CARLYLE REAL ESTATE LTD PARTNERSHIP XIII, 10-K405, 1997-03-31

CARLYLE REAL ESTATE LTD PARTNERSHIP XIII
10-K405, 1997-03-31
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the fiscal year
ended December 31, 1996 Commission File Number 0-12791

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

Illinois 36-3207212
(State of organization) (I.R.S. Employer Identification No.)

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

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

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

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

None None

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

LIMITED PARTNERSHIP INTERESTS
(Title of Class)

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

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

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

Documents incorporated by reference: None

TABLE OF CONTENTS

Page
----
PART I

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

Item 2. Properties . . . . . . . . . . . . . . . . . 8

Item 3. Legal Proceedings. . . . . . . . . . . . . . 10

Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . 10

PART II

Item 5. Market for the Partnership's Limited
Partnership Interests and Related
Security Holder Matters. . . . . . . . . . . 10

Item 6. Selected Financial Data. . . . . . . . . . . 12

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

Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . 24

Item 9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . 63

PART III

Item 10. Directors and Executive Officers
of the Partnership . . . . . . . . . . . . . 63

Item 11. Executive Compensation . . . . . . . . . . . 66

Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . 68

Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . 69

PART IV

Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . 69

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 73

PART I

ITEM 1. BUSINESS

Unless otherwise indicated, all references to "Notes" are to Notes to
Consolidated Financial Statements contained in this report. Capitalized
terms used herein, but not defined, have the same meanings as used in the
Notes.

The registrant, Carlyle Real Estate Limited Partnership-XIII (the
"Partnership"), is a limited partnership formed in late 1982 and currently
governed by the Revised Uniform Limited Partnership Act of the State of
Illinois to invest in improved income-producing commercial and residential
real property. The Partnership sold 366,177.57 limited partnership
interests (the "Interests") at $1,000 per Interest commencing on June 9,
1983, pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933 (Registration No. 2-81125 and No. 2-87033). The
offering closed on May 22, 1984. No holder of Interests (hereinafter,
"Holder" or "Holder of Interests") has made any additional capital
contribution after such date. The Holders of Interests share in their
portion of the benefits of ownership of the Partnership's real property
investments according to the number of Interests held.

The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title, leasehold estates and/or through
joint venture partnership interests. The Partnership's real estate
investments are located throughout the nation and it has no real estate
investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an understanding
of the Partnership's business taken as a whole. Pursuant to the
Partnership Agreement, the Partnership is required to terminate no later
than December 31, 2033. The Partnership is self-liquidating in nature. At
sale of a particular property, the net proceeds, if any, are generally
distributed or reinvested in existing properties rather than invested in
acquiring additional properties. As discussed further in Item 7, the
Partnership currently expects to conduct an orderly liquidation of most of
its remaining investment portfolio as quickly as practicable. As a result,
the Partnership currently expects that it will sell or dispose of its
remaining investment properties, with the possible exception of its
indirect interests in the 237 Park Avenue and the 1290 Avenue of the
Americas properties, not later than December 31, 1999, barring any
unforeseen economic developments.

The Partnership has made the real property investments set forth in
the following table:

SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1996,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (f) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP (b)
- ---------------------- ---------- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Copley Place
multi-use complex
Boston,
Massachusetts. . . 1,220,000
sq.ft. 9/1/83 24% fee ownership of improve-
n.r.a. ments and leasehold
interest in air rights
(through joint venture
partnership) (c)(d)(j)
2. 1001 Fourth Avenue
Plaza
office building
Seattle,
Washington . . . . 678,000
sq.ft. 9/1/83 11/1/93 fee ownership of land and
n.r.a. improvements
3. Plaza Tower
office building
Knoxville,
Tennessee. . . . . 418,000
sq.ft. 10/26/83 4% fee ownership of land and
n.r.a. improvements
4. Gables Corporate
Plaza
office building
Coral Gables,
Florida. . . . . . 106,000
sq.ft. 11/15/83 1/5/94 fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (g)
5. University Park
office building
Sacramento,
California . . . . 120,000
sq.ft. 1/16/84 1/10/94 fee ownership of land and
n.r.a. improvements (g)

6. Sherry Lane Place
office building
Dallas, Texas. . . 286,000
sq.ft. 12/1/83 6% fee ownership of land and
n.r.a. improvements (through joint
venture partnerships) (c)
7. Allied Automotive
Center
Southfield,
Michigan . . . . . 192,000
sq.ft. 3/30/84 10/10/90 fee ownership of land and
n.r.a. improvements (e)
8. Commercial Union
Building
Quincy,
Massachusetts. . . 172,000
sq.ft. 3/12/84 8/15/91 fee ownership of land and
n.r.a. improvements
9. 237 Park Avenue
Building
New York,
New York . . . . . 1,140,000
sq.ft. 8/14/84 10/10/96 fee ownership of land and
n.r.a. (i) improvements (through joint
venture partnerships)
(c)
10. 1290 Avenue of
the Americas
Building
New York,
New York . . . . . 2,000,000
sq.ft. 7/27/84 10/10/96 fee ownership of land and
n.r.a. (i) improvements (through joint
venture partnerships)
(c)
11. 2 Broadway
Building
New York,
New York . . . . . 1,600,000
sq.ft. 8/14/84 9/18/95 fee ownership of land and
n.r.a. improvements (through joint
venture partnerships)
(c)(e)

12. Long Beach Plaza
shopping center
Long Beach,
California . . . . 559,000
sq.ft. 6/22/83 4% fee ownership of land and
g.l.a. improvements and leasehold
interest in the parking
structure (d)
13. Marshalls Aurora
Plaza
shopping center
Aurora (Denver),
Colorado . . . . . 123,000
sq.ft. 4/1/83 1% fee ownership of land and
g.l.a. improvements
14. Old Orchard
shopping center
Skokie (Chicago),
Illinois . . . . . 843,000
sq.ft. 4/1/84 8/30/93 fee ownership of land and
g.l.a. improvements (through a
joint venture partnership)
(c)(h)
15. Heritage Park-II
Apartments
Oklahoma City,
Oklahoma . . . . . 244 units 7/1/83 3/26/92 fee ownership of land and
improvements (through a
joint venture partnership)
16. Quail Place
Apartments
Oklahoma City,
Oklahoma . . . . . 180 units 7/1/83 3/26/92 fee ownership of land and
improvements (through a
joint venture partnership)
17. Lake Point
Apartments
Charlotte,
North Carolina . . 208 units 9/15/83 12/29/89 fee ownership of land and
improvements

18. Eastridge
Apartments
Tucson, Arizona. . 456 units 8/23/83 6/30/94 fee ownership of land and
improvements (through a
joint venture partnership)
(e)
19. Rio Cancion
Apartments
Tucson, Arizona. . 380 units 8/18/83 3/31/93 fee ownership of land and
improvements
20. Bridgeport
Apartments
Irving, Texas. . . 312 units 9/30/83 4/2/92 fee ownership of land and
improvements
21. Carrollwood Station
Apartments
Tampa, Florida . . 336 units 12/16/83 1% fee ownership of land and
improvements (through a
joint venture partnership)
(c)
22. Greenwood Creek II
Apartments
Benbrook
(Fort Worth),
Texas. . . . . . . 152 units 3/30/84 4/6/93 fee ownership of land and
improvements
23. The Glades
Apartments
Jacksonville,
Florida . . . . . 360 units 10/9/84 11/21/96 fee ownership of land and
improvements (through a
joint venture partnership)
(e)

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

(a) The computation of this percentage for properties held at December
31, 1996 does not include amounts invested from sources other than the
original net proceeds of the public offering as described above and in Item
7.

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

(c) Reference is made to the Notes for a description of the joint
venture partnership or partnerships through which the Partnership has made
this real property investment.

(d) Reference is made to the Notes for a description of the leasehold
interest, under a ground lease or air-rights lease, in the land or
air-rights on which this real property investment is situated.

(e) This property or the Partnership's interest in this property has
been sold. Reference is made to the Notes for a description of the sale of
such real property investment.

(f) Reference is made to Item 8 - Schedule III to the Consolidated
Financial Statements filed with this annual report for further information
concerning real estate taxes and depreciation.

(g) The Partnership transferred title to the lender via a deed in lieu
of foreclosure. Reference is made to the Notes.

(h) The venture sold its interest in the property. Reference is made
to the Notes.

(i) The original invested capital percentage for the 237 Park Avenue
Building and the 1290 Avenue of the Americas Building was 4% and 8%,
respectively. Reference is made to the Notes for a description of the
reorganization and restructuring of the Partnership's indirect interests in
these investment properties.

(j) The Partnership's interest in this property was sold January 23,
1997. Reference is made to the Notes for a description of the sale of such
interest.

</TABLE>

The Partnership's real property investments are subject to competi-
tion from similar types of properties (including in certain areas,
properties owned by affiliates of the General Partners or properties owned
by certain of the joint venture partners) in the respective vicinities in
which they are located. Such competition is generally for the retention of
existing tenants. Reference is made to Item 7 below for a discussion of
competitive conditions and capital improvement plans of the Partnership and
certain of its significant investment properties. Approximate occupancy
levels for the properties are set forth in the table in Item 2 below to
which reference is hereby made. The Partnership maintains the suitability
and competitiveness of its properties in its markets primarily on the basis
of effective rents, tenant allowances and services provided to tenants. In
the opinion of the Corporate General Partner of the Partnership, all of the
investment properties held at December 31, 1996 are adequately insured.
Although there is earthquake insurance coverage for a portion of the value
of the Partnership's investment properties, the Corporate General Partner
does not believe that such coverage for the entire replacement cost of the
investment properties is available on economic terms.

On November 21, 1996, the Partnership sold the land and related
improvements of the Glades Apartments. Reference is made to the Notes for
further description of the transaction.

On January 23, 1997, the Partnership sold its entire partnership
interest in Copley Place Associates. Reference is made to the Notes for
further description of the transaction.

Reference is made to the Notes filed with this annual report for a
schedule of minimum lease payments to be received in each of the next five
years, and in the aggregate thereafter, under leases in effect at certain
of the Partnership's properties as of December 31, 1996.

The Partnership has no employees other than personnel performing on-
site duties at some of the Partnership's properties, none of whom are
officers or directors of the Corporate General Partner of the Partnership.

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

<TABLE>

ITEM 2. PROPERTIES

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

The following is a listing of principal businesses or occupations carried on in and approximate physical
occupancy levels by quarter during fiscal years 1996 and 1995 for the Partnership's investment properties owned
during 1996:
<CAPTION>
1995 1996
------------------------- -------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Marshalls Aurora Plaza
shopping center
Aurora (Denver),
Colorado . . . . . . . . Retail 94% 94% 92% 92% 95% 96% 96% 96%
2. Carrollwood Station
Apartments
Tampa, Florida . . . . . Residential 99% 99% 97% 96% 96% 98% 97% 96%
3. Long Beach Plaza
shopping center
Long Beach,
California . . . . . . . Retail 55% 53% 53% 55% 55% 55% 55% 55%
4. The Glades Apartments
Jacksonville, Florida. . Residential 87% 94% 96% 95% 92% 93% 93% N/A
5. Sherry Lane Place
office building
Dallas, Texas. . . . . . Legal and
Financial Services 98% 99% 97% 97% 96% 97% 96% 96%
6. Copley Place
multi-use complex
Boston, Massachusetts
(1). . . . . . . . . . . Retail/Business
Machines/Financial
Services 73% 73% 88% 86% 89% 93% 90% 90%

1995 1996
------------------------- -------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
7. Plaza Tower
office building
Knoxville, Tennessee . . Financial Services 92% 92% 93% 92% 91% 93% 93% 93%
8. 237 Park Avenue
Building
New York, New York . . . Advertising/Insurance/
Paper/Real Estate 98% 98% 98% 98% 98% 98% 98% *
9. 1290 Avenue of the
Americas Building
New York, New York . . . Men's Clothing
Financial Services 94% 94% 94% 93% 78% 71% 81% *

<FN>
- -----------------
Reference is made to Item 6, Item 7, and to the Notes for further information regarding property occupancy,
competitive conditions and tenant leases at the Partnership's investment properties.

An "N/A" indicates that the property was sold and was not owned by the Partnership or its joint venture at
the end of the period.

An "*" indicates that the joint venture which owns the property was restructured. Reference is made to the
Notes for further information regarding the reorganized and restructured ventures.

(1) The Partnership's interest in this property was sold January 23, 1997 as described more fully in the
Notes.

</TABLE>

ITEM 3. LEGAL PROCEEDINGS

In February 1996, an action entitled TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA V. CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII, JMB
REALTY CORPORATION, et. al. was initiated in California Superior Court of
Orange County, California. In the proceeding, Teachers Insurance and
Annuity Association of America ("Teachers"), as the holder of the mortgage
notes secured by the Long Beach Plaza Shopping Center, sought the
appointment of a receiver for the benefit of the lender to take exclusive
possession, control and operation of the property. Due to declining retail
sales at the shopping center and one of its anchor tenant's previously
vacating its space, the Partnership has not made all of the scheduled debt
service payments on the mortgage notes since June 1993. The Partnership
also did not pay the outstanding principal and accrued interest on the
first mortgage note at its maturity in August 1995 (combined principal and
accrued interest balance at December 31, 1996 was approximately
$47,624,000). The Partnership was unable to obtain a long-term
modification of the mortgage notes from Teachers, and the Partnership
decided not to commit any significant additional amounts to the property.
In March 1996, the Court granted Teachers' application and entered an order
for a receiver to take exclusive possession, control and operation of the
property. Accordingly, the receiver has control of the property and its
operations. An affiliate of the General Partners continues as the property
manager, at the discretion of the receiver. Title to the property is
expected to be transferred to Teachers or its designee in 1997.

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

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

There were no matters submitted to a vote of security holders during
1995 and 1996.

PART II

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

As of December 31, 1996, there were 38,736 record holders of the
366,006.87688 Interests outstanding in the Partnership. There is no public
market for Interests and it is not anticipated that a public market for
Interests will develop. Upon request, the Corporate General Partner may
provide information relating to a prospective transfer of Interests to an
investor desiring to transfer his Interests. The price to be paid for the
Interests, as well as any other economic aspects of the transaction, will
be subject to negotiation by the investor. There are certain conditions
and restrictions on the transfer of Interests, including, among other
things, the requirement that the substitution of a transferee of Interests
as a Limited Partner of the Partnership be subject to the written consent
of the Corporate General Partner, which may be granted or withheld in its
sole and absolute discretion. The rights of a transferee of Interests who
does not become a substituted Limited Partner will be limited to the rights
to receive his share of profits or losses and cash distributions from the
Partnership, and such transferee will not be entitled to vote such
Interests or have other rights of a Limited Partner. No transfer will be
effective until the first day of the next succeeding calendar quarter after
the requisite transfer form satisfactory to the Corporate General Partner
has been received by the Corporate General Partner. The transferee
consequently will not be entitled to receive any cash distributions or any
allocable share of profits or losses for tax purposes until such next
succeeding calendar quarter. Profits or losses from operations of the
Partnership for a calendar year in which a transfer occurs will be
allocated between the transferor and the transferee based upon the number

of quarterly periods in which each was recognized as the Holder of the
Interests, without regard to the results of the Partnership's operations
during particular quarterly periods and without regard to whether cash
distributions were made to the transferor or transferee. Profits or losses
arising from the sale or other disposition of Partnership properties will
be allocated to the recognized Holder of the Interests as of the last day
of the quarter in which the Partnership recognized such profits or losses.
Cash distributions to a Holder of Interests arising from the sale or other
disposition of Partnership properties will be distributed to the recognized
Holder of the Interests as of the last day of the quarterly period with
respect to which such distribution is made.

Reference is made to Item 6 below for a discussion of cash distribu-
tions made to the Holders of Interests. The mortgage loans secured by the
Sherry Lane office building, Plaza Tower office building and the Copley
Place multi-use complex restrict the use by the Partnership of the cash
flow from those properties as more fully discussed in the Notes. In
addition, the purchase money notes issued by JMB/NYC in connection with its
acquisition of interests in the 237 Park Avenue and 1290 Avenue of the
Americas investment properties require that any distributions payable to
JMB/NYC with respect to such investment properties be applied to reduce the
outstanding principal and interest on the purchase notes. Reference is
made to the Notes for a description of the provisions of the Partnership
Agreement relating to cash distributions to the partners.

