CARLYLE REAL ESTATE LTD PARTNERSHIP XIII, 10-Q, 1994-11-14

CARLYLE REAL ESTATE LTD PARTNERSHIP XIII
10-Q, 1994-11-14
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended September 30, 1994 Commission file#0-12791

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

Illinois 36-3207212
(State of organization) (IRS Employer Identification No.)

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

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

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

PART I FINANCIAL INFORMATION

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

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . . 30

PART II OTHER INFORMATION

Item 3. Defaults Upon Senior Securities . . . . . . 39

Item 5. Other Information . . . . . . . . . . . . . 40

Item 6. Exhibits and Reports on Form 8-K. . . . . . 42
<TABLE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 1994 AND DECEMBER 31, 1993

(UNAUDITED)

ASSETS
------

<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . $ 4,314,569 5,362,152
Short-term investments (note 1). . . . . . . . . . . . . . . . . 25,990,128 23,095,901
Restricted funds . . . . . . . . . . . . . . . . . . . . . . . . 538,800 538,800
Rents and other receivables. . . . . . . . . . . . . . . . . . . 1,013,832 3,711,359
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . 475,272 397,109
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . 5,323,554 3,918,882
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . 37,656,155 37,024,203
------------ ------------
Investment properties, at cost:
Land and leasehold interests . . . . . . . . . . . . . . . . . 20,935,808 27,002,062
Buildings and improvements . . . . . . . . . . . . . . . . . . 408,436,794 447,201,128
------------ ------------
429,372,602 474,203,190
Less accumulated depreciation. . . . . . . . . . . . . . . . . . 146,127,699 149,914,951
------------ ------------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . . . 283,244,903 324,288,239
------------ ------------
Investment in unconsolidated venture,
at equity (notes 1, 2 and 6) . . . . . . . . . . . . . . . . . . 2,453,210 2,446,681
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . 5,229,485 5,983,034
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . 475,162 487,289
Venture partners' deficits in ventures . . . . . . . . . . . . . . 6,058,801 4,557,854
------------ ------------
$335,117,716 374,787,300
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(a limited partnership)
and Consolidated Ventures
Consolidated Balance Sheets (Continued)

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------

SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
Current liabilities:
Current portion of long-term debt (note 3) . . . . . . . . . . . $ 52,119,139 94,086,630
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 2,907,842 2,397,159
Amounts due to affiliates (note 5) . . . . . . . . . . . . . . . 14,060,971 14,894,459
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . 474,292 770,237
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . 9,012,969 8,591,163
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . 2,269,986 2,064,479
-------------------------
Total current liabilities. . . . . . . . . . . . . . . . . 80,845,199 122,804,127
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . 583,932 880,056
Investment in unconsolidated venture, at equity
(notes 1, 2 and 6) . . . . . . . . . . . . . . . . . . . . . . . 76,888,626 72,546,193
Long-term debt, less current portion (note 3). . . . . . . . . . . 358,913,218 360,881,897
------------ ------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . 517,230,975 557,112,273
Venture partners' subordinated equity in ventures . . . . . . . . 328,929 330,185
Partners' capital accounts (deficits) (note 1):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . (20,236,647) (19,664,338)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (1,039,022) (1,039,022)
------------ ------------
(21,274,669) (20,702,360)
------------ ------------
Limited partners:
Capital contributions, net of offering costs . . . . . . . . . 326,224,167 326,224,167
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . (457,416,797)(458,202,076)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (29,974,889) (29,974,889)
------------ ------------
(161,167,519)(161,952,798)
------------ ------------
Total partners' deficits . . . . . . . . . . . . . . . . . (182,442,188)(182,655,158)
------------ ------------
Commitments and contingencies (notes 2, 3 and 7)
$335,117,716 374,787,300
============ ============

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

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------------------
1994 1993 1994 1993
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . $14,671,145 22,446,906 48,605,544 67,427,966
Interest income. . . . . . . . . . . . 230,490 112,069 626,048 334,664
----------- ---------- ---------- -----------
14,901,635 22,558,975 49,231,592 67,762,630
----------- ---------- ---------- -----------
Expenses:
Mortgage and other interest. . . . . . 10,035,107 13,982,900 29,833,796 41,959,064
Depreciation . . . . . . . . . . . . . 3,399,098 4,712,808 10,355,491 14,262,970
Property operating expenses. . . . . . 10,043,718 10,302,759 28,627,018 32,652,626
Professional services. . . . . . . . . 56,001 68,592 444,859 590,580
Amortization of deferred expenses. . . 310,297 340,678 1,158,809 1,001,390
General and administrative . . . . . . 120,835 85,233 410,617 346,895
----------- ---------- ---------- -----------
23,965,056 29,492,970 70,830,590 90,813,525
----------- ---------- ---------- -----------
Operating loss . . . . . . . . . (9,063,421) (6,933,955) (21,598,998)(23,050,895)
Partnership's share of gain (loss) from
operations of unconsolidated
ventures (notes 1, 2 and 6). . . . . . (1,537,644) (1,889,920) (4,345,904) (5,809,670)
Venture partners' share of (earnings)
loss from ventures' operations
(note 2) . . . . . . . . . . . . . . . 2,704,581 1,196,786 5,094,872 1,996,041
----------- ---------- ---------- -----------
Net operating loss . . . . . . . (7,896,484) (7,627,129) (20,850,030)(26,864,524)
Gain on sale or disposition of
investment properties, net of
venture partners' share of
$2,887,659 in 1994 (notes 3(e),
3(f), 7(b), 7(c) and 7(d)). . . . . . -- -- 18,364,792 4,312,031
Gain on sale of interest in
unconsolidated venture (note 2(d)) . . 1,702,082 7,898,727 1,702,082 7,898,727
----------- ---------- ---------- -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------------------
1994 1993 1994 1993
----------- ---------- ----------- -----------
Net earnings (loss) before extra-
ordinary item. . . . . . . . . (6,194,402) 271,598 (783,156)(14,653,766)
Extraordinary items (notes 3(d)
and 3(k)). . . . . . . . . . . . . . . -- (141,776) 996,126 (141,776)
----------- ---------- ---------- -----------
Net earnings (loss). . . . . . . $(6,194,402) 129,822 212,970 (14,795,542)
=========== ========== ========== ===========

Net earnings (loss) per
limited partnership interest
(note 1):
Net operating loss . . . . . . $ (20.70) (20.00) (54.67) (70.43)
Gain on sale or disposition
of investment properties . . -- -- 49.66 11.66
Gain on sale of interest
in unconsolidated venture. . 4.60 21.35 4.60 21.35
Extraordinary gain on early
extinguishment of debt
(notes 3(d) and 3(k)). . . . -- .39 2.69 .38
----------- ---------- ---------- -----------
Net earnings (loss). . . . $ (16.10) 1.74 2.28 (37.04)
=========== ========== ========== ===========
Cash distributions per
limited partnership
interest . . . . . . . . . . . $ -- -- -- --
=========== ========== ========== ===========

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)

<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . $ 212,970 (14,795,542)
Items not requiring (providing) cash or
cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 10,355,491 14,262,970
Amortization of deferred expenses. . . . . . . . . . . . . . . 1,158,809 1,001,390
Amortization of discount on long-term debt . . . . . . . . . . 85,983 76,306
Partnership's share of loss from operations
of unconsolidated ventures . . . . . . . . . . . . . . . . . 4,345,904 5,809,670
Venture partners' share of loss from ventures'
operations and gain on disposition of
investment property. . . . . . . . . . . . . . . . . . . . . (5,094,872) (1,996,041)
Long-term debt - deferred accrued interest . . . . . . . . . . 8,079,317 11,954,600
Gain on sale or disposition of investment properties . . . . . (18,364,792) (4,458,784)
Gain on sale of interest in unconsolidated venture . . . . . . (1,702,082) (7,898,727)
Extraordinary items. . . . . . . . . . . . . . . . . . . . . . (996,126) 141,776
Changes in:
Restricted funds . . . . . . . . . . . . . . . . . . . . . . . -- (55,881)
Rents and other receivables. . . . . . . . . . . . . . . . . . 2,697,527 (316,984)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . (78,163) (296,068)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . (1,404,672) (616,652)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 12,127 542,113
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 510,683 897,504
Amounts due to affiliates. . . . . . . . . . . . . . . . . . . (295,945) 300,006
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . 421,806 (346,130)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . 205,507 1,671,484
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . (833,488) 532,836
Deferred management fees and lease commissions . . . . . . . . -- 612,744
Tenant security deposits . . . . . . . . . . . . . . . . . . . (296,124) (36,901)
------------ -----------
Net cash provided by (used in) operating
activities . . . . . . . . . . . . . . . . . . . . . . . (980,140) 6,985,689
------------ -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)

1994 1993
------------ -----------

Cash flows from investing activities:
Net purchases of short-term investments. . . . . . . . . . . . . (2,894,227) (280,855)
Additions to investment properties . . . . . . . . . . . . . . . (1,192,364) (1,934,061)
Cash sales proceeds from sale of investment
properties, net of selling expenses
(notes 7(b), 7(c) and 7(d)). . . . . . . . . . . . . . . . . . 11,781,988 1,220,737
Cash expended in disposition of investment
property . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,014) --
Partnership's contributions to unconsolidated
ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,000) (983,541)
Partnership's distribution from unconsolidated
ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,702,082 --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (405,256) (1,545,423)
------------ -----------
Net cash provided by (used in)
investing activities . . . . . . . . . . . . . . . . . . 8,981,209 (3,523,143)
------------ -----------
Cash flows from financing activities:
Proceeds from refinancing of long-term debt
(note 3(k)). . . . . . . . . . . . . . . . . . . . . . . . . . -- 4,253
Principal payments on long-term debt . . . . . . . . . . . . . . (9,753,662) (521,758)
Ventures partners' contribution to venture . . . . . . . . . . . 705,010 --
------------ -----------
Net cash used in financing activities. . . . . . . . . . . (9,048,652) (517,505)
------------ -----------
Net increase in cash and cash equivalents. . . . . . . . . $ (1,047,583) 2,945,041
============ ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)

1994 1993
------------ -----------
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . $ 29,411,990 27,223,613
============ ===========
Non-cash investing and financing activities:
Total sales price of investment property,
net of selling expenses. . . . . . . . . . . . . . . . . . . $ 11,781,988 18,479,297
Balance due on long-term debt cancelled
(notes 3(b), 3(e), 3(f) and 3(g)). . . . . . . . . . . . . . 41,351,685 (17,258,560)
Reduction in land. . . . . . . . . . . . . . . . . . . . . . . (6,066,254) --
Reduction in buildings and improvements. . . . . . . . . . . . (39,956,697) --
Reduction in accumulated depreciation. . . . . . . . . . . . . 14,142,743 --
Cash expended in disposition of investment
property . . . . . . . . . . . . . . . . . . . . . . . . . . (1,014) --
Venture partners share of gain on disposition
of investment property . . . . . . . . . . . . . . . . . . . (2,887,659) --
------------ -----------
Gain on sale of investment property and
extinguishment of debt . . . . . . . . . . . . . . . . . $ 18,364,792 1,220,737
============ ===========
Principal balance due on mortgages payable . . . . . . . . . . . $ 9,696,126 --
Payment on long-term debt from sale of investment properties . . (8,700,000) --
------------ -----------
Extraordinary items - non-cash gain recognized
on forgiveness of indebtedness . . . . . . . . . . . . . $ 996,126 --
============ ===========
Proceeds from refinancing of long-term debt
(note 3(k)). . . . . . . . . . . . . . . . . . . . . . . . . . $ -- 7,455,000
Payoff of long-term debt . . . . . . . . . . . . . . . . . . . . -- (7,160,425)
Prepayment penalty . . . . . . . . . . . . . . . . . . . . . . . -- (141,776)
Refinancing costs. . . . . . . . . . . . . . . . . . . . . . . . -- (148,546)
------------ -----------
Proceeds from refinancing of
long-term debt . . . . . . . . . . . . . . . . . . . . . $ -- $ 4,253
============ ===========

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)

Readers of this quarterly report should refer to the
Partnership's audited financial statements for the fiscal year
ended December 31, 1993, which are included in the
Partnership's 1993 Annual Report, on Form 10-K (File No. 0-
12791) filed on March 28, 1994 (the "Annual Report"), as
certain footnote disclosures which would substantially
duplicate those contained in such audited financial statements
have been omitted from this report.

(1) BASIS OF ACCOUNTING

The accompanying consolidated financial statements
include the accounts of the Partnership and its consolidated
ventures (note 2) - Copley Place Associates ("Copley Place"),
Gables Corporate Plaza Associates ("Gables"), Carrollwood
Station Associates, Ltd. ("Carrollwood"), Jacksonville Cove I
Associates, Ltd. ("Glades") and Sherry Lane Associates
("Sherry Lane"). 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 interests in Orchard Associates (note 2(d))
and Carlyle-XIII Associates, L.P., which has an interest in
JMB/NYC Office Building Associates L.P. ("JMB/NYC") (note
2(b)).

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 effect of these items is
summarized as follows for the nine months ended September 30:

1994 1993
----------------------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------
Net earnings
(loss). . . . $212,970 535,616 (14,795,542)(11,634,588)
Net earnings
(loss) per
limited
partnership
interest. . . $ 2.28 7.73 (37.04) (29.36)
======== ===============================

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

Statement of Financial Accounting Standards No. 95
requires the Partnership to present a statement which
classifies receipts and payments according to whether they
stem from operating, investing or financing activities. The
required information has been segregated and accumulated

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

according to the classifications specified in the pronounce-
ment. 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 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 (approximately
$1,686,000 and none at September 30, 1994 and December 31,
1993, respectively) as cash equivalents with any remaining
amounts (generally with original maturities of one year or
less) reflected as short-term investments being held to
maturity.

