----------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>

National City Bank 406,346 $4,680,369 1/2006 7-10 year options
(Bank)

Ernst & Young 81,640 1,099,691 11/1996 - 1-5 year options
(Public Accounting Firm) 61,230 s.f.
Month-to-month -
20,410 s.f

Baker & Hostetler 145,705 2,139,976 12/2001 15-5 year options
(Law Firm)
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at the National City Center Office Building:

Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>

1994 -- -- -- --
1995 -- -- -- --
1996 1 61,230 824,768 9%
1997 -- -- -- --
1998 1 11,402 173,196 2%
1999 -- -- -- --
2000 1 39,470 599,155 7%
2001 5 178,562 2,526,652 28%
2002 -- -- -- --
2003 -- -- -- --
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1994.
</TABLE>
<TABLE>

Property
- --------

First Interstate
Office Building a) The GLA historical occupancy rate and average base rent per square foot for the last five years were as
follows:

Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>

1989 . . . . . 94% $21.77
1990 . . . . . 94% 21.92
1991 . . . . . 95% 21.89
1992 . . . . . 96% 21.02
1993 . . . . . 97% 21.63
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option
------------------- ----------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>

First Interstate Bank 198,077 $4,422,374 9/2003 2-10 year options
(Bank)

Burlington Northern 183,099 3,876,771 10/2003 4-5 year options
(Railroad)

</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at the First Interstate Office Building:

1994 25 79,538 1,503,268 8%
1995 18 144,945 2,761,202 14%
1996 12 80,769 1,429,611 7%
1997 4 35,517 674,823 4%
1998 11 34,062 648,881 3%
1999 6 44,211 395,688 2%
2000 1 62,390 1,622,140 8%
2001 -- -- -- --
2002 1 31,158 716,634 4%
2003 3 396,667 9,460,508 49%
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1994.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

On June 21, 1982, the Partnership commenced an offering of $160,000,000
pursuant to a Registration Statement on Form S-11 under the Securities Act of
1933. All Interests were subscribed and issued between June 21, 1982 and
April 19, 1983 from which the Partnership received gross proceeds of
$160,000,000.

After deducting selling expenses and other offering costs, the Partner-
ship had approximately $141,004,000 with which to make investments in income-
producing commercial and residential real property, to pay legal fees and
other costs (including acquisition fees) related to such investments and to
satisfy working capital requirements. Portions of the proceeds were utilized
to acquire the properties described in Item 1 above.

At December 31, 1993, the Partnership and its consolidated ventures had
cash and cash equivalents of approximately $2,790,000. Such funds and short-
term investments of approximately $6,866,000 are available for capital
improvements, future distributions to partners, and for working capital
requirements, including capital improvements and leasing costs currently
being incurred at the National City Center Office Building. Certain of the
Partnership's investment properties currently operate in overbuilt markets
which are characterized by lower occupancies and/or reduced rent levels. The
Partnership currently has adequate cash and cash equivalents to maintain the
operations of the Partnership. The Partnership has taken steps to preserve
its working capital by deciding to suspend distributions to the Limited and
General Partners effective as of the first quarter of 1992. The Partnership
had also deferred cash distributions and partnership management fees, payable
to the Corporate General Partner related to the third and fourth quarters of
1991. In addition, as of December 31, 1993, the General Partners and their
affiliates have deferred payment of certain property management and leasing
fees of approximately $3,523,000 (approximately $22 per Interest) as more
fully described in Note 9. These amounts do not bear interest and are
expected to be paid in future periods.

The Partnership and its consolidated ventures have currently budgeted for
1994 approximately $3,555,000 for tenant improvements and other capital
expenditures. The Partnership's share of such items in 1994 is currently
budgeted to be approximately $3,029,000. Included in this amount is the roof
and parking lot at the Permian Mall which are currently in need of repair. To
fund the Permian Mall improvements, the Partnership intends to initiate
discussions with the mortgage lender regarding a modification to the loan.
There can be no assurance that a loan modification can be obtained. Actual
amounts expended in 1994 may vary depending on a number of factors including
actual leasing activity, results of operations, liquidity considerations and
other market conditions over the course of the year. The source of capital
for such items and for both short-term and long-term future liquidity and
distributions is expected to be through net cash generated by the
Partnership's investment properties and through the sale of such investments.
In addition, the Partnerships does not consider the remaining mortgage note
receivable (related to San Mateo Fashion Island) to be a source of future
liquidity. Reference is made to Note 7(b). 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.

As described more fully in Note 4, the Partnership has received mortgage
note modifications on certain of its properties which expire on various dates
commencing June 30, 1994. One of the long-term mortgage lenders on the
Country Square Apartments would not modify or extend its mortgage which became
due January 1, 1993. Based upon current market conditions, the Partnership
decided not to commit additional funds to the Country Square Apartments. In
February 1993, the lender realized upon its security by obtaining title to the
property. Therefore, the Partnership no longer has an ownership interest in
the property. The above noted transaction resulted in a gain for financial
reporting purposes of approximately $1,521,000 and a gain for Federal income
tax purposes with no corresponding distributable proceeds. The mortgage on
Stonybrook Apartments II matures October 1, 1994 (Stonybrook Apartments I is
not subject to a mortgage loan) with an outstanding balance of approximately
$5,633,000 at December 31, 1993. The Partnership intends to initiate
discussions with the mortgage lender regarding an extension or modification to
the mortgage loan. If the Partnership is unable to secure an extension or
modification to the loan, based upon current market conditions, the
Partnership would likely not commit any significant additional amounts to the
property. This would result in the Partnership no longer having an ownership
interest in the property. Such a decision could result in a gain for
financial reporting and Federal income tax purposes with no corresponding
distributable proceeds.

The lease for Carrara Place Office Building's major tenant, which
represented 46% of the building's leasable area and provided for rental
payments that were significantly greater than current market rental rates,
expired in December 1992. The Denver, Colorado region has been adversely
affected by increased competition for tenants as a result of overbuilding in
the area. As a result of the current market rental rates, the cash flow
generated by the property would have been significantly less than the payments
required under the original mortgage note even if the space was re-leased.
Further, re-leasing the space requires significant re-leasing costs.
Additionally, the lease for a tenant occupying approximately 17% of the
building's leasable area was scheduled to expire in June 1994. The venture
has reached an agreement with the tenant to extend their lease for an
additional five years. The Carrara venture initiated discussions with the
mortgage lender regarding a modification to the mortgage loan and in September
1993 reached an agreement to modify the loan retroactive to January 1, 1993.
Under the modification, the maturity date is extended from June 30, 1994 until
January 1, 1998. Interest continues to accrue at 9.875% from January 1, 1993
until January 1, 1998. Effective January 1, 1993, the net cash flow of the
property, subject to certain reserves, will be paid to the lender and applied
toward the payment of accrued and unpaid interest, current interest and
principal balance of the loan, respectively. Any capital costs, including re-
leasing costs, are to be funded by the lender, subject to their approval, and
such costs added to the principal balance of the loan. Approximately $203,900
has been funded by the lender as of December 31, 1993.

Concurrent with the modification, the Carrara venture was reorganized
such that the Partnership became the sole general partner of the venture, with
its venture partner becoming a limited partner of the venture. In addition,
the property manager (an affiliate of the unaffiliated venture partner) was
replaced effective September 1993. Based upon an analysis of current and
anticipated market conditions, the Partnership has decided not to commit
additional funds to the Carrara Place Office Building. There must be a
significant improvement in market and property conditions in order for the
value of the property to be greater than the mortgage payoff amount at any
point in time, including accrued interest. Therefore, it is unlikely that any
significant proceeds would be received by the Partnership in the event the
property were sold or refinanced.

In conjunction with the modification, the Carrara venture has agreed to
transfer title to the lender if the venture fails to pay the loan in full on
the earlier of the extended maturity date or an acceleration of the loan as a
result of the occurrence of an event of default (as defined).

Regarding the First Interstate Center, although new construction in the
Seattle office market has virtually ceased, the overall office market remains
very competitive due to significant amount of sublease space on the market.
In May 1989, an initiative was passed in Seattle to limit future development
of downtown office space. Over time, this initiative (which is effective for
ten years) may have a favorable impact on the Seattle office market. Although
the occupancy (97% at December 31, 1993) at First Interstate Center has not
been adversely affected to date by the competitive office market, effective
rental rates have decreased as a result. Due to the competitive market
conditions and the significant amounts of expiring square footage over the
next several years, the property will reserve a portion of its cash flow in
order to cover the re-leasing costs required. The first mortgage loan secured
by the property is scheduled to mature in December 1995. The venture
anticipates approaching the mortgage lender regarding an extension or
modification of the existing mortgage loan. There can be no assurance that
any such extension or modification will be obtained.

At the National City Center Office Building located in Cleveland, Ohio, a
major tenant (Baker & Hostetler) extended its lease term to 2001, but reduced
its space leased by approximately 18,000 square feet as of January 1993. The
extended lease requires tenant improvement costs of approximately $92,000 per
year through the expiration of the lease with an additional amount to paid in
1996 of approximately $730,000. The Partnership received a lease termination
fee of approximately $1,100,000 from another tenant (KPMG Peat Marwick) for
vacating approximately 19,700 square feet (which was subsequently leased to
National City Bank). In addition, the Partnership has signed a lease with a
law firm to occupy approximately 20,400 square feet and the leasing costs
required under the lease for this new tenant will result in the property
incurring a slight deficit for 1994. In January 1994, the debt service
payments under the existing mortgage are scheduled to increase from 9-5/8% to
11-7/8% until the maturity of the loan in December 1995. The Partnership
reached an agreement in principle with the current mortgage lender to
refinance the existing mortgage which would be effective February 1, 1994,
with an interest rate of 8.5%. The loan would be amortized over 22 years with
a balloon payment due in seven years. The Partnership paid a refundable loan
commitment fee of $1,164,000 in 1993. The Partnership also expects to pay a
prepayment penalty of approximately $600,000, based on the outstanding
mortgage balance at the time of refinancing. In addition, the lender would
require an escrow account of approximately $610,000 to be established at the
inception of the refinancing which would be supplemented from time to time for
scheduled future tenant improvements costs at the property. Real estate taxes
payable in 1994 are expected to increase due to 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.

During 1992, the Partnership entered into a contract (that was
subsequently terminated) to sell the Sierra Pines Apartments subject to
certain contingencies. Based upon the proposed sales price, the Partnership
would not have recovered the net carrying value of the investment property.
The Partnership, therefore, as a matter of prudent accounting practice, made a
provision for value impairment on such investment property of $2,682,822.
Such provision was recorded in September 1992 to effectively reduce the net
carrying value of the investment property concurrently based upon the proposed
sale price. On July 29, 1993, the Partnership sold the Sierra Pines and
Crossing Apartments to an unaffiliated buyer. After the deduction of
additional interest and normal costs of sale, the Partnership received
proceeds of approximately $950,000 (including $288,000 in advisory fees) in
the aggregate.

In connection with the San Francisco earthquake experienced on October
17, 1989, the Yerba Buena office building incurred some structural and
cosmetic damage which was repaired. Five tenants (approximately 54% of the
building) vacated the building and withheld substantially all of their rent
(commencing at various times) since November 1989. The Partnership concluded
not to pursue legal recourse against said tenants based on, among other
things, the costs of pursuing its remedies, competing demands on the
Partnership's resources and the prospects of any material return to the
Partnership in light of recent events. Reference is made to Note 3(c) for
further discussion.

Based upon the conditions at Yerba Buena, the joint venture had not made
the debt service payments to the underlying lender, commencing with the
January 1990 payment. Accordingly, the joint venture received a default
notice from the underlying lender in late February 1990. The Partnership and
Affiliated Partners had decided, based upon analysis of current market
conditions and the probability of large future cash deficits, not to fund
future joint venture cash deficits. The joint venture had been negotiating
with the underlying lender to obtain a loan modification to pay for expected
future cash deficits. The joint venture was unable to negotiate a loan
modification whereby the joint venture retained ownership of the property and
in June, 1992 the joint venture transferred title to the property to the
lender in return for an opportunity to share in future sale or refinancing
proceeds above certain specified levels. In order for the joint venture to
share in such proceeds, there must be a significant improvement in current
market and property operating conditions resulting in a significant increase
in value of the property. In addition, during a certain period of time, the
joint venture will have a right of first opportunity to purchase the property
if the lender chooses to sell. An affiliate of the Partnership's Corporate
General Partner continues to manage and lease the property for the lender. As
a result of the transfer of title to the lender as discussed above, the
Partnership no longer has an ownership interest in the property and recognized
a gain for financial reporting and Federal income tax purposes during 1992 of
$2,261,223 and $1,350,845, respectively with no corresponding distributable
proceeds.