<TABLE>
ITEM 6. SELECTED FINANCIAL DATA

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

DECEMBER 31, 1996, 1995, 1994, 1993 AND 1992

(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)

<CAPTION>
1996 1995 1994 1993 1992
------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Total income. . . . . . . $ 69,093,943 66,763,349 65,969,277 85,193,793 93,609,884
============ ============ ============ ============ ============
Operating earnings
(loss) . . . . . . . . . $(40,507,575) (23,721,300) (25,410,848) (30,620,211) (37,939,335)
Partnership's share of
income (loss) from
unconsolidated ventures
(including income
from restructuring of
$78,704,658 in 1996) . . 79,070,546 (6,600,158) (6,271,489) (22,416,922) (8,007,990)
Venture partners'
share of earnings
(loss) from con-
solidated ventures'
operations . . . . . . . 3,536,251 4,588,759 5,659,744 2,008,939 3,376,600
------------ ------------ ------------ ------------ ------------
Net operating
earnings (loss). . . . . 42,099,222 (25,732,699) (26,022,593) (51,028,194) (42,570,725)
Gain (loss) on sale
or disposition of
investment properties,
net of venture partners'
share of ($329,169)
in 1996 and $2,887,659
in 1994. . . . . . . . . 5,484,249 -- 18,364,792 11,083,791 2,132,879
Partnership's share
of gain (loss) on sale
of property or
interest in
property of
unconsolidated
ventures . . . . . . . . -- (14,789,529) 1,702,082 7,898,727 --
------------ ------------ ------------ ------------ ------------

1996 1995 1994 1993 1992
------------- ------------ ----------- ------------ ------------
Earnings (loss) before
extraordinary items. . . 47,583,471 (40,522,228) (5,955,719) (32,045,676) (40,437,846)
Extraordinary items . . . -- 15,632,407 996,126 (141,776) 7,139,936
------------ ------------ ------------ ------------ ------------
Net earnings
(loss) . . . . . . . . . $ 47,583,471 (24,889,821) (4,959,593) (32,187,452) (33,297,910)
============ ============ ============ ============ ============
Net earnings (loss) per
Interest (b):
Net operating earnings
(loss) . . . . . . . . $ 110.42 (67.47) (68.22) (133.78) (111.62)
Gain on sale
or disposition of
investment
properties, net of
venture partners'
share of ($329,169)
in 1996 and $2,887,659
in 1994 . . . . . . . 14.83 -- 49.66 29.97 5.77
Share of gain (loss)
on sale of property
or interest in
property of
unconsolidated
ventures . . . . . . . -- (39.99) 4.60 21.35 --
Extraordinary items . . -- 42.27 2.69 (.38) 19.31
------------ ------------ ------------ ------------ ------------
Net earnings (loss) . . $ 125.25 (65.19) (11.27) (82.84) (86.54)
============ ============ ============ ============ ============
Total assets. . . . . . . $280,595,580 307,460,106 333,577,902 374,787,300 489,687,072
Long-term debt. . . . . . $384,098,834 382,303,505 361,563,239 360,881,897 464,855,926
Cash distributions
per Interest (b) . . . . $ -- 30.00 -- -- .50
============ ============ ============ ============ ============
<FN>
- -------------

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

(b) Cash distributions from the Partnership are generally not equal to Partnership income (loss) for
financial reporting or Federal income tax purposes. Each Partner's taxable income or (loss) from the Partnership
in each year is equal to his allocable share of the taxable income (loss) of the Partnership, without regard to
the cash generated or distributed by the Partnership. Accordingly, cash distributions to the Holders of Interests
since the inception of the Partnership have not resulted in taxable income to such Holders of Interests and have
therefore represented a return of capital.

</TABLE>

SIGNIFICANT PROPERTIES - SELECTED RENTAL AND OPERATING DATA

As of December 31, 1996, only the Long Beach Shopping Center, Copley
Place multi-use complex, 1290 Avenue of the Americas and 237 Park Avenue
investment properties would be considered by the Partnership to be
significant. However, as more fully described in the Notes, the Long Beach
property is in receivership, the Copley Place property was sold in January
1997, and the Partnership's interests in 1290 and 237 Park properties were
restructured such that the Partnership has virtually no ongoing economic
interest. Therefore, selected rental and operating data has not been
presented for those properties in this Annual Report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

As a result of the public offering of Interests as described in Item
1, the Partnership had approximately $326,000,000 (after deducting selling
expenses) and other offering costs with which to make investments in
income-producing commercial and residential real property, to pay legal
fees and other costs (including acquisition fees) related to such invest-
ments and to satisfy working capital requirements. A portion of the
proceeds was utilized to acquire the properties described in Item 1 above.

In March 1997 some of the Holders of Interests received from a third
party unaffiliated with the Partnership an unsolicited offer to purchase up
to 17,000 Interests at $10 per Interest. Such offer is scheduled to expire
on April 10, 1997. The board of directors of JMB Realty Corporation
("JMB"), the Corporate General Partner, has established a special committee
(the "Special Committee") consisting of certain directors of JMB to deal
with all matters relating to tender offers for Interests, including any and
all responses to such tender offers. The Special Committee has retained
independent counsel to advise it in connection with any tender offers for
Interests and has retained Lehman Brothers Inc. as financial advisor to
assist the Special Committee in evaluating and responding to such tender
offers. With respect to the offer for Interests at $10 per Interest, the
Special Committee, on behalf of the Partnership, has recommended against
acceptance of this offer on the basis that, among other things, the offer
price is inadequate. The Partnership has received a request from another
unaffiliated third party for the list of Holders of Interests. It is
possible that other offers for Interests may be made by unaffiliated third
parties in the future, although there is no assurance that any third party
will commence an offer for Interests, the terms of any such offer or
whether any such offer, if made, will be consummated, amended or withdrawn.

At December 31, 1996, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $6,030,000 and short-term
investments of approximately $374,000. Approximately $1,403,000 of the
cash and cash equivalents are for payment of a portion of the real estate
taxes for Copley Place. In January 1997, this amount was expended.
Remaining amounts are available for working capital requirements and
potential leasing and tenant improvement costs at certain of the
Partnership's other investment properties as further described below. The
Partnership and its consolidated ventures have currently budgeted in 1997
approximately $2,489,000 for tenant improvements and other capital
expenditures. The Partnership's share of such items in 1997 is currently
budgeted to be $2,489,000. Actual amounts expended in 1997 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 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 and escrow deposits required under the terms of certain
loan modifications and restricted funds. In such regard, reference is made
to the discussion below and to the Notes regarding the sale of the
Partnership's interest in the Copley Place multi-use complex on January 23,
1997. In addition, the Partnership does not consider its indirect interest
in JMB/NYC as well as the Long Beach Plaza to be significant sources of
liquidity. In such regard, reference is made to the Partnership's property
specific discussions below. The Partnership's and its ventures' mortgage
obligations are separate non-recourse loans secured individually by the
investment properties and are not obligations of the entire investment
portfolio, and the Partnership and its ventures are not personally liable
for the payment of the mortgage indebtedness.

Based upon estimated operations of certain of the Partnership's
investment properties and on the anticipated requirements of the
Partnership to fund its share of leasing and capital improvement costs at
certain properties, the Partnership had suspended operating cash
distributions to the Holders of Interests and General Partners effective as
of the first quarter of 1992. It is important to maintain liquidity in the
Partnership in order to provide funds for potential future obligations or
for opportunities to preserve or enhance the value of the remaining
properties. Future distributions from operations, sales or refinancings
will be dependent upon a combination of the current cash flow from the
investment properties and the longer term capital requirements of the
Partnership.

As described more fully in the Notes, the Partnership has received
mortgage note modifications (certain of which have expired and others of
which expire at various dates commencing June 1997) or refinancings on the
Sherry Lane Place office building, Plaza Tower office building, Carrollwood
Apartments and Marshall's Aurora Plaza. If the Partnership is unable to
secure as necessary 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
would result in the Partnership no longer having an ownership interest in
such property and would generally result in net 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. With regard to Long Beach Plaza, the
Partnership has been unable to obtain a further modification of the
mortgage loan, as more fully described below and in the Notes.

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
$2,822,000 (approximately $8 per Interest) through December 31, 1996. The
Partnership paid $10,000,000 of previously deferred fees during February
1995. The currently deferred amounts do not bear interest and are payable
in future periods.

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.

While the real estate markets are recuperating, highly competitive
market conditions continue to exist in most locations. As a result, the
Partnership continues to conserve its working capital. All expenditures
are carefully analyzed and certain capital projects are deferred when
appropriate. By conserving working capital, the Partnership will be in a
better position to meet the future needs of its properties since the
availability of satisfactory outside sources of capital may be limited
given the portfolio's current debt levels, among other things. After
reviewing the remaining properties and their competitive marketplace, the
General Partners of the Partnership expect to be able to conduct an
orderly liquidation of most of the remaining assets as quickly as
practicable. In such regard, as of December 31, 1996, all of the
Partnership's consolidated investment properties were, or had been
previously, classified by the Partnership or its ventures as held for sale
or disposition and will no longer be subject to continued depreciation.
Therefore, it is currently expected that the Partnership will sell or
dispose of its remaining investment properties, with the possible exception
of the Partnership's indirect interest in the 237 Park Avenue and 1290
Avenue of the Americas properties, no later than 1999 (sooner if the
properties are sold or disposed of in the nearer term), barring unforeseen
economic developments.

The Partnership has held certain of its investment properties longer
than originally anticipated in an effort to maximize the return of their
investment to the Holders of Interests. Although the Partnership expects
to distribute from sale proceeds some portion of the Holders' original
capital, the Holders of Interests are expected to receive substantially
less than one-fourth of their original investment from all distributions of
sale and refinancing proceeds over the entire term of the Partnership.

Copley Place

On January 23, 1997, through a series of transactions the Partnership
sold its entire partnership interest in Copley Place Associates. The
Partnership received approximately $929,000 of net proceeds after repayment
of the purchase price note, at a discount, and repayment of its portion of
the deficit loans. Reference is made to the Notes for a further
description of such sale. This sale will result in a significant gain for
financial reporting and Federal income tax purposes in 1997.

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.

Old Orchard Urban Venture could have received reimbursement, under
certain conditions, of up to an additional $3,400,000 (of which Orchard
Associates had a 79.1667 interest) of previously incurred development costs
based upon certain future earnings of the property (as defined). In
December 1996, the joint venture received a final settlement of $2,450,000
(of which the Partnership share was $969,796) of such development costs
related to the sale of the Old Orchard Shopping Center.

In 1996, OOUV distributed to Orchard Associates $1,389,210 in proceeds
from the settlement of operating prorations. As a result, Orchard
Associates distributed $694,605 to the Partnership representing its share
of such operating prorations.

JMB/NYC

In October 1994, the Partnership and its affiliated partners (together
with the Partnership, the "Affiliated Partners"), through JMB/NYC, entered
into an agreement (the "Agreement") with the affiliates (the "Olympia &
York affiliates") of Olympia & York Developments, Ltd. ("O&Y") who were the
venture partners in the Joint Ventures which owned 237 Park Avenue, 1290
Avenue of the Americas and 2 Broadway, to resolve certain disputes among
the Affiliated Partners and the Olympia & York affiliates. In general, the
parties agreed to: (i) restructure the first mortgage loan; (ii) sell the
2 Broadway Building; (iii) reduce or eliminate approval rights of JMB/NYC
with respect to virtually all property management, leasing, sale or
refinancing; (iv) amend the Joint Ventures' agreements to eliminate any
funding obligations by JMB/NYC and (v) establish a new preferential cash
distribution level for the Olympia & York affiliates. In accordance with
the Agreement and in anticipation of the sale of the 2 Broadway Building,
the unpaid first mortgage indebtedness previously allocated to 2 Broadway
was allocated in 1994 to 237 Park Avenue and 1290 Avenue of the Americas.

As part of the Agreement, JMB/NYC and the Olympia & York affiliates
agreed to file a pre-arranged bankruptcy plan for reorganization under
Chapter 11 of the Bankruptcy Code in order to facilitate the restructuring
of the Joint Ventures between JMB/NYC and the Olympia & York affiliates and
the debt encumbering the two properties remaining after the sale of 2
Broadway. In June 1995, the 2 Broadway Joint Ventures filed their pre-
arranged bankruptcy plans for reorganization, and in August 1995, the
bankruptcy court entered an order confirming their plans of reorganization.

In September 1995, the sale of the 2 Broadway Building was completed. Such
sale did not result in any distributable proceeds to JMB/NYC or the Olympia
and York affiliates.

Bankruptcy filings for the Joint Ventures owning the 237 Park Avenue
and 1290 Avenue of the Americas properties were made in April 1996, and in
August 1996, an Amended Plan of Reorganization and Disclosure Statement
(the "Plan") was filed with the Bankruptcy Court for these Joint Ventures.
The Plan was accepted by the various classes of debt and equity holders and
confirmed by the Court on September 20, 1996 and became effective October
10, 1996 ("Effective Date"). The Plan provides that JMB/NYC has an
indirect limited partnership interest which, before taking into account
significant preferences to other partners, equals approximately 4.9% of the
reorganized and restructured ventures owning 237 Park and 1290 Avenue of
the Americas (the "Properties"). Neither O&Y nor any of its affiliates has
any direct or indirect continuing interest in the Properties. The new
ownership structure gives control of the Properties to a newly-organized
real estate investment trust which is owned primarily by holders of the
first mortgage debt which encumbered the Properties prior to the
bankruptcy. JMB/NYC has, under certain limited circumstances, through
January 1, 2001 rights of consent regarding sale of the Properties or the
consummation of certain other transactions that significantly reduce
indebtedness of the Properties.

The restructuring and reorganization discussed above eliminates any
potential additional obligation of the Partnership in the future to provide
additional funds under its previous joint venture agreements. The
Affiliated Partners entered into a joint and several obligation to
indemnify, through a date no later than January 2, 2001, the newly formed
real estate investment trust to the extent of $25 million to ensure their
compliance with the terms and conditions relating to JMB/NYC's indirect
limited partnership interest in the restructured and reorganized joint
ventures that own the Properties. The Affiliated Partners contributed
approximately $7.8 million (of which the Partnership's share was
approximately $1.9 million) to JMB/NYC which was deposited into an escrow
account as collateral for such indemnification. These funds have been
invested in stripped U.S. Government obligations with a maturity date of
February 15, 2001. Compliance with the provisions of the indemnification
agreement generally deal with impacting the operations of the newly
organized real estate investment trust. Compliance, therefore, is within
the control of the Affiliated Partners and non-compliance with such
provisions by either the Partnership or the Affiliated Partners is highly
unlikely. Therefore, it is highly likely that the Partnership's share of
the collateral will be returned to it at the termination of the
indemnification agreement. The Partnership may either retain for working
capital purposes or distribute all or portions of such funds upon return.

Long Beach Plaza

The Partnership has not remitted all of the scheduled debt service
payments for the mortgage loan secured by the Long Beach Plaza Shopping
Center since June 1993. The Partnership had initiated discussions with the
first mortgage lender regarding a permanent modification of its mortgage
loan secured by the property. In December 1994, the lender agreed to
extend the maturity of the loan until August 1995. The Partnership has
been unable to secure a permanent modification of the first and second
notes from the lender. The Partnership decided not to commit any
significant additional amounts to the property. In March 1996, a receiver
was appointed for the benefit of the lender. As a result, the Partnership
was required to submit to the lender approximately $1,000,000 of prior
years' cash generated from the property. Title to the property is expected

to transfer in 1997. Reference is made to Item 3 of this report for a
discussion of the receivership proceeding. This will result in the
Partnership no longer having an ownership interest in the property and will
result in a gain for financial reporting and Federal income tax purposes
with no corresponding distributable proceeds in 1997. Reference is made to
the Notes.

PLAZA TOWER OFFICE BUILDING

In accordance with the terms of the 1995 refinancing of the Plaza
Tower Office Building, the Partnership is obligated to deposit into escrow
$100,000 annually for five years to cover future tenant improvement
obligations pursuant to a lease executed with a major tenant effective
April 1996. Should the current tenant lease be terminated or amended such
that the Partnership's obligation to the tenant is eliminated, such
escrowed funds (plus interest earned thereon) would be released to the
Partnership.

The property is expected to operate at the break-even level for 1997.
This is a result of the Partnership's decision to undertake a modest lobby
renovation to be completed by the second quarter of 1997, which is included
in the budgeted capital improvements amounts described above. The
Partnership believes that this modest renovation is necessary to retain
tenants whose leases are expiring in 1997, 1998 and 1999 for 56,679, 51,515
and 76,827 square feet, respectively, or 13%, 12% and 18% of the building,
respectively. In addition, the renovation will better position the
property with maximum marketing potential for a sale during 1997.

SHERRY LANE PLACE

All excess cash flow is remitted to the lender as additional debt
service on the modified mortgage. Accordingly, the Partnership does not
consider this investment to be a source of short-term liquidity.

The Partnership has committed to a plan to sell or dispose of Sherry
Lane Place office building not later than December 31, 1999. Accordingly,
as of December 31, 1996, the Partnership has classified this property as
held for sale or disposition in the accompanying consolidated financial
statements, and therefore, the property will not be subject to continued
depreciation.