Certain amounts in the 1993 consolidated financial
statements have been reclassified to conform with the 1994
presentation.

As more fully discussed in note 2(b), due to the
potential sale of the 2 Broadway building at a sales price
significantly below its net carrying value and due to
discussions with the O & Y affiliates regarding the
reallocation of the unpaid first mortgage indebtedness
currently allocated to 2 Broadway, the 2 Broadway venture has
made a provision for value impairment on such investment
property of $192,627,560 in 1993. Such provision for value
impairment was allocated $136,534,366 and $56,093,194 to the O
& Y affiliates and to JMB/NYC, respectively. The provision
for value impairment has been allocated to the partners to
reflect their respective ownership percentages before the
effect of the non-recourse promissory notes, including the
related accrued interest.

(2) VENTURE AGREEMENTS

(a) General

The Partnership at September 30, 1994 is a party to seven
operating joint venture agreements. Pursuant to such
agreements, the Partnership made initial capital contributions
of approximately $152,831,130 (before legal and other
acquisition costs and its share of operating deficits as
discussed below). In general, the joint venture partners, who
are either the sellers (or their affiliates) of the property
investments acquired, or parties which have contributed an
interest in the property developed, or were subsequently
admitted to the ventures, made no cash contributions to the
ventures, but their retention of an interest in the property,
through the joint venture, was taken into account in
determining the purchase price of the Partnership's interest,
which was 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,
two apartment complexes, four office buildings and a multi-use
complex. The joint venture partners (who in many instances
were primarily responsible for constructing the properties)
contributed any excess of cost over the aggregate amount
available from the Partnership contributions and financing
and, to the extent such funds exceeded the aggregate costs,
were to retain such excesses. Certain of the venture
properties have been financed under various long-term debt
arrangements as described in note 3.

The Partnership generally has a cumulative preferred
interest in net cash receipts (as defined) from the
properties. 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; net cash
receipts are generally shared in a ratio

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

relating to the various ownership interests of the Partnership
and its venture partners. During the nine months ended
September 30, 1994, three of the ventures' properties produced
net cash receipts. In addition, 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. In general,
operating profits and losses are shared in the same ratio as
net cash receipts; however, if there are no net cash receipts,
substantially all profits or losses are allocated to the
partners in accordance with their respective economic
interest.

Physical management of the properties generally was
performed by affiliates of the venture partners during the
development period and initial rent-up period. The managers
were responsible for cash flow deficits (after debt service
requirements). Compensation to the managers during such
periods for management and leasing was limited to specified
payments made by the ventures, plus any excess net cash
receipts generated by the properties during the periods.
Thereafter, the management agreements generally provide for an
extended term during which the management fee is calculated as
a percentage of certain types of cash income from the
property. The management terms are in the extended term for
all of the ventures.

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

The terms of the significant venture agreements are
summarized as follows:

(b) JMB/NYC

The Partnership owns indirectly through Carlyle-XIII
Associates, L.P. and JMB/NYC an interest in (i) the 237 Park
Avenue Associates venture which owns an existing 23-story
office building, (ii) the 1290 Associates venture which owns
an existing 44-story office building, and (iii) the 2 Broadway
Associates and 2 Broadway Land Co. ventures which own an
existing 32-story office building (together "Three Joint
Ventures" and individually a "Joint Venture"). All of the
buildings are located in New York, New York. In addition to
JMB/NYC, the partners of the Three Joint Ventures include O&Y
Equity Company, L.P. and O&Y NY Building Corp. (hereinafter
sometimes referred to as the "Olympia & York affiliates"),
both of which are affiliates of Olympia and York Developments,
Ltd. (hereinafter sometimes referred to as "O&Y").

JMB/NYC is a joint venture among Carlyle-XIII Associates,
L.P. (of which the Partnership holds a 99% limited partnership
interest), Carlyle-XIV Associates, L.P. and Property Partners,
L.P. as limited partners and Carlyle Managers, Inc. as the
sole general partner. Effective March 25, 1993, the
Partnership became a 20% shareholder of Carlyle Managers, Inc.

Related to this investment, the Partnership has an obligation
to fund, on demand, $600,000 of additional paid-in capital to
Carlyle Managers, Inc. (reflected in amounts due to affiliates
in the accompanying financial statements). The terms of the
JMB/NYC venture agreement generally provide that JMB/NYC's
share of the Three Joint Ventures' annual cash flow, sale or
refinancing proceeds, operating and capital costs (to the
extent not covered by cash flow from a property) and profit
and loss will be distributed to, contributed by or allocated
to the Partnership in proportion to its (indirect) share of
capital contributions to JMB/NYC. In

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

March 1993, JMB/NYC, originally a general partnership, was
converted to a limited partnership, and the Partnership's
interest in JMB/NYC, which previously had been held directly,
was contributed to Carlyle-XIII Associates, L.P. As a result
of these transactions, the Partnership currently holds,
indirectly as a limited partner of Carlyle-XIII Associates,
L.P., an approximate 25% limited partnership interest in
JMB/NYC. The sole general partner of Carlyle-XIII Associates,
L.P. is Carlyle Investors, Inc., of which the Partnership
became a 20% shareholder effective March 25, 1993. Related to
this investment, the Partnership has an obligation to fund, on
demand, $600,000 of additional paid-in capital (reflected in
amounts due to affiliates in the accompanying financial
statements). The general partner in each of JMB/NYC and
Carlyle-XIII Associates, L.P. is an affiliate of the
Partnership. For financial reporting purposes, the allocation
of profits and losses of JMB/NYC to the Partnership is 25%.

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

JMB/NYC purchased a 46.5% interest in each of the Three
Joint Ventures for approximately $173,600,000, subject to a
long-term first mortgage loan which has been allocated among
the individual Joint Ventures. A portion of the purchase
price is represented by four 12-3/4% promissory notes (the
"Purchase Notes") which have an aggregate outstanding
principal balance of $34,158,225 at June 30, 1994 and December
31, 1993. Such Purchase Notes, which contain cross-default
provisions, and are non-recourse to JMB/NYC, are secured by
JMB/NYC's interests in the Three Joint Ventures, and such
Purchase Note relating to the purchase of the interest in the
ventures owning the 2 Broadway Building is additionally
secured by JMB/NYC's interest in $19,000,000 of distributable
sale proceeds from the other two Joint Ventures. A default
under the Purchase Notes would include, among other things, a
failure by JMB/NYC to repay a Purchase Note upon acceleration
of the maturity, and could cause an immediate acceleration of
the Purchase Notes for the other ventures. Beginning in 1992,
the Purchase Notes provide for monthly interest only payments
on the principal and accrued interest based upon the level of
distributions payable to JMB/NYC discussed below. If there
are no distributions payable to JMB/NYC or if the
distributions are insufficient to cover monthly interest on
the Purchase Notes, then the shortfall interest (as defined)
accrues and compounds monthly. Interest accruals total
$85,987,889 at June 30, 1994. During 1993 and for the six
months ended June 30, 1994, no payments were made on any of
the Purchase Notes. All of the principal and accrued interest
on the Purchase Notes is due in 1999 or, if earlier, on the
sale or refinancing of the related property. As discussed
more fully below, the Olympia & York affiliates have informed
JMB/NYC that they have received a sales contract for the sale
of the 2 Broadway Building at a price which will not provide
any proceeds to JMB/NYC to repay the related Purchase Notes.
Consequently, if the proposed sale is finalized, $19,000,000
of the 2 Broadway Purchase notes will be re-allocated and will
be payable out of JMB/NYC's share of distributable sale
proceeds from the other two Joint Ventures.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Prior to 1992, operating profits (excluding depreciation
and amortization) were allocated 30% to JMB/NYC and 70% to the
Olympia & York affiliates, and operating losses (excluding
depreciation and amortization) were allocated 96% to JMB/NYC
and 4% to the Olympia & York affiliates. Depreciation and
amortization were allocated 46.5% to JMB/NYC and 53.5% to the
Olympia & York affiliates. Subsequent to 1991, pursuant to
the agreement between JMB/NYC and the Olympia & York
affiliates, for the period January 1, 1992 to June 30, 1993,
as discussed below, gross income was allocable to the Olympia
& York affiliates to the extent of the distributions of excess
monthly cash flow received for the period with the balance of
operating profits or losses allocable 46.5% to JMB/NYC and
53.5% to the Olympia & York affiliates. Beginning July 1,
1993, operating profits or losses, in general, are allocated
46.5% to JMB/NYC and 53.5% to the Olympia & York affiliates.

The Three Joint Ventures agreements further provide that,
in general, upon sale or refinancing of the properties, net
sale or refinancing proceeds will be distributable 46.5% to
JMB/NYC and 53.5% to the Olympia & York affiliates subject to,
as described above, repayment by JMB/NYC of its Purchase
Notes.

Under the terms of the Three Joint Ventures agreements,
JMB/NYC was entitled to a preferred return of annual cash
flow, with any additional cash flow distributable 99% to the
Olympia & York affiliates and 1% to JMB/NYC, through 1991.
The Olympia & York affiliates were obligated to make capital
contributions to the Three Joint Ventures to pay any operating
deficits (as defined) and to pay JMB/NYC's preferred return
through December 31, 1991. JMB/NYC did not receive its
preferred return for the fourth quarter 1991. Subsequent to
1991, capital contributions to pay for property operating
deficits and other requirements that may be called for under
the Three Joint Ventures agreements are required to be shared
46.5% by JMB/NYC and 53.5% by the Olympia & York affiliates.
Pursuant to the Three Joint Ventures agreements between the
Olympia & York affiliates and JMB/NYC, the effective rate of
interest with reference to the first mortgage loan for
calculating JMB/NYC's share of operating cash flow or deficits
through 1991 was as though the rate were fixed at 12-3/4% per
annum (versus the short-term U.S. Treasury obligation rate
plus 1-3/4% per annum (with a minimum 7%) payable on the first
mortgage loan). JMB/NYC believes that, commencing in 1992,
the Three Joint Ventures' agreements require an effective rate
of interest with reference to the first mortgage loan, based
upon each Joint Venture's allocable share of the loan, to be
1-3/4% over the short-term U.S. Treasury obligation rate plus
any excess monthly operating cash flow after capital costs of
each of the Three Joint Ventures, such sum not to be less than
a 7% nor exceed a 12-3/4% per annum interest rate, rather than
the 12-3/4% per annum fixed rate that applied prior to 1992.
The Olympia & York affiliates disputed this calculation of
interest expense and contended that the 12-3/4% per annum
fixed rate applied after 1991.

During the quarter ended March 31, 1993, an agreement was
reached between JMB/NYC and the Olympia & York affiliates
which rescinded default notices previously received by JMB/NYC
alleging defaults for failing to make capital contributions
and eliminated the alleged operating deficit funding
obligation of JMB/NYC for the period January 1, 1992 through
June 30, 1993. Pursuant to this agreement, during this
period, JMB/NYC recorded interest expense at 1-3/4% over the
short-term U.S. Treasury obligation rate (subject to a minimum
rate of 7% per annum), which is the interest rate on the
underlying first mortgage loan. Under the terms of this
agreement, during this period, the amount of capital
contributions that the

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Olympia & York affiliates and JMB/NYC would have been required
to make to the Three Joint Ventures if the first mortgage loan
bore interest at a rate of 12.75% per annum (the Olympia &
York affiliates' interpretation), became a priority
distribution level to the Olympia & York affiliates from the
Three Joint Ventures' annual cash flow or net sale or
refinancing proceeds. The agreement also entitles the Olympia
& York affiliates to a 7% per annum return on such unpaid
priority distribution level. It was also agreed that during
this period the excess available operating cash flow after the
payment of the priority distribution level discussed above
from any of the Three Joint Ventures will be advanced in the
form of loans to pay operating deficits and/or unpaid priority
distribution level amounts of any of the Three Joint Ventures.

Such loans will bear a market rate of interest, have a final
maturity of ten years from the date when made and are
repayable only out of first available annual cash flow or net
sale or refinancing proceeds. The agreement also provides
that except as specifically agreed otherwise, the parties each
reserves all rights and claims with respect to each of the
Three Joint Ventures and each of the partners thereof,
including, without limitation, the interpretation of or rights
under each of the joint venture partnership agreements for the
Three Joint Ventures. As a result of the above noted
agreement with the Olympia & York affiliates, the cumulative
priority distribution level payable to the Olympia & York
affiliates at June 30, 1994 is $48,522,601. The term of the
agreement expired on June 30, 1993. Therefore, effective July
1, 1993, JMB/NYC is recording interest expense at 1-3/4% over
the short-term U.S. Treasury obligation rate plus any excess
operating cash flow after capital costs of the Three Joint
Ventures, such sum not to be less than 7% nor exceed a 12-3/4%
per annum interest rate. The Olympia & York affiliates
continue to dispute this calculation for the period commencing
July 1, 1993 and contend that the 12-3/4% per annum fixed rate
applies. Based upon the Olympia & York affiliates'
interpretation, interest expense for the Three Joint Ventures
for the six months ended June 30, 1994 was $58,720,786. Based
upon the amount of interest determined by JMB/NYC for the six
months ended June 30, 1994, interest expense for the Three
Joint Ventures was $41,873,661. The effect of recording the
interest expense calculated by JMB/NYC is to reduce the losses
of the Three Joint Ventures by $16,847,125 (of which the
Partnership's share is $1,958,478) for the six months ended
June 30, 1994 and to correspondingly reduce what would
otherwise be JMB/NYC's funding obligation with respect to the
Three Joint Ventures.