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 joint venture
partners may have economic or business interests or goals that are
inconsistent with those of the Partnership.

In response to the weakness of the economy and the general security of
credit in the real estate industry financing in particular, the Partnership is
taking steps to preserve its working capital. Therefore, the Partnership is
carefully scrutinizing the appropriateness of any discretionary expenditures,
particularly in relation to the amount of working capital it has available.
By conserving working capital, the Partnership will be in a better position to
meet future needs of its properties without having to rely on external
financing sources.

Due to the factors discussed above and the general lack of buyers of real
estate today, it is likely that the Partnership may hold some of its
investment properties longer than originally anticipated in order to maximize
the return to the Limited Partners. Also, in light of the current severely
depressed real estate markets, it currently appears that the Partnership's
goal of capital appreciation will not be achieved. Although the Partnership
expects to distribute from sale proceeds some portion of the Limited Partners'
original capital, without a dramatic improvement in market conditions the
Limited Partners will not receive a full return of their original investment.

RESULTS OF OPERATIONS

The increase in short-term investments as of December 31, 1993 as
compared to December 31, 1992 is primarily due to (i) the Partnership
suspending cash distributions from operations effective with the first quarter
of 1992 as discussed above, and (ii) the Partnership withholding the proceeds
from the Sierra Pines Apartments and The Crossing Apartments sales for future
capital requirements.

The increase in loan commitment fee as of December 31, 1993 as compared
to December 31, 1992 is due to the payment of a refundable loan commitment fee
(approximately $1,164,000) for the National City Center Building mortgage
refinancing in 1993 (see Note 4(e)).

The decrease in escrow deposits as of December 31, 1993 as compared to
December 31, 1992, primarily reflects the refund in 1993 of an escrow account
of approximately $477,000 established for capital improvements at Sierra Pines
and Crossing Apartments at the time the Partnership obtained replacement loans
for previously existing long-term mortgage notes. This decrease is partially
offset by the increase of escrow accounts at the Carrara Place Office Building
for operating reserves and real estate taxes required by the mortgage loan
modification. Reference is made to Note 4.

The decrease in investment properties, current portion of long-term debt
and tenant security deposits as of December 31, 1993 as compared to December
31, 1992 is primarily due to the second mortgage lender's realization upon its
security represented by the Country Square Apartments in February 1993 and the
sales of the Sierra Pines and Crossing Apartments in July 1993. (See Notes
4(b) and 7(c)). In addition, the decrease in current portion of long-term
debt and corresponding increase in long-term debt, less current portion is
primarily due to the reclassification of the mortgage at the Carrara Place
Office Building due to the Partnership no longer being in default as more
fully described in Note 3(d). The current portion of long-term debt in 1993
primarily reflects the Stonybrook-II apartment complex mortgage and second
mortgage obligations payable in October 1994. Reference is made to Note 4.

The decrease in deferred expenses at December 31, 1993 as compared to
December 31, 1992 is primarily due to amortization of leasing commissions and
lease assumptions in 1993 at First Interstate Office Building.

The increase in accrued interest as of December 31, 1993 as compared to
December 31, 1992 reflects the cumulative unpaid interest attributable to the
Carrara Place Office Building mortgage. Reference is made to Note 4.

The decrease in accounts payable and accrued real estate taxes as of
December 31, 1993 as compared to December 31, 1992 is primarily due to the
second mortgage lender's realization upon its security represented by the
Country Square Apartments in February 1993 and the sale of the Sierra Pines
and Crossing Apartments in July 1993.

The decrease in rental income for the year ended December 31, 1993 as
compared to the years ended December 31, 1992 and 1991 is primarily due to
decreased occupancy at the Carrara Place Office Building, the second mortgage
lender's realization upon its security represented by the Country Square
Apartments in February 1993 and the sale of the Sierra Pines and Crossing
Apartments in July 1993. This decrease is partially offset by a lease
termination fee received in January 1993 at the National City Center Office
Building.

The decrease in interest income for the year ended December 31, 1993 as
compared to the year ended December 31, 1992 is primarily due to a decrease in
interest income recognized on the promissory note receivable for San Mateo
Fashion Island (reference is made to Note 7(b)). The decrease in interest
income for the year ended December 31, 1992 as compared to 1991 is primarily
due to a decrease in interest income recognized on the wrap-around notes
receivable for Arbor Town Apartments-I and Arbor Town Apartments-II (reference
is made to Note 7(a)).

The decrease in mortgage and other interest, depreciation and property
operating expenses for the year ended December 31, 1993 as compared to 1992 is
primarily due to the second mortgage lender's realization upon its security
represented by the Country Square Apartments in February 1993 and the sale of
the Sierra Pines and Crossing Apartments in July 1993. In addition, the
decrease in mortgage and other interest is also due to the lenders realizing
upon their security in the Arbor Town Apartments-I and Arbor Town Apartments-
II in December 1992. (See Notes 4(b), 4(d), 7(a) and 7(c)). The decrease in
mortgage and other interest for the year ended December 31, 1992 as compared
to 1991 is primarily due to a decrease in interest expense recognized on the
underlying mortgage notes payable at the Arbor Town Apartments-I and Arbor
Town Apartments-II in 1992 (as described above).

The decrease in management fees to the Corporate General Partner for the
year ended December 31, 1993 as compared to 1992 and 1991 is due to the
Partnership reducing the Limited Partners cash distribution effective as of
the third and fourth quarters of 1991 and suspending distributions to the
Limited and General Partners effective as of the first quarter 1992 (reference
is made to Note 9).

The provision for value impairment for the year ended December 31, 1992
is due to the Partnership recording a provision to reduce the net carrying
value of the Sierra Pines Apartments, based upon a proposed sales price (see
Note 1).

The provision for uncollectible note receivable for the year ended
December 31, 1991 is due to the Partnership's reserve on the note receivable
on the San Mateo Fashion Island shopping center. (See Note 7(b).)

The increase in Partnership's share of operations of unconsolidated
venture for the year ended December 31, 1993 as compared to 1992 is due to the
transfer of title to the property to the lender of the Yerba Buena West Office
Building in June 1992.

The increase in venture partners' share of ventures' operations for the
year ended December 31, 1993 as compared to 1992 and 1992 as compared to 1991
and the corresponding increase in venture partners' deficits in venture as of
December 31, 1993 as compared to 1992, is primarily due to decreased rental
income at the Carrara Place Office Building primarily due to decreased
occupancy.

The gain on sale or disposition of investment properties for the year
ended December 31, 1993 is due to the second mortgage lender's realization
upon its security represented by the Country Square Apartments in February
1993 of $1,520,734 and the $2,570,949 gain on sale of the Sierra Pines and
Crossing Apartments in July 1993. The gain on disposition of investment
property for the year ended December 31, 1992 is due to the transfer of title
to the property to the lender of the Yerba Buena West Office Building in June
1992. In addition, the lenders of Arbor Town Apartments - I and Arbor Town
Apartments - II realized upon their security and took title to the properties
in December 1992. The gain on disposition in 1991 is due to the lender
realizing upon its security in Summerfield/Oakridge Apartments and taking
title to the properties in January 1991. Reference is made to Note 7.

INFLATION

Due to the decrease in the level of inflation in recent years, inflation
generally has not had a material effect on rental income or property operating
expenses.

To the extent that inflation in future periods does have an adverse
impact on property operating expenses, the effect will generally be offset by
amounts recovered from tenants, as many of the long-term leases at the
Partnership's commercial properties have escalation clauses covering increases
in the cost of operating and maintaining the properties as well as real estate
taxes. Therefore, there should be little effect on operating earnings if the
properties remain substantially occupied. In addition, substantially all of
the leases at the Partnership's shopping center investment contain provisions
which entitle the Partnership to participate in gross receipts of tenants
above fixed minimum amounts.

Future inflation may also cause capital appreciation of the Partnership's
investment properties over a period of time to the extent that rental rates
and replacement costs of properties increase.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

INDEX

Independent Auditors' Report

Consolidated Balance Sheets, December 31, 1993 and 1992

Consolidated Statements of Operations, years ended December 31, 1993, 1992
and 1991

Consolidated Statements of Partners' Capital Accounts (Deficit),
years ended December 31, 1993, 1992 and 1991

Consolidated Statements of Cash Flows, years ended December 31, 1993,
1992 and 1991

Notes to Consolidated Financial Statements

SCHEDULE
--------

Supplementary Income Statement Information X
Consolidated Real Estate and Accumulated Depreciation XI

SCHEDULES NOT FILED:

All schedules other than those indicated in the index have been omitted
as the required information is inapplicable or the information is presented in
the consolidated financial statements or related notes.

INDEPENDENT AUDITORS' REPORT

The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII:

We have audited the consolidated financial statements of Carlyle Real
Estate Limited Partnership - XII (a limited partnership) and consolidated
ventures as listed in the accompanying index. In connection with our audits
of the consolidated financial statements, we also have audited the financial
statement schedules as listed in the accompanying index. These consolidated
financial statements and financial statement schedules are the responsibility
of the General Partners of the Partnership. Our responsibility is to express
an opinion on these consolidated financial statements and financial statement
schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Carlyle
Real Estate Limited Partnership - XII and consolidated ventures at December
31, 1993 and 1992, and the results of their operations and their cash flows
for each of the years in the three-year period ended December 31, 1993, in
conformity with generally accepted accounting principles. Also in our
opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.

KPMG PEAT MARWICK

Chicago, Illinois
March 25, 1994

<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992

ASSETS
------
<CAPTION>
1993 1992
------------ -----------
<S> <C> <C>

Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,789,530 2,764,994
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,865,532 5,609,992
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,085,701 929,867
Loan commitment fee (note 4(e)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,163,524 --
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,073 262,353
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605,734 1,138,803
------------ -----------

Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,664,094 10,706,009
------------ -----------

Investment properties, at cost (notes 2, 3, and 4)-Schedule XI:
Land and leasehold interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,021,695 22,853,920
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235,978,139 264,885,861
------------ -----------

253,999,834 287,739,781
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,546,206 88,213,016
------------ -----------
Total investment properties, net of accumulated depreciation. . . . . . . . . . . . . . . . . . 171,453,628 199,526,765
------------ -----------

Deferred expenses (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,527,843 6,500,793
Accrued rents receivable (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,114,243 4,742,285
Venture partners' deficits in ventures (note 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,876,348 12,339,653
------------ -----------

$209,636,156 233,815,505
============ ===========

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

CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1993 1992
------------ -----------
Current liabilities:
Current portion of long-term debt (notes 3 and 4). . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,489,518 36,361,442
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,326,663 3,544,943
Amounts due to affiliates (note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,596,654 3,785,863
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,364,920 1,084,302
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,764,835 3,004,887
------------ -----------

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,542,590 47,781,437
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,391 159,567
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,062,011 2,157,683
Long-term debt, less current portion (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,712,434 188,904,448
------------ -----------