CARROLLWOOD APARTMENTS

In April 1996, the property manager (an affiliate of the Partnership's
joint venture partner in the property) of the apartment complex notified
the Partnership of potential sub-terranean termite damage at the property.
This damage was discovered as a result of a wood replacement project that
was undertaken to prepare the property to market for sale. The property
manager obtained three competitive bids to repair the damage, each of which
totalled approximately $1,400,000 (all bids were received prior to the tear
out and reconstruction of the prototype building as discussed below). The
exterminating company that had been treating the property for several years
was notified of the extensive damage and was negotiating with the property
manager and the venture partners its liability regarding the damage. In
August 1996, the joint venture, in conjunction with the exterminating
company, reached an agreement whereby one of the complex's twenty-seven
buildings was chosen as a prototype building to better survey the termite
damage. This building was analyzed and repaired at a total cost of
$69,430. The joint venture and the exterminating company then commenced
negotiating regarding a possible settlement for the entire complex. In
December 1996, the exterminating company notified the Partnership of its
desire to schedule a mediation between the parties in order to resolve
certain disputes regarding the repair costs. On March 19, 1997, the joint
venture and the exterminating company settled these issues and agreed on a
settlement in principle in the amount of $637,500. Finalization of the
settlement is subject to the execution of a definitive agreement by the
parties. The joint venture will repair the property in 1997 at a total

cost not expected to exceed $700,000. Although the joint venture has
recorded for financial reporting purposes a liability for such repair
costs, as a matter of prudent accounting practice, no amounts have been
recorded as receivable from the exterminating company in the accompanying
consolidated financial statements.

THE GLADES APARTMENTS

On November 21, 1996, the Partnership sold the land and related
improvements of the Glades Apartments. The sale price of the land and
related improvements was $12,900,000. Reference is made to the Notes for a
further description of the sale.

MARSHALL'S AURORA PLAZA

In February 1996, the Partnership was notified by TJX, the new owner
of the Marshall's store, of its intent to sublease or assign its lease as
permitted by Marshall's current lease agreement. The Partnership was
working with TJX to secure another tenant for its 28,000 square foot store
and issued a proposal for a replacement tenant. In May 1996, the
Partnership was notified that an agreement in principle was reached between
TJX and a national retailer specializing in crafts and hobby supplies,
whereby TJX will assign its lease to the national retailer. Subsequently,
in February 1997, a sublease was executed between the parties. The new
tenant is scheduled to open in May 1997. This transaction is not expected
to have an adverse financial impact on the property and the new national
retailer's store, when open, is expected to generate additional traffic to
the center.

RESULTS OF OPERATIONS

The aggregate decrease in cash and cash equivalents and short-term
investments at December 31, 1996 as compared to December 31, 1995 is
primarily due to $1,300,000 in excess cash flow generated at the Copley
Place multi-use complex that was held at December 31, 1995 and then
subsequently submitted to the lender in 1996 as required by the terms of
the loan modification agreement. Additionally, the Partnership contributed
approximately $1,900,000 to JMB/NYC pursuant to the terms of the
indemnification agreement, partially offset by the proceeds received from
the sale of Glades Apartments.

The decrease in restricted funds and the corresponding decrease in
tenant security deposits at December 31, 1996 as compared to December 31,
1995 is primarily due to a refund of a $1,010,000 security deposit to a
large tenant upon the renewal of their lease at Copley Place, partially
offset by restricted cash held by the appointed receiver of Long Beach
Plaza Shopping Center.

The decrease in rents and other receivables at December 31, 1996 as
compared to December 31, 1995 is primarily due to the timing of rental
collections at the Copley Place multi-use complex.

The increase in escrow deposits at December 31, 1996 as compared to
December 31, 1995 is primarily due to the excess cash flow being generated
from the Copley Place multi-use complex and deposited with the lender as
required by the loan modification.

The decrease in investment properties at December 31, 1996 as compared
to December 31, 1995 is primarily due to the sale of the Glades Apartments
in November 1996 and the provisions for value impairment recorded at Long
Beach Plaza in 1996.

The decrease in investment in unconsolidated ventures, at equity at
December 31, 1996 as compared to December 31, 1995 is primarily due to a
reduction of the Partnership's paid-in-capital obligation to Carlyle
Managers, Inc. and Carlyle Investors, Inc.

The increase in venture partners' deficits in ventures at December 31,
1996 as compared to December 31, 1995 is primarily due to the allocation to
the venture partner of its share of operating losses being incurred at the
Copley Place multi-use complex.

The increase in accounts payable at December 31, 1996 as compared to
December 31, 1995 is primarily due to a recorded liability at Carrollwood
Apartments relating to the estimated repair costs of the subterranean
termite damage at the property as discussed above.

The increase in unearned rents at December 31, 1996 as compared to
December 31, 1995 is primarily due to the timing of receipt of rental
income at the Copley Place multi-use complex.

The increase in accrued interest at December 31, 1996 as compared to
December 31, 1995 is primarily due to the continued suspension of debt
service payments on the long-term mortgage loan secured by Long Beach Plaza
and the accrual of interest on the deficit loans at the Copley Place multi-
use complex.

The decrease in the deficit balance of the investment in
unconsolidated venture is due to the restructuring of the Partnership's
indirect interest in JMB/NYC. The deficit balance of the investment in
unconsolidated venture has been adjusted so as to reflect the proportionate
exposure to the Partnership under its indemnification as more fully
described in the Notes.

The increase in long-term debt, less current portion at December 31,
1996 as compared to December 31, 1995 is primarily due to the accrual of
long-term deferred interest of approximately $2,749,000 on the Copley Place
mortgage note and the accrual of long-term deferred interest of
approximately $9,577,000 on the Copley Place purchase price note partly
offset by the repayment of the long-term mortgage loan secured by the
Glades Apartments upon sale of that property.

The decrease in venture partners' subordinated equity in venture at
December 31, 1996 as compared to December 31, 1995 is due to the sale of
the Glades Apartments in 1996.

The increase in rental income for the year ended December 31, 1996 as
compared to the year ended December 31, 1995 is primarily due to higher
average occupancy at the Copley Place multi-use complex in 1996. The
increase in rental income for the year ended December 31, 1995 as compared
to the year ended December 31, 1994 is primarily attributable to the
Registry of Motor Vehicles taking occupancy of approximately 129,000 square
feet in August of 1995 at Copley Place multi-use complex, partially offset
by the loss of IBM and John Hancock as tenants of the Copley Place multi-
use complex during April and October 1994, respectively.

The decrease in interest income for the year ended December 31, 1996
as compared to the year ended December 31, 1995 and the decrease in
interest income for the year ended December 31, 1995 as compared to the
year ended December 31, 1994 are primarily due to lower average balances in
short-term investments in 1996 and 1995 as a result of the February 1995
distribution to partners of previously undistributed sales proceeds of
$11,094,473 and the February 1995 payment of $10,000,000 for previously
deferred property management and leasing fees.

The increase in mortgage and other interest for the year ended
December 31, 1996 as compared to the year ended December 31, 1995 and the
increase in mortgage and other interest for the year ended December 31,
1995 as compared to the year ended December 31, 1994 are due to the
compounding of interest on the Copley Place purchase price note.

The decrease in depreciation expense for the year ended December 31,
1996 as compared to the year ended December 31, 1995 is due to the
$13,100,000 value impairment recorded as of January 1, 1996 for the Long
Beach Plaza Shopping Center as a result of the uncertainty of the

Partnership's ability to recover the net carrying value of the Long Beach
Plaza Shopping Center from future operations or sale. It is also due to
the suspension of depreciation expense on certain properties sold or
considered held for sale or disposition.

The increase in property operating expenses for the year ended
December 31, 1996 as compared to December 31, 1995 is primarily due to
higher real estate taxes (which are partially recoverable from tenants) at
the Copley Place multi-use complex, as well as a $700,000 accrual recorded
for the repair costs relating to the sub-terranean termite damage at
Carrollwood Apartments. In 1996, the city of Boston reevaluated and
increased the real estate taxes based on the increase in office occupancy
of approximately 15%. The decrease in property operating expenses for the
year ended December 31, 1995 as compared to the year ended December 31,
1994 is primarily due to the decrease in assessed property value for the
Copley Place multi-use complex, which lowered the property tax liability
for this investment property in 1995.

The decrease in professional services for the year ended December 31,
1996 as compared to the year ended December 31, 1995 is primarily due to
lower audit and legal fees incurred.

The increase in general and administrative expense for the year ended
December 31, 1995 as compared to the year ended December 31, 1994 is
attributable primarily to an increase in reimbursable costs to affiliates
of the General Partners in 1995 and the recognition of certain additional
prior year reimbursable costs to such affiliates.

The provision for value impairment in the amount of $17,600,000 for
the year ended December 31, 1996 is due to the uncertainty of the
Partnership's ability to recover the net carrying value of the Long Beach
Plaza Shopping Center from future operations or sale.

The Partnership's share of income from operations of unconsolidated
venture for the year ended December 31, 1996 is primarily due to the
restructuring of the Partnership's indirect interests in JMB/NYC.

The decrease in venture partners' share of loss from consolidated
ventures' operations for the year ended December 31, 1996 as compared to
December 31, 1995 is primarily due to improved operations at the Copley
Place multi-use complex as a result of higher rental income due to
increased average occupancy, partially offset by increased real estate
taxes which are only partially recoverable from tenants.

The gain of $5,484,249 on the sale or disposition of investment
property for the year ended December 31, 1996 is the result of the
Partnership's share of gain on sale of the Glades Apartments and the final
settlement of OOUV's share of reimbursable development costs related to the
sale of Old Orchard Shopping Center which was sold in September 1993. The
net gain of $18,364,792 on sale or disposition of investment property for
the year ended December 31, 1994 consists of a gain of $5,676,413 on the
transfer of the University Park office building, a gain (net of 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.

The loss on sale of interest in unconsolidated ventures and the
extraordinary item for the year ended December 31, 1995 and the related
increase in the Partnership's deficit investment in unconsolidated venture
at December 31, 1995 as compared to December 31, 1994 is primarily due to
the 1995 sale of 2 Broadway and the related gain on the extinguishment of
indebtedness.

The gain on sale of interest in unconsolidated venture of $1,702,802
for the year ended 1994 is due to the Partnership selling its interest in
the Old Orchard Shopping Center and the receipt of certain contingent
amounts resulting from the sale.

The extraordinary item of $996,126 for 1994 is due to the discounted
payoff of the mortgage note secured by the Eastridge Apartments.

INFLATION

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

Inflation is not expected to significantly impact future operations
due to the expected liquidation of most of the Partnership's investment
properties by 1999. However, to the extent that inflation in future
periods would have an adverse impact on property operating expenses, the
effect would generally be offset by amounts recovered from tenants as many
of the long-term leases at the Partnership's commercial properties have
escalation clauses covering increases in the cost of operating and main-
taining the properties as well as real estate taxes. Therefore, the effect
on operating earnings generally will depend upon whether properties remain
substantially occupied. In addition, substantially all of the leases at
the Partnership's shopping center investments contain provisions which
entitle the property owner to participate in gross receipts of tenants
above fixed minimum amounts.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)

AND CONSOLIDATED VENTURES

INDEX

Independent Auditors' Report

Consolidated Balance Sheets, December 31, 1996 and 1995

Consolidated Statements of Operations, years ended December 31,
1996, 1995 and 1994

Consolidated Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1996, 1995 and 1994

Consolidated Statements of Cash Flows, years ended December 31,
1996, 1995 and 1994

Notes to Consolidated Financial Statements

SCHEDULE
--------

Consolidated Real Estate and Accumulated Depreciation III

SCHEDULES NOT FILED:

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

INDEPENDENT AUDITORS' REPORT

The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII:

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

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
the Partnership and consolidated ventures at December 31, 1996 and 1995,
and the results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 1996, in conformity with
generally accepted accounting principles. Also in our opinion, the related
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

As discussed in the Notes to the consolidated financial statements, in
1996, the Partnership and its consolidated ventures changed their method of
accounting for long-lived assets and long-lived assets to be disposed of to
conform with Statement of Financial Accounting Standards No. 121.

KPMG PEAT MARWICK LLP

Chicago, Illinois
March 21, 1997

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

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1996 AND 1995

ASSETS
------
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 6,030,217 5,908,236
Short-term investments. . . . . . . . . . . . . . . . . . . . . . . 374,085 2,568,329
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . 1,055,386 1,312,240
Rents and other receivables . . . . . . . . . . . . . . . . . . . . 2,576,860 2,963,711
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 262,562 289,250
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 11,435,274 6,191,089
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . 21,734,384 19,232,855
Investment properties, at cost - Schedule III:
Land and leasehold interests. . . . . . . . . . . . . . . . . . . -- 20,935,810
Buildings and improvements. . . . . . . . . . . . . . . . . . . . -- 412,286,995
------------ ------------
-- 433,222,805
Less accumulated depreciation . . . . . . . . . . . . . . . . . . -- 163,309,553
------------ ------------
Total properties held for investment,
net of accumulated depreciation . . . . . . . . . . . . . -- 269,913,252

Properties held for sale or disposition . . . . . . . . . . . . . 238,208,441 --
------------ ------------

Total investment properties . . . . . . . . . . . . . . . . 238,208,441 269,913,252

Investment in unconsolidated ventures, at equity. . . . . . . . . . . 432,357 1,459,879
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 5,133,689 5,261,096
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . 447,345 489,911
Venture partners' deficits in ventures. . . . . . . . . . . . . . . . 14,639,364 11,103,113
------------ ------------

$280,595,580 307,460,106
============ ============

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

CONSOLIDATED BALANCE SHEETS - CONTINUED

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

1996 1995
------------ -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 39,232,585 39,666,113
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 3,434,187 2,858,162
Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . 4,238,789 4,249,390
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,633,263 600,610
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . 17,431,535 13,252,892
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 1,475,510 1,330,231
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . 67,445,869 61,957,398
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 800,941 1,704,872
Investment in unconsolidated venture, at equity . . . . . . . . . . . 4,265,510 84,764,207
Long-term debt, less current portion. . . . . . . . . . . . . . . . . 384,098,834 382,303,505
------------ ------------
Commitments and contingencies

Total liabilities . . . . . . . . . . . . . . . . . . . . . 456,611,154 530,729,982
Venture partners' subordinated equity in venture. . . . . . . . . . . -- 329,169
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . (19,776,680) (21,515,491)
Cumulative cash distributions . . . . . . . . . . . . . . . . . (1,149,967) (1,149,967)
------------ ------------
(20,925,647) (22,664,458)
------------ ------------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . 326,224,167 326,224,167
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . (440,355,677) (486,200,337)
Cumulative cash distributions . . . . . . . . . . . . . . . . . (40,958,417) (40,958,417)
------------ ------------
(155,089,927) (200,934,587)
------------ ------------
Total partners' capital (deficits). . . . . . . . . . . . . (176,015,574) (223,599,045)
------------ ------------
$280,595,580 307,460,106
============ ============

<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

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<CAPTION>

1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . $ 68,293,433 65,729,288 64,648,336
Interest income . . . . . . . . . . . . . . . . . 800,510 1,034,061 1,320,941
------------ ------------ ------------
69,093,943 66,763,349 65,969,277
------------ ------------ ------------
Expenses:
Mortgage and other interest . . . . . . . . . . . 39,959,842 38,615,594 37,651,732
Depreciation. . . . . . . . . . . . . . . . . . . 10,267,305 13,784,147 13,753,198
Property operating expenses . . . . . . . . . . . 39,183,796 35,234,465 37,293,007
Professional services . . . . . . . . . . . . . . 323,882 647,443 547,566
Amortization of deferred expenses . . . . . . . . 1,570,746 1,421,951 1,525,373
General and administrative. . . . . . . . . . . . 695,947 781,049 609,249
Provision for value impairment. . . . . . . . . . 17,600,000 -- --
------------ ------------ ------------

109,601,518 90,484,649 91,380,125
------------ ------------ ------------
Operating earnings (loss). . . . . . . . . . (40,507,575) (23,721,300) (25,410,848)
Partnership's share of income (loss) from
unconsolidated ventures (including income
from restructuring of $78,704,658
in 1996). . . . . . . . . . . . . . . . . . . . . 79,070,546 (6,600,158) (6,271,489)
Venture partners' share of earnings (loss) from
consolidated ventures' operations . . . . . . . . 3,536,251 4,588,759 5,659,744
------------ ------------ ------------
Net operating earnings (loss) . . . . . . . 42,099,222 (25,732,699) (26,022,593)
Gain (loss) on sale or disposition of investment
properties, net of venture partners'
share of ($329,169) in 1996 and $2,887,659
in 1994 . . . . . . . . . . . . . . . . . . . . . 5,484,249 -- 18,364,792
Partnership's share of gain (loss)
on sale of property or interest
in property of unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . -- (14,789,529) 1,702,082
------------ ------------ ------------
Earnings (loss) before extraordinary items. 47,583,471 (40,522,228) (5,955,719)

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

CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED

1996 1995 1994
------------ ------------ ------------
Extraordinary items . . . . . . . . . . . . . . . . -- 15,632,407 996,126
------------ ------------ ------------

Net earnings (loss). . . . . . . . . . . . . $ 47,583,471 (24,889,821) (4,959,593)
============ ============ ============

Net earnings (loss) per limited partnership
interest:
Net operating earnings (loss) . . . . . . . . . $ 110.42 (67.47) (68.22)
Gain (loss) on sale or disposition of
investment properties and
extinguishment of debt. . . . . . . . . . . . 14.83 -- 49.66
Share of gain (loss) on sale of
property or interest in property
of unconsolidated ventures. . . . . . . . . . -- (39.99) 4.60
Extraordinary items . . . . . . . . . . . . . . -- 42.27 2.69
------------ ------------ ------------