O & Y and certain of its affiliates have been involved in
bankruptcy proceedings in the United States and Canada and
similar proceedings in England. The Olympia & York
affiliates have not been directly involved in these
proceedings. During the quarter ended March 31, 1993, O & Y
emerged from bankruptcy protection in the Canadian
proceedings. In addition, a reorganization of the management
of the company's United States operations has been completed,
and affiliates of O & Y are in the process of renegotiating or
restructuring a number of loans affecting various properties
in the United States in which they have an interest. The
Partnership is unable to assess and cannot presently determine
to what extent these events may adversely affect the
willingness and ability of the Olympia & York affiliates
either to meet their own obligations to the Three Joint
Ventures and JMB/NYC or to negotiate a restructuring of the
joint venture agreements, or otherwise reach an understanding
with JMB/NYC regarding any future funding obligation of
JMB/NYC.

During the fourth quarter of 1992, the Joint Ventures
received a notice from the first mortgage lender alleging a
default for failure to meet certain reporting requirements of
the Olympia & York affiliates contained in the first mortgage
loan documents. No monetary default has

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

been alleged. The Olympia & York affiliates have responded to
the lender that the Joint Ventures are not in default.
JMB/NYC has been unable to determine if the Three Joint
Ventures are in default. There have not been any further
notices from the first mortgage lender. However, on June 30,
1994 the Olympia & York affiliates, on behalf of the Three
Joint Ventures, signed a non-binding letter of intent with
representatives of the lender (consisting of a steering
committee of holders of notes evidencing the mortgage loan),
to restructure certain terms of the existing mortgage loan.
The proposed restructuring would change the interest rate on
the notes from a floating rate equal to 1.75% over the rate on
three months U.S. treasury bills to a fixed rate of 9% per
annum with periodic payments of interest only at a pay rate of
7%. Unpaid interest would accrue at 9% per annum and unless
previously paid out of excess property cash flow will be
payable at maturity. There is no assurance that a
restructuring of the loan will be obtained under these or any
other terms. In conjunction with negotiations held prior to
June 30, 1994, the Olympia & York affiliates reached an
agreement with the first mortgage lender whereby effective
January 1, 1993, the Olympia & York affiliates are limited to
taking distributions of $250,000 on a monthly basis from the
Three Joint Ventures reserving the remaining excess cash flow
in a separate interest-bearing account to be used exclusively
to meet the obligations of the Three Joint Ventures as
approved by the lender. Interest on the first mortgage loan
is currently calculated based upon a variable rate related to
the short-term U.S. Treasury obligation rate, subject to a
minimum rate on the loan of 7% per annum. An increase in the
short-term U.S. Treasury obligation rate could result in
increased interest payable on the first mortgage loan by the
Three Joint Ventures.

During 1992, the Olympia & York affiliates and certain
other affiliates of O & Y reached an agreement with the City
of New York to defer the payment of real estate taxes on
properties in which O&Y affiliates have an ownership interest,
including the 237 Park Avenue, 1290 Avenue of the Americas and
2 Broadway buildings, whereby, payment of the July real estate
taxes are made in six equal monthly installments from July
through December and payment of the December real estate taxes
are made in six equal installments from January through June.
This agreement has been extended through December 1994. As of
the date of this report, 237 Park Avenue and 1290 Avenue of
the Americas are current in their payments to the City of New
York. However, the August 1994 real estate tax installment
payment related to the 2 Broadway building has not been paid
and there is uncertainty regarding the remittance of future
installment payments related to the building.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

have sufficient funds to repay, any of the Purchase Notes and
accrued interest thereon. This could result in JMB/NYC no
longer having an interest in any of the related ventures,
which would result in substantial net gain for financial
reporting and Federal income tax purposes to JMB/NYC (and
through JMB/NYC and the Partnership, to the Limited Partners)
with no distributable proceeds. In such event, the JMB/NYC
would then proceed to terminate its affairs.

If JMB/NYC is successful in its negotiations to
restructure the joint venture agreements and retains an
interest in one or more of these investment properties, there
would nevertheless need to be a significant improvement in
current market and property operating conditions resulting in
a significant increase in value of the 237 Park and 1290
Avenue of the Americas properties before JMB/NYC would receive
any share of future net sale or refinancing proceeds. The 2
Broadway building is in need of a major renovation. The Joint
Ventures that own the 2 Broadway building and land have no
plans for a renovation of the property because of a potential
sale of the property discussed below and because the effective
rents that could be obtained under the current office market
conditions may not be sufficient to justify the costs of the
renovation.

The O & Y affiliates have informed JMB/NYC that they have
received a contract for the sale of 2 Broadway for a net
purchase price of $15,000,000. The first mortgage lender has
preliminarily agreed in the loan restructuring proposal
discussed above to the sale of the building according to the
terms of the 2 Broadway sales contract. A sale pursuant to
the contract received by the O & Y affiliates would be subject
to, among other things, the approval of the first mortgage
lender as well as JMB/NYC. While there can be no assurance
that a sale would occur pursuant to such contract or any other
contract, if this contract were to be accepted by or consented
to by all required parties and the sale completed pursuant
thereto, and if discussions with the O & Y affiliates relating
to the contract were finalized to allocate the unpaid first
mortgage indebtedness currently allocated to 2 Broadway to 237
Park and 1290 Avenue of the Americas after completion of the
sale, then the 2 Broadway Joint Ventures would incur a
significant loss for financial reporting purposes and federal
income tax purposes. Accordingly, a provision for value
impairment was recorded at December 31, 1993 for financial
reporting purposes for $192,627,560, net of the non-recourse
portion of the Purchase Notes including accrued interest
related to the 2 Broadway Joint Venture interests that are
payable by JMB/NYC to the O & Y affiliates in the amount of
$46,646,810. The provision for value impairment has been
allocated $136,534,366 and $56,093,194 to the O & Y affiliates
and to JMB/NYC, respectively. Such provision was allocated to
the partners to reflect their respective ownership percentages
before the effect of the non-recourse promissory notes,
including accrued interest.

In the event of a dissolution and liquidation of a Joint
Venture, the terms of the joint venture partnership agreements
between the Olympia & York affiliates and JMB/NYC for the
Three Joint Ventures provide that if there is a deficit
balance in the tax basis capital account of JMB/NYC, after the
allocation of profits or losses and the distribution of all
liquidation proceeds, then JMB/NYC generally would be required
to contribute cash to the Joint Venture in the amount of its
deficit capital account balance. Taxable gain arising from
the sale or other disposition of a Joint Venture's property
generally would be allocated to the joint venture partner or
partners then having a deficit balance in its or their
respective capital accounts in accordance with the terms of
the joint venture partnership agreement. However, if such
taxable gain is insufficient to eliminate the deficit balance
in its account in connection

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

with a liquidation of a Joint Venture, JMB/NYC would be
required to contribute funds to the Joint Venture (regardless
of whether any proceeds were received by JMB/NYC from the
disposition of the Joint Venture's property) to eliminate any
remaining deficit capital account balance.

The Partnership's liability for such contribution, if
any, would be its share, if any, of the liability of JMB/NYC
and would depend upon, among other things, the amounts of
JMB/NYC's and the Olympia & York affiliates' respective
capital accounts at the time of a sale or other disposition of
Joint Venture property, the amount of JMB/NYC's share of the
taxable gain attributable to such sale or other disposition of
the Joint Venture property and the timing of the dissolution
and liquidation of the Joint Venture. In such event, the
Partnership could be required to sell or dispose of its other
assets in order to satisfy any obligation attributable to it
as a partner of JMB/NYC to make such contribution. Although
the amount of such liability could be material, the Limited
Partners of the Partnership would not be required to make
additional contributions of capital to satisfy such
obligation, if any, of the Partnership. The Partnership's
deficit investment balance in JMB/NYC as reflected in the
balance sheet (aggregating $73,353,098 at June 30, 1994) does
not necessarily represent the amount, if any, the Partnership
would be required to pay to satisfy its deficit restoration
obligation.

Subsequent to the end of the quarter, JMB/NYC entered
into a binding letter agreement with the Olympia & York
affiliates to resolve certain disputes which are more fully
discussed above. In general, the parties have agreed to: (i)
amend the Three Joint Ventures' agreements to eliminate any
funding obligation by JMB/NYC for any purpose in return for
JMB/NYC relinquishing its rights to approve most all property
management, leasing, sale (for any sale subsequent to 1998) or
refinancing decisions and the establishment of a new
preferential distribution level payable to the Olympia & York
affiliates from all future sources of cash, (ii) sell the 2
Broadway Building, and (iii) restructure the first mortgage
loan. The general terms for sale of the 2 Broadway Building
and the restructure of the underlying loan are as outlined
above. In order to facilitate the restructuring of JMB/NYC,
the Olympia & York affiliates, and representatives of the
mortgage lender have agreed to file for each of the three
Joint Ventures a pre-arranged bankruptcy plan for
reorganization under Chapter 11 of the Bankruptcy Code. Such
filing's are expected to occur prior to the end of the year.
The reorganization plans will essentially be the proposed
transactions contained in the letter agreement. During the
bankruptcy proceedings there exists a possibility that one or
more of plans could be challenged by certain creditors
resulting in elimination or changes to all or portions of the
letter agreement transactions by the bankruptcy court.
Consequently, there are no assurances that the transactions
contemplated in the letter agreement will be finalized. If
the transactions contemplated in the letter agreement are
finalized, there would nevertheless need to be a significant
improvement in current market and property operating
conditions resulting in a significant increase in the value of
the 237 Park Avenue and 1290 Avenue of the Americas properties
before JMB/NYC would receive any share of future net proceeds
from operations, sale or refinancing.

The properties are being managed by an affiliate of the
Olympia & York affiliates. An affiliate of the Olympia & York
affiliates performs certain maintenance and repair work and
construction of certain tenant improvements at the investment
properties. Additionally, the Olympia & York affiliates have
lease agreements and occupy approximately 95,000 square feet
of space at 237 Park Avenue at rental rates which approximate
market.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Partnership acquired in 1983, through a joint venture
with the developer, an interest in a portion of Copley Place,
a multi-use complex in Boston, Massachusetts.

Initially, the Partnership purchased an interest in the
complex from the developer for a purchase price of $20,000,000
which was paid by giving a purchase price note to the
developer. Subsequently, the Partnership and the developer
formed Copley Place Associates which purchased the balance of
the office and retail portion of the complex from the
developer for $245,000,000. The Partnership contributed its
previously acquired interest in the property and made total
cash contributions of $60,000,000 for its interest in Copley
Place Associates.

In December 1984, an affiliate of the Corporate General
Partner of the Partnership acquired ownership of the joint
venture partner.

The joint venture agreement provides that, in general,
from 1985 through 1989, the Partnership was entitled to a
guaranteed return of annual cash flow of $3,600,000 increasing
to $4,800,000. The joint venture partner was obligated to
fund (through capital contributions and loans, as defined) any
deficiency in the Partnership's guaranteed return and any
operating deficits (as defined). Commencing January 1, 1990,
the Partnership was entitled to a preferred return of
$6,000,000 per year through December 31, 1991 of any available
cash flow. The joint venture partner was obligated through
December 31, 1991 to loan amounts to pay for any operating
deficits (as defined). The joint venture partner has loaned
approximately $13,398,000 through September 30, 1994 to fund
its required obligation. The loan accrues interest at the
contract rate based on the joint venture partner's line of
credit. The line of credit bears interest at a floating rate
(currently averaging 6.06% per annum at September 30, 1994).
The loan is to be repaid from future available cash flow (as
defined). In addition, the Partnership and the joint venture
partner were obligated to contribute equally to tenant
improvement and other capital costs beginning in 1990.
Commencing January 1, 1992, the Partnership and the venture
partner are required to equally fund all cash deficits of the
property. Annual cash flow (as defined), after repayment to
the joint venture partner of operating deficit loans and
funding requirements, is to be allocated equally between the
Partnership and joint venture partner. In March 1994, the
venture partner and the Partnership each contributed $424,980
for the payment of previously deferred management fees.

Operating profits and losses of the joint venture are 50%
to the Partnership and 50% to the joint venture partner.

The joint venture agreement further provides that, in
general, upon any sale or refinancing of the complex, the
first $60,000,000, after repayment of the joint venture loans,
of net proceeds will be distributed equally between the
Partnership and the joint venture partner. The Partnership
will then be entitled to receive an amount equal to any
cumulative deficiencies of its annual preferred return of cash
flow for 1990 and 1991 (balance at September 30, 1994 is
$12,000,000). The Partnership will then be entitled to
receive the next $190,000,000 plus an amount equal to certain
interest which has been paid or is payable to the developer on
its $20,000,000 purchase price note. The joint venture
partner will then be entitled to receive the next $190,000,000
plus an amount equal to certain interest paid to it on the
$20,000,000 purchase price note, with any remaining proceeds
distributable equally to the Partnership and the joint venture
partner. Reference is made to Note 3(h) for a discussion of
the modification of the mortgage loan (effective March 1,
1992) for the property.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

An affiliate of the Partnership and joint venture partner
manages the portion of the complex owned by the joint venture,
pursuant to an agreement which provides for a fee calculated
as a percentage of certain types of income from the property.

(d) Orchard Associates

The Partnership's interest in Old Orchard shopping center
(through Orchard Associates and Old Orchard Urban Venture
("OOUV")) was sold in September 1993, as described below.

At sale, OOUV and an unaffiliated third party contributed
the Old Orchard shopping center and $60,366,572 in cash
(before closing costs and prorations), respectively, to a
newly formed limited partnership. Immediately at closing, the
new partnership distributed to OOUV $60,366,572 in cash
(before closing costs and prorations) in redemption of
approximately 89.5833% of OOUV's interest in the new
partnership. OOUV, the limited partner, has retained a
10.4167% interest in the new limited partnership after such
redemption. OOUV was also entitled to receive up to an
additional $4,300,000 based upon certain events (as defined
all of which was earned and received as of September 1994).
Upon receipt, OOUV distributed the $4,300,000 to the
respective partners, based upon their pre-contribution
percentage interests. OOUV still may earn up to an additional
$3,400,000 based upon certain future earnings of the property
(as defined), none of which has been earned or received as of
the date of this report.