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,402,426 239,003,135
Venture partners' equity in ventures (note 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445,474 444,316
Partners' capital accounts (deficit):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,373,178) (8,227,236)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (564,211) (564,211)
------------ -----------
(8,936,389) (8,790,447)
------------ -----------
Limited partners (160,005 interests):
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,003,683 141,003,683
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (118,231,222) (117,797,366)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,047,816) (20,047,816)
------------ -----------
2,724,645 3,158,501
------------ -----------
Total partners' capital accounts (deficits) . . . . . . . . . . . . . . . . . . . . . . . . . . (6,211,744) (5,631,946)
------------ -----------
Commitments and contingencies (notes 3, 4 and 8)
$209,636,156 233,815,505
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $48,834,313 52,358,787 52,542,265
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351,898 494,889 1,582,802
------------ ----------- -----------
49,186,211 52,853,676 54,125,067
------------ ----------- -----------
Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 24,850,497 25,563,854 26,320,725
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,144,746 9,598,560 9,476,084
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 20,304,224 22,790,284 22,350,695
Management fees to corporate general partner . . . . . . . . . . . . . . . . . . -- 16,667 108,336
Professional services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378,862 326,219 288,791
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . 1,261,667 1,344,460 1,537,862
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . 332,765 256,387 273,304
Provision for value impairment (note 1). . . . . . . . . . . . . . . . . . . . . -- 2,682,822 --
Provision for uncollectible note receivable (note 7(b)). . . . . . . . . . . . . -- -- 3,720,000
------------ ----------- -----------
56,272,761 62,579,253 64,075,797
------------ ----------- -----------
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,086,550) (9,725,577) (9,950,730)
Partnership's share of operations of unconsolidated venture. . . . . . . . . . . . -- (723,696) (1,447,179)
Venture partners' share of ventures' operations (note 3) . . . . . . . . . . . . . 2,415,069 1,803,556 1,226,873
------------ ----------- -----------
Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,671,481) (8,645,717) (10,171,036)
Gain on sale or dispositions net of venture partners' share of
$270,551 in 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,091,683 3,817,800 1,637,840
------------ ----------- -----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (579,798) (4,827,917) (8,533,196)
============ =========== ===========
Net earnings (loss) per limited partnership interest (note 1):
Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . $ (28.03) (51.87) (61.02)
Net gain on sale or dispositions . . . . . . . . . . . . . . . . . . . 25.32 23.62 10.13
------------ ----------- -----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (2.71) (28.25) (50.89)
============ =========== ===========

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

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICIT)

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (160,005 INTERESTS)
------------------------------------------------------- ------------------------------------------------
CONTRI-
BUTIONS
NET OF
CONTRI- NET CASH OFFERING NET CASH
BUTIONS LOSS DISTRIBUTIONS TOTAL COSTS LOSS DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance (deficit)
December 31, 1990 . $1,000 (7,529,122) (509,209) (8,037,331) 141,003,683 (105,134,367) (18,247,758) 17,621,558
Net loss (note 5). . -- (390,463) -- (390,463) -- (8,142,733) -- (8,142,733)
Cash distributions
($9.75 per limited
partnership
interest). . . . . -- -- (55,002) (55,002) -- -- (1,560,050) (1,560,050)
------ ---------- -------- ---------- ----------- ------------ ----------- -----------
Balance (deficit)
December 31, 1991 . 1,000 (7,919,585) (564,211) (8,482,796) 141,003,683 (113,277,100) (19,807,808) 7,918,775
Net loss (note 5). . -- (307,651) -- (307,651) -- (4,520,266) -- (4,520,266)
Cash distributions
($1.50 per limited
partnership
interest). . . . . -- -- -- -- -- -- (240,008) (240,008)
------ ---------- -------- ---------- ----------- ------------ ----------- -----------
Balance (deficit)
December 31, 1992 . 1,000 (8,227,236) (564,211) (8,790,447) 141,003,683 (117,797,366) (20,047,816) 3,158,501

Net loss (note 5). . -- (145,942) -- (145,942) -- (433,856) -- (433,856)
------ ---------- -------- ---------- ----------- ------------ ----------- -----------
Balance (deficit)
December 31, 1993 . $1,000 (8,373,178) (564,211) (8,936,389) 141,003,683 (118,231,222) (20,047,816) 2,724,645
====== ========== ======== ========== =========== ============ =========== ===========

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<CAPTION>
1993 1992 1991
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (579,798) (4,827,917) (8,533,196)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,144,746 9,598,560 9,476,084
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . 1,261,667 1,344,460 1,537,862
Amortization of discount on long-term debt . . . . . . . . . . . . . . . . . 1,514,317 1,377,367 1,252,567
Accrued interest expense on accelerated long-term debt . . . . . . . . . . . -- -- 340,337
Long-term debt - deferred accrued interest . . . . . . . . . . . . . . . . . -- 406,000 1,066,349
Reduction in note receivable . . . . . . . . . . . . . . . . . . . . . . . . -- -- 1,575,935
Partnership's share of operations of unconsolidated venture. . . . . . . . . -- 723,696 1,447,179
Venture partners' share of ventures' operations. . . . . . . . . . . . . . . (2,415,069) (1,803,556) (1,226,873)
Provision for value impairment . . . . . . . . . . . . . . . . . . . . . . . -- 2,682,822 --
Provision for uncollectible note receivable. . . . . . . . . . . . . . . . . -- -- 3,720,000
Gain on sale or dispositions . . . . . . . . . . . . . . . . . . . . . . . . (4,091,683) (3,817,800) (1,637,840)
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . (155,834) 432,758 707,445
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,280 (4,359) 11,459
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533,069 (523,436) (6,961)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . (371,958) (87,501) (286,651)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,218,280) 64,075 563,761
Amounts due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . (189,209) (34,969) (134,349)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,322,534 (906) (2,779,707)
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . (240,052) 96,925 1,084,014
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . (74,176) (11,730) (18,589)
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (95,672) (208,996) (194,321)
------------ ------------ -------------
Net cash provided by operating activities. . . . . . . . . . . . . . . 5,452,882 5,405,493 7,964,505
------------ ------------ -------------
Cash flows from investing activities:
Net sales (purchases) of short-term investments. . . . . . . . . . . . . . . . (1,255,540) 788,712 --
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . (3,097,755) (2,635,297) (2,994,084)
Proceeds from sale or disposition of investment properties, net of selling
expenses (notes 4(b) and 7(c)) . . . . . . . . . . . . . . . . . . . . . . . 1,892,932 -- 101,358
Partnership's distributions from unconsolidated venture. . . . . . . . . . . . -- -- 99,796
Partnership's contributions to unconsolidated venture. . . . . . . . . . . . . -- (9,448) --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . (274,549) (264,608) (985,823)
------------ ------------ -------------
Net cash used in investing activities. . . . . . . . . . . . . . . . . (2,734,912) (2,120,641) (3,778,753)
------------ ------------ -------------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1993 1992 1991
------------ ------------ -----------
Cash flows from financing activities:
Loan commitment fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,163,524) -- --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . (51,087) -- --
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . (1,746,375) (1,941,796) (1,770,742)
Proceeds of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . 388,020 -- --
Venture partners' contributions to venture . . . . . . . . . . . . . . . . . . 165,051 42,523 19,938
Distributions to venture partners. . . . . . . . . . . . . . . . . . . . . . . (285,519) (283,848) (423,525)
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . . -- (240,008) (1,560,050)
Distributions to general partners. . . . . . . . . . . . . . . . . . . . . . . -- -- (55,002)
------------ ------------ -------------
Net cash used in financing activities. . . . . . . . . . . . . . . . . (2,693,434) (2,423,129) (3,789,381)
------------ ------------ -------------
Net increase in cash and cash equivalents. . . . . . . . . . . . . . . $ 24,536 861,723 396,371
============ ============ =============
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . $ 21,055,562 23,781,393 26,781,516
Non-cash investing and financing activities:
Balance due on mortgage note payable cancelled . . . . . . . . . . . . . . . $ 12,239,900 -- --
Balance due on accelerated wrap-around mortgage note payable canceled. . . . -- 9,210,122 15,314,469
Balance due on wrap-around mortgage note payable canceled. . . . . . . . . . -- (10,183,885) --
Recognition of deferred gain on sale of investment property. . . . . . . . . -- 2,146,341 --
Reduction of land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,170,000) -- (1,686,407)
Reduction of buildings and improvements. . . . . . . . . . . . . . . . . . . (14,045,964) -- (17,220,540)
Reduction of accumulated depreciation. . . . . . . . . . . . . . . . . . . . 5,454,885 -- 5,059,174
Reduction of accrued interest payable. . . . . . . . . . . . . . . . . . . . 41,916 383,999 340,337
Proceeds from disposition of investment property . . . . . . . . . . . . . . -- -- 101,358
Venture partners' share of gain. . . . . . . . . . . . . . . . . . . . . . . -- -- (270,551)
------------ ------------ -------------
Non-cash gain recognized on disposition of investment property . . . . . . $ 1,520,737 1,556,577 1,637,840
============ ============ =============
Sale of investment properties (note 4(c)):
Total sales proceeds, net of selling expenses . . . . . . . . . . . . . . . . $ 13,872,932 -- --
Principal balance on loans payable. . . . . . . . . . . . . . . . . . . . . . (11,980,000) -- --
------------ ------------ -------------
Cash sales proceeds from sale of investment properties, net of
selling expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,892,932 -- --
============ ============ =============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1993 1992 1991
------------ ------------ -----------

Equity from relinquishment of venture partner's interest . . . . . . . . . . . $ -- -- 1,335,308
Reduction in carrying value of fixed assets due to relinquishment of
venture partner's interest . . . . . . . . . . . . . . . . . . . . . . . . . -- -- (1,335,308)
------------ ------------ -------------

Non-cash proceeds from relinquishment of venture partner's interest . . . . $ -- -- --
============ ============ =============

Disposals of fully depreciated assets. . . . . . . . . . . . . . . . . . . . . $ 793,534 321,023 517,584
============ ============ =============

Principal reductions on Arbor Town mortgage notes receivable and
payable (notes 4(d) and 7(a)). . . . . . . . . . . . . . . . . . . . . . . . $ -- 6,080 --
============ ============ =============

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1993, 1992 AND 1991

(1) BASIS OF ACCOUNTING

The accompanying consolidated financial statements include the accounts
of the Partnership and its ventures Carlyle Seattle Associates ("Carlyle
Seattle"), Stonybrook Partners Limited Partnership ("Stonybrook"), Carrara
Place Limited ("Carrara"), Carlyle/P.M. Apartments Partnership
("Carlyle/P.M."), Carlyle Carrollton Associates ("Carlyle Carrollton"), and
Carlyle/National City Associates ("Carlyle/National City"), Carlyle Seattle's
venture, Wright-Carlyle Seattle ("First Interstate"), Carlyle Carrollton's
venture, Country Square, Ltd. ("Country Square"), and Carlyle/P.M.'s venture,
Oakridge Apartments Partnership ("Oakridge"). 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 Yerba Buena Limited Partnership ("Yerba Buena"), through the date
of its disposition (note 3(c)). Accordingly, the accompanying consolidated
financial statements do not include the accounts of Yerba Buena.

The Partnership 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 present the Partnership's accounts in
accordance with generally accepted accounting principles ("GAAP") and to
consolidate the accounts of the ventures as described above. Such adjustments
are not recorded on the records of the Partnership. The net effect of these
items is summarized as follows:

<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

1993 1992
-------------------------------------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>

Total assets . . . . . . . . . . . . . . . . . . . . . . . $209,636,156 18,540,991 233,815,505 27,110,243

Partners' capital accounts (deficits) (note 5):
General partners . . . . . . . . . . . . . . . . . . . . (8,936,389) (10,287,024) (8,790,447) (11,389,725)
Limited partners . . . . . . . . . . . . . . . . . . . . 2,724,645 (30,967,779) 3,158,501 (34,735,757)

Net earnings (loss) (note 5):
General partners . . . . . . . . . . . . . . . . . . . . (145,942) 1,102,701 (307,651) (421,484)
Limited partners . . . . . . . . . . . . . . . . . . . . (433,856) 3,767,978 (4,520,266) (11,569,718)

Net earnings (loss) per limited partnership interest . . . (2.71) 23.55 (28.25) (72.31)
============ =========== =========== ===========

</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The net earnings (loss) per limited partnership interest is based upon
the limited partnership interests outstanding at the end of each year
(160,005). Deficit capital accounts will result, through the duration of the
Partnership, in net gain for financial reporting and income tax purposes.

Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement. Partnership
distributions from unconsolidated ventures are considered cash flow from
operating activities only to the extent of the Partnership's cumulative share
of net earnings. In addition, the Partnership records amounts held in U.S.
Government obligations and certificates of deposit at cost which approximates
market. Therefore, 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 (none held at December 31, 1993 and 1992) as cash equivalents
with any remaining amounts reflected as short-term investments.

Deferred expenses are comprised principally of deferred leasing
commissions and deferred lease assumption costs which are amortized over the
lives of the related leases and deferred mortgage costs which are amortized
over the term of the related notes.

Although certain leases of the Partnership provide for tenant occupancy
during periods for which no rent is due and/or increases in minimum lease
payments over the term of the lease, the Partnership accrues rental income for
the full period of occupancy on a straight-line basis.

Statement of Financial Accounting Standards No. 107, ("SFAS
107"),"Disclosures about Fair Value of Financial Instruments", requires
entities with total assets exceeding $150 million at December 31, 1993 to
disclose the SFAS 107 value of all financial assets and liabilities for which
it is practicable to estimate. Value is defined in the Statement as the
amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. The
Partnership believes the carrying amount of its financial instruments
classified as current assets and liabilities (excluding current portion of
long-term debt) approximates SFAS 107 value due to the relatively short
maturity of these instruments. There is no quoted market value available for
any of the Partnership's other instruments. The debt, with a carrying balance
of $201,201,952, has been calculated to have an SFAS 107 value of $213,686,333
by discounting the scheduled loan payments to maturity. Due to restrictions
on transferability and prepayment, and the inability to obtain comparable
financing due to previously modified debt terms or other property specific
competitive conditions, the Partnership would be unable to refinance these
properties to obtain such calculated debt amounts reported. (See note 4.)
The Partnership has no other significant financial instruments.

The Sierra Pines Apartments was sold in July 1993 (note 7(c)).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the Partners rather than the Partnership.
However, in certain instances, the Partnership has been required under
applicable law to remit directly to the taxing authorities amounts
representing withholding from distributions paid to partners.

(2) INVESTMENT PROPERTIES

The Partnership has acquired, either directly or through joint ventures,
ten apartment complexes, four office buildings, and two enclosed shopping
malls. During 1984, the Partnership sold its interest in the Arbor Town
Apartments-I and the Arbor Town Apartments-II complexes. Subsequently, in
1992, the lenders on the Arbor Town Apartments-I and Arbor Town Apartments-II
complexes realized upon their security and obtained title to the properties
resulting in the Partnership no longer having a security interest in the
properties (note 4(d)). In 1986, the Partnership conveyed its interest in the
Presidio West Apartments-II and sold its interest in the San Mateo shopping
center. In 1990, the Partnership disposed of its interest in the Timberline
Apartments and sold its interest in the Meadows Southwest Apartments. In
1991, the Partnership, through its joint venture, disposed of its interest in
the Summerfield/Oakridge Apartments. In 1992, the Yerba Buena venture
transferred title to the property to the lender (note 3(c)). In 1993, the
Partnership sold its interest in the Sierra Pines Apartments and The Crossing
Apartments, and disposed of its interest in the Country Square Apartments
(note 7). The five properties owned at December 31, 1993 were completed and
in operation.

Depreciation on the operating properties has been provided over estimated
useful lives of 5 to 40 years using the straight-line method.

All investment properties are pledged as security for long-term debt, for
which there is no recourse to the Partnership. The second mortgage on the
Stonybrook apartment complex represented a mortgage loan which was subordinate
to an existing senior mortgage loan. The Stonybrook second mortgage note was
assigned to the Partnership during 1987.

The mortgage loans secured by Stonybrook Apartment II mature in October
1994. The Partnership intends to initiate discussions with the mortgage
lender regarding an extension or modification to the mortgage loan. If the
Partnership is unable to secure an extension or modification to the loan,
based upon current market conditions, the Partnership would likely not commit
any significant additional amounts to the property. This would result in the
Partnership no longer having an ownership interest in the property. Such a
decision could result in a gain for financial reporting and Federal income tax
purposes with no corresponding distributable proceeds. As of December 31,
1993 the outstanding balances are reflected in the current portion of long-
term debt in the accompanying consolidated financial statements.

Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives.

(3) VENTURE AGREEMENTS

(a) General

The Partnership, at December 31, 1993, is a party to four operating joint
venture agreements. Pursuant to such agreements, the Partnership made
aggregate capital contributions of $99,276,831. In general, the joint venture
partners, who are either the sellers (or their affiliates) of the property
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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.

The Partnership has acquired, through the above ventures, one apartment
complex and three office buildings. In some instances, the properties were
acquired (as completed) for a fixed purchase price. In other instances,
properties were developed by the ventures and, in those instances, the
contributions of the Partnership were generally fixed. The joint venture
partners (who were primarily responsible for constructing the properties)
contributed any excess of cost over the aggregate amount available from
Partnership contributions and financing and, to the extent such funds exceeded
the aggregate costs, were to retain such excess. The venture properties have
been financed under various long-term debt arrangements as described in note
4.

The Partnership has a cumulative preferred interest in net cash receipts
(as defined) from two of the Partnership's venture properties-Carrara Place
Office Building and First Interstate Center. Such preferential interest
relates to a negotiated rate of return on contributions made by the
Partnership. After the Partnership receives its preferential return, the
venture partner is generally entitled to a non-cumulative return on its
interest in the venture; additional net cash receipts are generally shared in
a ratio relating to the various ownership interests of the Partnership and its
venture partners. One of the ventures' properties produced net cash receipts
during 1993, two in 1992. In general, operating profits and losses are shared
in the same ratio as net cash receipts. If there are no net cash receipts,
substantially all profits or losses are allocated in accordance with the
partners' respective economic interests. The Partnership generally has
preferred positions (related to the Partnership's cash investment in the
ventures) with respect to distribution of sale or refinancing proceeds from
the ventures.

(b) First Interstate Center

During 1982, the Partnership acquired, through a joint venture ("First
Interstate") between an affiliated joint venture ("Carlyle Seattle") described
below and the developer, a fee ownership of improvements and a leasehold
interest in an office building in Seattle, Washington. Carlyle Seattle is a
joint venture between the Partnership and Carlyle Real Estate Limited
Partnership-X, an affiliated partnership sponsored by the Corporate General
Partner of the Partnership. Under the terms of the First Interstate venture
agreement, Carlyle Seattle made initial cash contributions aggregating
$30,000,000.

The terms of the Carlyle Seattle venture agreement provide that all the
capital contributions will be made in the proportion of 73.3% by the Partner-
ship and 26.7% by the affiliated partner. The initial required contribution
by the Partnership to the Carlyle Seattle venture was $22,000,000. The
Carlyle Seattle venture agreement further provides that all of the venture's

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

share of the First Interstate joint venture's annual cash flow, sale or
refinancing proceeds, operating profits and losses, and tax items will be
allocated 73.3% to the Partnership and 26.7% to the affiliated partner.

Carlyle Seattle will generally be entitled to receive a preferred
distribution (on a cumulative basis) of annual cash flow equal to 8% of its
capital contributions to the First Interstate joint venture. Cash flow in
excess of this preferred distribution will be distributable to the First
Interstate joint venture partner up to the next $400,000 and any remaining
annual cash flow will be distributable 50% to Carlyle Seattle and 50% to the
First Interstate joint venture partner. Operating deficits, if any, will be
shared 50% by Carlyle Seattle and 50% by the First Interstate joint venture
partner. Operating profits or losses of the First Interstate joint venture
generally are allocated in the same ratio as the allocation of annual cash
flow, however, the joint venture partner will be allocated not less than 25%
of such profits and losses. As of December 31, 1993, $20,049,000 of
cumulative preferred distributions due to Carlyle Seattle were unpaid.

The First Interstate joint venture agreement provides that upon sale of
the property, Carlyle Seattle will be, in general, entitled to receive the
first $39,000,000 of net sale proceeds plus an amount equal to any
deficiencies (on a cumulative basis) in distributions of Carlyle Seattle's
preferred return of annual cash flow. The First Interstate joint venture
partner will be entitled to receive the next $5,000,000 and any remaining
proceeds will be distributable 50% to Carlyle Seattle and 50% to the First
Interstate joint venture partner.

The office building is managed by an affiliate of the First Interstate
joint venture partner for a fee computed at 2% of base and percentage rents.

In August 1985, the Partnership acquired, through the Carlyle Yerba Buena
Limited Partnership ("Yerba Buena"), an interest in an existing six-story
office building known as Yerba Buena West Office Building in San Francisco,
California. The Partners of Yerba Buena include Carlyle Real Estate Limited
Partnership-XI and Carlyle Real Estate Limited Partnership-XIV, two public
partnerships sponsored by the Corporate General Partner of the Partnership
(the "Affiliated Partners") and four limited partners unaffiliated with the
Partnership or its General Partners (the "Unaffiliated Partners").

The Partnership and the Affiliated Partners purchased an 80% interest in
the property from the sellers and simultaneously formed Yerba Buena with the
Unaffiliated Partners. The Partnership was generally entitled to 32.72% of
Yerba Buena's annual net cash flow, net sale or refinancing proceeds and
profits and losses.

As has been previously reported, in connection with the October 17, 1989
San Francisco earthquake, the Yerba Buena office building incurred some
structural and cosmetic damage which has been repaired. In addition, five
tenants (approximately 54% of the building), based upon concerns over the
structural integrity of the building, moved out of the building after the
earthquake and have withheld all or portions of their rent commencing at
various times since November 1989. The Partnership concluded not to pursue
legal recourse against said tenants based on, among other things, the costs of
pursuing its remedies, competing demands on the Partnership's resources and
the prospects of any material return to the Partnership in light of recent
events.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Based upon the conditions at Yerba Buena and the probability of large
future cash deficits, the Partnership and its Affiliated Partners had decided
not to fund future deficits and, therefore, the joint venture has not made the
debt service payments to the underlying lender commencing with the January
1990 payment. Accordingly, the joint venture received a default notice from
the underlying lender in late February 1990.

The joint venture had been negotiating with the underlying lender to
obtain a loan modification to pay for expected future cash deficits. The
joint venture was unable to negotiate a loan modification whereby the joint
venture retained ownership of the property and in June 1992, the joint venture
transferred title to the property to the lender in return for an opportunity
to share in future sale or refinancing proceeds above certain specified
levels. In order for the joint venture to share in such proceeds, there must
be a significant improvement in current market and property operating
conditions resulting in a significant increase in value of the property. In
addition, during a certain period of time, the joint venture will have a right
of first opportunity to purchase the property if the lender chooses to sell.
An affiliate of the Partnership's Corporate General Partner continues to
manage and lease the property for the lender. As a result of the transfer of
title to the lender as discussed above, the Partnership no longer has an
ownership interest in the property and recognized a gain for financial
reporting and Federal income tax purposes of $2,261,223 and $1,350,845,
respectively, in 1992 with no corresponding distributable proceeds.

(d) Carrara

The Carrara joint venture agreement provides that operating profits and
losses of the venture are allocated 50% to the venture and 50% to the venture
partner. Gain arising from the sale or other disposition of the property
would be allocated to the venture partner or partners then having a deficit
balance in its or their respective capital accounts in accordance with the
terms of the venture agreement. Any additional gain would be allocated in
accordance with the distribution of sales proceeds. The lease for Carrara
Place Office Building's major tenant, which represented 46% of the building's
leasable area and provided for rental payments that were significantly greater
than current market rental rates, expired in December 1992 and the tenant
vacated. The Carrara venture initiated discussions with the mortgage lender
regarding a modification to the mortgage loan and in September 1993 reached an
agreement to modify the loan retroactive to January 1, 1993. Under the
modification, the maturity date has been extended from June 30, 1994 until
January 1, 1998. Interest continues to accrue at 9.875% from January 1, 1993
until January 1, 1998. Effective January 1, 1993, the net cash flow of the
property (after the required minimum interest payments of $8,333 monthly or
$100,000 annually), subject to certain reserves including a $350,000 operating
reserve to fund deficits, will be paid to the lender and applied toward the
payment of accrued and unpaid interest, current interest and principal balance
of the loan, respectively. Any capital costs, including re-leasing costs, are
to be funded by the lender, (subject to their approval) and will be added to
the principal balance of the loan. Approximately $203,900 has been funded by
the lender as of December 31, 1993.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Concurrent with the modification, the Carrara venture has been
reorganized such that the Partnership became the sole general partner of the
venture, with its venture partner becoming a limited partner of the venture.
In addition, the property manager (an affiliate of the unaffiliated venture
partner) was replaced effective September 1993. Based upon an analysis of
current and anticipated market conditions, the Partnership has decided not to
commit additional funds to the Carrara Place Office Building. There must be a
significant improvement in market and property conditions in order for the
value of the property to be greater than the mortgage pay off amount at any
point in time, including accrued interest. Therefore, it is unlikely that any
significant proceeds would be received by the Partnership from a sale of the
property or that the mortgage loan could be refinanced when it becomes due.