Net earnings (loss) . . . . . . . . . . . . . $ 125.25 (65.19) (11.27)
============ ============ ============

<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 PARTNERS' CAPITAL ACCOUNTS (DEFICITS)

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS
------------------------------------------------ -----------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ------------ ------------ -------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficit)
Decem-
ber 31,
1993 . . . .$1,000 (19,664,338) (1,039,022)(20,702,360) 326,224,167 (458,202,076) (29,974,889)(161,952,798)
Net earn-
ings (loss). -- (830,274) -- (830,274) -- (4,129,319) -- (4,129,319)
------ ----------- ---------- ----------- ----------- ------------ ----------- ----------
Balance
(deficit)
Decem-
ber 31,
1994 . . . . 1,000 (20,494,612) (1,039,022)(21,532,634) 326,224,167 (462,331,395) (29,974,889)(166,082,117)

Net earn-
ings (loss). -- (1,020,879) -- (1,020,879) -- (23,868,942) -- (23,868,942)
Cash distri-
butions
($30 per
limited
partnership
interest). . -- -- (110,945) (110,945) -- -- (10,983,528)(10,983,528)
------ ----------- ---------- ----------- ----------- ------------ ----------- -----------

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

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED

GENERAL PARTNERS LIMITED PARTNERS
------------------------------------------------ -----------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ------------ ------------ -------------------------
Balance
(deficit)
Decem-
ber 31,
1995 . . . . 1,000 (21,515,491) (1,149,967)(22,664,458) 326,224,167 (486,200,337) (40,958,417)(200,934,587)

Net earn-
ings (loss). -- 1,738,811 -- 1,738,811 -- 45,844,660 -- 45,844,660
------ ----------- ---------- ----------- ----------- ------------ ----------- -----------
Balance
(deficit)
Decem-
ber 31,
1996 . . . .$1,000 (19,776,680) (1,149,967)(20,925,647) 326,224,167 (440,355,677) (40,958,417)(155,089,927)
====== =========== ========== =========== =========== ============ =======================

<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

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . $ 47,583,471 (24,889,821) (4,959,593)
Items not requiring (providing) cash or
cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . 10,267,305 13,784,147 13,753,198
Amortization of deferred expenses . . . . . . . 1,570,746 1,421,951 1,525,373
Amortization of discount on long-term debt. . . 147,795 224,415 116,398
Long-term debt - deferred accrued interest. . . 12,575,684 11,980,846 10,854,534
Partnership's share of income (loss) from
unconsolidated ventures (including income
from restructuring of $78,704,658 in 1996). . (79,070,546) 6,600,158 6,271,489
Venture partners' share of consolidated
ventures' operations. . . . . . . . . . . . . (3,536,251) (4,588,759) (5,659,744)
Gain on sale or disposition of investment
properties. . . . . . . . . . . . . . . . . . (5,484,249) -- (18,364,792)
Extraordinary items . . . . . . . . . . . . . . -- (15,632,407) (996,126)
Partnership's share of (gain) loss on
sale of property or interest in property
of unconsolidated ventures. . . . . . . . . . -- 14,789,529 (1,702,082)
Provision for value impairment. . . . . . . . . 17,600,000 -- --
Changes in:
Restricted funds. . . . . . . . . . . . . . . . 256,854 (828,006) 54,566
Rents and other receivables . . . . . . . . . . 356,584 151,462 596,186
Prepaid expenses. . . . . . . . . . . . . . . . 26,688 29,086 78,773
Escrow deposits . . . . . . . . . . . . . . . . (5,439,699) (126,335) (2,145,872)
Accrued rents receivable. . . . . . . . . . . . 42,566 24,380 (27,002)
Accounts payable. . . . . . . . . . . . . . . . 576,025 839,886 (378,883)
Unearned rents. . . . . . . . . . . . . . . . . 1,099,239 (17,800) (151,827)
Accrued interest. . . . . . . . . . . . . . . . 4,476,029 4,140,326 521,403
Accrued real estate taxes . . . . . . . . . . . 321,108 (425,059) (309,189)
Amounts due to affiliates . . . . . . . . . . . 789,399 (9,960,695) (684,374)
Tenant security deposits. . . . . . . . . . . . (846,950) 938,939 (114,123)
------------ ------------ ------------
Net cash provided by (used in)
operating activities. . . . . . . . . . 3,311,798 (1,543,757) (1,721,687)
------------ ------------ ------------

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1996 1995 1994
------------ ------------ ------------
Cash flows from investing activities:
Cash proceeds from sale of investment
properties, net of selling expenses . . . . . . 1,651,689 -- 11,781,988
Additions to investment properties. . . . . . . . (4,337,187) (3,246,082) (1,796,484)
Cash expended in disposition of
investment properties . . . . . . . . . . . . . -- -- (1,014)
Net sales and maturities (purchases)
of short-term investments . . . . . . . . . . . 2,194,244 16,391,657 4,135,915
Partnership's distributions from
unconsolidated ventures . . . . . . . . . . . . 1,679,901 1,186,046 1,702,082
Partnership's contributions to
unconsolidated ventures . . . . . . . . . . . . (2,009,693) -- (10,000)
Payment of deferred expenses. . . . . . . . . . . (1,575,688) (1,531,975) (693,408)
------------ ------------ ------------
Net cash provided by (used in)
investing activities. . . . . . . . . . (2,396,734) 12,799,646 15,119,079
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from refinancing of long-term debt . . . -- 14,900,000 --
Principal payments on long-term debt. . . . . . . (793,083) (18,705,089) (10,022,203)
Venture partners' contributions to ventures . . . -- -- 814,568
Distributions to limited partners . . . . . . . . -- (10,983,528) --
Distributions to general partners . . . . . . . . -- (110,945) --
------------ ------------ ------------
Net cash provided by (used in)
financing activities. . . . . . . . . . (793,083) (14,899,562) (9,207,635)
------------ ------------ ------------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . 121,981 (3,643,673) 4,189,757

Cash and cash equivalents,
beginning of year . . . . . . . . . . . 5,908,236 9,551,909 5,362,152
------------ ------------ ------------
Cash and cash equivalents,
end of year . . . . . . . . . . . . . . $ 6,030,217 5,908,236 9,551,909
============ ============ ============

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1996 1995 1994
------------ ------------ ------------

Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . $ 21,830,425 22,733,319 26,150,776
============ ============ ============
Non-cash investing and financing activities:
Reduction in investment in unconsolidated venture $ 800,000 -- --
============ ============ ============
Reduction in amounts due to affiliates. . . . . $ (800,000) -- --
============ ============ ============

Principal balance due on mortgages payable. . . $ -- -- 9,696,126
Payment on long-term debt . . . . . . . . . . . -- -- (8,700,000)
------------ ------------ ------------
Extraordinary items - non-cash gain recognized
on forgiveness of indebtedness. . . . . . . . $ -- -- 996,126
============ ============ ============

<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

DECEMBER 31, 1996, 1995 AND 1994

OPERATIONS AND BASIS OF ACCOUNTING

GENERAL

The Partnership holds (either directly or through joint ventures) an
equity investment portfolio of United States real estate. Business
activities consist of rentals to a wide variety of commercial and retail
companies, and the ultimate sale or disposition of such real estate. The
Partnership currently expects to conduct an orderly liquidation of its
remaining investment portfolio and wind up its affairs not later than
December 31, 1999.

The accompanying consolidated financial statements include the
accounts of the Partnership and its consolidated ventures - Eastridge
Associates Limited Partnership ("Eastridge"), 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") in which the
Partnership has certain preferential claims and rights as discussed below.
The effect of all transactions between the Partnership and the consolidated
ventures has been eliminated.

The Partnership holds an approximate 25% interest in JMB/NYC Office
Building Associates, L.P. ("JMB/NYC") which in turn owns an indirect
approximate 4.9% interest in commercial real estate in the city of New
York, New York consisting of the 237 Park Avenue and 1290 Avenue of the
Americas properties (the "Properties").

The equity method of accounting has been applied in the accompanying
financial statements with respect to the Partnership's 25% indirect
interest in JMB/NYC through Carlyle XIII Associates, L.P. Accordingly, the
financial statements do not include the accounts of JMB/NYC or Carlyle-XIII
Associates, L.P. Effective with the confirmation and acceptance of the
Amended Plan of Reorganization and Disclosure Statement on October 10, 1996
("Effective Date"), JMB/NYC accounts for its indirect interest in the
Properties on the cost basis of accounting as a result of JMB/NYC
converting its ownership interest in the joint ventures which owned the
Properties to a limited partner. As a limited partner, JMB/NYC has no
future funding obligations (other than that related to a certain
indemnification provided in connection with the restructuring) and has no
influence or control over the day-to-day affairs of the Partnerships which
own the Properties subsequent to the Effective Date. Accordingly, JMB/NYC
(and the Partnership) have suspended loss recognition relative to their
respective real estate investments and have reversed those previously
recognized losses that the Partnership and JMB/NYC are no longer obligated
to fund. The Partnership maintains a deficit balance in its investment in
unconsolidated venture to reflect its maximum exposure under the
indemnification agreement. The share of income from unconsolidated
ventures in the accompanying Partnership financial statements includes the
respective partnerships' proportionate share of the operations of the
Properties through the Effective Date, as well as income from restructuring
consisting primarily of the reversal of previously recognized losses as
noted above and the adjustments necessary to record the restructuring.
JMB/NYC utilized the equity method to account for such investments prior to
the Effective Date.

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 GAAP and consolidation adjustments are not recorded on the
records of the Partnership. The effect of these items for the years ended
December 31, 1996 and 1995 is summarized as follows:

1996 1995
------------------------------ ------------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
------------ ---------- ----------- ----------
<S> <C> <C> <C> <C>
Total assets. . . . . . . . . . . . $280,595,580 66,129,981 307,460,106 69,275,776

Partners' capital accounts
(deficits):
General partners . . . . . . . (20,925,647) (29,981,225) (22,664,458) (30,958,036)
Limited partners . . . . . . . (155,089,927) (263,290,961) (200,934,587) (263,807,168)

Net earnings (loss):
General partners . . . . . . . 1,738,811 976,751 (1,020,879) 8,200
Limited partners . . . . . . . 45,844,660 516,267 (23,868,942) (36,054,854)

Net earnings (loss) per
limited partnership
interest. . . . . . . . . . . . . 125.25 1.41 (65.19) (98.47)
============ ============ ============ ============

</TABLE>

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

The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

Certain amounts in the 1995 financial statements have been
reclassified to conform with the 1996 presentation.

Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. In addition, the Partnership records
amounts held in U.S. Government obligations at cost, which approximates
market. For the purposes of these statements, the Partnership's policy is
to consider all such amounts held with original maturities of three months
or less ($5,500,762 and $2,194,000 at December 31, 1996 and 1995,
respectively) as cash equivalents, which includes investments in an
institutional mutual fund which holds U.S. Government obligations, with any
remaining amounts (generally with original maturities of one year or less)
reflected as short-term investments being held to maturity.

Deferred expenses are comprised principally of leasing fees which are
amortized using the straight-line method over the terms stipulated in the
related agreements, and commitment fees which are amortized over the
related commitment periods.

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

Statement of Financial Accounting Standards No. 107, "Disclosures
about Fair Value of Financial Instruments" (as amended), requires certain
large public entities to disclose the SFAS 107 value of all financial
assets and liabilities for which it is practicable to estimate. Value is
defined in the Statement as the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale. The Partnership believes the carrying amount
of its financial instruments classified as current assets and liabilities
(excluding current portion of long-term debt) approximates SFAS 107 value
due to the relatively short maturity of these instruments. There is no
quoted market value available for any of the Partnership's other
instruments. The debt secured by the Long Beach Plaza has been classified
by the Partnership as a current liability at December 31, 1996 because the
debt has now matured, and a receiver has been appointed for the property
for the benefit of the lender. The Partnership considers the disclosure of
the SFAS 107 value of such debt to be impracticable. The remaining debt,
with a carrying balance of $389,683,191, has been calculated to have an
SFAS 107 value of $332,287,787 by discounting the scheduled loan payments
to maturity. Due to restrictions on transferability and prepayment, and
the inability to obtain comparable financing due to previously modified
debt terms or other property specific competitive conditions, the
Partnership would be unable to refinance these properties to obtain such
assumed debt amounts reported. The Partnership has no other significant
financial instruments.

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

The Partnership has acquired, either directly or through joint
ventures, nine apartment complexes, three shopping centers, ten office
buildings and a multi-use complex. Fifteen properties have been sold or
disposed of by the Partnership as of December 31, 1996. All of the
remaining properties owned at December 31, 1996 were operating and held for
sale or disposition. The cost of the investment properties represents the
total cost to the Partnership or its ventures plus miscellaneous acquisi-
tion costs.

Depreciation on the properties has been provided over the estimated
useful lives of the various components as follows:

YEARS
-----

Building and Improvements -- straight-line . . 30
Personal property -- straight-line . . . . . . 5
==

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

Statement of Financial Accounting Standards No. 121 ("SFAS 121")
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" was issued in March 1995. The Partnership
adopted SFAS 121 as required in the first quarter of 1996. SFAS 121
requires that the Partnership record an impairment loss on its properties
to be held for investment whenever their carrying value cannot be fully
recovered through estimated undiscounted future cash flows from their
operations and sale. The amount of the impairment loss to be recognized
would be the difference between the property's carrying value and the
property's estimated fair value. The Partnership's policy is to consider a
property to be held for sale or disposition when the Partnership has
committed to a plan to sell or dispose of such property and active
marketing activity has commenced or is expected to commence in the near
term or the Partnership has concluded that it may dispose of the property
by no longer funding operating deficits or debt service requirements of the
property thus allowing the lender to realize upon its security. In
accordance with SFAS 121, any properties identified as "held for sale or
disposition" are no longer depreciated. Adjustments for impairment loss
for such properties (subsequent to the date of adoption of SFAS 121) are
made in each period as necessary to report these properties at the lower of
carrying value or fair value less costs to sell. In certain situations,
such estimated fair value could be less than the existing non-recourse debt
which is secured by the property. There can be no assurance that any
estimated fair value of these properties would ultimately be realized by
the Partnership in any future sale or disposition transaction.

Under the prior accounting policy, provisions for value impairment
were recorded with respect to investment properties whenever the estimated
future cash flows from a property's operations and projected sale were less
than the property's carrying value. The amount of any such impairment loss
recognized by the Partnership was limited to the excess, if any, of the
property's carrying value over the outstanding balance of the property's
non-recourse indebtedness. An impairment loss under SFAS 121 is determined
without regard to the nature or the balance of such non-recourse
indebtedness. Upon the disposition of a property with the related
extinguishment of the long-term debt for which an impairment loss has been
recognized under SFAS 121, the Partnership would recognize, at a minimum, a

net gain for financial reporting purposes (comprised of gain on
extinguishment of debt and gain or loss on the sale or disposition of
property) to the extent of any excess of the then outstanding balance of
the property's non-recourse indebtedness over the then carrying value of
the property, including the effect of any reduction for impairment loss
under SFAS 121.

In addition, upon the disposition of an impaired property, the
Partnership would generally recognize more net gain for financial reporting
purposes under SFAS 121 than it would have under the Partnership's prior
impairment policy, without regard to the amount, if any, of cash proceeds
received by the Partnership in connection with the disposition. Although
implementation of this accounting statement could significantly impact the
Partnership's reported earnings, there would be no impact on cash flows.
Further, any such impairment loss would not be recognized for Federal
income tax purposes.

The results of operations for consolidated properties classified as
held for sale or disposition as of December 31, 1996 or sold or disposed of
during the past three years were ($30,174,664), ($14,205,821) and
($17,487,132), respectively, for the years ended December 31, 1996, 1995
and 1994. In addition, the accompanying consolidated financial statements
include $0, ($2,399,842) and $7,919,052, respectively, of the Partnership's
share of total property operations of $0, ($10,321,904) and $34,060,437 of
unconsolidated properties held for sale or disposition as of December 31,
1996 or sold or disposed of in the past three years.

All investment properties are pledged as security for the long-term
debt, for which generally there is no recourse to the Partnership. A
portion of the long-term debt on the Copley Place multi-use complex
represents a mortgage loan which is subordinated to the existing senior
mortgage loan.

VENTURE AGREEMENTS - GENERAL

The Partnership at December 31, 1996 is a party to four 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 being
acquired, or parties which have contributed an interest in the property
being developed, or were subsequently admitted to the ventures, make no
cash contributions to the ventures, but their retention of an interest in
the property, through the joint venture, is taken into account in
determining the purchase price of the Partnership's interest, which 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, one
apartment complex, four office buildings, and a multi-use complex. In most
instances, the joint venture partners (who 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 below.

The Partnership in certain cases 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
relating to the various ownership interests of the Partnership and its
venture partners. During 1996, 1995 and 1994, two, two and three,
respectively, of the ventures' properties produced net cash receipts. In
addition, the Partnership in certain cases 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
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 agreements 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.