Contemporaneously with the formation of the new limited
partnership, OOUV redeemed Orchard Associates' ("Orchard")
interest in OOUV for $56,689,747 (before closing costs and
prorations). This transaction has resulted in Orchard having
no ownership interest in the property as of the effective date
of the redemption agreement. Orchard recognized a gain of
$15,797,454 for financial reporting purposes ($7,898,727
allocable to the Partnership) and recognized a gain for
Federal income tax reporting purposes of $32,492,776,
($16,246,388 allocable to the Partnership) in 1993.

OOUV and Orchard have also entered into a contribution
agreement whereby they have agreed to share future gains and
losses which may arise with respect to potential revenues and
liabilities from events which predated the contribution of the
property to the new venture (including, without limitation,
the distribution to OOUV of $4,300,000 and the potential
future distribution of $3,400,000 as described above) in
accordance with their pre-contribution percentage interests.
In September 1994, Orchard received its share of the
contingent $4,300,000 as discussed above and distributed to
each of the respective partners their fifty percent share
($1,702,082) of such amount. The Partnership has recognized a
gain of $1,702,082 for financial reporting purposes in
September 1994 and expects to recognize a gain for Federal
income tax reporting purposes in 1994. Upon receipt of all or
a portion of the remaining contingent amounts, Orchard and the
Partnership would expect to recognize additional gain for
Federal income tax and financial reporting purposes in the
year of such receipts. However, there can be no assurance
that any portion of the remaining contingent amounts will be
received.

(3) LONG-TERM DEBT MODIFICATIONS AND REFINANCINGS

(a) General

As described below and in response to operating deficits
incurred at certain properties, the Partnership or its
ventures are seeking and/or have

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

received mortgage note modifications on certain properties.
Certain of the modifications received have expired and others
expire on various dates commencing November 1996. In
addition, certain properties have loans with scheduled
maturities commencing November 1994. Upon expiration of such
modifications or at maturity, should the Partnership or its
ventures be unable to secure new or additional modifications
to the loans, based upon current and anticipated future market
conditions, the Partnership may decide not to commit any
significant additional amounts to these properties. This
generally would result in the Partnership no longer having an
ownership interest in such properties and may result in a gain
for financial reporting purposes and Federal income tax
purposes without any net distributable proceeds. Such
decisions would be made on a property-by-property basis.

(b) Rio Cancion Apartments

The mortgage note secured by the Rio Cancion apartments
located in Tucson, Arizona and related deferred interest was
satisfied on March 31, 1993 upon sale of the property (see
note 7(b)). The first mortgage loan was modified in 1987 and
1989 to lower interest payable. During 1992, the Partnership
reached an agreement for an additional modification to the
first mortgage loan whereby on January 1, 1993, the contract
rate of 12.25% per annum and the pay rate of 10.25% per annum
was permanently lowered to 10%. The additional modification
also extended the maturity date to January 1, 1997. In
return, the lender was entitled to, as additional interest, a
minority residual participation of 25% of net sales proceeds
(as defined) after the Partnership recovered its investment
(as defined). The lender received approximately $317,000 as
its 25% minority residual participation upon sale of the
property in March, 1993 as discussed in note 7(b).

The Partnership transferred title to the property to the
lender on November 1, 1993, as discussed below.

The long-term mortgage note secured by the 1001 Fourth
Avenue Plaza office building located in Seattle, Washington
was modified effective June 16, 1987 to lower both the
contract and payment interest rates. The contract interest
rate had been reduced to 9% per annum for the period from June
16, 1987 through December 15, 1992, to 10% per annum for the
period from December 16, 1992 through May 15, 1994 and to 12%
per annum for the period from May 16, 1994 through May 15,
1995. In addition, the interest payment rate had been reduced
to 7% per annum from June 16, 1987 through May 15, 1989, to 8%
per annum from May 16, 1989 through December 15, 1992 and to
9% per annum from December 16, 1992 through May 15, 1995. The
difference between the contract rate and the interest paid was
deferred and bore interest at 9% per annum. In addition, any
Net Cash Flow (as defined) from the property was escrowed for
future capital improvements. On May 16, 1995, the note was to
revert to its original terms. In addition, upon the
subsequent sale of the property, the lender would have been
entitled to a minority residual participation beginning at 30%
and decreasing to 15% of Net Proceeds (as defined) from such
sale or refinancing.

The Partnership continued to maintain a $2,000,000 letter
of credit as additional security for the lender for the
modification of interest rates, repayment schedule and other
terms of the original loan. The letter of credit was secured
by the Partnership's investments in U.S. government
obligations in an equal amount. The letter of credit was to
be renewed annually until the earlier of June 15, 1995 or the
date on which Operating Income (as defined) from the property
equaled at least 1.2 times the original debt service for a
twelve month period. In October 1992, the

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Partnership notified the lender of its intent not to renew the
letter of credit based on the property generating sufficient
Operating Income (as defined) to meet the calculation
requirement described above. As a result, the lender
subsequently notified the Partnership that the Partnership was
in default for non-submittal of Net Cash Flow (as defined).
As previously reported, the Partnership was attempting to
obtain an additional loan modification from the mortgage
lender. Such negotiations proved to be unsuccessful, and in
November 1993 the Partnership transferred title to the
property in full satisfaction of the Partnership's mortgage
obligation. As part of the agreement to transfer title, the
lender agreed to the return of the Partnership's letter of
credit. The transfer of the Partnership's ownership interest
resulted in a net gain of $6,771,760 for financial reporting
and a gain of $27,567,458 for Federal income tax purposes with
no corresponding distributable proceeds in 1993.

(d) Eastridge Apartments

In August 1990, the Partnership reached an agreement to
remodify the mortgage note effective July 1, 1989 to lower
both the contract rate (as defined) and interest payment rates
for a thirty-six month period. The difference between the
contract rate and the interest paid was deferred and bore
interest when added to the outstanding principal balance of
the note on July 1, 1992. Thereafter, monthly installments,
payable at 10.34% per annum, of principal and interest were
due (amortized on a 30 year term) until maturity of the loan
in March 1995. The Partnership subsequently reached an
agreement for another modification on the existing loan. The
remodification extended the maturity date to May 1, 1998 and
adjusted the contract rate to 8% per annum. The
remodification became effective May 1, 1993 and the
Partnership was required to submit equal payments of principal
and interest (amortized over approximately 22 years) until
maturity when all outstanding principal and interest would be
due. The remodification established release prices for the
mortgage obligation (as defined), upon execution until May 1,
1995.

In April 1994, the Partnership exercised its option,
under the latest loan modification, for a discounted payoff of
its mortgage obligation secured by the Eastridge Apartments.
The loan balance of approximately $9,696,000 was fully
satisfied with a payment of approximately $8,700,000. As a
result of this transaction, the Partnership will recognize an
extraordinary gain of $996,126 for financial reporting
purposes and expects to recognize a gain for Federal income
tax purposes in 1994. The Partnership determined that
exercising its option for the early payoff was necessary in
order to maximize its return upon sale of the property which
occurred on June 30, 1994 (see note 7(d)).

(e) University Park Office Building

Effective July 1989, the Partnership remodified the note
such that the interest payment rate was reduced to 10% per
annum for a period of two years, at which time the loan was to
be due and payable. The difference between the contract rate
and the interest paid was deferred and was accruing at 12.5%
per annum. In July 1991, the Partnership exercised its option
to extend the maturity date from July 1991 to maturity in July
1993, during which time interest only payments were due at a
rate of 10.66% per annum.

In April 1993, the Partnership had began submitting cash
flow debt service payments to the lender due to the move-out
of the building's primary tenant. The Partnership's
discussions with the first mortgage lender to further modify
the note were unsuccessful. As a result, on January 10, 1994,
the Partnership transferred to the lender title to the
property. This resulted in the Partnership's no longer having
an ownership

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

interest in the property, has resulted in a gain of
approximately $5,676,000 for financial reporting purposes.
The Partnership also expects to recognize a gain for Federal
income tax purposes of approximately $6,897,000 in 1994.
There were no corresponding distributable proceeds as a result
of the transfer of title.

(f) Gables Corporate Plaza

Effective March 1, 1989, the Gables venture reached an
agreement to modify the long-term first mortgage note secured
by Gables Corporate Plaza located in Coral Gables, Florida.
The contract rate had been permanently lowered from 12.8% to
10.75% per annum and from January 1, 1989 through December 31,
1993, interest only payments were due at a rate of 7% per
annum. The difference between the interest paid and the
contract rate was deferred and was accrued at the contract
rate. Deferred interest was due monthly from cash flow or
upon maturity of the note. From April 1, 1994 through
maturity in 1996, interest only payments were due at the
contract rate.

In addition, the Partnership agreed with the joint
venture partner to defer interest payments on its second and
third mortgage notes for the same five year period. The
interest rate had been permanently lowered for the five years
from 12.9% per annum to 11.99% per annum. The Partnership
also agreed with the joint venture partner to reduce the
second and third mortgage notes by $230,000 and treat this
amount as a capital contribution by the joint venture partner.

The Partnership agreed to pay operating deficits at the
property of up to $1,200,000 from January 1, 1989 through
December 31, 1993.

Gables venture had negotiated for an additional
modification or refinancing of the first mortgage loan. Since
January 1991, interest only payments were remitted at a 5% pay
rate instead of the required 7% rate to the extent of
available property cash flow. Negotiations with the lender
were unsuccessful and the Partnership on behalf of the venture
decided to not commit any significant additional amounts to
the property. On May 3, 1993, the lender appointed a receiver
and took possession and control of the property. In addition,
the venture entered into an agreement with the lender whereby
the venture would transfer title to the lender in January,
1994. During this period, the venture attempted to sell the
property. The venture was unable to sell the property during
the allotted time. On January 5, 1994, the venture
transferred title of the property to the lender in accordance
with its previous agreement. This resulted in the venture no
longer having an ownership interest in the property and has
resulted in a gain to the venture in 1994 of approximately
$10,565,000 for financial reporting purposes (of which the
Partnership's share is approximately $7,667,500). The venture
also expects to recognize a gain in 1994 of approximately
$12,464,000 for Federal income tax purposes (of which the
Partnership's share is approximately $3,793,000) in 1994.
There were no corresponding distributable proceeds as a result
of the transfer of title.

(g) Greenwood Creek II Apartments

The Partnership had been negotiating for modification of
the long-term mortgage note secured by Greenwood Creek II
Apartments located in Benbrook (Fort Worth), Texas. The
Partnership had reached an agreement in principle with the
lender to submit the monthly cash flow as debt service
payments beginning April 1, 1991 while continuing to negotiate
for the modification. However, the Partnership was notified
that the loan had been sold to a third party. The Partnership
was not successful in securing a modification. On April 6,
1993, the Partnership transferred title to the property to the
lender for a transfer price of $100,000 (before selling

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

costs and prorations) in excess of the existing mortgage
balance. The Partnership recognized a gain of $1,787,073 for
financial reporting and recognized a gain for Federal income
tax purposes of $1,823,988 in 1993 (see note 7(c)).

(h) Copley Place

The joint venture modified the existing first mortgage
note effective March 1, 1992. The modification lowered the
pay rate from 12% to 9% per annum through August 1993 and, at
that time, further reduced it to 7-1/2% per annum through
August 1998. The contract rate has been lowered to 10% per
annum through August 1993 and, at that time, further reduced
it to 8-1/2% per annum through August 1998. After each
monthly payment, the difference between the contract interest
rate on the outstanding principal balance on the loan,
including the difference between deferred interest and
interest paid at the applicable pay rate, (as defined), will
be added to the principal balance and will accrue interest at
the contract interest rate. All outstanding principal,
including the unpaid deferred interest, is due and payable on
August 31, 1998. In return, the lender will be entitled to
receive, as additional interest, a minority residual
participation of 10% of net proceeds (if any, as defined) from
a sale or refinancing after the Partnership and its joint
venture partner have recovered their investments (as defined).

Any cash flow from the property, after all capital and leasing
expenditures, will be escrowed for the purpose of paying for
future capital and leasing requirements. As a result of the
debt modification, the property produced cash flow in 1993.
This cash flow has been escrowed for future potential leasing
requirements as set forth in the loan modification. The
property has experienced a significant loss of rental income
in 1994 due to the expiration of a major tenant's lease.
Based on this fact, the joint venture has initiated
discussions with the first mortgage lender regarding an
additional modification of the loan. There can be no
assurances such additional modification will be consummated.
If the joint venture is unable to secure such remodification,
it may decide not to commit any significant additional amounts
to the property. This would result in the joint venture no
longer having an ownership interest in the property and would
result in a net gain for financial reporting and Federal
income tax purposes with no corresponding distributable
proceeds. The joint venture is aggressively marketing the
recently vacated space.