In conjunction with the modification, the venture has agreed to transfer
title to the lender if the venture fails to pay the loan in full on the
earlier of the extended maturity date or an acceleration of the loan as a
result of the occurrence of an event of default (as defined).
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(4) LONG-TERM DEBT

(a) General

Long-term debt consists of the following at December 31, 1993 and 1992:

<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
9.5% mortgage note; cross-collateralized by the Sierra Pines apartment complex and the Crossings
apartment complex in Houston, Texas; retired in full upon sale of property in 1993; payable in
monthly installments of interest only until January 1, 1999 when the remaining balance was to
be payable; the loan provided for payment of contingent interest (approximately $46,000 and
$73,000 for 1993 and 1992, respectively) in the amount of 35% of the amount by which gross
receipts (as defined) attributable to a fiscal year (as defined) exceeded a base amount;
contingent interest payments were due April 1 following each fiscal year;
(see notes 4(c) and 7(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -- 4,380,000

9.5% mortgage note; cross-collateralized by the Crossings apartment complex and the Sierra Pines
apartment complex in Houston, Texas; retired in full upon sale of property 1993 payable in
monthly installments of interest only until January 1, 1999 when the remaining balance was to
be payable; the loan provided for payment of contingent interest (approximately $62,000 and
$103,000 for 1993 and 1992, respectively) in the amount of 35% of the amount by which gross
receipts (as defined) attributable to a fiscal year (as defined) exceed a base amount;
contingent interest payments were due April 1 following each fiscal year;
(see notes 4(c) and 7(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 7,600,000

9.21% (8.5% through September 30, 1991) mortgage obligation; secured by the Stonybrook-II
apartment complex in Tucson, Arizona; interest payable monthly at the lesser of net operating
income (as defined) or rates increasing annually from 6.75% to 8.65%, deficiencies between
interest paid monthly and specified pay rates are due annually; unpaid accrued interest and
the remaining principal balance are due October 1, 1994 . . . . . . . . . . . . . . . . . . 4,152,600 4,152,600

8.5% second mortgage note; secured by the Stonybrook-II apartment complex in Tucson, Arizona;
interest payable annually at the greater of the excess net operating income over the specified
pay rates of the above mortgage obligation or $40,000; unpaid accrued interest and remaining
principal balance due October 6, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . 654,800 654,800

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

1993 1992
----------- -----------
9.875% mortgage note; secured by the Carrara Place office building in Englewood, Colorado;
payable in monthly installments of principal and interest of $202,146 until modified.
Effective January 1, 1993, payable in monthly installments of net cash flow until January 1,
1998 when the remaining balance and any unpaid interest is payable (see notes 3(d) and 4(b)) 22,763,187 22,375,167

10-1/8% mortgage note; secured by the Country Square (Phase I) apartment complex in
Carrollton, Texas; cancelled in 1993; payable in monthly installments of principal and interest
of $20,413 until August 1, 1996 when the remaining balance of $1,530,495 would be payable;
(see note 4(b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,800,007

10% mortgage note; secured by the Country Square (Phase II) apartment complex in Carrollton, Texas;
cancelled in 1993; payable in monthly installments of principal and interest of $15,358 until April
1, 2007; the lender had the right to call the loan on February 1, 1993, 1997 or 2002 when the
remaining balances would be $1,396,814, $1,178,490 and $749,702, respectively; (see note 4(b)) -- 1,400,500

9-3/4% mortgage note; secured by the Country Square (Phase III) apartment complex in Carrollton,
Texas; cancelled in 1993; payable in monthly installments of principal and interest of $19,975
until October 1, 2007, the lender had the right to call the loan on October 31, 1992
(balance was $1,881,084) or at any time thereafter; (see note 4(b)) . . . . . . . . . . . . -- 1,876,393

Second mortgage note; secured by the Country Square apartment complex in Carrollton, Texas;
cancelled in 1993; payable in monthly installments of interest only until January 1, 1993 when
the entire principal balance was payable; (see note 4(b)) . . . . . . . . . . . . . . . . . -- 7,163,000

9-7/8% mortgage note; secured by the Permian Mall shopping center in Odessa, Texas;
payable in monthly installments of principal and interest of $238,891 until
June 1, 2010; balance is net of $4,883,701 and $5,152,702, respectively, of
unamortized discount based upon an imputed interest rate of 14% . . . . . . . . . . . . . . 18,416,331 18,684,007

11% mortgage note, secured by the First Interstate Center office building in
Seattle, Washington; payable in monthly installments of principal and
interest of $922,425 until December 15, 1995 at which time the remaining principal
balance of $96,275,082 will be payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 97,493,927 97,819,002

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

1993 1992
----------- -----------

Mortgage note; secured by the National City Center office building in Cleveland,
Ohio; payable in monthly installments of principal and interest (at 9-5/8%
per annum) of $545,164 through December 1993, payable in monthly installments
of principal and interest (at 11-7/8% per annum) of $634,221 until December 10,
1995 when the outstanding principal balance of $56,745,610 is payable; balance
is net of $570,301 and $1,815,618, respectively, of unamortized discount
based upon an imputed interest of 12% (see note 4(e)) . . . . . . . . . . . . . . . . . . . 57,721,107 57,360,414
------------ ------------

Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,201,952 225,265,890
Less current portion of long-term debt (notes 2 and 4(b)) . . . . . . . . . . . . 6,489,518 36,361,442
------------ ------------

Total long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $194,712,434 188,904,448
============ ============

</TABLE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Included in the above total long-term debt is $2,055,549 and $3,418,549
at December 31, 1993 and 1992, respectively, which represents mortgage
interest accrued but not currently payable pursuant to the terms of the notes
(as modified).

Five year maturities of long-term debt (exclusive of amortization of
discount) are as follows:

1994 . . . . . . . . . .$ 6,489,518
1995 . . . . . . . . . . 155,348,654
1996 . . . . . . . . . . 720,851
1997 . . . . . . . . . . 795,347
1998 . . . . . . . . . . 23,640,728
============

(b) Debt Modifications

The Partnership modified the $5,800,000 second mortgage note secured by
the Country Square apartment complex in Carrollton, Texas effective June 1,
1989. The pay rate was raised from 4% per annum to 5% per annum (payable in
monthly installments of interest only) through December 1, 1992. Interest
accrued and was deferred at a rate of 11% per annum from June 1, 1989 through
December 31, 1990 and 12% per annum from January 1, 1991 through December 31,
1992; payable each April 30 to the extent of any annual cash flow (as defined)
or upon the earlier of subsequent sale of the property or the January 1, 1993
maturity of the note. The lender notified the Partnership that it would not
modify the existing terms of the second mortgage. The Partnership was unable
to secure new or additional modifications or extensions to the loan, therefore
as of December 31, 1992, the outstanding balance of $7,163,000 was reflected
in the current portion of long-term debt in the accompanying consolidated
financial statements. On February 2, 1993, the second mortgage lender
concluded proceedings to realize upon its security and took title to the
property. As a result, the Partnership recognized a gain for financial
reporting purposes of $1,520,734 and a gain for Federal income tax purposes of
$5,633,431 in 1993 with no corresponding distributable proceeds.

The long-term mortgage notes secured by the Summerfield/Oakridge Apart-
ments, located in Aurora, Colorado were modified, effective August 1, 1986.
Beginning October 1, 1990, the scheduled monthly payments to the lender were
not made. The lender provided the venture with a notice of default and placed
the property in receivership October 16, 1990. Negotiations for further debt
relief were not successful. In January 1991, the lender concluded proceedings
to realize upon its security and took title to the property resulting in the
Partnership recognizing a gain of $1,637,840 (net of venture partners' share
of $270,551) for financial reporting purposes. Although no distributable
proceeds were realized on this transaction, a gain of approximately $7,493,000
for Federal income tax purposes was recognized in 1991.

As of December 31, 1992, the outstanding loan balance of the long-term
mortgage note secured by the Carrara Place Office Building was reflected in
the current portion of long-term debt due to the venture not making the
scheduled debt service payments beginning January 1, 1993. The note was
subsequently modified effective January 1, 1993. Under the modification, the
maturity date has been extended from June 30, 1994 until January 1, 1998.
Interest continues to accrue at 9.875% from January 1, 1993 until maturity.
Effective January 1, 1993, the net cash flow of the property (after the
required minimum interest payments of $8,333 monthly or $100,000 annually),
subject to certain reserves including a $350,000 operating reserve to fund
deficits, will be paid to the lender and applied toward the payment of accrued
and unpaid interest, current interest and principal balance of the loan,

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

respectively. Any capital costs, including re-leasing costs, are to be funded
by the lender, (subject to their approval) and will be added to the principal
balance of the loan.

Effective December 27, 1990, the Partnership obtained replacement loans
from an institutional lender to retire in full satisfaction, at an aggregated
discount, the previously modified existing long-term mortgage notes secured by
the Sierra Pines Apartments and the Crossings Apartments. The new lender
required the establishment of escrow accounts, of approximately $253,000 and
$291,000, to be used toward the purchase of capital items at the Sierra Pines
Apartments and the Crossings Apartments, respectively. As of the date of sale
(see note 7(c)) approximately $62,000 and $6,000 were used for such purposes
for the respective properties. The new mortgage loans, which were cross-
collateralized, required interest only payments at 9.5% plus contingent
interest (as defined) until January 1, 1999, when the remaining balance was
payable. In 1993 and 1992, $176,334 and $145,029 were paid for 1992 and 1991
contingent interest, respectively for the properties. $107,945 was paid in
1993 for 1993 contingent interest for both properties through the date of
sale. In the event that these properties were sold before the maturity date
of the loan, the lender was to receive additional interest of 6% of the
mortgage principal and, in general, the higher of 65% of the sale proceeds (as
defined) or ten times the highest contingent interest (as defined) amount in
any of the three full fiscal years preceding the sale. In 1993, the
Partnership sold its interest in the Sierra Pines Apartments and The Crossing
Apartments (see note 7(c)).

(d) Arbor Town Apartments-I and Arbor Town Apartments-II

In 1984, the Arbor Town Apartments-I and Arbor Town Apartments-II were
sold, at which time the Partnership received $12,400,000 in wrap-around notes
receivable. The Partnership elected to retain the original mortgages and
planned to ultimately pay off the outstanding original mortgage balances from
proceeds of the wrap-around notes receivable. The buyer voluntarily filed for
protection under Chapter 11 of the United States Bankruptcy Code in May 1988.
In April 1989, the United States Bankruptcy Court approved a plan of
reorganization whereby the underlying mortgage notes payable were allowed to
be modified. The subsequent modifications on the underlying mortgage notes
payable were made retroactively effective to April 24, 1989 and September 1,
1988. The wrap-around notes receivable held by the Partnership had been
modified to the extent the Partnership had agreed that the buyer make payments
directly to the lenders (note 7(a)).