INVESTMENT PROPERTIES

LONG BEACH PLAZA

The Partnership purchased Long Beach Plaza located in Long Beach,
California for $45,839,458 (net of discount on long-term debt of
$10,330,542). The Partnership has not remitted all of the scheduled debt
service payments for the mortgage loan secured by the Long Beach Plaza
Shopping Center since June 1993. Accordingly, the combined balances of the
mortgage note and related accrued interest of approximately $47,624,000 at
December 31, 1996 and approximately $44,220,000 at December 31, 1995 have
been classified as current liabilities in the accompanying consolidated
financial statements. The Partnership had initiated discussions with the
first mortgage lender regarding a modification of its mortgage loan secured
by the property, which was originally due in June 1994. The lender agreed
to a short-term loan extension until August 31, 1995. The Partnership has
been unable to secure a modification or further extension to the loan. The
Partnership decided not to commit any significant additional amounts to the
property. In March 1996, a receiver for the property was appointed for the
benefit of the lender. As a result, the Partnership was required to submit
to the lender approximately $1,000,000 of prior years' cash generated from
the property. Title is expected to be transferred in 1997. This will
result in the Partnership no longer having an ownership interest in such
property and will result in gain for financial reporting and Federal income
tax purposes to the Partnership with no corresponding distributable
proceeds in 1997.

On adoption of SFAS 121 as described above, the Partnership recorded a
provision for value impairment of $13,100,000 as of January 1, 1996 to
reflect the then estimated fair value of the property based upon the use of
an appropriate capitalization rate on the property's net operating income.
As of July 1, 1996, the Partnership had committed to a plan to dispose of
Long Beach Plaza. Accordingly, the Partnership classified this property as
held for sale or disposition in the accompanying consolidated financial
statements as of such date, and therefore, the property will not be subject

to continuing depreciation. On December 31, 1996, the Partnership recorded
an additional provision for value impairment of $4,500,000 to revise the
estimated fair value, less costs to sell, of the property based on current
net operating income.

COPLEY PLACE

The Partnership acquired in 1983, through a joint venture ("Copley
Place Associates") with the developer, an interest in a portion of Copley
Place, a multi-use complex in Boston, Massachusetts. Initially, the
Partnership purchased its joint venture interest in the complex from the
developer for consideration which included a purchase price note secured by
the Partnership's interest in the joint venture. The purchase price note
(the "Note") with an original balance of $20,000,000, bore interest at
11.5% per annum on a compounded basis. The unpaid balance of the Note at
December 31, 1996 was $88,554,145. The Partnership had also 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.

As a result of such transaction, and subsequent assignments, the Note was
held by an affiliate of the Corporate General Partner at December 31, 1996.

The joint venture partner was obligated to fund (through capital
contributions and loans, as defined) any deficiency in the Partnership's
guaranteed return to 1989 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 had loaned approximately $13,648,000 through December
31, 1996 to fund its required obligation. The loans (the "Deficit Loans")
accrued interest at the contract rate based on the joint venture partner's
line of credit. The line of credit bore interest at a floating rate
(averaging 7.57% per annum at December 31, 1996). The outstanding
principal and accrued interest were to be repaid from future available cash
flow, as defined. During 1996, 1995 and 1994, the joint venture paid
approximately $225,000, $1,518,000 and $3,597,000, respectively, of accrued
interest on these loans. In May 1996, the venture used approximately
$945,000 of Copley Place pre-loan modification cash reserves to repay a
1996 advance of approximately $720,000 from the joint venture partner with
the remaining balance applied to accrued interest on the operating deficit
loans discussed above.

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

The joint venture agreement further provided that, in general, upon
any sale or refinancing of the complex the first $60,000,000 of net
proceeds would be distributed equally between the Partnership and the joint
venture partner. The Partnership would 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 December 31, 1996 was
$12,000,000). The Partnership would then be entitled to receive the next
$190,000,000 plus an amount equal to certain interest which had been paid
or was payable to the developer and its successors on the Note. The joint
venture partner would have been entitled to receive the next $190,000,000
plus an amount equal to certain interest paid to it on the Note, with any
remaining proceeds distributable equally to the Partnership and the joint
venture partner. However, the Partnership was obligated to use its share
of any sale or refinancing proceeds to satisfy, in full, the Note payable
to the joint venture partner.

The joint venture modified the existing first mortgage note effective
March 1, 1992. The modification lowered the pay rate from 12% to 7-1/2%
per annum through August 1998. The contract rate was lowered to 10% per
annum through August 1993 and, 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 on the loan,
including the difference between deferred interest and interest paid at the
applicable pay rate (as defined), was added to the principal balance and
accrued interest at the contract interest rate. On September 1, 1996, the
joint venture elected to pay mortgage interest using the contract rate of
8.5% rather than the pay rate of 7.5%. All outstanding principal,
including the unpaid deferred interest, was due and payable on August 31,
1998. Any cash flow from the property, after all capital and leasing
expenditures, but before payment of a portion of the property management
fees, was escrowed for the purpose of paying for future capital and leasing
requirements.

As a result of the debt modification, the property produced cash flow
since 1993. This cash flow had been escrowed for future potential leasing
requirements as set forth in the loan modification.

From and after 1986, substantially all of the joint venture partner's
interest in the joint venture was owned by the Corporate General Partner.
An affiliate of the Corporate General Partner managed the portion of the
complex owned by the joint venture, pursuant to an agreement similar to
those described above.

During 1996, the Partnership and Copley Place Associates had committed
to a plan to sell the property, and therefore, classified the property as
held for sale at October 1, 1996. The property was not subject to
continued depreciation as of such date. In 1996, the joint venture
determined that receivables due from an affiliate were uncollectible. As a
result, the joint venture wrote off these amounts in 1996.

The Partnership's outstanding obligations on the Note and for the
Deficit Loans, and the projected continuing accruals of additional interest
on such amounts made it unlikely that the Partnership's interest in Copley
Place Associates would ever be sold for an amount which would result in any
net proceeds to the Partnership. The Partnership sold its interest on
January 23, 1997. In order to provide the Partnership with incentive to
consummate the sale of its interest, the joint venture partner, the holder
of the Note and the Partnership executed an agreement whereby the net
proceeds were distributed in a manner which permitted the Partnership to
satisfy its obligations relative to the Note and the Deficit Loans and
still realize some modest cash proceeds. In addition, the holder of the
Note agreed on a discounted payoff of the Note. In general, the
Partnership received $43,900,000 of sale proceeds, of which $34,000,000 was
remitted to the holder of the Note as payment in full satisfaction of the
Note. As a result, the Partnership was relieved of an approximately
$55,000,000 obligation. The Partnership's obligation under the Deficit
Loans were next satisfied in full out of the Partnership's remaining sale
proceeds. After the repayment of the Note and Deficit Loans, as discussed
above, the Partnership's remaining net proceeds amounted to approximately
$929,000, all of which was received in cash at closing. The Partnership
currently intends to retain these funds as necessary working capital
reserves.

The effect on the Partnership's consolidated financial statements as a
result of the sale will be to eliminate the Partnership's investment in
Copley Place Associates and to recognize a gain on sale of the
Partnership's interest in the consolidated venture of approximately
$126,500,000 for financial reporting purposes in 1997. The Partnership
also expects to recognize a gain on the sale of approximately $171,500,000
for Federal income tax purposes in 1997.

JMB/NYC

JMB/NYC is a limited partnership among Carlyle-XIII Associates, L.P.,
Carlyle-XIV Associates, L.P. and Property Partners, L.P. as limited
partners and Carlyle Managers, Inc. as the sole general partner. The
Partnership is a 20% shareholder of Carlyle Managers, Inc. and related to
this investment, the Partnership has an obligation to fund, on demand,
$200,000 (reduced from $600,000 during 1996) of additional paid-in capital
to Carlyle Managers, Inc. (reflected in amounts due to affiliates in the
accompanying financial statements). 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 is a 20% shareholder. Related to this investment,
the Partnership has an obligation to fund, on demand, $200,000 (reduced
from $600,000 during 1996) 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%.

In September 1995, the sale of the 2 Broadway Building was completed. Such
sale did not result in any distributable proceeds to JMB/NYC or the Olympia
& York affiliates.

Bankruptcy filings for the Joint Ventures owning the 237 Park Avenue
and 1290 Avenue of the Americas properties were made in April 1996, and in
August 1996, an Amended Plan of Reorganization and Disclosure Statement
(the "Plan") was filed with the Bankruptcy Court for these Joint Ventures.
The Plan was accepted by the various classes of debt and equity holders and
confirmed by the Court on September 20, 1996 and became effective October
10, 1996 ("Effective Date"). The Plan provides that JMB/NYC has an
indirect limited partnership interest which, before taking into account
significant preferences to other partners, equals approximately 4.9% of the
reorganized and restructured ventures owning 237 Park and 1290 Avenue of
the Americas. Neither O&Y nor any of its affiliates has any direct or
indirect continuing interest in the Properties. The new ownership
structure gives control of the Properties to a newly-organized real estate

investment trust which is owned primarily by holders of the first mortgage
debt which encumbered the Properties prior to the bankruptcy. JMB/NYC has,
under certain limited circumstances, through January 1, 2001 rights of
consent regarding sale of the Properties or the consummation of certain
other transactions that significantly reduce indebtedness of the
Properties.

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.

OOUV was entitled to receive up to an additional $4,300,000 based upon
certain events (as defined), all of which was earned and was subsequently
received in 1994. Upon receipt, OOUV distributed the $4,300,000 to the
respective partners based upon their percentage interests. OOUV could have
received reimbursement, under certain conditions, of up to an additional
$3,400,000 (of which Orchard Associates had a 79.1667 interest) of
previously incurred development costs based upon certain future earnings of
the property (as defined). In December 1996, OOUV received a final
settlement of $2,450,000 (of which the Partnership's share was $969,796) of
such development costs related to the sale of the Old Orchard Shopping
Center.

At the time of redemption, OOUV retained a portion of the Orchard
Associates redemption proceeds in order to fund certain contingent amounts
which may have been due in the future. In July 1995, OOUV distributed to
Orchard Associates a significant portion of its redemption holdback of
$2,083,644. As a result, the Partnership received its share of the
holdback of $1,041,820. In October 1995, OOUV distributed to Orchard
Associates its share of the pre-sale settlement with Federated Department
Stores of $288,452. As a result, Orchard Associates distributed to the

Partnership its share of the settlement of $144,226. In 1996, OOUV
distributed to Orchard Associates proceeds of $1,389,210 from the
settlement of operating prorations. As a result, Orchard Associates
distributed $694,605 to the Partnership representing its share of such
operating prorations. The Partnership intends to retain these funds for
working capital purposes.

OOUV and Orchard Associates had also entered into a contribution
agreement whereby they 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 share ($1,702,082 to
the Partnership) of such amount. The Partnership recognized a gain of
$1,702,082 for financial reporting purposes and Federal income tax purposes
in 1994. In December 1996, Orchard received its share of the earn out
provision of $2,450,000, as discussed above, and distributed to each of the
respective partners their share ($969,796 to the Partnership) of such
amount. The Partnership recognized a gain of $870,837 for financial
reporting purposes and for Federal income tax purposes in 1996.

SHERRY LANE PLACE OFFICE BUILDING

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
second note, consisting of the remaining unpaid principal and accrued
interest, has a zero pay and accrual rate. 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).

The Partnership has committed to a plan to sell or dispose of Sherry
Lane Place office building not later than December 31, 1999. Accordingly,
as of December 31, 1996, the Partnership has classified this property as
held for sale or disposition in the accompanying Consolidated Financial
Statements, and therefore, the property will not be subject to continued
depreciation.

CARROLLWOOD APARTMENTS

In September 1993, the venture refinanced with an unaffiliated third
party lender the existing $7,200,000 mortgage loan. The new loan is in the
amount of $7,455,000. 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 has been subsequently funded by the operations of the venture. As of
the date of this report, the escrow account has approximately $123,000 and
no amounts have been withdrawn.

The Partnership has committed to a plan to sell or dispose of
Carrollwood Apartments. Accordingly, as of December 31, 1996, the
Partnership has classified this property as held for sale or disposition in
the accompanying Consolidated Financial Statements, and therefore, the
property will not be subject to continued depreciation.

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 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 1996. Concurrent
with the closing of the modification, the Partnership paid down the
existing mortgage balance in the amount of $250,000. The Partnership
initiated discussions with the first mortgage lender for a short-term
extension of the mortgage loan. The lender agreed to a short-term loan
extension until June 2, 1997 with the payment of a loan extension fee (paid
on November 1, 1996) equal to 1.25% of the outstanding balance of
approximately $5,368,000 or $67,100.

As of December 31, 1996, the Partnership has committed to a plan to
sell or dispose of Marshall's Aurora Plaza. Accordingly, the Partnership
has classified this property as held for sale or disposition in the
accompanying Consolidated Financial Statements, and therefore, the property
will not be subject to continued depreciation. However, if the Partnership
is unable to sell the property by the revised maturity date of the loan
(June 2, 1997), the Partnership will seek a further extension of such loan.

There can be no assurance that such an extension can be obtained.

PLAZA TOWER

The first mortgage loan secured by the Plaza Tower office building
property matured on November 1, 1994. The Partnership reached an agreement
for a short-term extension until January 1, 1995 upon paying a $15,000
extension fee to the existing lender. During January 1995, the Partnership
reached another agreement with the existing lender for an extension until
March 31, 1995 provided the Partnership pay down the principal balance by
$1,500,000 and find an alternative source of financing. The Partnership
continued to remit debt service during this period under the existing loan
terms.

In April 1995, the Partnership agreed with a new third party lender to
refinance approximately $14,900,000 of the existing mortgage note. As
such, the Partnership paid the previous mortgage lender another $1,100,000
on the existing mortgage note in order to further extend the loan until the
refinancing closed. The refinancing closed in April 1995 and there were no
distributable proceeds available.

The Partnership has committed to a plan to sell or dispose of Plaza
Tower office building. Accordingly, as of December 31, 1996, the
Partnership has classified this property as held for sale or disposition in
the accompanying Consolidated Financial Statements, and therefore, the
property will not be subject to continued depreciation.

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.

The Partnership had 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 land. The land was to be purchased by the buyer after the
environmental clean-up was completed. The Partnership was informed that
certain regulatory agencies have approved the clean-up of the site and
approved the shut-down of the clean-up operation. On March 12, 1997, the
Partnership sold the Parcel for approximately $682,000. The sale of this
Parcel will result in gain for financial reporting and Federal income tax
purposes in the first quarter of 1997.

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 obligation was satisfied in full
prior to the sale date. The Partnership recognized a gain of $5,010,871
for financial reporting purposes and approximately $7,081,000 for Federal
income tax purposes in 1994.

UNIVERSITY PARK OFFICE BUILDING

The Partnership transferred title to the property to the lender in
January 1994 which resulted in net gain of approximately $5,676,000 for
financial reporting and approximately $6,897,000 for Federal income tax
purposes to the Partnership with no corresponding distributable proceeds in
1994.

GABLES CORPORATE PLAZA

Title to the property to the lender was transferred to the lender in
January 1994 which resulted in net gain of approximately $3,793,000 for
Federal income tax purposes without any net distributable proceeds in 1994.

THE GLADES APARTMENTS

The joint venture had been marketing the Glades Apartments for sale.
The property was classified as held for sale or disposition as of April 1,
1996, and therefore, was not subject to continued depreciation. In July
1996, the joint venture signed a letter of intent to sell the property to
an unaffiliated third party.

On November 21, 1996, the Partnership sold the land and related
improvements of the Glades Apartments. The purchaser was not affiliated
with the Partnership or its General Partners and the sale price was
determined by arm's-length negotiations. The sale price was $12,900,000
(before selling costs). The sale price was represented by the buyer's
assumption of the first mortgage loan which, at closing, had an outstanding
principal balance of $9,640,000, the payoff of the second mortgage which,
at closing, had an outstanding principal balance of $1,187,420, and
approximately $298,450 in brokerage commissions and selling expenses in
connection with the sale. The balance of the purchase price was paid in
cash at closing. The Partnership recognized a gain of $4,616,259 for
financial reporting purposes and $8,135,436 for Federal income tax purposes
in 1996.

LONG-TERM DEBT

GENERAL

In response to operating deficits incurred at certain properties, the
Partnership has received mortgage note modifications on certain properties.

Certain of the modifications received have expired and others expire on
various dates commencing June 1997. In addition, certain properties have
loans with scheduled maturities commencing August 1998. Upon expiration of
such modifications or at maturity, should the Partnership or its ventures
be unable to secure new or additional modifications to or refinancing of
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 gain for
financial reporting and Federal income tax purposes without any net
distributable proceeds. Such decisions would be made on a property-by-
property basis.