(i) Sherry Lane Place

The existing long-term note secured by the Sherry Lane
Place office building located in Dallas, Texas was modified
effective February 1, 1988 to lower both the contract and
payment interest rates. The contract interest rate was
reduced to 9% per annum for the period from March 1, 1988
through February 28, 1993 and to 10% per annum for the period
from March 1, 1993 through April 1, 1998. Interest only was
to be payable at 6.5% per annum from February 1, 1988 through
July 31, 1991, at 8% per annum from August 1, 1991 through
July 31, 1994 and at 10% per annum from August 1, 1994 through
March 1, 1998. The difference between the contract rate and
the interest paid was to be deferred and to bear interest at
13.125% per annum from February 1, 1988 through February 28,
1988, at 9% per annum from March 1, 1988 through February 28,
1993 and at 10% per annum from March 1, 1993 through April 1,
1998. In addition, upon the earlier of the subsequent sale of
the property or maturity of the note, the lender is entitled
to a residual participation equal to 40% of the applicable
value (as defined). In connection with the modification, the
Partnership prepaid $1,665,000 of principal without a
prepayment penalty, and paid a loan modification fee of
$2,335,000.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In November 1993, the Partnership reached an agreement
with the current lender to further modify the existing long-
term non-recourse mortgage note secured by the property.
Under the terms of the remodification, the existing mortgage
balance was divided into two notes. The first note of
$22,000,000 bears a contract interest rate of 8% per annum for
the period retroactive from January 1, 1993 through December
31, 1994, increasing to 8.5% per annum for the period from
January 1, 1995 through April 1, 1998. Interest only is
payable on the first note at 5.75% per annum for the period
retroactive to January 1, 1993 through December 31, 1993, at
8% per annum from January 1, 1994 through December 31, 1994
and at 8.5% per annum from January 1, 1995 through April 1,
1998. The difference between the contract rate and the pay
rate was added to the principal balance. The second note,
consisting of the remaining unpaid principal and accrued
interest in the aggregate amount of approximately $18,526,000,
has a zero pay and accrual rate and is due and payable April
1, 1998. All excess cash flow above debt service on the first
note is to be applied first against accrued interest on the
first note and then as contingent interest on the second note
(as defined).

(j) Marshall's Aurora Plaza

The long-term note secured by the Marshall's Aurora Plaza
shopping center located in Aurora, Colorado reached its
scheduled maturity in June 1993. The Partnership had
continued remitting debt service under the original terms of
the loans until January 1994, when the Partnership reached an
agreement with the current lender to modify and extend the
existing long-term note. The modification, which became
effective in November 1993, lowered the pay and accrual rates
from 12.75% per annum to 8.375% per annum and extended the
loan for a three year period to November 1, 1996. Concurrent
with the closing of the modification, the Partnership paid
down the existing mortgage balance in the amount of $250,000.

(k) Carrollwood Apartments

In September 1993, the venture refinanced with a third
party lender the existing underlying mortgage loan with a
balance of approximately $7,200,000 payable at 12 3/4% per
annum due in 1995. The new loan is in the amount of
$7,455,000. The loan is payable in monthly installments of
principal and interest and bears interest at 7.45% per annum
for a five year period until maturity. The venture paid a
prepayment penalty relating to the original mortgage of
approximately $143,200 in connection with the refinancing.
The Partnership recognized its share of approximately $141,700
as an extraordinary loss for financial reporting purposes in
1993. In addition, the venture was obligated to establish an
escrow account for future capital improvements. The escrow
account was initially funded by the Partnership's capital
contribution to the venture and is subsequently funded by the
operations of the venture plus interest. As of the date of
this report, the escrow account is approximately $118,000 and
no amounts have been withdrawn.

(l) Long Beach Plaza

The long-term mortgage note, secured by Long Beach Plaza,
matured in June 1994. The Partnership has initiated and
continues to hold discussions with the first mortgage lender
regarding a modification and extension of the mortgage loan.
There can be no assurance that any modification agreement will
be executed. If the Partnership is unable to secure such
modification and extension, it may decide not to commit any
significant additional amounts to the property. This would
result in the Partnership no longer having an ownership
interest in the property and would result in a net gain for
financial reporting and Federal income tax purposes with no
corresponding distributable proceeds. The Partnership has not
remitted all

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

of the scheduled debt service payments since June 1993. The
combined balances of the mortgage note and related accrued
interest of approximately $38,738,000 are in arrears at
September 30, 1994 and are classified as current liabilities
in the accompanying consolidated financial statements.

(m) Plaza Tower

The long-term mortgage note, secured by the Plaza Tower
office building, matured on November 1, 1994. The Partnership
and the mortgage lender have reached an agreement in principle
to extend the existing mortgage note for a period of four
months. Accordingly, the Partnership has continued to remit
debt service under the existing loan terms. In addition, the
Partnership has submitted an application to refinance the
mortgage loan with another third-party lender. However, there
can be no assurance that the Partnership will be able to
secure such refinancing.

(4) MANAGEMENT AGREEMENTS

The Partnership has entered into agreements for the
operation and management of the investment properties. Such
agreements are summarized as follows:

The Partnership entered into an agreement with an
affiliate of the seller for the operation and management of
Marshall's Aurora Plaza, Aurora, Colorado for a management fee
calculated at a percentage of certain types of cash income
from the property.

The Long Beach Plaza in Long Beach, California, Copley
Place in Boston, Massachusetts, Plaza Tower office building in
Knoxville, Tennessee, Greenwood Creek II Apartments in
Benbrook, Texas, (prior to its sale in April 1993), Rio
Cancion Apartments in Tucson, Arizona, (prior to its sale in
March 1993), Eastridge Apartments in Tucson, Arizona, (prior
to its sale in June 1994), University Park office building in
Sacramento, California (prior to transferring title to the
lender in January 1994), 1001 Fourth Avenue Plaza office
building in Seattle, Washington (prior to transferring title
to the lender in November 1993), Sherry Lane Place office
building in Dallas, Texas, and Gables Corporate Plaza in Coral
Gables, Florida (prior to the lender appointing a receiver in
May 1993), are or were managed by an affiliate of the
Corporate General Partner for a fee equal to a percentage of
defined gross income from the property.

(5) TRANSACTIONS WITH AFFILIATES

Certain of the Partnership's properties are managed by
affiliates of the General Partner. In October 1994, one of
the affiliated property managers agreed to sell substantially
all of its assets to an unaffiliated third party. In
addition, substantially all of the management personnel of the
property manager will become management personnel of the
purchaser or its affiliates if the sale is completed. The
sale is subject to certain closing conditions. In the event
that the sale is completed, it is expected that the successor
to the affiliated property manager's assets would act as the
property manager of Plaza Tower and Sherry Lane on the same
terms that existed prior to the sale. In addition, in
December 1994, the affiliated manager that is to be sold is
expected to assume the management duties at Glades Apartments
for the same fees as with the former manager.

Fees, commissions and other expenses required to be paid
by the Partnership or the Partnership's consolidated ventures
to the General Partners and their affiliates as of September
30, 1994 and for the nine months ended September 30, 1994 and
1993 are as follows:

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Unpaid at
September 30,
1994 1993 1994
---------- --------- -------------
Property manage-
ment and leasing
fees. . . . . . . . . .$2,022,357 2,801,094 12,818,640
Insurance commissions. . 56,710 223,255 --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . 1,736 34,077 264
---------- --------- ----------
$2,080,803 3,058,426 12,818,904
========== ========= ==========

Payment of certain pre-1993 property management and
leasing fees payable under the terms of the management
agreements ($12,818,640 approximately $35 per $1,000 interest
at September 30, 1994) has been deferred. All property
management fees and leasing fees are being paid currently.

The Corporate General Partner and its affiliates are
entitled to reimbursement for salaries of employees and direct
expenses of officers and employees of the Corporate General
Partner relating to the administration of the Partnership and
operation of the properties. Such costs were $179,093 and
$112,063 for December 31, 1993 and September 30, 1994,
respectively, of which $108,202 of the costs were unpaid as of
September 30, 1994.

Effective January 1, 1994, certain officers and directors
of the Corporate General Partner acquired interests in a
company which, among other things, has provided and continues
to provide certain property management services to certain of
the investment properties of the Partnership. Such
acquisition had no effect on the fees payable by the
Partnership or its consolidated ventures under any existing
agreements with such company. The fees earned by such company
from the Partnership and its consolidated ventures for the
nine months ending September 30, 1994 were $50,113.

(6) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION

Summary income statement information for JMB/NYC venture
for the nine months ended September 30, 1994 and 1993 is as
follows:

1994 1993
------------ -----------
Total income from
properties
(unconsolidated) . . . $117,625,535 127,902,357
============ ===========
Operating loss of
ventures . . . . . . . $ 17,369,731 20,884,687
============ ===========
Partnership's share
of loss. . . . . . . . $ 4,342,433 5,221,172
============ ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(7) SALE OF INVESTMENT PROPERTY

(a) Allied Automotive Center

On October 10, 1990, the Partnership sold the land,
building, and related improvements of the Allied Automotive
Center located in Southfield, Michigan for $19,613,121 (in
cash before prorations and cost of sale).

The sale included the adjacent undeveloped land, building
and improvements owned by two other partnerships affiliated
with the Corporate General Partner. The Partnership has
retained title to a defined 1.9 acre piece of land (the
"Parcel"). During the buyer's due diligence investigation,
the buyer found traces of contamination located on a portion
of the Parcel as well as on a portion of the land owned by the
two affiliated selling entities. It was subsequently
determined that such contamination was most likely the result
of certain activities of the previous owner. As a result, the
purchase price was reduced by approximately $682,000 for the
Partnership's excluded parcel. The parcel may be purchased by
the buyer after the environmental clean-up is completed. As a
condition of the sale, the Partnership has agreed to conduct
investigations to determine all contaminants and to conduct
clean-up of any such contaminants. The Partnership was also
required to indemnify the buyer from specified potential
clean-up related liabilities. If the clean-up is successful,
the buyer will purchase the parcel for $682,000, the purchase
price adjustment. In addition, the Partnership has reached an
agreement with the previous owner of the Allied Automotive
Center, who has agreed to cause such investigation and clean-
up to be done at the previous owner's expense. The previous
owner has also indemnified the Partnership from specified
potential clean-up related liabilities. The Partnership, in
cooperation with the previous owner, has approved a plan to
clean up the parcel, and the previous owner has undertaken the
clean up and is paying the costs thereof. The cost of clean
up remaining to be performed are not estimated to be material.

The gain associated with this Parcel, approximately $543,000,
will be recognized when the closing occurs (currently
estimated to be in mid 1995). There can be no assurance that
the sale of this Parcel will be consummated on these or any
other terms.

(b) Rio Cancion Apartments

On March 31, 1993, the Partnership sold the land, related
improvements, and personal property of the Rio Cancion
Apartments, located in Tucson, Arizona for $13,700,000 (before
selling costs and prorations) which was paid in cash at
closing. In conjunction with the sale, the mortgage note and
related accrued interest with a balance of approximately
$12,157,000 was satisfied in full. The lender received, as
its 25% minority residual participation (as defined),
approximately $317,000 (see note 3(b)). The Partnership
received net sales proceeds of approximately $809,000. The
Partnership recognized a gain from this transaction in 1993 of
$2,524,958 for financial reporting purposes and recognized a
gain of $7,865,633 for Federal income tax purposes in 1993.

On April 6, 1993, the Partnership transferred to the
existing lender title to the land, related improvements, and
personal property of the Greenwood Creek II Apartments,
located in Benbrook, (Fort Worth) Texas for a transfer price
of $100,000 (before selling costs and prorations) in excess of
the existing mortgage balance of approximately $3,747,000 (see
note 3(g)). The Partnership recognized a gain for financial
reporting purposes in 1993 of $1,787,073 and recognized a gain
of $1,823,988 for Federal income tax purposes in 1993.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(d) Eastridge Apartments

On June 30, 1994, the Partnership sold the land, related
improvements, and personal property of the Eastridge
Apartments, located in Tucson Arizona for $12,000,000 (before
selling costs and prorations) which was paid in cash at
closing. The mortgage note was satisfied in full prior to the
sale date (see note 3(d)). The Partnership recognized a gain
of $5,010,871 for financial reporting purposes and expects to
recognize a gain of approximately $7,877,000 for federal
income tax purposes in 1994.

(8) ADJUSTMENTS

In the opinion of the Corporate General Partner, all
adjustments (consisting solely of normal recurring adjustments
and adjustments to reflect the treatment given certain
transactions in the Partnership's 1993 Annual Report)
necessary for a fair presentation have been made to the
accompanying figures as of September 30, 1994 and for the
three and nine months ended September 30, 1994 and 1993 (see
note 1).<PAGE>
PART I. FINANCIAL INFORMATION

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

LIQUIDITY AND CAPITAL RESOURCES

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

At September 30, 1994, the Partnership and its
consolidated ventures had cash and cash equivalents of
approximately $4,315,000. Such funds and short-term
investments of approximately $25,990,000 are available for
distributions to partners, leasing and capital improvement
costs and/or operating deficits at Long Beach Plaza,
Marshall's Aurora Plaza, and the Plaza Tower Office Building,
for funding requirements at Copley Place for its share of
management fees, for working capital requirements, including
potential future operating deficits, and for significant
leasing and tenant improvement costs at certain of the
Partnership's other investment properties. The Partnership
and its consolidated ventures have currently budgeted in 1994
approximately $7,266,000 for tenant improvements and other
capital expenditures. The Partnership's share of such items
and its share of such similar items for its unconsolidated
ventures in 1994 is currently budgeted to be approximately
$6,490,000. Actual amounts expended in 1994 may vary
depending on a number of factors including actual leasing
activity, results of property operations, liquidity
considerations and other market conditions over the course of
the year. The source of capital for such items and for both
short-term and long-term future liquidity and distributions is
expected to be through the net cash generated by the
Partnership's investment properties and through the sale or
refinancing of such investments as well as the cash and short-
term investments currently held by the Partnership and its
ventures. Due to impending maturities of long-term debt and
other operational constraints as discussed below, only certain
of the Partnership investment properties would be considered a
significant source of future liquidity. The Partnership's and
its ventures' mortgage obligations are generally non-recourse
and therefore, the Partnership and its ventures generally are
not personally obligated to pay such mortgage indebtedness.