(e) National City Center Office Building

In January 1994, the debt service payments under the existing mortgage
for the National City Center Office Building are scheduled to increase from 9-
5/8% to 11-7/8% until the maturity of the loan in December 1995. The
Partnership reached an agreement in principle with the current mortgage lender
to refinance the existing mortgage which would be effective February 1, 1994,
with an interest rate of 8.5%. The loan would be amortized over 22 years with
a balloon payment due in seven years. The Partnership paid a refundable loan
commitment fee of $1,164,000 in 1993 in conjunction with the proposed
refinancing. The Partnership also expects to pay a prepayment penalty of
approximately $600,000, based on the outstanding mortgage balance at the time

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

of refinancing. In addition, the lender would require an escrow account of
approximately $610,000 to be established at the inception of the refinancing
which would be supplemented from time to time for scheduled future tenant
improvements costs at the property. There can be no assurance that the loan
refinancing can be obtained.

The buyer retroactively modified the terms of the mortgage note payable
and related accrued interest secured by the Arbor Town Apartments-I under the
reorganization mentioned above. The modified principal balance (including
deferred fees) was determined to be $3,261,865. Monthly payments of interest
only at 9.875% per annum were due until August 1991. Beginning September 1,
1991, through the scheduled maturity date of December 20, 1994, monthly
payments of principal and interest were due at 9.875%. The maturity date of
the mortgage note payable could have been extended to August 31, 1998, at the
option of the buyer.

The buyer also retroactively modified the terms of the mortgage note
payable and related accrued interest secured by the Arbor Town Apartments-II
under the reorganization mentioned above. Monthly payments of interest only
of 8%, 8.5% and 9% were effective September 1, 1990, 1991 and 1992,
respectively. The interest accrual rate was reduced from 14.5% per annum to
9% per annum. The difference between the accrual interest rate and the pay
rates was added to the outstanding principal balance which would have been due
January 1, 1993.

The buyer was in default on the underlying first mortgage payments made
directly to the lenders. As a result, the lenders provided the Partnership
with letters of default. In December 1992, the lenders concluded proceedings
to realize upon their security and obtained title to the properties resulting
in the Partnership no longer having a security interest in the properties.
Although the Partnership received no cash proceeds from the transfer of its
security interest; it did, however, recognize a gain for financial reporting
purposes and a loss for Federal income tax purposes in 1992 of $1,556,577 and
$275,509, respectively.

(5) PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Limited
Partners and 4% to the General Partners. Profits from the sale or other
disposition of investment properties will be allocated first to the General
Partners in an amount equal to the greater of the amount distributable to the
General Partners as sale or refinancing proceeds from sale or other
disposition of investment properties (as described below) or 1% of the profits
from the sale or refinancing. Losses from the sale or other disposition of
investment properties will be allocated 1% to the General Partners. The
remaining sale or other disposition of investment properties profits and
losses will be allocated to the Limited Partners.

An amendment to the Partnership Agreement, effective January 1, 1991,
generally provides that notwithstanding any allocation contained in the
Agreement, if at any time profits are realized by the Partnership, any current
or anticipated event that would cause the deficit balance in absolute amount
in the Capital Account of the General Partners to be greater than their share
of the Partnership's indebtedness (as defined) after such event, then the
allocation of Profits to the General Partners shall be increased to the extent
necessary to cause the deficit balance in the Capital Account of the General
Partners to be no less than their respective shares of the Partnership's
indebtedness (as defined) after such event. In general, the effect of this
amendment is to allow the deferral of the recognition of taxable gain to the
Limited Partners.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The General Partners are not required to make any capital contributions
except under certain limited circumstances upon dissolution and termination of
the Partnership. Distributions of "net cash receipts" of the Partnership will
be allocated 90% to the Limited Partners and 10% to the General Partners (of
which 6.25% constitutes a management fee to the Corporate General Partner for
services in managing the Partnership). Distributions of "sale proceeds" and
"financing proceeds" are to be allocated 99% to the Limited Partners and 1% to
the General Partners until receipt by the Limited Partners of their initial
contributed capital plus a stipulated return thereon. Thereafter,
distributions of "sale proceeds" and "financing proceeds" are to be allocated
to the General Partners until the General Partners have received an amount
equal to 3% of the gross sales prices of any properties sold, then the balance
85% to the Limited Partners and 15% to the General Partners.

(6) MANAGEMENT AGREEMENTS

The Partnership has entered into agreements with sellers or affiliates of
the sellers for the operation and management of several properties. Such
agreements provided that, during the term of these agreements, the managers
paid all expenses of the properties and retained the excess, if any, of cash
revenues from operations over costs and expenses, as defined, as a management
fee. Upon termination of the agreements, an affiliate of the General Partners
assumed management under agreements providing for management fees calculated
at a percentage of the gross income from the properties.

An affiliate of the General Partners of the Partnership manages the
following properties for a fee calculated at a percentage of gross income from
the following properties:

Sierra Pines Apartments, Houston, Texas
(through July 29, 1993)
Country Square Apartments, Carrollton, Texas
(through February 1, 1993)
Permian Mall, Odessa, Texas
National City Center, Cleveland, Ohio
Crossing Apartments, Houston, Texas
(through July 29, 1993)
Stonybrook Apartments-I & II, Tucson, Arizona

(7) SALE OF INVESTMENT PROPERTIES

(a) Arbor Town Apartments-I and Arbor Town Apartments-II

During November 1984, the Partnership concurrently sold the land and
related improvements of the Arbor Town Apartments-I and Arbor Town
Apartments-II located in Arlington, Texas for $15,500,000, consisting of
$3,100,000 in cash and $12,400,000 of wrap-around notes receivable. The
purchase wrap-around notes were subject to existing mortgage notes (note 4).

The sale was accounted for by the installment method whereby the gain on
sale of $2,724,491 (net of discount on the notes receivable of $890,413) was
recognized as collections of principal were received. No profit was
recognized by the Partnership in 1992 and 1991.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Partnership did not receive the scheduled interest only payments of
approximately $2,000,000 on the wrap-around notes receivable from January 1988
through May 1989 and, therefore, the Partnership did not make the
corresponding scheduled monthly payments on the underlying indebtedness. The
buyer voluntarily filed for protection under Chapter 11 of the United States
Bankruptcy Code in May 1988. In April 1989, the United States Bankruptcy
Court approved a plan of reorganization, whereby scheduled payments on the
wrap-around notes receivable and related underlying mortgage notes payable
were allowed to be modified by the buyer. Under the terms of the Bankruptcy
Reorganization Plan, the Partnership's wrap-around notes receivable and
underlying non-recourse mortgage notes payable remained outstanding. The
buyer subsequently negotiated the modification of the underlying non-recourse
mortgage notes payable directly with the lenders while the wrap-around notes
receivable had been modified to the extent the Partnership had agreed that the
buyer make payments directly to the lender. These modifications modified the
terms of the original underlying loan agreements resulting in permanent
interest expense reductions. For financial reporting purposes, these interest
expense reductions had been offset by adjustments to the wrap-around notes
receivable. No reserve for collectibility had been established previously due
to the existence of deferred gain exceeding the net equity in the wrap-around
notes receivable, with the underlying indebtedness being non-recourse to the
Partnership. The Partnership recognized interest income on the wrap-around
notes receivable only to the extent interest had been paid by the buyer on the
modified underlying indebtedness. In December 1992, the lenders concluded
proceedings to realize upon their security and obtained title to the
properties resulting in the Partnership no longer having a security interest
in the properties (see note 4(d)).

(b) San Mateo Fashion Island

On December 31, 1986, the Partnership sold its right, title and interest
in the land, leasehold interest and related improvements of the San Mateo
Fashion Island shopping center for $44,202,559 and recognized profit in full
of $9,528,813. The sale price consisted of $950,000 in cash at closing, the
assumption of the existing mortgage note having an unpaid principal balance of
$39,302,559 (for financial reporting purposes the principal balance was
$28,895,264) and an additional promissory note in the amount of $3,950,000
($950,000 paid in March 1988) secured by a subordinated deed of trust on the
property. In addition to the sale price, the Partnership received $7,600,000
from the venture partner during 1986 under the terms of the venture agreement.

During the first quarter of 1992, the Partnership was advised by the
buyer (in which the Corporate General Partner has an interest) that it had
initiated discussions directly with the first mortgage lender regarding a
modification to the first mortgage note. The buyer is currently making
reduced payments to the first mortgage lender and has discontinued making
payments to the Partnership as of March 1992. Due to uncertainty regarding
the value of the underlying collateral, the Partnership reserved for the
entire outstanding principal balance and accrued interest ($3,720,000) on the
note receivable as of December 31, 1993 and 1992 in the accompanying
consolidated financial statements. In addition, the entire outstanding
principal balance and accrued interest was written off for Federal income tax
purposes in 1992.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

On July 29, 1993, the Partnership sold the land, buildings, related
improvements and personal property of the Sierra Pines and Crossing Apartments
located in Houston, Texas. The purchaser is not affiliated with the
Partnership or its General Partners and the sale price was determined by
arm's-length negotiations. The sale prices of the land, buildings, related
improvements and personal property for Sierra Pines and Crossing Apartments
were $4,880,000 and $9,535,000, respectively. A portion of the cash proceeds
was utilized to retire the first mortgage notes with outstanding balances of
$4,380,000 and $7,600,000, respectively, secured by the properties. The
Partnership paid additional interest of $1,230,923 in the aggregate in
connection with the retirement of the mortgage notes. The Partnership
received in connection with these sales, after additional interest and normal
costs of sale, a net amount of cash of approximately $950,000 (including
$288,000 in advisory fees) in the aggregate. As a result of these sales, the
Partnership recognized gains for financial reporting purposes of $44,030 and
$2,526,916, respectively, and recognized a gain for Federal income tax
purposes of $1,510,727 and $6,164,118, respectively.

(8) LEASES

(a) As Property Lessor

At December 31, 1993, the Partnership and its consolidated ventures'
principal assets are one apartment complex, one enclosed shopping mall and
three office buildings. The Partnership has determined that all leases
relating to these properties are properly classified as operating leases;
therefore, rental income is reported when earned and the cost of each of the
properties, excluding cost of land, is depreciated over the estimated useful
life.

Leases with commercial tenants range in term from one to thirty years and
provide for fixed minimum rent and partial reimbursement of operating costs.
In addition, leases with shopping center tenants provide additional rent based
upon percentages of tenants' sales volumes. With respect to the Partnership's
shopping center investment, a substantial portion of the ability of retail
tenants to honor their leases is dependent upon the retail economic sector.
Apartment complex leases in effect at December 31, 1993 are generally for a
term of one year or less and provide for annual rents of approximately
$1,762,376.

Cost and accumulated depreciation of the leased assets are summarized as
follows at December 31, 1993:

Shopping mall:
Cost. . . . . . . . . . . . $ 24,294,375
Accumulated depreciation. . (7,666,062)
------------
16,628,313
------------
Office buildings:
Cost. . . . . . . . . . . . 221,682,710
Accumulated depreciation. . (71,337,019)
------------
150,345,691
------------

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Apartment complex:
Cost. . . . . . . . . . . . 8,022,749
Accumulated depreciation. . (3,543,125)
------------
4,479,624
------------

Total. . . . . . . . . . $171,453,628
============

Minimum lease payments, including amounts representing executory costs
(e.g., taxes, maintenance, insurance) and any related profit in excess of
specific reimbursements, to be received in the future under the above
commercial operating lease agreements, are as follows:

1994 . . . . . . . . . . . $ 29,940,250
1995 . . . . . . . . . . . 26,817,970
1996 . . . . . . . . . . . 24,999,921
1997 . . . . . . . . . . . 22,656,470
1998 . . . . . . . . . . . 22,120,863
Thereafter . . . . . . . . 114,672,214
------------
Total. . . . . . . . . $241,207,688
============

(b) As Property Lessee

The First Interstate venture owns a net leasehold interest (which expires
in 2052) in the land underlying the Seattle, Washington office building,
subject to a 20-year extension. The lease provides for an annual rent of
$670,000 and has been determined to be an operating lease.