<TABLE>

Long-term debt consists of the following at December 31, 1996 and 1995:
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
11.5% purchase price note payable to an affiliate;
secured by Partnership's interest in the joint venture
that owns Copley Place multi-use complex in Boston,
Massachusetts; accruing interest through August 31,
1998 when the entire balance was payable (satisfied
in January 1997 at sale). . . . . . . . . . . . . . . . . . . . . . $ 88,554,145 78,977,399

8.5% mortgage note (the note has been modified; due August
1998; secured by Copley Place multi-use complex in
Boston, Massachusetts; balance originally payable
in monthly installments of principal and interest
of $2,184,042 through September 30, 1993 and
$1,306,321 through August 31, 1996 and $1,562,215
thereafter (assumed by the purchaser of the property
in January 1997). . . . . . . . . . . . . . . . . . . . . . . . . . 219,052,858 216,303,920

9.02% mortgage note; secured by the Plaza Tower office building,
payable monthly, interest only, until October 2000 when the
principal and any accrued interest is due . . . . . . . . . . . . . 14,900,000 14,900,000

8.5% mortgage note; secured by the Sherry Lane Place office building
in Dallas, Texas; payable in monthly installments of interest
only until April 1, 1998 when the remaining principal
balance is payable (as remodified). . . . . . . . . . . . . . . . . 22,000,000 22,000,000

Contingent interest note; secured by the Sherry Lane
Place office building in Dallas, Texas; contingent
interest due annually equal to the excess cash flow
of the property (as defined); due April 1, 1998 . . . . . . . . . . 18,003,538 18,158,558

13% mortgage note (in default) secured by the Long Beach Plaza
shopping center in Long Beach, California; payable
in monthly installments of principal and interest
of $372,583 originally due June 27, 1994 and
subsequently extended to August 31, 1995 when the
remaining principal balance of $33,734,354 was
payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,734,354 33,734,354

1996 1995
----------- -----------
Other mortgage loans:
Long Beach Plaza Shopping Center, non-interest bearing, (net
of $8,686,860 and $8,834,655 unamortized discount at 12%
at December 31, 1996 and 1995, respectively), due 2014. . . . . . 1,313,140 1,165,345

Marshalls Aurora Plaza Shopping Center, 8.375%;
payable in monthly installments of principal and
interest until November 1, 1996 and subsequently
extended to June 2, 1997 when the remaining principal
balance is payable. (The note has been modified) . . . . . . . . 5,282,757 5,601,708

Glades apartment complex, 6.1%, due 2002
(satisfied in November 1996). . . . . . . . . . . . . . . . . . . -- 9,737,500

Glades apartment complex, 6% (plus,
subsequent to April 1995, 50% of cash flows
(as defined)), originally accruing interest through
October 1, 2002 (satisfied in November 1996). . . . . . . . . . . -- 950,262

Carrollwood apartment complex, 7.45%,
due August 1998 . . . . . . . . . . . . . . . . . . . . . . . . . 6,842,195 7,042,140

Other (satisfied in January 1997) . . . . . . . . . . . . . . . . . 13,648,432 13,398,432
------------ -----------
Total debt. . . . . . . . . . . . . . . . . . . . . . . . . 423,331,419 421,969,618
Less current portion of long-term debt. . . . . . . . . . . 39,232,585 39,666,113
------------ -----------
Total long-term debt. . . . . . . . . . . . . . . . . . . . $384,098,834 382,303,505
============ ===========

</TABLE>

Included in the above total long-term debt is $84,795,053 and
$72,714,370 for 1996 and 1995, respectively, which represents mortgage
interest accrued but not currently payable pursuant to the terms of the
various notes.

Five year maturities of long-term debt are as follows:

1997 . . . . . . . . . . . . . . $ 39,232,585
1998 . . . . . . . . . . . . . . 46,630,153
1999 . . . . . . . . . . . . . . --
2000 . . . . . . . . . . . . . . 14,900,000
2001 . . . . . . . . . . . . . . --
============

Due to the sale of Copley Place Associates on January 23, 1997, the
above schedule excludes the maturity of long-term debt related to this
investment property.

PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Holders
of Interests and 4% to the General Partners. Profits from the sale of
investment properties are to be allocated to the General Partners to the
greatest of (i) 1% of such profits, (ii) the amount of cash distributions
to the General Partners, or (iii) an amount which will reduce the General
Partners' capital account deficits (if any) to a level consistent with the
gain anticipated to be realized from the sale of properties. Losses from
the sale of properties are to be allocated 1% to the General Partners. The
remaining profits and losses will be allocated to the Holders of Interests.

The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon termination
of the Partnership. Distributions of "Net cash receipts" of the
Partnership are allocated 90% to the Holders of Interests and 10% to the
General Partners (of which 6.25% constitutes a management fee to the
Corporate General Partner for services in managing the Partnership).

The Partnership Agreement provides that the General Partners shall
receive as a distribution of the proceeds (net after expenses and
liabilities and retained working capital) from the sale or refinancing of a
real property of up to 3% of the selling price of a property, and that the
remaining net proceeds for any property sold be distributed 85% to the
Holders of Interests and 15% to the General Partners. However, prior to
such distributions being made, the Holders of Interests are entitled to
receive 99% of net sale or refinancing proceeds and the General Partners
are entitled to receive 1% until the Holders of Interests (i) have received
cumulative cash distributions from the Partnership's operations which, when
combined with net sale or refinancing proceeds previously distributed,
equal a 6% annual return on the Holders' average capital investment for
each year (their initial capital investment as reduced by net sale or
refinancing proceeds previously distributed) and (ii) have received cash
distributions of net sale or refinancing proceeds in an amount equal to the
Holders' aggregate initial capital investment in the Partnership. If upon
the completion of the liquidation of the Partnership and the distribution
of all Partnership funds, the Holders of Interests have not received the
amounts in (i) and (ii) above, the General Partners will be required to
return all or a portion of the 1% distribution of net sale or refinancing
proceeds described above in an amount equal to such deficiency in payments
to the Holders of Interests pursuant to (i) and (ii) above. The Holders of
Interests have not received and are not expected to receive distributions
to the above levels. As of the date of this report, the General Partners
have received $123,891 in distributions of net sale proceeds.

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, Plaza Tower office
building in Knoxville, Tennessee and Eastridge Apartments in Tucson,
Arizona (prior to its sale in June 1994), University Park office building
in Sacramento, California, (prior to transferring the property to the
lender in January 1994), Sherry Lane Place office building in Dallas,
Texas, Glades Apartments in Jacksonville, Florida and Gables Corporate
Plaza in Coral Gables, Florida (prior to the lender appointing a receiver
in May 1993) were managed by an affiliate of the Corporate General Partner
until December 1994 for a fee equal to a percentage of defined gross income
from the property. In December 1994, one of the affiliated property
managers sold substantially all of its assets and assigned its interest in
its management contracts to an unaffiliated third party. In addition,
certain of the management personnel of the property manager became
management personnel of the purchaser and its affiliates. The successor to
the affiliated property manager's assets is acting as the property manager
of the Plaza Tower office building and the Sherry Lane office building on
the same terms that existed prior to the assignment.

LEASES - AS PROPERTY LESSOR

At December 31, 1996, the Partnership and its consolidated ventures'
principal assets are two office buildings, two shopping centers, a
multi-use complex and one apartment complex. The Partnership has
determined that all leases relating to these properties are properly
classified as operating leases; therefore, rental income is reported when
earned and the cost of each of the properties, excluding cost of land, is
depreciated over the estimated useful lives. Leases with commercial
tenants range in term from one to 30 years and provide for fixed minimum
rent and partial reimbursement of operating costs. In addition, leases
with shopping center tenants generally provide for additional rent based
upon percentages of tenants' sales volumes. With respect to the
Partnership's shopping center investments, a substantial portion of the
ability of retail tenants to honor their leases is dependent upon the
retail economic sector.

Apartment complex leases in effect at December 31, 1996 are generally
for a term of one year or less and provide for annual rents of approx-
imately $1,966,000.

Cost and accumulated depreciation of the leased assets are summarized
as follows at December 31, 1996:

Shopping centers:
Cost . . . . . . . . . . . . . $ 35,145,235
Accumulated depreciation . . . (20,059,290)
------------
15,085,945
------------
Office buildings:
Cost . . . . . . . . . . . . . 72,878,267
Accumulated depreciation . . . (27,829,919)
------------
45,048,348
------------

Multi-use complex:
Cost . . . . . . . . . . . . . 290,724,496
Accumulated depreciation . . . (118,070,415)
------------
172,654,081
------------
Apartment complex:
Cost . . . . . . . . . . . . 9,061,349
Accumulated depreciation . . . (3,641,282)
------------
5,420,067
------------
Total. . . . . . . . . $238,208,441
============

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

1997. . . . . . . . . . . . $14,550,595
1998. . . . . . . . . . . . 10,804,653
1999. . . . . . . . . . . . 8,675,516
2000. . . . . . . . . . . . 6,735,829
2001. . . . . . . . . . . . 5,472,849
Thereafter. . . . . . . . . 14,320,246
===========

Due to the sale of the Partnership's interest in Copley Place
Associates on January 23, 1997, the above schedule excludes future lease
payments related to this investment property.

Additional rent based upon percentages of tenants' sales volumes
included in rental income aggregated $725,568, $675,043 and $526,850 for
the years ended December 31, 1996, 1995 and 1994, respectively.

LEASES - AS PROPERTY LESSEE

The following lease agreements have been determined to be operating
leases:

The Partnership owns the leasehold rights to the parking structure
adjacent to the Long Beach, California shopping center. The lease has an
initial term of 50 years which commenced in 1981 with one 49-year renewal
option exercisable by a local municipal authority. The lease provides for
annual rental of $745,000, which is subject to decrease based on formulas
which relate to the amount of real estate taxes assessed against the
shopping center and the parking structure. The rental expense for 1996,
1995 and 1994 under the above operating lease was $424,783, $633,548 and
$538,159, respectively, and consisted exclusively of minimum rent.

The Copley Place venture had leased the air rights over the
Massachusetts Turnpike located beneath the Boston, Massachusetts multi-use
complex. The lease had a term of 99 years which commenced in 1978. The
total rent due under the terms of the air rights lease was prepaid by the
seller and was being amortized over the term of the air rights lease.

TRANSACTIONS WITH AFFILIATES

In December 1984, Urban Holdings, Inc., an affiliate of the Corporate
General Partner of the Partnership, purchased all the outstanding stock of
the developer (joint venture partner) and property manager of the Old
Orchard Shopping Center and the Copley Place multi-use complex, and
successor entities to the developer and property manager continue in their
respective capacities. Consequently, the joint venture partner is an
affiliate of the Corporate General Partner and continues to possess all of
the rights and obligations granted the original developer under the terms
of the respective acquisition and related agreements.

The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investment properties. Fees, commissions
and other expenses required to be paid by the Partnership to the General
Partners and their affiliates as of December 31, 1996, 1995 and 1994 are as
follows:

UNPAID AT
DECEMBER 31,
1996 1995 1994 1996
---------- --------- --------- ------------
Property management
and leasing fees . . . .$1,575,148 1,459,783 1,195,147 2,821,503
Insurance commissions . . 67,579 65,185 55,542 --
Reimbursement (at cost)
for accounting services. 23,862 164,441 220,159 6,111
Reimbursement (at cost)
for portfolio manage-
ment services. . . . . . 40,841 74,396 69,775 8,528
Reimbursement (at cost)
for legal services . . . 18,386 9,267 20,977 5,076
Reimbursement (at cost)
for administrative
charges and other out-
of-pocket expenses . . . 91,596 208,625 1,372 52,777
---------- --------- --------- ---------

$1,817,412 1,981,697 1,562,972 2,893,995
========== ========= ========= =========

Payment of certain pre-1993 property management and leasing fees
payable under the terms of the management agreements ($2,822,000,
approximately $8 per $1,000 interest) at December 31, 1996 has been
deferred. All amounts currently payable do not bear interest and are
expected to be paid in future periods. All property management fees and
leasing fees are being paid currently. In February 1995, the Partnership
paid $10,000,000 of previously deferred property management and leasing
fees to an affiliate of the General Partner.

Reference is made to the JMB/NYC discussion above regarding the
Partnership's obligation to fund, on demand, $600,000 and $600,000 to
Carlyle Managers, Inc. and Carlyle Investors, Inc., respectively, of
additional paid-in capital (reflected in amounts due to affiliates in the
accompanying financial statements). These obligations were reduced to
$200,000 and $200,000, respectively. As of December 31, 1996, these
obligations bore interest at 5.93% per annum and cumulative interest
accrued on these obligations was $236,929.

The affiliated joint venture partner was obligated through December
31, 1991 to loan amounts (the "Deficit Loans") to pay for any operating
deficits (as defined) of Copley Place. Through December 31, 1996, the
affiliated joint venture partner had loaned approximately $13,648,000 at an
interest rate based on its line of credit, which bore interest at a
floating rate (averaging 7.57% per annum at December 31, 1996). During
1996, approximately $1,234,000 of interest accrued on these loans, and the
joint venture paid approximately $225,000 of accrued interest (including a
portion accrued from a prior year) on these loans. As of January 23, 1997,
these Deficit Loans were paid in full as discussed below.

The consideration paid by the Partnership for its interest in Copley
Place Associates included a purchase price note with an original principal
balance of $20,000,000 and bearing interest at 11.5% per annum (the
"Note"). The unpaid balance of the Note at December 31, 1996 was
$88,554,145 and was payable to an affiliate of the Corporate General
Partner, as discussed above.

INVESTMENT IN UNCONSOLIDATED VENTURE

Summary financial information for JMB/NYC as of and for the years
ended December 31, 1996 and 1995 (combined to include its unconsolidated
ventures through December 31, 1995) is as follows:

1996 1995
------------ ------------

Current assets. . . . . . . . . . . . $ 27,859 13,898,980
Current liabilities (includes
$902,603,491 of current portion
of long-term debt at December 31,
1995) . . . . . . . . . . . . . . . -- (930,523,456)
------------ ------------
Working capital (deficit). . . . . 27,859 (916,624,476)
------------ ------------
Investment property, net. . . . . . . -- 649,606,970
Escrow deposits . . . . . . . . . . . 7,937,459 --
Accrued rent receivable . . . . . . . -- 52,194,637
Deferred expenses . . . . . . . . . . -- 18,168,925
Other liabilities . . . . . . . . . . (91,313,934) (85,039,094)
Investment in partnership . . . . . . (25,000,000) --
Venture partners' deficit . . . . . . 79,838,583 207,040,770
------------ ------------
Partnership's capital (deficit). . $(28,510,033) (74,652,268)
============ ============
Represented by:
Invested capital . . . . . . . . . . $ 45,737,708 43,728,411
Cumulative net losses. . . . . . . . (64,873,992) (109,006,930)
Cumulative cash
distributions . . . . . . . . . . (9,373,749) (9,373,749)
------------ ------------
$(28,510,033) (74,652,268)
============ ============
Total income. . . . . . . . . . . . . $228,184,030 163,838,267
============ ============
Expenses applicable to operating loss $ 11,202,134 180,511,256
============ ============
Net income (loss) (including income
from restructuring of $220,431,722
in 1996) . . . . . . . . . . . . . . $216,981,896 (16,672,989)
============ ============

During 1996, as a result of the adoption of the Plan, JMB/NYC adopted
the cost method of accounting for its investments in unconsolidated
ventures. Accordingly, JMB/NYC adjusted its deficit basis in the
unconsolidated ventures to the extent of its share of the maximum
obligation escrow of $25,000,000. The net income for the year ended
December 31, 1996 includes $7,618,056 of income from operations through the
Effective Date of which the Partnership's share is $1,904,514. The
Partnership's capital (deficit) in JMB/NYC differs from its investment in
unconsolidated venture as reflected in the accompanying financial
statements due to the Partnership's 1996 reversal of previously recognized
losses in JMB/NYC as a result of the restructuring of partnership
interests.

Total income and net loss for the year ended December 31, 1995
includes a loss on sale of investment property of $38,214,703, offset by an
extraordinary gain on forgiveness of indebtedness of $62,529,627 related to
the sale of the 2 Broadway building in September 1995.

Also, for the year ended December 31, 1994, total income was
$147,761,499, expenses applicable to operating loss were $183,850,523 and
the net loss was $36,089,024 for JMB/NYC and the unconsolidated ventures.