Many of the Partnership's investment properties currently
operate in overbuilt markets which are characterized by lower
than normal occupancies and/or reduced rent levels. Such
competitive conditions have resulted in the operating deficits
described above.

As described more fully below and/or in Note 3, the
Partnership has received (certain of which have expired and
others of which expire at various dates commencing November,
1996) or is negotiating mortgage note modifications or
refinancing on the Sherry Lane Place office building, Glades
Apartments, Long Beach Plaza, Carrollwood Apartments,
Marshall's Aurora Plaza, Plaza Tower office building and
Copley Place multi-use complex. The Partnership was
unsuccessful in its efforts to obtain modifications of the
loans secured by the 1001 Fourth Avenue office building,
University Park office building and the Gables Corporate
Plaza, as further discussed below and in Note 3. The
Partnership has not remitted the required debt service
payments pursuant to the loan agreement on the Long Beach
Plaza which matured in June 1994. The corresponding balance
of its mortgage note and related deferred accrued interest
thereon has been classified as a current liability in the
accompanying Consolidated Financial Statements. In January
1994, the Partnership or its venture transferred title to
Gables Corporate Plaza and to the University Park office
buildings to their respective lenders and the related mortgage
loans were fully discharged by each. (Reference is made to
Notes 3(f) and (e)). In April 1994, the Partnership exercised
its option to fully satisfy its obligation with respect to the
Eastridge Apartment mortgage loan at the previously agreed
upon release price. The loan balance of approximately
$9,696,000 was fully satisfied with a payment of approximately
$8,700,000, which was paid out of the Partnership's cash and
cash equivalents and proceeds from the sale and maturity of
short term investments. (See Notes 3(d) and 7(d)). In
October 1994, the Partnership submitted an application
with a third-party mortgage lender, to refinance the Plaza
Tower office building. The existing mortgage lender has
agreed, in principle, to a four month extension of the loan
which came due on November 1, 1994. For those investment
properties where modifications are being sought, or with
expired modifications or short-term modifications, if the
Partnership is unable to secure new or additional
modifications to the loans, based upon current and anticipated
market conditions, the Partnership may decide not to commit
any significant additional amounts to any of the properties
which are incurring, or in the future do incur, operating
deficits. This could result in the Partnership no longer
having an ownership interest in such properties and could
result in gain for financial reporting and Federal income tax
purposes to the Partnership with no corresponding
distributable proceeds. Such decisions would be made on a
property-by-property basis.

The indebtedness on certain other of the Partnership's
investment properties matures and is due and payable
commencing in 1994 and subsequent years (Reference is made to
Note 3). The source of repayment is expected to be from
proceeds from the sale or refinancing of such properties, or
extension of such indebtedness. However, there can be no
assurance that any such sales, refinancings or extensions will
occur.

Copley Place

The Boston office market remains very competitive due to
the large supply of available space and to the prevalence of
concessions being offered to attract and retain tenants.

Commencing January 1, 1992, cash deficits and funding
requirements are allocated equally between the Partnership and
the joint venture partner. The joint venture has obtained a
modification of the existing first mortgage note effective
March 1, 1992. The modification lowered the pay rate from 12%
to 9% per annum through August 1993, and at that time, further
reduced it to 7-1/2% per annum through August 1998. The
contract rate has been lowered to 10% per annum through August
1993 and at that time further reduced to 8-1/2% per annum
through August 1998. After each monthly payment, the
difference between the contract interest rate on the
outstanding principal balance of the loan, including the
difference between deferred interest and interest paid at the
applicable pay rate (as defined), will be added to the
principal balance and will accrue interest at the contract
interest rate. The outstanding principal balance, including
the unpaid deferred interest, is due and payable on August 31,
1998. In return, the lender will be entitled to receive, as
additional interest, a minority residual participation of 10%
of net proceeds (as defined) from a sale or refinancing after
the Partnership and its joint venture partner have recovered
their investments (as defined). Any cash flow from the
property, after all capital and leasing expenditures, will be
escrowed for the purpose of paying for future capital and
leasing requirements. As a result of the debt modification,
the property produced cash flow in 1993, which has been
escrowed for future potential leasing requirements as set
forth in the current loan modification.

In 1994, the property has experienced a significant loss
in rental income in connection with the expiration of the IBM
lease (279,432 square feet in April 1994) representing 23% of
the leasable office space in the aggregate. Although the
structure of the modification of the first mortgage loan took
into account the potential downsizing of IBM, it was
originally anticipated that IBM would renew approximately
80,000 square feet. However, IBM has renewed only 8,398
square feet. In addition, the John Hancock Property and
Casualty Co. (which leased 97,180 square feet representing
11.5% of the leasable office space) vacated their space upon
the expiration of their lease in October 1994. Therefore, the
property's operations will be insufficient to pay the modified
debt service. The joint venture has initiated discussions
with the first mortgage lender regarding an additional
modification of the loan. There can be no assurances such
remodification will be consummated. If the joint venture is
unable to secure such remodification, the joint venture may
decide not to commit any significant additional amounts to the
property. This could result in the joint venture no longer having
an ownership interest in the property, which would result in a gain for
financial reporting and Federal income tax purposes with no
corresponding distributable proceeds. The joint venture is
aggressively marketing IBM's and John Hancock's vacant space
and currently has numerous prospective replacements for the
space, although replacement cannot be assured. The joint
venture partners decided to pay previously deferred property
management fees owed to an affiliate for 1993 and to end the
deferment of any subsequent fees incurred. As a result, the
venture partners have made contributions of $705,010 as of
September 30, 1994 and will continue to make capital
contributions for the payment of the above mentioned fees. As
of September 30, 1994 the aggregate amount of such deferred
management fees was approximately $619,000.

Old Orchard

On September 2, 1993, effective August 30, 1993, Orchard
Associates, in which the Partnership and an affiliated
partnership sponsored by the Corporate General Partner each
had a 50% interest, sold its interest in the Old Orchard
Shopping Center. At sale, OOUV and an unaffiliated third
party contributed the Old Orchard shopping center and
$60,366,572 in cash (before closing costs and prorations),
respectively, to a newly formed limited partnership.
Immediately at closing, the new partnership distributed to
OOUV $60,366,572 in cash (before closing costs and prorations)
in redemption of approximately 89.5833% of OOUV's interest in
the new partnership. OOUV, the limited partner, has retained
a 10.4167% interest in the new limited partnership after such
redemption. OOUV has received an additional $4,300,000 as a
result of certain events (as defined) and still may earn up to
an additional $3,400,000 based upon certain future earnings of
the property (as defined). In September 1994, the Partnership
has received its share ($1,702,082) of the $4,300,000. The
Partnership is currently retaining its share of the net
proceeds from the sale for working capital purposes.
Reference is made to Note 2(d).

JMB/NYC

At the 2 Broadway Building, occupancy during the quarter
decreased to 19%, down from 30% in the previous quarter due to
Bear Stearns Co. vacating its space in April 1994 upon the
expiration of its lease. Kidder Peabody & Co. (71,994 square
feet or approximately 4.5% of the building's leasable space)
whose lease was to expire December 1993 extended their lease
to December 31, 1995. The remaining tenant roster at the
property includes several other major financial service
companies whose leases expire in 1994. Most of these
companies maintain back office support operations in the
building which can be easily consolidated or moved. In
addition to the competition for tenants in the Downtown
Manhattan market from other buildings in the area, there is
ever increasing competition from less expensive alternatives
to Manhattan, such as locations in New Jersey and Brooklyn,
which are also experiencing high vacancy levels. Rental rates
in the Downtown market continue to be at depressed levels and
this can be expected to continue while the large amount of
vacant space is gradually absorbed. Little, if any, new
construction is planned for Downtown over the next couple
years. It is expected that 2 Broadway will continue to be
adversely affected by a high vacancy rate and the low
effective rental rates achieved upon re-leasing of space under
existing leases which expire over the next few years. In
addition, the property is in need of a major renovation in
order to compete in the office leasing market. However, there
are currently no plans for a renovation because of the
potential sale of the property discussed below and because the
effective rents that could be obtained under current market
conditions likely are not sufficient to justify the costs of
the renovation. As more fully discussed below, the Olympia &
York affiliates have informed JMB/NYC that they have received
a written proposal for the sale of the 2 Broadway building.

Occupancy at 1290 Avenue of the Americas remained at 91%.

It is expected that the property will continue to be adversely
affected by low effective rental rates achieved upon releasing
of space under existing leases which expire over the next few
years and may be adversely affected by an increased vacancy
rate over the next few years. Although approximately 20% of
the building's space under tenant leases
will expire by the end of 1995, negotiations are currently
being conducted with a number of prospective tenants in the
financial services industry to lease a significant portion of
the current and anticipated vacant space. There can be no
assurances that such negotiations will be successful. John
Blair & Co. (which had leased 253,193 square feet or
approximately 13% of the building's leasable space) filed for
Chapter 11 bankruptcy protection in 1993. Because much of the
John Blair space had been subleased, the Joint Venture had
been collecting approximately 70% of the monthly rent due from
John Blair from the subtenants. Due to the uncertainty
regarding the collection of the balance of the monthly rents
from Blair, a provision for doubtful accounts related to rents
and other receivables and accrued rents receivable aggregating
$7,659,366 was recorded at December 31, 1993 related to this
tenant. During the quarter a settlement was reached whereby
the Joint Venture received a $7,000,000 lease termination fee
which included settlement of past due amounts. In conjunction
with the settlement, effective July 1, 1994 John Blair is
released from all future lease obligations and the Joint
Venture now has direct leases with the original Blair
subtenants. Such subtenants occupy 228,398 square feet or
approximately 11% of the building's leasable space. As a
result of the settlement, the provision for doubtful accounts
related to Blair is $0 at June 30, 1994.

Occupancy at 237 Park Avenue during the quarter remained
at 98%. It is expected that the property will be adversely
affected by the low effective rental rates achieved upon re-
leasing of space under existing leases which expire over the
next few years and may be adversely affected by an increased
vacancy rate over the next few years.

JMB/NYC has had a dispute with the unaffiliated venture
partners who are affiliates (hereinafter sometimes referred to
as the "Olympia & York affiliates") of Olympia & York
Developments, Ltd. (hereinafter sometimes referred to as
"O&Y") over the calculation of the effective interest rate
with reference to the first mortgage loan, which covers all
three properties, for the purpose of determining JMB/NYC's
deficit funding obligation, as described more fully in Note
2(b). Under JMB/NYC's interpretation of the calculation of
the effective rate of interest payable, only 2 Broadway
operated at a deficit for the six months ended June 30, 1994.
During the first quarter of 1993, an agreement was reached
between JMB/NYC and the Olympia & York affiliates which
rescinded the default notices previously received by JMB/NYC
and eliminated the operating deficit funding obligation of
JMB/NYC for the period January 1, 1992 through June 30, 1993.
Pursuant to this agreement, during this period, JMB/NYC
recorded interest expense at 1-3/4% over the short-term U.S.
Treasury obligation rate (subject to a minimum rate of 7% per
annum), which is the interest rate on the underlying first
mortgage loan. Under the terms of this agreement, during this
period, the amount of capital contributions that the Olympia &
York affiliates and JMB/NYC would have been required to make
to the Joint Ventures if the first mortgage loan bore interest
at a rate of 12-3/4% per annum (the Olympia & York affiliates'
interpretation), became a priority distribution level to the
Olympia & York affiliates from the Joint Ventures' annual cash
flow or net sale or refinancing proceeds. The agreement also
entitles the Olympia & York affiliates to a 7% per annum
return on such unpaid priority distribution level amount. It
was also agreed that during this period, the excess available
operating cash flow after the payment of the priority
distribution level discussed above from any of the Three Joint
Ventures would be advanced in the form of loans to pay
operating deficits and/or unpaid priority distribution level
amounts of any of the other Three Joint Ventures. Such loans
bear a market rate of interest, have a final maturity of ten
years from the date when made and are repayable only out of
first available annual cash flow or net sale or refinancing
proceeds. The agreement also provides that except as
specifically agreed otherwise, the parties each reserve all
rights and claims with respect to each of the Three Joint
Ventures and each of the partners thereof, including, without
limitation, the interpretation of or rights under each of the
joint venture<PAGE>
partnership agreements for the Three Joint Ventures. The term
of the agreement expired on June 30, 1993. Therefore,
effective July 1, 1993, JMB/NYC is recording interest expense
at 1-3/4% over the short-term U.S. Treasury obligation rate
plus any excess operating cash flow after capital costs of
each of the Three Joint Ventures, such sum not to be less than
7% nor exceed a 12-3/4% per annum interest rate. The Olympia
& York affiliates continue to dispute this calculation after
the period commencing July 1, 1993 and contend that the 12-
3/4% per annum fixed rate applies.