(9) TRANSACTIONS WITH AFFILIATES

Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of December 31,
1993 and for the years ended December 31, 1993, 1992 and 1991 are as follows:

<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

<CAPTION>
UNPAID AT
DECEMBER 31,
1993 1992 1991 1993
--------- --------- --------- --------------
<S> <C> <C> <C> <C>

Disbursement agent fees. . . . . . . . . . . . . . . . . . . . . $ -- -- 8,947 --
Insurance commissions. . . . . . . . . . . . . . . . . . . . . . 50,000 50,000 50,000 --
Property management and leasing fees . . . . . . . . . . . . . . 1,055,773 1,094,265 1,051,709 3,522,816
Management fees to Corporate General Partner . . . . . . . . . . -- 16,667 108,336 33,334
Reimbursement (at cost) for accounting services. . . . . . . . . 29,180 102,783 53,172 29,180
Reimbursement (at cost) for legal services . . . . . . . . . . . 11,247 14,516 9,983 11,247
Reimbursement (at cost) for out-of-pocket expenses . . . . . . . 18,634 16,639 10,597 77
Reimbursement (at cost) for out-of-pocket salary and salary related
expenses relating to on-site and other cost for the Partnership and
its investment properties . . . . . . . . . . . . . . . . . . . 201,153 227,735 275,575 --
---------- --------- --------- ---------

$1,365,987 1,522,605 1,568,319 3,596,654
========== ========= ========= =========

</TABLE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

The General Partners and their affiliates have deferred through June 30,
1988 payment of certain property management and leasing fees of $3,522,816.
In addition, the Partnership deferred the General Partners' cash distribution
and management fee of $19,666 and $33,334, respectively, for the third and
fourth quarters of 1991. These deferred amounts (approximately $22 per
Interest in the aggregate) and amounts currently payable do not bear interest
and are expected to be paid in future periods.
SCHEDULE X

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

SUPPLEMENTARY INCOME STATEMENT INFORMATION

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ------------ ------------

Maintenance and repairs. $4,852,082 5,068,044 4,825,845

Depreciation . . . . . . 9,144,746 9,598,560 9,476,084

Taxes:

Real estate. . . . . . 4,747,734 5,198,223 5,009,727

Other. . . . . . . . . 11,727 459,393 7,009

Advertising. . . . . . . 289,171 363,351 380,435
========== ========= =========

<TABLE>
SCHEDULE XI
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1993

<CAPTION>
COSTS
CAPITALIZED
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) TO ACQUISITION AT CLOSE OF PERIOD (B)
-------------------------- -------------- --------------------------------------
LAND AND BUILDINGS LAND AND BUILDINGS
LEASEHOLD AND BUILDINGS AND LEASEHOLD AND
ENCUMBRANCE INTERESTS IMPROVEMENTS IMPROVEMENTS INTEREST IMPROVEMENTS TOTAL (D)
------------ ----------- ------------ ------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>

APARTMENT BUILDING:
Tucson, Arizona . . $ 4,807,400 1,331,500 7,885,152 (1,193,903) 1,116,695 6,906,054 8,022,749
OFFICE BUILDINGS:
Englewood, Colorado 22,763,187 850,000 20,989,348 3,450,380 850,000 24,439,728 25,289,728
Cleveland, Ohio . . 57,721,107 13,500,000 69,078,344 5,786,875 13,500,000 74,865,219 88,365,219
Seattle, Washington 97,493,927 -- (c) 91,387,111 16,640,652 -- 108,027,763 108,027,763
SHOPPING MALL:
Odessa, Texas . . . 18,416,331 2,555,000 20,145,739 1,593,636 2,555,000 21,739,375 24,294,375
------------ ---------- ----------- ---------- ---------- ----------- -----------

Total. . . . . . $201,201,952 18,236,500 209,485,694 26,277,640 18,021,695 235,978,139 253,999,834
============ ========== =========== ========== ========== =========== ===========

</TABLE>
<TABLE>
SCHEDULE XI - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1993

<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1993
ACCUMULATED DATE OF DATE OPERATION REAL ESTATE
DEPRECIATION(E) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
APARTMENT BUILDINGS:
Tucson, Arizona . . . . . . . . . . . . . . $ 3,543,125 1983 10/1/82 5-30 years 132,753
OFFICE BUILDINGS:
Englewood, Colorado . . . . . . . . . . . . 8,513,641 1982 11/23/82 5-30 years 400,018
Cleveland, Ohio . . . . . . . . . . . . . . 24,721,676 1980 7/27/83 5-30 years 1,518,186
Seattle, Washington . . . . . . . . . . . . 38,101,702 1983 3/10/82 5-40 years 1,704,719
SHOPPING MALL:
Odessa, Texas . . . . . . . . . . . . . . . 7,666,062 1979 12/28/82 5-30 years 624,545
----------- ---------

Total. . . . . . . . . . . . . . . . . . $82,546,206 4,380,221
=========== =========

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

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1993

<FN>
- -----------------
(A) The cost to the Partnership represents the original purchase price of the properties, including amounts incurred
subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes is
approximately $258,753,073.
(C) Property operated under ground lease; see Note 8.
(D) Reconciliation of real estate owned:

</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991
------------ ------------ -----------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . $287,739,781 288,108,329 305,874,084
Additions during period. . . . . . . . . . . 3,097,755 2,635,297 2,994,084
Provision for value impairment . . . . . . . -- (2,682,822) --
Reductions during period . . . . . . . . . . (36,837,702) (321,023) (20,759,839)
------------ ----------- -----------

Balance at end of period . . . . . . . . . . $253,999,834 287,739,781 288,108,329
============ =========== ===========

(E) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . $ 88,213,016 78,935,479 75,036,153
Depreciation expense . . . . . . . . . . . . 9,144,746 9,598,560 9,476,084
Reduction in accumulated depreciation. . . . (14,811,556) (321,023) (5,576,758)
------------ ----------- -----------

Balance at end of period . . . . . . . . . . $ 82,546,206 88,213,016 78,935,479
============ =========== ===========

</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

There were no changes of or disagreements with accountants during fiscal
year 1993 and 1992.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

The Corporate General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware corporation. JMB, as the Corporate General
Partner, has responsibility for all aspects of the Partnership's operations,
subject to the requirement that sales of real property must be approved by the
Associate General Partner of the Partnership, Realty Associates-XII, L.P., an
Illinois limited partnership with JMB as the sole general partner. The
Associate General Partner shall be directed by a majority in interest of its
limited partners (who are generally officers, directors and affiliates of JMB
or its affiliates) as to whether to provide its approval of any sale of real
property (or any interest therein) of the Partnership. Various relationships
of the Partnership to the Corporate General Partner and its affiliates are
described under the caption "Conflicts of Interest" at pages 9-14 of the
Prospectus, which description is hereby incorporated herein by reference to
exhibit 3-A to the Partnership's report for December 31, 1992 on Form 10-K
(File No. 0-12433) dated March 19, 1993.

The names, positions held and length of service therein of each director
and executive officer and certain officers of the Corporate General Partner
are as follows:

SERVED IN
NAME OFFICE OFFICE SINCE
---- ------ ------------

Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Jerome J. Claeys III Director 5/09/88
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer 8/02/93
Jeffrey R. Rosenthal Chief Financial Officer 8/01/93
Gary Nickele Executive Vice President and 1/01/92
General Counsel 2/27/84
Ira J. Schulman Executive Vice President 6/01/88
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors or
officers. The foregoing directors have been elected to serve one-year terms
until the annual meeting of the Corporate General Partner to be held on June
7, 1994. All of the foregoing officers have been elected to serve one-year
terms until the first meeting of the Board of Directors held after the annual
meeting of the Corporate General Partner to be held on June 7, 1994. There
are no arrangements or understandings between or among any of said directors
or officers and any other person pursuant to which any director or officer was
elected as such.

JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), Carlyle Real Estate Limited Partnership-X ("Carlyle-X"),
Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real Estate
Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate Limited
Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV
("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI ("Carlyle-XVI"),
Carlyle Real Estate Limited Partnership-XVII ("Carlyle-XVII"), JMB Mortgage
Partners, Ltd. ("Mortgage Partners"), JMB Mortgage Partners, Ltd.-II
("Mortgage Partners-II"), JMB Mortgage Partners, Ltd.-III ("Mortgage
Partners-III"), JMB Mortgage Partners, Ltd.-IV ("Mortgage Partners-IV"),
Carlyle Income Plus, Ltd. ("Carlyle Income Plus") and Carlyle Income Plus,
Ltd.-II ("Carlyle Income Plus-II") and the managing general partner of JMB
Income Properties, Ltd.-IV ("JMB Income-IV"), JMB Income Properties, Ltd.-V
("JMB Income-V"), JMB Income Properties, Ltd.-VI ("JMB Income-VI"), JMB Income
Properties, Ltd.-VII ("JMB Income-VII"), JMB Income Properties, Ltd.-VIII
("JMB Income-VIII"), JMB Income Properties, Ltd.-IX ("JMB Income-IX"), JMB
Income Properties, Ltd.-X ("JMB Income-X"), JMB Income Properties, Ltd.-XI
("JMB Income-XI"), JMB Income Properties, Ltd.-XII ("JMB Income-XII") and JMB
Income Properties, Ltd.-XIII ("JMB Income-XIII"). Most of the foregoing
directors and officers are also officers and/or directors of various
affiliated companies of JMB including Arvida/JMB Managers, Inc. (the general
partner of Arvida/JMB Partners, L.P. ("Arvida")), Arvida/JMB Managers-II, Inc.
(the general partner of Arvida/JMB Partners, L.P.-II ("Arvida-II")) and Income
Growth Managers, Inc. (the corporate general partner of IDS/JMB Balanced
Income Growth, Ltd. ("IDS/BIG")). Most of such directors and officers are
also partners of certain partnerships which are associate general partners in
the following real estate limited partnerships: Carlyle-VII, Carlyle-IX,
Carlyle-X, Carlyle-XI, Carlyle-XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI,
Carlyle-XVII, JMB Income-VI, JMB Income-VII, JMB Income-VIII, JMB Income-IX,
JMB Income-X, JMB Income-XI, JMB Income-XII, JMB Income-XIII, Mortgage
Partners, Mortgage Partners-II, Mortgage Partners-III, Mortgage Partners-IV,
Carlyle Income Plus, Carlyle Income Plus-II and IDS/BIG.

The business experience during the past five years of each such director
and officer of the Corporate General Partner of the Partnership in addition to
that described above is as follows:

Judd D. Malkin (age 56) is an individual general partner of JMB Income-IV
and JMB Income-V. Mr. Malkin has been associated with JMB since October,
1969. He is a Certified Public Accountant.

Neil G. Bluhm (age 56) is an individual general partner of JMB Income-IV,
JMB Income-V. Mr. Bluhm has been associated with JMB since August, 1970. He
is a member of the Bar of the State of Illinois and a Certified Public
Accountant.

Jerome J. Claeys III (age 51) (Chairman and Director of JMB Institutional
Realty Corporation) has been associated with JMB since September, 1977. He
holds a Masters degree in Business Administration from the University of Notre
Dame.

Burton E. Glazov (age 55) has been associated with JMB since June, 1971
and served as an Executive Vice President of JMB until December 1990. He is a
member of the Bar of the State of Illinois and a Certified Public Accountant.

Stuart C. Nathan (age 52) has been associated with JMB since July, 1972.
He is a member of the Bar of the State of Illinois.

A. Lee Sacks (age 60) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.

John G. Schreiber (age 47) has been associated with JMB since December,
1970 and served as an Executive Vice President of JMB until December 1990. He
holds a Masters degree in Business Administration from Harvard University
Graduate School of Business.

H. Rigel Barber (age 44) has been associated with JMB since March, 1982.
He holds a J.D. degree from the Northwestern Law School and is a member of the
Bar of the State of Illinois.

Jeffrey R. Rosenthal (age 42) has been associated with JMB since
December, 1987. He is a Certified Public Accountant.

Gary Nickele (age 41) has been associated with JMB since February, 1984.
He holds a J.D. degree from the University of Michigan Law School and is a
member of the Bar of the State of Illinois.

Ira J. Schulman (age 42) has been associated with JMB since February,
1983. He holds a Masters degree in Business Administration from the
University of Pittsburgh.

Gailen J. Hull (age 45) has been associated with JMB since March, 1982.
He holds a Masters degree in Business Administration from Northern Illinois
University and is a Certified Public Accountant.