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

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1996

<CAPTION>
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (a) ACQUISITION AT CLOSE OF PERIOD (b)
------------------------- ------------- -----------------------------------
LAND AND BUILDINGS LAND PROVISION LAND AND BUILDINGS
ENCUM- LEASEHOLD AND BUILDINGS AND FOR VALUE LEASEHOLD AND
DESCRIPTION BRANCE INTEREST IMPROVEMENTS IMPROVEMENTS IMPAIRMENT(g) INTEREST IMPROVEMENTS TOTAL(h)
- -------------------- ----------- -------------------------- ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
APARTMENT
BUILDINGS:
Tampa,
Florida
(d). . . . .$ 6,842,1951,092,010 7,408,618 560,720 -- 1,092,010 7,969,338 9,061,348
OFFICE
BUILDINGS:
Knoxville,
Tennessee
(e). . . . .14,900,000 -- 28,884,725 5,132,485 -- 1,508,417 32,508,793 34,017,210

COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (a) ACQUISITION AT CLOSE OF PERIOD (b)
------------------------- ------------- -----------------------------------
LAND AND BUILDINGS LAND PROVISION LAND AND BUILDINGS
ENCUM- LEASEHOLD AND BUILDINGS AND FOR VALUE LEASEHOLD AND
DESCRIPTION BRANCE INTEREST IMPROVEMENTS IMPROVEMENTS IMPAIRMENT(g) INTEREST IMPROVEMENTS TOTAL(h)
- -------------------- ----------- -------------------------- ----------- ---------- ------------ ----------
Dallas,
Texas (d). .40,003,5387,902,979 35,029,347 (4,209,066) -- 6,198,484 32,524,776 38,723,260
Southfield,
Michigan
(f). . . . . -- 1,715,373 -- (1,577,575) -- 137,798 -- 137,798
SHOPPING
CENTERS:
Long Beach,
Califor-
nia. . . . .35,047,4943,801,066 42,765,277 (2,765,245) (17,600,000) 1,179,046 25,022,052 26,201,098
Aurora,
Colorado . .5,282,757 2,035,721 6,674,891 233,525 -- 2,035,721 6,908,416 8,944,137
MULTI-USE
COMPLEX:
Boston,
Massachu-
setts
(c)(d) . . .321,255,4354,769,913 271,584,219 14,370,364 -- 4,769,912 285,954,584290,724,496
------------ ---------- ----------- ----------- ----------- ---------- ----------------------

Total . . .$423,331,41921,317,062392,347,077 11,745,208 (17,600,000) 16,921,388 390,887,959407,809,347
============ ========== =========== ========== =========== ========== ======================

</TABLE>

<TABLE>
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1996

<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1996
ACCUMULATED DATE OF DATE OPERATION REAL ESTATE
DESCRIPTION DEPRECIATION(i) CONSTRUCTION ACQUIRED IS COMPUTED (h) TAXES
- ----------- ---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
APARTMENT BUILDINGS:
Tampa, Florida (d) . . . 3,641,282 1984 12/16/83 5-30 years 208,007
OFFICE BUILDINGS:
Knoxville, Tennessee
(e). . . . . . . . . . . 13,389,019 1979 10/26/83 5-30 years 653,406
Dallas, Texas (d). . . . 14,440,900 1983 12/1/83 5-30 years 690,205
Southfield, Michigan (f) -- 1974 3/30/84 5-30 years 3,001
SHOPPING CENTERS:
Long Beach, California . 16,925,470 1982 6/22/83 5-30 years 818,166
Aurora, Colorado . . . . 3,133,820 1982 4/1/83 5-30 years 180,892
MULTI-USE COMPLEX:
Boston, Massachusetts
(c)(d). . . . . . . . . 118,070,415 1983 9/1/83 5-30 years 8,165,830
------------ ----------

Total. . . . . . . . $169,600,906 10,719,507
============ ==========

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

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1996

<FN>

- ---------------
Notes:
(a) The initial cost to the Partnership represents the original purchase price of the properties, including
amounts incurred subsequent to acquisition which were contemplated at the time the property was acquired.

(b) The aggregate cost of real estate owned at December 31, 1996 for Federal income tax purposes was
approximately $86,168,397.

(d) Properties owned and operated by joint ventures.

(e) The Partnership purchased the land underlying Plaza Tower office building in December 1985.

(f) Property sold except for a 1.9 acre parcel.

(g) A provision for value impairment of $13,100,000 was recorded January 1, 1996 at the Long Beach Plaza
investment property. On December 31, 1996, the Partnership recorded an additional provision for value impairment of
$4,500,000, as more fully described in the Notes.

(h) During 1996, all the Partnership's remaining investment properties were classified as held for sale or
disposition, as more fully described in the Notes.

</TABLE>

<TABLE>
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1996

(h) Reconciliation of real estate carrying costs:

Balance at beginning of period . . . . . . . . . $433,222,805 429,976,723 474,203,190
Additions during period. . . . . . . . . . . . . 4,337,187 3,246,082 1,796,484
Reductions during period . . . . . . . . . . . . (12,150,645) -- (46,022,951)
Provisions for value impairment. . . . . . . . . (17,600,000) -- --
------------ ------------ ------------

Balance at end of period . . . . . . . . . . . . $407,809,347 433,222,805 429,976,723
============ ============ ============

(i) Reconciliation of accumulated depreciation:

Balance at beginning of period . . . . . . . . . $163,309,553 149,525,406 149,914,951
Depreciation expense . . . . . . . . . . . . . . 10,267,305 13,784,147 13,753,198
Reductions during period . . . . . . . . . . . . (3,975,952) -- (14,142,743)
------------ ------------ ------------

Balance at end of period . . . . . . . . . . . . $169,600,906 163,309,553 149,525,406
============ ============ ============

</TABLE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

There were no changes in or disagreements with accountants during
fiscal year 1996 and 1995.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

The Corporate General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware corporation. Substantially all of the
outstanding shares of JMB are owned, directly or indirectly, by certain of
its officers, directors, members of their families and their affiliates.
JMB as the Corporate General Partner has responsibility for all aspects of
the Partnership's operations, subject to the requirement that purchases and
sales of real property must be approved by the Associate General Partner of
the Partnership, ABPP Associates, L.P. ABPP Associates, L.P., an Illinois
limited partnership with JMB as its sole general partner, shall be directed
by a majority in interest of its limited partners (who are generally
officers, directors and affiliates of JMB or its affiliates) as to whether
to provide its approval of any purchase or sale of real property (or any
interest therein) of the Partnership.

The Partnership is subject to certain conflicts of interest arising
out of its relationships with the General Partners and their affiliates as
well as the fact that the General Partners and their affiliates are engaged
in a range of real estate activities. Certain services have been and may
in the future be provided to the Partnership or its investment properties
by affiliates of the General Partners, including property management
services and insurance brokerage services. In general, such services are
to be provided on terms no less favorable to the Partnership than could be
obtained from independent third parties and are otherwise subject to
conditions and restrictions contained in the Partnership Agreement. The
Partnership Agreement permits the General Partners and their affiliates to
provide services to, and otherwise deal and do business with, persons who
may be engaged in transactions with the Partnership, and permits the
Partnership to borrow from, purchase goods and services from, and otherwise
to do business with, persons doing business with the General Partners or
their affiliates. The General Partners and their affiliates may be in
competition with the Partnership under certain circumstances, including, in
certain geographical markets, for tenants for properties and/or for the
sale of properties. Because the timing and amount of cash distributions
and profits and losses of the Partnership may be affected by various
determinations by the General Partners under the Partnership Agreement,
including whether and when to sell or refinance a property, the
establishment and maintenance of reasonable reserves, the timing of
expenditures and the allocation of certain tax items under the Partnership
Agreement, the General Partners may have a conflict of interest with
respect to such determinations.

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

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

Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Chief Financial Officer 2/22/96
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer 8/01/93
Executive Vice President 1/02/87
Glenn E. Emig Executive Vice President 1/01/93
Chief Operating Officer 1/01/95
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91

There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the Corporate General Partner to be held
on June 7, 1997. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Corporate General Partner to be held on June 7,
1997. There are no arrangements or understandings between or among any of
said directors or officers and any other person pursuant to which any
director or officer was elected as such.

JMB is the Corporate General Partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"),
Carlyle Real Estate Limited Partnership-XII ("Carlyle-XII"), Carlyle Real
Estate Limited Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited
Partnership-XV ("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI
("Carlyle-XVI"), Carlyle Real Estate Limited Partnership-XVII ("Carlyle-
XVII"), JMB Mortgage Partners, Ltd.-III ("Mortgage Partners-III"), JMB
Mortgage Partners, Ltd-IV ("Mortgage Partners-IV"), Carlyle Income Plus,
Ltd. ("Carlyle Income Plus") and Carlyle Income Plus, L.P.-II ("Carlyle
Income Plus-II") and the managing general partner of JMB Income Properties,
Ltd.-IV ("JMB Income-IV"), JMB Income Properties, Ltd.-V ("JMB Income-V"),
JMB Income Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties,
Ltd.-VII ("JMB Income-VII"), JMB Income Properties, Ltd.-X ("JMB
Income-X"), JMB Income Properties, Ltd.-XI ("JMB Income-XI"), JMB Income
Properties, Ltd.-XII ("JMB Income-XII"), and JMB Income Properties, Ltd.-
XIII ("JMB Income-XIII"). JMB is also the sole general partner of the
associate general partner of most of the foregoing partnerships.

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

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

Judd D. Malkin (age 59) is an individual general partner of JMB
Income-II, JMB Income-IV and JMB Income-V. Mr. Malkin has been associated
with JMB since October, 1969. Mr. Malkin is a director of Urban Shopping
Centers, Inc. ("USC, Inc."), an affiliate of JMB that is a real estate
investment trust in the business of owning, managing and developing
shopping centers. He is a Certified Public Accountant.

Neil G. Bluhm (age 59) is an individual general partner of JMB
Income-II, JMB Income-IV and JMB Income-V. Mr. Bluhm has been associated
with JMB since August, 1970. Mr. Bluhm is a director of USC, Inc. He is a
member of the Bar of the State of Illinois and a Certified Public
Accountant.

Burton E. Glazov (age 58) has been associated with JMB since June,
1971 and served as an Executive Vice President of JMB until December 1990.
He is a member of the Bar of the State of Illinois and a Certified Public
Accountant.

Stuart C. Nathan (age 55) has been associated with JMB since July,
1972. Mr. Nathan is a director of Sportmart, Inc., a retailer of sporting
goods. He is a member of the Bar of the State of Illinois.

A. Lee Sacks (age 63) (President of JMB Insurance Agency, Inc.) has
been associated with JMB since December, 1972.

John G. Schreiber (age 50) has been associated with JMB since
December, 1970 and served as an Executive Vice President of JMB until
December 1990. Mr. Schreiber is President of Schreiber Investments, Inc. a
company which is engaged in the real estate investing business. He is also
a senior advisor and partner of Blackstone Real Estate Partners, an
affiliate of the Blackstone Group, L.P. Since 1994, Mr. Schreiber has also
served as a Trustee of Amli Residential Property Trust, a publicly-traded
real estate investment trust that invests in multi-family properties. He
is also a director of USC, Inc., as well as a director for a number of
investment companies advised or managed by T. Rowe Price Associates and its
affiliates. Mr. Schreiber holds a Masters degree in Business
Administration from Harvard University Graduate School of Business.

H. Rigel Barber (age 47) has been associated with JMB since March,
1982. He holds a J.D. degree from the Northwestern Law School and is a
member of the Bar of the State of Illinois.

Glenn E. Emig (age 49) has been associated with JMB since December
1979. Prior to becoming Executive Vice President of JMB in 1993, Mr. Emig
was Executive Vice President and Treasurer of JMB Institutional Realty
Corporation. He holds a Masters degree in Business Administration from
Harvard University Graduate School of Business and is a Certified Public
Accountant.

Gary Nickele (age 44) has been associated with JMB since February,
1984. He holds a J.D. degree from the University of Michigan Law School
and is a member of the Bar of the State of Illinois.

Gailen J. Hull (age 48) has been associated with JMB since March,
1982. He holds a Masters degree in Business Administration from Northern
Illinois University and is a Certified Public Accountant.

Howard Kogen (age 61) has been associated with JMB since March, 1973.
He is a Certified Public Accountant.

ITEM 11. EXECUTIVE COMPENSATION

The Partnership has no officers or directors. The Partnership is
required to pay a management fee to the Corporate General Partner and the
General Partners are entitled to receive a share of cash distributions,
when and as cash distributions are made to the Holders of Interests, and a
share of profits or losses. Reference is made to the Notes for a
description of such distributions and allocations. In 1996, the General
Partners received distributions of $0, and the Corporate General Partner
received no management fee. The General Partners received a share of
Partnership gains for tax purposes aggregating $976,751 in 1996.

The Partnership is permitted to engage in various transactions
involving affiliates of the Corporate General Partner of the Partnership,
as described in the Notes. The relationship of the Corporate General
Partner (and its directors and officers) to its affiliates is set forth
above in Item 10.

An affiliate of the Corporate General Partner provided property
management services during 1996 for the Long Beach Plaza in Long Beach,
California and the Copley Place multi-use complex in Boston, Massachusetts,
at various fees calculated based upon the gross income from the properties.

In 1996, such affiliate earned property management and leasing fees
amounting to $1,575,148 for such services. As set forth in the Partnership
Agreement, the Corporate General Partner must negotiate such agreements on
terms no less favorable to the Partnership than those customarily charged
for similar services in the relevant geographical area (but in no event at
rates greater than 6% of the gross income from a property), and such
agreements must be terminable by either party thereto, without penalty,
upon 60 days' notice.

JMB Insurance Agency, Inc., an affiliate of the Corporate General
Partner, earned insurance brokerage commissions in 1996 aggregating $67,579
in connection with the providing of insurance coverage for certain of the
real property investments of the Partnership, all of which was paid at
December 31, 1996. Such commissions are at rates set by insurance
companies for the classes of coverage provided.

The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses and salaries
and related salary expenses relating to the administration of the
Partnership and the acquisition and operation of the Partnership's real
property investments. In 1996, the Corporate General Partner of the
Partnership or its affiliates were due reimbursement for such out-of-pocket
expenses in the amount of $91,596, of which $52,777 was unpaid at December
31, 1996. The General Partners are also entitled to reimbursements for
portfolio management, legal and accounting services. Such costs for 1996
were $40,841, $18,386 and $23,862, respectively, of which $8,528, $5,076
and $6,111, respectively, was unpaid at December 31, 1996.

The Partnership had obligations to fund, on demand, $600,000 and
$600,000 to Carlyle Managers, Inc. and Carlyle Investors, Inc.,
respectively, of additional paid-in capital (reflected in amounts due to
affiliates in the accompanying financial statements). During 1996, these
obligations were reduced to $200,000 and $200,000, respectively. As of
December 31, 1996, these obligations bore interest at 5.93% per annum and
interest accrued on these obligations was $236,929.

The affiliated joint venture partner was obligated through December
31, 1991 to loan amounts to pay for any operating deficits (as defined) of
Copley Place. Through December 31, 1996, the affiliated joint venture
partner had loaned approximately $13,648,000 at an interest rate based on
its line of credit, which bore interest at a floating rate (averaging 7.57%
per annum at December 31, 1996). During 1996, approximately $1,234,000 of
interest accrued on these loans, and the joint venture paid approximately
$225,000 of accrued interest (including a portion accrued from a prior
year) on these loans. As of January 23, 1997, these Deficit Loans were
paid in full as discussed above.

<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

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

NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership
Interests JMB Realty Corporation 5 Interests directly Less than 1%

Limited Partnership
Interests Corporate General 6.79 Interests directly (1) Less than 1%
Partner, its officers
and directors and the
Associate General
Partner as a group
<FN>

(1) Includes 1.79 Interests owned by officers or their relatives for which an officer has investment and
voting power as to such Interests so owned.

No officer or director of the Corporate General Partner of the Partnership possesses a right to acquire
beneficial ownership of Interests of the Partnership.

Reference is made to Item 10 for information concerning ownership of the Corporate General Partner.

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

</TABLE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There were no significant transactions or business relationships with
the Corporate General Partner, affiliates or their management other than
those described in Items 10 and 11 above.

PART IV

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

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

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

(2) Exhibits.

3-A.* Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, and which is hereby
incorporated by reference.

3-B. Acknowledgement of rights and duties of the
General Partners of the Partnership between ABPP Associates, L.P. (a
successor Associated General Partner of the Partnership) and JMB Realty
Corporation as of December 31, 1995 is hereby incorporated herein by
reference to the Partnership's Report for September 30, 1996 on Form 10-Q
(File No. 0-12791) dated November 8, 1996.

4-A. 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-B.* Documents relating to the modification of the
mortgage loan secured by the Copley Place multi-use complex are hereby
incorporated herein by reference.

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

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

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

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

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

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

10-J. Assumption Agreements dated October 14, 1994 made
by 237 Park Avenue Associates and by 1290 Associates in favor and for the
benefit of O&Y Equity Company, L.P., O&Y NY Building Corp. and JMB/NYC
Office Building Associates, L.P., copies of which are herein incorporated
by reference to the Partnership's Report for December 31, 1994 on Form 10-K
(File No. 0-12791) dated March 27, 1995.

10-K. Assumption Agreements dated October 14, 1994 made
by O&Y Equity Company, L.P., and by O&Y NY Building Corp. and by JMB/NYC
Office Building Associates, L.P. in favor and for the benefit of 2 Broadway
Associates and 2 Broadway Land Company, copies of which are herein
incorporated by reference to the Partnership's Report for December 31, 1994
on Form 10-K (File No. 0-12791) dated March 27, 1995.

10-L. Amendment No. 1 to the Agreement of Limited
Partnership of Carlyle-XIII Associates, L.P. is hereby incorporated by
reference to the Partnership's Report for March 31, 1995 on Form 10-Q (File
No. 0-12791) dated May 11, 1995.

10-M. Amendment No. 1 to the Second Amended and
Restated Articles of Partnership of JMB/NYC Office Building Associates,
L.P. is hereby incorporated by reference to the Partnership's Report for
March 31, 1995 on Form 10-Q (File No. 0-12791) dated May 11, 1995.