JMB/NYC continues to seek, among other things, a
restructuring of the joint venture partnership agreements or
otherwise to reach an acceptable understanding regarding its
funding obligations. If JMB/NYC is unable to achieve this,
based upon current and anticipated market conditions mentioned
above, JMB/NYC may decide not to commit any additional amounts
to the Three Joint Ventures. In addition, it is possible that
JMB/NYC may determine to litigate these issues with the
Olympia & York affiliates. A decision not to commit any
additional funds or an adverse litigation result could, under
certain circumstances, result in the loss of the interest in
the related ventures. The loss of an interest in a particular
venture could, under certain circumstances, permit an
acceleration of the maturity of the related Purchase Note
(each Purchase Note is secured by JMB/NYC's interest in the
related Joint Venture). The failure to repay a Purchase Note
could, under certain circumstances, constitute a default that
would permit an immediate acceleration of the maturity of the
Purchase Notes for the other Joint Ventures. In such event,
JMB/NYC may decide not to repay, or may not have sufficient
funds to repay, any of the Purchase Notes and accrued interest
thereon. This could result in JMB/NYC no longer having an
interest in any of the related Joint Ventures, which would
result in net gain for financial reporting and Federal income
tax purposes to JMB/NYC (and through JMB/NYC and the
Partnership, to the Limited Partners) with no distributable
proceeds. As discussed more fully below, the Olympia & York
affiliates have informed JMB/NYC that they have received a
sales contract for the sale of the 2 Broadway Building at a
price which will not provide any proceeds to JMB/NYC to repay
the related Purchase Notes. Consequently, if the proposed
sale is finalized, $19,000,000 of the 2 Broadway Purchase
notes will be re-allocated and will be payable out of
JMB/NYC's share of distributable sale proceeds from the other
two Joint Ventures. In addition, as discussed more fully in
Note 2(b), under certain circumstances, JMB/NYC may be
required to make additional capital contributions to the Joint
Ventures in order to fund a deficit restoration obligation
associated with a deficit balance in its capital account, and
the Partnership could be required bear a share of such capital
contributions obligation.

If JMB/NYC is successful in its negotiations to
restructure the Three Joint Ventures agreements and retains an
interest in one or more of these investment properties, there
would nevertheless need to be a significant improvement in
current market and property operating conditions (including a
major renovation of the 2 Broadway building) resulting in a
significant increase in value of the properties before JMB/NYC
would receive any share of future net sale or refinancing
proceeds. The Joint Ventures that own the 2 Broadway building
and land have no plans for a renovation of the property
because of the potential sale of the property discussed below
and because the effective rents that could be obtained under
the current office market conditions are not sufficient to
justify the costs of the renovation.

The Olympia & York affiliates have informed JMB/NYC that
they have received a contract for the sale of 2 Broadway for
a net purchase price of $15 million. The first mortgage
lender has preliminarily agreed in the loan restructuring
proposal discussed below to the sale of the building according
to the terms of the 2 Broadway sales contract. A sale
pursuant to the contract received by the Olympia & York
affiliates would be subject to, among other things, the
approval of the first mortgage lender as well as JMB/NYC.
While there can be no assurance that a sale would occur
pursuant to such contract or any other contract, if this
contract were to be accepted by or consented to by all
required parties and the sale completed pursuant thereto, and
if discussions with the Olympia & York affiliates relating to
the contract were finalized to allocate the unpaid
first mortgage indebtedness currently allocated to 2 Broadway
to 237 Park and 1290 Avenue of the Americas after completion
of the sale, then the 2 Broadway Joint Ventures would incur a
significant loss for financial reporting purposes.
Accordingly, a provision for value impairment was recorded at
December 31, 1993 for financial reporting purposes for
$192,627,560, net of the non-recourse portion of the Purchase
Notes including accrued interest related to the 2 Broadway
Joint Venture interests that are payable by JMB/NYC to the
Olympia & York affiliates in the amount of $46,646,810. The
provision for value impairment has been allocated $136,534,366
and $56,093,194 to the Olympia & York affiliates and JMB/NYC,
respectively. Such provision has been allocated to the
partners to reflect their respective ownership percentages
before the effect of the non-recourse promissory notes
including accrued interest.

There are certain risks and uncertainties associated with
the Partnership's investments made through joint ventures
including the possibility that the Partnership's Joint Venture
Partners might become unable or unwilling to fulfill their
financial or other obligations or that such Joint Venture
Partners may have economic or business interest or goals, that
are inconsistent with those of the Partnership. O & Y and
certain of its affiliates have been involved in bankruptcy
proceedings in the United States and Canada and similar
proceedings in England. The Olympia & York affiliates have
not been directly involved in these proceedings. In addition,
a reorganization of the management of the company's United
States operations has been completed, and affiliates of O & Y
are in the process of renegotiating or restructuring a number
of loans affecting various properties in the United States in
which they have an interest. The Partnership is unable to
assess and cannot presently determine to what extent these
events may adversely affect the willingness and ability of the
Olympia & York affiliates either to meet their own obligations
to the Joint Ventures and JMB/NYC or to negotiate a
restructuring of the Joint Venture agreements, or otherwise
reach an understanding with JMB/NYC regarding any funding
obligation of JMB/NYC. However, the financial difficulties of
Olympia & York and its affiliates may be adversely affecting
the Three Joint Ventures' efforts to restructure the mortgage
loan and to re-lease vacant space in the buildings.

During the fourth quarter 1992, the Joint Ventures
received a notice from the first mortgage lender alleging a
default for failure to meet certain reporting requirements of
the Olympia & York affiliates contained in the first mortgage
loan documents. No monetary default has been alleged. The
Olympia & York affiliates have responded to the lender that
the Joint Ventures are not in default. JMB/NYC is unable to
determine if the Joint Ventures are in default. There have
not been any further notices from the first mortgage lender.
However, on June 30, 1994 the Olympia & York affiliates, on
behalf of the Three Joint Ventures, signed a letter of intent
with representatives of the lender (consisting of a steering
committee of holders of notes evidencing the mortgage loan) to
restructure certain terms of the existing mortgage loan. The
proposed restructuring would change the interest rate on the
notes from a floating rate equal to 1.75% over the rate on
three months U.S. treasury bills to a fixed rate of 9% per
annum with periodic payments of interest only at a pay rate of
7% per annum. Unpaid interest would accrue at 9% per annum
and unless previously paid out of excess property cash flow
will be payable at maturity. There is no assurance that a
restructuring of the loan will be obtained under these or any
other terms. In conjunction with negotiations held prior to
June 30, 1994, the Olympia & York affiliates reached an
agreement with the first mortgage lender whereby effective
January 1, 1993, the Olympia & York affiliates are limited to
taking distributions of $250,000 on a monthly basis from the
Three Joint Ventures reserving the remaining excess cash flow
in a separate interest-bearing account to be used exclusively
to meet the obligations of the Three Joint Ventures as
approved by the lender. Interest on the first mortgage loan
is currently calculated based upon a variable rate related to
the short-term U.S. Treasury obligation rate, subject to a
minimum rate on the loan of 7% per annum. An increase in the
short-term U.S. Treasury obligation rate could result in
increased interest payable on the first mortgage loan by the
Three Joint Ventures.

Long Beach Plaza

In March 1993, the Partnership completed a settlement of
its litigation with Australian Ventures, Inc. ("AVI")
involving a long-term ground and improvement lease for
approximately 144,000 square feet at the shopping center.
Under the terms of the settlement, AVI paid the Partnership
$550,000, and the parties terminated the ground and
improvement lease. As a result, the gross leasable area owned
by the Partnership increased by 144,000 square feet. In
addition, both parties dismissed their respective claims in
the lawsuit with prejudice. The Partnership has paid the
$550,000 received from AVI to the mortgage lender for the
property as scheduled debt service due for April and part of
May 1993 on the loan secured by the property. The Partnership
is seeking a replacement tenant for the vacated space. In
January 1994, the Partnership received a letter of intent from
Ross Dress for Less to lease approximately 27,200 square feet
of the first floor of the vacated Buffum's building. In
addition, Gold's Gym has offered to lease approximately 34,000
square feet of the third floor of the vacated Buffum's
building and relocate from its current 9,813 square foot space
on Pine Avenue. The Partnership has several prospects for the
smaller Gold's Gym space. There can be no assurance these
leases will be consummated. The Partnership had discussions
with several tenants regarding their requests for temporary
rent relief commencing in 1992. The tenants indicated that,
due to the poor sales levels of their stores at the mall, such
relief was necessary if they were to continue to operate.
After review of those tenants requesting relief, the
Partnership decided to grant temporary relief (approximately
50% of their minimum rent) to certain tenants through December
31, 1992. The Partnership had re-evaluated each tenant's
sales level and financial situation for 1993. Additional
relief was granted for 1993 and has been granted in 1994. As
a result of the foregoing, the Partnership has initiated and
continues to hold discussions with the first mortgage lender
regarding a modification of its mortgage loan secured by the
property which matured in June 1994. Due to declining retail
sales at the center along with one of the center's anchor
tenants vacating its space in 1991, the Partnership has not
remitted all of the scheduled debt service payments since June
1993. There can be no assurance that such modification will
be consummated (reference is made to Note 3(l)).

University Park

University Park office building's major tenant,
California Vision Services, vacated its space of 70,697 square
feet (59% of the building) upon the expiration of its lease in
April 1993. The tenant's anticipated space requirements over
the next several years were expected to grow to over 200,000
square feet, which the property was unable to accommodate.
The Partnership had been actively marketing the vacated space.

As a result of Cal-Vision's move out, the Partnership was
unable to remit the full debt service payment from property
operations and had submitted cash flow from the property
through May, 1993. In addition, the Partnership's discussions
with the first mortgage lender to further modify the note were
unsuccessful. The Partnership decided not to commit any
additional capital to the property. Given the current vacancy
level of the building and the current and projected market
conditions, the likelihood of recovering any additional cash
investment necessary to retain ownership of the building would
have been remote. As a result, on January 10, 1994, the
Partnership transferred to the lender title to the property.
This resulted in the Partnership recognizing a gain of
approximately $5,676,000 for financial reporting, and it
expects to recognize a gain of approximately $6,897,000 for
Federal income tax purposes with no distributable proceeds in
1994. (See Note 3(e)).

1001 Fourth Avenue

In recent years, the Seattle, Washington office market
has been very competitive due to significant overbuilding,
especially in the Central Business District where 1001 Fourth
Avenue Plaza is located. Current vacancy rates exceed 15%,
and rental rates remain significantly depressed. In addition,
a substantial amount of sublease space had become available in
the immediate downtown area. Given the current and projected
market conditions, the likelihood of recovering the additional
cash investment necessary to fund anticipated operating
deficits for 1001 Fourth Avenue Plaza would have been remote.

In addition, certain disputes had arisen between the
Partnership and the lender regarding a $2,000,000 letter of
credit maintained by the Partnership as additional security
for the lender in connection with the existing loan
modification. As a result of defaults alleged by the lender,
the lender attempted to draw on the $2,000,000 letter of
credit prior to its expiration in November 1992. Subsequent
negotiations with the lender for a loan modification were
unsuccessful. On November 1, 1993, the Partnership
transferred title to the 1001 Fourth Avenue Plaza office
building in full satisfaction of the Partnership's mortgage
obligation (which had an outstanding balance, including
accrued interest, of approximately $102,607,000). In exchange
for the transfer of title, the lender agreed to return the
Partnership's bond and letter of credit. This transfer has
resulted in the Partnership no longer having an ownership
interest in the property. Reference is made to Note 3(c).

Eastridge Apartments

In April 1994, the Partnership exercised its option for a
discounted payoff of its mortgage obligation secured by the
Eastridge Apartments (see Note 3(d)). On June 30, 1994, the
Partnership sold the land, building and related improvements
of the Eastridge Apartments, located in Tucson, Arizona. See
Note 7(d).

Plaza Tower Office Building

The mortgage loan on the Plaza Tower office building,
which has an outstanding principal balance at September 30,
1994 of approximately $17,800,000, matured on November 1,
1994. The Partnership has an agreement in principle for a
short term loan extension and has submitted an application
(with a $50,000 application fee) with a third-party mortgage
lender for a refinancing of the mortgage loan (see note 3(m)).

However, there can be no assurance that an extension and/or
refinancing can be obtained. As of September 30, 1994,
approximately 51,000 square feet of leased space expired, all
of which has been renewed or re-leased.

General

The affiliates of the Corporate General Partner have
deferred certain pre-1993 property management and leasing fees
payable to them under the terms of the management agreements
in an aggregate amount of approximately $12,818,000
(approximately $35 per interest) through September 30, 1994.
The amounts do not bear interest and are payable in future
periods. All property management fees and leasing fees are
being paid currently. Reference is made to Note 5.

A number of the Partnership's investments have been made
through joint ventures. There are certain risks associated
with these investments, 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.

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 recovery
of its investments and any potential return thereon. However,
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 receive substantially less than half their
original investment. It should be noted, however, that in
connection with sales or other dispositions (including
transfers to lenders) of properties (or interests therein)
owned by the Partnership or its joint ventures, the Limited
Partners may be allocated substantial gain for Federal income
tax purposes even though the Partnership would not be able to
return a substantial amount of the Limited Partners' original
capital from such sales or other dispositions.

RESULTS OF OPERATIONS

The net increase in cash and cash equivalents and short-
term investments is due to a $1,702,082 cash distribution from
Orchard Associates and cash proceeds related to the sale of
the Eastridge Apartments (see note 7(d)). The corresponding
decrease in amounts due to affiliates and the increase in
escrow deposits are due primarily to (a) funding of the
capital improvement escrow of approximately $1,635,000
pursuant to the terms of the Copley Place loan modification as
more fully described in Note 3(h) and to (b) the payment of
approximately $850,000 of previously deferred management fees
and accrued interest of approximately $2,747,000 related to
the deficit loans at the Copley Place multi-use complex. As
of the date of this report, no amounts have been withdrawn
from the capital improvement escrow.

The decreases in rents and other receivables, land and
leasehold interest, buildings and improvements, accumulated
depreciation, deferred expenses, current portion of long-term
debt, tenant security deposits, unearned rents and long-term
debt less current portion at September 30, 1994 as compared to
December 31, 1993 and the corresponding decreases in rental
income, mortgage and other interest, depreciation and property
operating expenses for the three and nine months ended
September 30, 1994 as compared to September 30, 1993 are due
primarily to the lender taking title to the Gables Corporate
Plaza and University Park office buildings and to the sale of
the Eastridge Apartments in 1994, and to the sales of the Rio
Cancion and Greenwood Creek II apartments and to the lender
taking title to the 1001 Fourth Avenue office building in
1993. The decrease in rental income is also attributable to
the expiration of the IBM lease at Copley Place multi-use
complex. Reference is made to Notes 3(c), 3(e), 3(f), 3(g),
7(b), 7(c) and 7(d), respectively.