Howard Kogen (age 58) has been associated with JMB since March, 1973. He
is a Certified Public Accountant.<PAGE>
ITEM 11. EXECUTIVE COMPENSATION

The Partnership has no officers or directors. The Partnership is
required to pay a management fee to the Corporate General Partner and the
General Partners are entitled to receive a share of cash distributions, when
and as cash distributions are made to the Limited Partners, and a share of
profits or losses as described under the caption "Compensation and Fees" at
pages 6-9, "Cash Distributions" at pages 138-139, "Allocation of Profits or
Losses for Tax Purposes" at page 137 and "Distributions and Compensations;
Allocations of Profits and Losses" at pages A-6 to A-11 of the Prospectus,
which descriptions are hereby incorporated herein by reference to Exhibit 3-A
to the Partnership's report for December 31, 1992 on Form 10-K (File No. 0-
12433) dated March 19, 1993. Reference is also made to Notes 5 and 9 for a
description of such transactions, distributions and allocations. In 1993,
1992 and 1991, cash distributions of $0, $0 and $55,002 were paid,
respectively, to the General Partners. Effective as of the third and fourth
quarters of 1991, the Partnership deferred the General Partner's cash
distribution and deferred management fees. The General Partners received a
share of the Partnership's long-term capital gain for tax purposes aggregating
$1,456,799 in 1993. In addition, the General Partners received a share of the
Partnership's operating losses aggregating $354,098. Such losses may benefit
the General Partners to the extent that such losses may be offset against
taxable income from the Partnership or other sources.

The Partnership is permitted to engage in various transactions involving
affiliates of the Corporate General Partner of the Partnership, as described
under the captions "Compensation and Fees" at pages 6-9, "Conflicts of
Interest" at pages 9-14 and "Powers, Rights and Duties of the General
Partners" at pages A-13 to A-19 of the Prospectus, which are hereby
incorporated herein by reference to Exhibit 3-A to the Partnership's report
for December 31, 1992 on Form 10-K (File No. 0-12433) dated March 19, 1993.
The relationship of the Corporate General Partner (and its directors and
officers) to its affiliates is set forth above in Item 10.

JMB Properties Company, an affiliate of the Corporate General Partner,
provided property management services to the Partnership for all or part of
1993 for the Sierra Pines Apartments, and Crossing Apartments in Houston,
Texas, the Country Square Apartments in Carrollton, Texas, the Stonybrook
Apartments - I & II in Tucson, Arizona, the Permian Mall in Odessa, Texas and
National City Center Office Building in Cleveland, Ohio at fees calculated at
a percentage of gross income from the properties. In 1993, such affiliate
earned property management fees amounting to $1,055,773 for such services, all
of which were paid as of December 31, 1993. As set forth in the Prospectus of
the Partnership, the Corporate General Partner must negotiate such agreements
on terms no less favorable to the Partnership than those customarily charged
for similar services in the relevant geographical area (but in no event at
rates greater than specified in the Prospectus), and such agreements must be
terminable by either party thereto, without penalty, upon 60 days' notice.

JMB Insurance Agency, Inc., an affiliate of the Corporate General
Partner, earned insurance brokerage commissions in 1993 aggregating
approximately $50,000, all of which were paid in 1993 in connection with the
providing of insurance coverage for certain of the real property investments
of the Partnership. Such commissions are at rates set by insurance companies
for the classes of coverage provided.

The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses relating to the
administration of the Partnership and the operation of the Partnership's real
property investments. In 1993, the Corporate General Partner of the
Partnership was due reimbursement for such out-of-pocket expenses in the
amount of $219,787, of which $77 was unpaid as of December 31, 1993.

Additionally, the General Partners may be reimbursed for salaries and
direct expenses of officers and employees of the Corporate General Partner and
its affiliates while directly engaged in the administration of the Partnership
and in the operation of the Partnership's real property investments. In 1993,
such costs were $40,427, all of which were unpaid at December 31, 1993. The
General Partners earned no disbursement agent fees in 1993.
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding Interests
of the Partnership.

(b) The Corporate General Partner and its officers and directors own the following Interests of the Partnership:

NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership Interests Corporate General Partner 100 Interests Less than 1%
and its officers and directly
directors as a group
- ---------------
<FN>
No officer or director of the Corporate General Partner of the Partnership possesses a right to acquire beneficial
ownership of Interests of the Partnership.

(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date result
in a change in control of the Partnership.

</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There were no significant transactions or business relationships with the
Corporate General Partner, affiliates or their management other than those
described in Items 10 and 11 above (see Note 3(c) to the accompanying Notes to
Consolidated Financial Statements).

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

(1) Financial Statements (See Index to Financial Statements
filed with this annual report).

(2) Exhibits.

3-A. The Prospectus of the Partnership dated June 21,
1982, as supplemented on August 24, 1982, October 21, 1982, November 1, 1982,
December 22, 1982 and February 18, 1983, as filed with the Commission pursuant
to Rules 424(b) and 424(c), is hereby incorporated herein by reference.
Copies of pages 6-14, 137-139, A-6 to A-11 and A-13 to A-19 are incorporated
by reference to the Partnership's Registration Statement on Form S-11 (File
No. 2-76443) dated June 21, 1982.

3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, is incorporated by
reference to the Partnership's Registration Statement on Form S-11 (File No.
2-76443) dated June 21, 1982.

4-A. Mortgage loan agreement between Wright-Carlyle
Seattle and The Prudential Insurance Company dated October 16, 1985, relating
to the First Interstate Center is hereby incorporated by reference to the
Partnership's report for December 31, 1992 on Form 10-K (File No. 0-12433)
dated March 19, 1993.

4-B. Mortgage loan agreement between Carlyle/National
City Associates and New York Life Insurance Company dated November 15, 1983,
relating to the National City Center Office Building is hereby incorporated by
reference to the Partnership's report for December 31, 1992 on Form 10-K (File
No. 0-12433) dated March 19, 1993.

10-A.Acquisition documents including the venture
agreement relating to the purchase by the Partnership of an interest in the
First Interstate Center in Seattle, Washington are hereby incorporated by
reference to the Partnership's prospectus on Form S-11 (File No. 2-76443),
dated June 21, 1982.

10-B.Acquisition documents including the venture
agreement relating to the purchase by the Partnership of an interest in the
National City Center Office Building in Cleveland, Ohio are hereby
incorporated by reference to the Partnership's Report on Form 8-K, dated
August 8, 1983.

10-C.Bargain and Sale Deed relating to the Partnership's
disposition of the Timberline Apartments in Denver, Colorado, dated July 25,
1990 is hereby incorporated by reference to the Partnership's report for
December 31, 1992 on Form 10-K (File No. 0-12433) dated March 19, 1993.

10-D.Sale documents and exhibits thereto relating to the
Partnership's sale of the Meadows Southwest Apartments in Houston, Texas are
hereby incorporated herein by reference to the Partnership's Report on Form 8-
K, dated January 11, 1991 by reference.

10-E.Non-Merger Quit Claim Deeds relating to the
Partnership's disposition of the Summerfield/Oakridge Apartments in Aurora,
Colorado, dated January 7, 1991 are hereby incorporated by reference to the
Partnership's report for December 31, 1992 on Form 10-K (File No. 0-12433)
dated March 19, 1993.

21. List of Subsidiaries.

24. Powers of Attorney.

___________

Although certain additional long-term debt instruments of
the Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such agreements to
the SEC upon request.

(b) No report on Form 8-K was filed since the beginning of the last quarter
of the period covered by this report.

No annual report for the year 1993 or proxy material has been sent to the
Partners of the Partnership. An annual report will be sent to the Partners
subsequent to this filing.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII

By: JMB Realty Corporation
Corporate General Partner

GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date:March 25, 1994

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

By: JMB Realty Corporation
Corporate General Partner

JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and Director
Date:March 25, 1994

NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date:March 25, 1994

H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date:March 25, 1994

JEFFREY R. ROSENTHAL*
By: Jeffrey R. Rosenthal, Chief Financial Officer
Principal Financial Officer
Date:March 25, 1994

GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date:March 25, 1994

A. LEE SACKS*
By: A. Lee Sacks, Director
Date:March 25, 1994

STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date:March 25, 1994

*By:GAILEN J. HULL, Pursuant to a Power of Attorney

GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date:March 25, 1994

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XII

EXHIBIT INDEX

DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------ ----

3-A. Pages 6-14, 137-139, A-6 to A-11 and
A-13 to A-19 of the Prospectus of the
Partnership dated June 21, 1982, as
supplemented on August 24, 1982,
October 21, 1982, November 1, 1982,
December 22,1982 and February 28, 1983Yes

3-B. Amended and Restated Agreement of
Limited Partnership set forth as
Exhibit A to the Prospectus Yes

4-A. Mortgage loan agreement related
to the First Interstate Center Yes

4-B. Mortgage loan agreement related
to the National City Center Office
Building Yes

10-A. Acquisition documents related to
First Interstate Center Yes

10-B. Acquisition documents related to
National City Center Office Building Yes

10-C. Bargain and Sale Deed related to
Timberline Apartments Yes

10-D. Sale documents related to
the Meadows Southwest Apartments Yes

10-E. Non-Merger Quit Claim Deeds related to
the Summerfield/Oakridge Apartments Yes

21. List of Subsidiaries No

24. Powers of Attorney No

EXHIBIT 21

LIST OF SUBSIDIARIES

The Partnership is a partner of Carlyle Seattle Associates, a venture
which is a partner in Wright-Carlyle Seattle a general partnership which holds
title to the First Interstate Center in Seattle, Washington. The developer of
the property is a partner in the joint venture. The Partnership is a partner
of Carrara Place Limited, a limited partnership which holds title to the
Carrara Place Office Building in Englewood, Colorado. The developer of the
property is a partner in the joint venture. The Partnership is a partner of
CP Permian Partners, a general partnership which holds title to the Permian
Mall in Odessa, Texas. The Corporate General Partner is a partner in the
joint venture. The Partnership is a partner of Carlyle/National City
Associates, a general partnership which holds title to the National City
Center Office Building in Cleveland, Ohio. Another partnership sponsored by
the Corporate General Partner is a partner in the joint venture.

POWER OF ATTORNEY
-----------------

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and
directors of JMB Realty Corporation, the managing general partner of
Carlyle Real Estate Ltd.- XII, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name and
on behalf of the undersigned officer or directors a Report on Form 10-K of
said partnership for the fiscal year ended December 31, 1993, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
the 26th day of January, 1994.

STUART C. NATHAN
_________________________ Executive Vice President and Director of
Stuart C. Nathan General Partner

A. LEE SACKS
_________________________ Director of General Partner
A. Lee Sacks

The undersigned hereby acknowledge and accept such power of authority to
sign, in the name on behalf of the above named officer and directors, a Report
on Form 10-K of said partnership for the fiscal year ended December 31, 1993,
and any and all amendments thereto, the 26th day of January, 1994.

GARY NICKELE
______________________
Gary Nickele

GAILEN J. HULL
______________________
Gailen J. Hull

DENNIS M. QUINN
___________________________
Dennis M. Quinn

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the managing general partner of
Carlyle Real Estate Ltd.- XII, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys
and agents of the undersigned with full power of authority to sign in the
name and on behalf of the undersigned officer or directors a Report on Form
10-K of said partnership for the fiscal year ended December 31, 1993, and any
and all amendments thereto, hereby ratifying and confirming all that said
attorneys and agents and any of them may do by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 23rd day of March, 1994.

JUDD D. MALKIN
- ------------------- Chairman and Director
Judd D. Malkin

NEIL G. BLUHM
- ------------------- President and Director
Neil G. Bluhm

H. RIGEL BARBER
- ------------------- Chief Executive Officer
H. Rigel Barber

JEFFREY R. ROSENTHAL
- ----------------------- Chief Financial Officer
Jeffrey R. Rosenthal

The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and directors,
a Report on Form 10-K of said partnership for the fiscal year ended
December 31, 1993, and any and all amendments thereto, the 23rd day of
March, 1994.

GARY NICKELE
------------
Gary Nickele

GAILEN J. HULL
---------------
Gailen J. Hull

DENNIS M. QUINN
---------------
Dennis M. Quinn