The increase in venture partners' deficits in ventures at
September 30, 1994 as compared to December 31, 1993 and the
corresponding increase in venture partner's share of losses
from ventures operations for the nine months ended
September 30, 1994 as compared to September 30,
1993 is due primarily to the venture partner's share of losses
incurred at Copley Place multi-use complex (see note 3(h))
offset by the venture partner's realization of its share of
gain on the disposition of the Gables Corporate Plaza office
building in January 1994 (as more fully discussed in Note
3(f)) and the contribution of its share of funds used for the
payment of deferred management fees at Copley Place in 1994.

The increase in accrued real estate taxes at September
30, 1994 as compared to December 31, 1993 is due primarily to
the timing of real estate tax payments at certain of the
Partnership's investment properties.

The increase in interest income for the three and nine
months ended September 30, 1994 as compared to September 30,
1993 is due primarily to higher average balances of
investments in U.S. Government Obligations and as a result of
the investment of proceeds retained from the sale of the Old
Orchard Shopping Center in September 1993 (see Note 2(d)) as
well as higher interest rates earned.

The decrease in the Partnership's share of loss from
unconsolidated ventures for the three and nine months ended
September 30, 1994 as compared to September 30, 1993 is due
primarily to the sale of the Partnership's interest in the Old
Orchard shopping center in September 1993 (as more fully
discussed in Note 2(d)). The decrease is also attributable to
JMB/NYC recording a $192,627,560 provision for value
impairment at 2 Broadway at December 31, 1993, which reduced
the subsequent depreciation expense related to that investment
property.

The net gain of $18,364,792 on sale or disposition of
investment property for the nine months ended September 30,
1994 consists of a gain of $5,676,413 on the transfer of the
University Park office building, a gain (net of the venture
partner's share) of $7,677,508 on the transfer of Gables
Corporate Plaza office building, and a gain of $5,010,871
related to the sale of the Eastridge Apartments (as more fully
discussed in Notes 3(e), 3(f), and 7(d)).

The net gain of $4,312,031 on sale or disposition of
investment property for the nine months ended September 30,
1993 consists primarily of a gain of $2,524,958 from the sale
of the Rio Cancion apartments and a gain of $1,787,073 from
the transfer of the Greenwood Creek Apartments (as more fully
discussed in Notes 7(b) and (c)).

The extraordinary item of $996,126 for the nine months
ended September 30, 1994 is due to the discounted payoff of
the mortgage note which secured the Eastridge Apartments (see
Note 3(d)).

PART II. OTHER INFORMATION

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Reference is made to Notes 2(b) (tenth paragraph), and
3(l) and 3(m) of the Notes to Consolidated Financial
Statements and to the Liquidity and Capital Resources section
of Management's Discussion and Analysis of Financial Condition
and Results of Operations filed with this report for
discussions of defaults (or alleged defaults) under, and/or
current attempts to obtain refinancing, modification or
extension of, mortgage loans secured by the 237 Park Avenue,
1290 Avenue of the Americas, and 2 Broadway office buildings,
the Plaza Tower office building, and Long Beach Plaza, which
discussions are hereby incorporated herein by reference.

<TABLE>
PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION
OCCUPANCY

The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties.
<CAPTION>
1993 1994
----------------------------- --------------------------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Greenwood Creek II Apartments
Benbrook (Forth Worth), Texas . . . . . . . 93% N/A N/A N/A N/A N/A N/A
2. Marshall's Aurora Plaza
shopping center
Aurora (Denver), Colorado . . . . . . . . . 90% 91% 88% 91% 89% 89% 89%
3. Carrollwood Station Apartments
Tampa, Florida. . . . . . . . . . . . . . . 94% 95% 96% 98% 98% 97% 98%
4. Long Beach Plaza shopping center
Long Beach, California (A). . . . . . . . . 64% 60% 60% 60% 57% 54% 51%
5. The Glades Apartments
Jacksonville, Florida . . . . . . . . . . . 94% 93% 98% 96% 94% 96% 97%
6. Gables Corporate Plaza
office building
Coral Gables, . . . . . . . . . . . . . . . 85% 83% 83% 83% N/A N/A N/A
7. Sherry Lane Place
office building
Dallas, Texas . . . . . . . . . . . . . . . 93% 90% 95% 96% 98% 97% 96%
8. Eastridge Apartments
Tucson, Arizona . . . . . . . . . . . . . . 96% 89% 95% 95% 97% N/A N/A
9. Copley Place multi-use complex
Boston, Massachusetts. . . . . . . . . . . 87% 94% 94% 93% 93% 75% 78%
10. Old Orchard Shopping Center
Skokie (Chicago), Illinois. . . . . . . . . 62% 53% N/A N/A N/A N/A N/A
11. 1001 Fourth Avenue Plaza
office building
Seattle, Washington . . . . . . . . . . . . 95% 92% 69% N/A N/A N/A N/A
12. Plaza Tower office building
Knoxville, Tennessee. . . . . . . . . . . . 91% 92% 92% 91% 91% 91% 91%
13. University Park office building
Sacramento, California (B). . . . . . . . . 98% 52% 65% 65% N/A N/A N/A
14. 237 Park Avenue Building
New York, New York. . . . . . . . . . . . . 100% 99% 99% 98% 98% 98% 98%
15. 1290 Avenue of the Americas
Building
New York, New York. . . . . . . . . . . . . 97% 95% 95% 98% 90% 91% 91%
16. 2 Broadway Building
New York, New York (C). . . . . . . . . . . 59% 59% 29% 30% 30% 19% 19%
<FN>
- ----------

An "N/A" indicates that the property was sold or was not
owned by the Partnership at the end of the quarter.

(A) Long Beach Plaza 1993 occupancy figures were
restated to reflect the additional 144,000 square feet of
gross leasable area acquired in the Buffum's settlement in
March 1993. Reference is made to Management Discussion and
Analysis of Financial Condition regarding the Long Beach
Plaza.

(B) University Park office building's major tenant,
California Vision Services vacated its space of 70,697 square
feet (59% of the building) upon expiration of its lease in
April 1993.

(C) 2 Broadway Building's major tenant, Merrill Lynch,
Pierce, Fenner & Smith, Incorporated vacated its space of
approximately 497,000 square feet (30% of the building) upon
expiration of its lease in August 1993.

</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

4-A. Documents relating to the mortgage loan secured
by the 1001 Fourth Avenue Plaza in Seattle, Washington are
also hereby incorporated herein by reference to Post-Effective
Amendment No. 2 in the Partnership's Registration Statement on
Form S-11 (File No. 2-81125) dated June 9, 1983.

4-B. Documents relating to the mortgage loan secured
by the Copley Place multi-use complex, in Boston
Massachusetts, are also hereby incorporated herein by
reference to Post-Effective Amendment No. 2 in the
Partnership's Registration Statement on Form S-11 (File No. 2-
81125) dated June 9, 1983.

4-C. Documents relating to the modification of the
mortgage loan secured by 1001 Fourth Avenue Plaza are hereby
incorporated by reference to the Partnership's report for
December 31, 1992 on Form 10-K (File No. 0-12791) dated March
29, 1993.

4-D. Documents relating to the modification of the
mortgage loan secured by the Copley Place multi-use complex
are hereby incorporated by reference to the Partnership's
report for December 31, 1992 on Form 10-K (File No. 0-12791)
dated March 29, 1993.

10-A. Acquisition documents relating to the purchase
by the Partnership of an interest in the 1001 Fourth Avenue
Plaza in Seattle, Washington, are hereby incorporated herein
by reference to Post-Effective Amendment No. 2 to the
Partnership's Registration Statement on Form S-11 (File No. 2-
81125) dated June 9, 1983.

10-B. Acquisition documents relating to the purchase
by the Partnership of an interest in the Copley Place multi-
use complex in Boston, Massachusetts, are hereby incorporated
herein by reference to Post-Effective Amendment No. 2 to the
Partnership's Registration Statement on Form S-11 (File No. 2-
81125) dated June 9, 1983.

10-C. Documents relating to the sale by the
Partnership of an interest in the Allied Automotive Center, in
Southfield, Michigan, are hereby incorporated herein by
reference to the Partnership's Report on Form 8-K (File No. 0-
12791) for October 10, 1990, dated October 30, 1990.

10-D. Documents describing the transferred title of
the Partnership's interest in the Commercial Union Office
Building to the second mortgage lender, are hereby
incorporated herein by reference to the Partnership's Report
on Form 8-K (File No. 0-12791) for August 15, 1991, dated
September 18, 1991.

10-E. Agreement dated March 25, 1993 between JMB/NYC
and the Olympia & York affiliates regarding JMB/NYC's deficit
funding obligations from January 1, 1992 through June 30, 1993
are hereby incorporated by reference to the Partnership's
report for December 31, 1992 on Form 10-K (File No. 0-12791)
dated March 29, 1993.

10-F. Agreement of Limited Partnership of Carlyle -
XIII Associates L.P. is hereby incorporated by reference to
the Partnership's Report for March 31, 1993 on Form 10-Q (File
No. 0-12791) dated May 14, 1993.

10-G. Documents relating to the sale by the
Partnership of its interest in the Rio Cancion Apartments in
Tucson, Arizona, are herein incorporated by reference to the
Partnership's Report on Form 8-K (File No. 0-12791) for March
31, 1993, dated May 14, 1992.

10-H. Documents relating to the sale by the
Partnership of its interest in the Old Orchard Urban Venture
are herein incorporated by reference to the Partnership's
Report on Form 8-K (File No. 0-12791) for August 30, 1993,
dated November 12, 1993.

10-I. Documents describing the transferred title of
the Partnership's interest in the 1001 Fourth Avenue Office
Building to the first mortgage lender, are hereby incorporated
herein by reference to the Partnership's report on Form 8-K
(File No. 0-12791) for November 1, 1993, dated November 12,
1993.

10-J. Second Amended and Restated Articles of
Partnership of JMB/NYC Office Building Associates, are herein
incorporated by reference to the Partnership's report for
December 31, 1993 on Form 10-K (File No. 0-12791) dated March
28, 1994.

10-K. Amended and Restated Certificate of
Incorporation of Carlyle-XIV Managers, Inc., are herein
incorporated by reference to the Partnership's report for
December 31, 1993 on Form 10-K (File No. 0-12791) dated March
28, 1994.

10-L. Amended and Restated Certificate of
Incorporation of Carlyle-XIII Managers, Inc., are herein
incorporated by reference to the Partnership's report for
December 31, 1993 on Form 10-K (File No. 0-12791) dated March
28, 1994.

10-M. $600,000 demand note between Carlyle-XIII
Associates, L.P. and Carlyle Managers, Inc., are herein
incorporated by reference to the Partnership's report for
December 31, 1993 on Form 10-K (File No. 0-12791) dated March
28, 1994.

10-N. $600,000 demand note between Carlyle-XIII
Associates, L.P. and Carlyle Investors, Inc., are herein
incorporated by reference to the Partnership's report for
December 31, 1993 on Form 10-K (File No. 0-12791) dated March
28, 1994.

10-O. Settlement Agreement between Gables Corporate
Plaza Associates and Aetna Life Insurance Company, are herein
incorporated by reference to the Partnership's report for
December 31, 1993 on Form 10-K (File No. 0-12791) dated March
28, 1994.

10-P. Bill of Sale and Grant Deed related to the
University Park Office Building between Carlyle Real Estate
Limited Partnership - XIII and California Federal Bank, are
herein incorporated by reference to the Partnership's report
for December 31, 1993 on Form 10K (File No. 0-12791) dated May
11, 1994.

10-Q. Documents relating to the sale by the
Partnership of its interest in the Eastridge Apartments in
Tucson, Arizona, are herein incorporated by reference to the
Partnership's report for August 12, 1994 on Form 8-K (File No.
0-12791) dated August 12, 1994.

27. Financial Data Schedule of the Partnership for
the period ended September 30, 1994 is filed herewith.

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) The following report on Form 8-K has been filed
for the quarter covered by this report.

(1) The Partnership's Report on Form 8-K (File No.
0-12791) for August 12, 1994 (describing the sale of the
Eastridge Apartments) was filed. The Report was dated August
12, 1994. No financial statements were required to be filed
with such report.

SIGNATURES

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

BY: JMB Realty Corporation
(Corporate General Partner)

By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date:November 10, 1994

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

GAILEN J. HULL
Gailen J. Hull,Principal Accounting Officer
Date:November 10, 1994

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>

<CIK> 0000711604
<NAME> CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994

<CASH> 4,853,369
<SECURITIES> 25,990,128
<RECEIVABLES> 6,812,658
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 37,656,155
<PP&E> 429,372,602
<DEPRECIATION> (146,127,699)
<TOTAL-ASSETS> 355,117,716
<CURRENT-LIABILITIES> (80,845,199)
<BONDS> (358,913,218)
<COMMON> 0
0
0
<OTHER-SE> 182,442,188
<TOTAL-LIABILITY-AND-EQUITY> (335,117,716)
<SALES> (48,605,544)
<TOTAL-REVENUES> (49,231,592)
<CGS> 0
<TOTAL-COSTS> 40,141,318
<OTHER-EXPENSES> 855,476
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,833,796
<INCOME-PRETAX> 21,598,998
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,850,030
<DISCONTINUED> (20,066,874)
<EXTRAORDINARY> (996,126)
<CHANGES> 0
<NET-INCOME> (212,970)
<EPS-PRIMARY> (2.28)
<EPS-DILUTED> 0

</TABLE>