10-N. Agreement of Sale between 2 Broadway Associates,
L.P. and 2 Broadway Acquisition Corp. dated August 10, 1995, is hereby
incorporated by reference to the Partnership's Report for December 31, 1995
on Form 10-K (File No. 0-12791) dated March 25, 1996.

10-O. Agreement of Conversion of 1290 Associates into
1290 Associates, L.L.C. dated October 10, 1995 among JMB/NYC Office
Building Associates, L.P., an Illinois limited partnership, O&Y Equity
Company, L.P., a Delaware limited partnership and O&Y NY Building Corp., a
Delaware corporation, is hereby incorporated by reference to the
Partnership's Report for December 31, 1995 on Form 10-K (File No. 0-12791)
dated March 25, 1996.

10-P. Agreement of Conversion of 237 Park Avenue
Associates into 237 Park Avenue Associates, L.L.C., dated October 10, 1995
among JMB/NYC Office Building Associates, L.P., an Illinois limited
partnership, O&Y Equity Company, L.P., a Delaware limited partnership and
O&Y NY Building Corp., a Delaware corporation, is hereby incorporated by
reference to the Partnership's Report for December 31, 1995 on Form 10-K
(File No. 0-12791) dated March 25, 1996.

10-Q. Disclosure Statement for the Second Amended Joint
Plan of Reorganization of 237 Park Avenue Associates, L.L.C. and 1290
Associates, L.L.C. dated August 9, 1996 is hereby incorporated by reference
to the Partnership's Report for September 30, 1996 on Form 10-Q (File No.
0-12791) dated November 8, 1996.

10-R. Consent of Director of Carlyle-XIV Managers, Inc.
(known as Carlyle Managers, Inc.) dated October
31, 1996 is filed herewith.

10-S. Consent of Director of Carlyle-XIII, Managers,
Inc. (known as Carlyle Investors, Inc.) dated October 31, 1996 is filed
herewith.

10-T. Allonge to demand note between Carlyle Real
Estate Limited Partnership - XIII and Carlyle Managers, Inc. dated October
31, 1996 is filed herewith.

10-U. Allonge to demand note between Carlyle Real
Estate Limited Partnership - XIII and Carlyle Investors, Inc., dated
October 31, 1996 is filed herewith.

10-V. Indemnification agreement between Property
Partners, L.P., Carlyle-XIII Associates, L.P. and Carlyle-XIV Associates,
L.P. dated as of October 10, 1996 is filed herewith.

10-W. Agreement of Limited Partnership of 237/1290
Lower Tier Associates, L.P. dated as of October 10, 1996 is filed herewith.

10-X. Amended and Restated Limited Partnership
Agreement of 237/1290 Upper Tier Associates, L.P. dated as of October 10,
1996 is filed herewith.

21. List of Subsidiaries.

24. Powers of Attorney.

27. Financial Data Schedule.

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

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

* Previously filed as Exhibits 3, 4-C and 4-D, respectively, to
the Partnership's Report for December 31, 1992 on Form 10-K to the
Securities Exchange Act of 1934 (File No. 0-12791) dated March 30, 1993 are
hereby incorporated herein by reference.

No annual report or proxy material for the fiscal year 1996 has been
sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing.

SIGNATURES

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

By: JMB Realty Corporation
Corporate General Partner

GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 21, 1997

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

By: JMB Realty Corporation
Corporate General Partner

JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and
Chief Financial Officer
Date: March 21, 1997

NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 21, 1997

H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 21, 1997

GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 21, 1997

GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 21, 1997

By: A. LEE SACKS*
A. Lee Sacks, Director
Date: March 21, 1997

By: STUART C. NATHAN*
Stuart C. Nathan, Executive Vice President
and Director
Date: March 21, 1997

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

GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 21, 1997

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

EXHIBIT INDEX

Document
Incorporated
By Reference Page
------------ ----
3-A. Amended and Restated Agreement of
Limited Partnership set forth as
Exhibit A to the Prospectus Yes

4-A. Mortgage loan documents secured by the
Copley Place multi-use complex Yes

4-B. Remodification of mortgage loan documents
secured by Copley Place multi-use complex. Yes

10-A. Acquisition documents related to the
Copley Place multi-use complex Yes

10-B. Documents related to the sale of Allied
Automotive Center. Yes

10-C. Agreement of Limited Partnership of
Carlyle-XIII Associates L.P. Yes

10-D. Documents relating to the sale of
its interest in the Old Orchard
Urban Venture Yes

10-E. Second Amended and Restated Articles
of Partnership of JMB/NYC Office
Building Associates, L.P. Yes

10-F. Amended and Restated Certificate
of Incorporation of Carlyle-XIV
Managers, Inc. Yes

10-G. Amended and Restated Certificate
of Incorporation of Carlyle-XIII
Managers, Inc. Yes

10-H. $600,000 demand note between
Carlyle-XIII Associates, Ltd. and
Carlyle Managers, Inc. Yes

10-I. $600,000 demand note between
Carlyle-XIII Associates, Ltd. and
Carlyle Investors, Inc. Yes

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

EXHIBIT INDEX - CONTINUED

Document
Incorporated
By Reference Page
------------ ----

10-L. Amendment No. 1 to Carlyle-XIII
Associates Yes

10-M. Amendment No. 1 to JMB/NYC Office
Building Associates, L.P. Yes

10-N. Agreement of Sale between 2 Broadway
Associates, L.P. and 2 Broadway
Acquisition Corp. dated August 10, 1995 Yes

10-O. Agreement of Conversion of 1290
Associates into 1290 Associates,
L.L.C. dated October 10, 1995 Yes

10-P. Agreement of Conversion of 237 Park
Avenue Associates into 237 Park Avenue
Associates, L.L.C. dated October 10,
1995 Yes

10-Q. Disclosure statement for the Second
Amended Joint Plan of Reorganization
of 237 Park Avenue Associates, L.L.C.
and 1290 Associates, L.L.C. dated
August 9, 1996 Yes

10-R. Consent of Director of Carlyle-XIV
Managers, Inc. (known as Carlyle
Managers, Inc.) dated October 31,
1996 No

10-S. Consent of Director of Carlyle-XIII,
Managers, Inc. (known as Carlyle
Investors, Inc.) dated October 31,
1996 No

10-T. Allonge to demand note between
Carlyle Real Estate Limited
Partnership-XIII and Carlyle
Managers, Inc. dated October 31,
1996 No

10-U. Allonge to demand note between
Carlyle Real Estate Limited
Partnership-XIII and Carlyle
Investors, Inc., dated
October 31, 1996 No

10-V. Indemnification agreement between
Property Partners, L.P., Carlyle-XIII
Associates, L.P. and Carlyle-XIV
Associates, L.P. dated as of
October 10, 1996 No

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

EXHIBIT INDEX - CONTINUED

Document
Incorporated
By Reference Page
------------ ----

10-W.** Agreement of Limited Partnership of
237/1290 Lower Tier Associates, L.P.
dated as of October 10, 1996 No

10-X.** Amended and Restated Limited
Partnership of 237/1290 Upper
Tier Associates, L.P. dated
as of October 10, 1996 No

21. List of Subsidiaries No

24. Powers of Attorney No

27. Financial Data Schedule No

- ------------------

* Previously filed as exhibits to the Partnership's Registration
Statement on Form S-11 (as amended) under the Securities Exchange Act of
1933 and the Partnership's prior Reports on Form 8-K and Form 10-K of the
Securities Exchange Act of 1934.

** FILED ON PAPER IN ACCORDANCE WITH RULE 201 OF REGULATION S-T, THESE
AGREEMENTS ARE BEING FILED IN PAPER PURSUANT TO A TEMPORARY HARDSHIP
EXEMPTION.

EXHIBIT 10-R
- ------------
(C-XIII)

CONSENT OF DIRECTOR
OF
CARLYLE MANAGERS, INC.

The undersigned, being all the directors of Carlyle Managers, Inc.,
a Delaware corporation (the "Corporation"), acting by written consent
pursuant to Section 141(f) of the Delaware General Corporation Law, hereby
consent to the adoption of, and do hereby adopt, the following resolutions:

WHEREAS, this Corporation is the holder of certain demand notes made
by its shareholders in the aggregate original principal amount of
$3,000,000 (the "Notes"), as set forth in EXHIBIT A attached hereto; and,

WHEREAS, this Corporation desires to make a distribution to its
shareholders aggregating $2,000,000, as a return of capital (the
"Distribution"); and,

WHEREAS, in order to effect the Distribution, the outstanding
principal amount of the Notes will be reduced as set forth in such Exhibit
A.

NOW, THEREFORE, BE IT RESOLVED, that this Corporation make the
Distribution, as a return of capital, effective as of the date hereof, to
be paid by the reduction of the outstanding principal amount as set forth
EXHIBIT A attached hereto; and,

FURTHER RESOLVED, that any officer of this Corporation is hereby
authorized and directed to effect the Distribution as of the date hereof,
to enter into, execute and deliver, or to ratify, any and all documents
incidental or related thereto, including without limitation, those
documents deemed necessary or appropriate to evidence the reduction in the
outstanding principal balances of each of the Notes as set forth herein,
and any said officer is hereby authorized and directed to take whatever
actions said officer deems reasonably necessary in order to consummate the
transaction described or contemplated.

Dated: October 31, 1996

STUART C. NATHAN
- --------------------
Stuart C. Nathan

Being the sole director or Carlyle Managers, Inc., a Delaware corporation.

EXHIBIT A
---------

Original
Principal Principal
Payor Date of Note Amount Reduction
- ----- -------------- ---------- ---------

JMB Realty Corporation March 25, 1993 $ 450,000 $300,000

JMB/Manhattan
Associates, Ltd. March 25, 1993 $ 600,000 $400,000

Carlyle Real Estate
Limited Partnership-XIII March 25, 1993 $ 600,000 $400,000

Carlyle Real Estate
Limited Partnership-XIV March 25, 1993 $1,200,000 $800,000

JMB Service Bureau
company (a division of
Northbrook Corporation),
as successor-in-interest
to JMB Holdings Corporation March 25, 1993 $ 150,000 $100,000

EXHIBIT 10-S
- ------------
(C-XIII)

CONSENT OF DIRECTOR
OF
CARLYLE INVESTORS, INC.

The undersigned, being all the directors of Carlyle Investors, Inc.,
a Delaware corporation (the "Corporation"), acting by written consent
pursuant to Section 141(f) of the Delaware General Corporation Law, hereby
consent to the adoption of, and do hereby adopt, the following resolutions:

WHEREAS, this Corporation desires to make a distribution to its
shareholders aggregating $2,000,000, as a return of capital (the
"Distribution"); and,

WHEREAS, in order to effect the Distribution, the outstanding
principal amount of the Notes will be reduced as set forth in such Exhibit
A.

Dated: October 31, 1996

STUART C. NATHAN
- --------------------
Stuart C. Nathan

Being the sole director or Carlyle Investors, Inc., a Delaware corporation.

EXHIBIT A
---------

Original
Principal Principal
Payor Date of Note Amount Reduction
- ----- -------------- ---------- ---------

JMB Realty Corporation March 25, 1993 $ 450,000 $300,000

JMB/Manhattan
Associates, Ltd. March 25, 1993 $ 600,000 $400,000

Carlyle Real Estate
Limited Partnership-XIII March 25, 1993 $ 600,000 $400,000

Carlyle Real Estate
Limited Partnership-XIV March 25, 1993 $1,200,000 $800,000

JMB Service Bureau
company (a division of
Northbrook Corporation),
as successor-in-interest
to JMB Holdings Corporation March 25, 1993 $ 150,000 $100,000

EXHIBIT 10-T
- ------------
(C-XIII)

ALLONGE TO DEMAND NOTE

Reference is made to that certain Demand Note, dated as of March 25,
1993 (the "Note"), made by Carlyle Real Estate Limited Partnership-XIII, an
Illinois limited partnership ("Carlyle XIII"), in favor of Carlyle
Managers, Inc., a Delaware corporation ("Investors"), in the original
principal amount of $600,000.

In consideration for the return of capital made by Investors to
Carlyle XIII as of the date hereof in the amount of $400,000, the
undersigned hereby reduces the outstanding principal balance of the Note to
$200,000. Such reduction shall not serve to reduce or cancel any accrued
and unpaid interest which may be outstanding on the Note.

This Allonge shall be attached to and become a part of the Note.

Dated as of October 31, 1996. CARLYLE MANAGERS, INC.
a Delaware corporation

By:___________________
Its:__________________

Acknowledged and Agreed:

CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII
an Illinois limited partnership

By: JMB REALTY CORPORATION,
a Delaware corporation
Corporate General Partner

By:__________________
Its:_________________

EXHIBIT 10-U
- ------------
(C-XIII)

ALLONGE TO DEMAND NOTE

Reference is made to that certain Demand Note, dated as of March 25,
1993 (the "Note"), made by Carlyle Real Estate Limited Partnership-XIII, an
Illinois limited partnership ("Carlyle XIII"), in favor of Carlyle
Investors, Inc., a Delaware corporation ("Investors"), in the original
principal amount of $600,000.

This Allonge shall be attached to and become a part of the Note.

Dated as of October 31, 1996. CARLYLE INVESTORS, INC.
a Delaware corporation

By:___________________
Its:__________________

Acknowledged and Agreed:

CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII
an Illinois limited partnership

By: JMB REALTY CORPORATION,
a Delaware corporation
Corporate General Partner

By:__________________
Its:_________________

EXHIBIT 10-V
- ------------
(C-XIII)

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT dated as of the 10 day of October
1996, given by PROPERTY PARTNERS, L.P., CARLYLE - XIII ASSOCIATES, L.P.,
and CARLYLE - XIV ASSOCIATES, L.P., each a Delaware limited partnership
having an office at 900 North Michigan Avenue - 19th floor, Chicago,
Illinois 60611 (hereinafter individually referred to as an "Indemnitor" and
collectively as the "Indemnitors") to METROPOLIS REALTY TRUST, INC., a
Maryland corporation having an office c/o Victor Capital Group, L.P., 885
Third Avenue - 12th Floor, New York, New York 10022, Attn: John Klopp
(hereinafter referred to as "Indemnitee").

WITNESSETH:

WHEREAS, each Indemnitor is a partner in JMB/NYC Office Building
Associates, L.P. ("JMB LP"), an Illinois limited partnership and a member
of 237 Park Avenue Associates, LLC and 1290 Associates, LLC (collectively,
the "Debtors"), each a New York limited liability company and the obligors
under certain notes in the aggregate original principal amount of
$970,000,000 issued pursuant to that certain Mortgage Spreader and
Consolidation Agreement and Trust Indenture dated as of March 20, 1984
among O&Y Equity Corp., Olympia & Holdings Corporation, FAME Associates,
Olympia & York 2 Broadway Land Company, Olympia & York 2 Broadway Company
and Manufacturers Hanover Trust Company as Trustee, as supplemented and
(the "Indenture"), which encumbers the fee estates of the Debtors in
properties known as 237 Park Avenue and 1290 Avenue of the Americas;

WHEREAS, the Debtors defaulted under the Indenture beyond the
expiration of all applicable notice and cure periods;

WHEREAS, the Debtors, JMB LP and Indemnitors requested that the
Trustee and the holders of the Existing Notes forbear from exercising their
rights to pursue an action to foreclose the Indenture in order to provide
the Debtors with an opportunity to file a pre - negotiated plan of
reorganization (hereinafter referred to as the "Plan") under the Bankruptcy
Code, which Plan provides for, among other things, (i) a transfer of the
Properties to the Property Owning Partnerships, (ii) the Lower Tier
Partnership to own a 99% interest as a limited partner in each of the
Property Owning Partnerships, (iii) the Upper Tier Partnership to own a 5%
interest as a limited partner in the Lower Tier Partnership, and (iv) JMB
LP to own a 99% interest as a limited partner in the Upper Tier
Partnership;

WHEREAS, the Trustee and the holders of the Existing Notes were
willing to forbear from exercising their rights to pursue an action to
foreclose the Indenture and to proceed with the transactions contemplated
by the Plan only if the Indemnitors execute and deliver this
Indemnification Agreement to the Indemnitee and the Plan and the Agreements
of Limited Partnership of the Upper Tier Partnership and the Lower Tier
Partnership require that JMB LP cause the Indemnitors to execute and
deliver this Indemnity Agreement to the Indemnitee;

WHEREAS, the Plan was filed with the Bankruptcy Court on April 23,
1996 and became effective pursuant to an order of the Bankruptcy Court
entered on September 20, 1996 and, pursuant to the terms thereof;

WHEREAS, the Indemnitors will materially benefit from the
consummation of the transactions provided for in the Plan and described
above;

NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, and in
order to induce the Trustee and the holders of the Existing Notes to
forbear from exercising their rights as hereinbefore stated and such
parties and the Indemnitee to proceed with the transactions contemplated by
the Plan, the Indemnitors hereby covenant and agree with the Indemnitee as
follows:

1. Capitalized terms used but not defined herein shall have the
meanings provided in the Plan.

2. The Indemnitors absolutely and unconditionally agree to indemnify
and to hold Indemnitee harmless from and against any and all losses,
claims, liabilities, damages, costs or expenses (including, without
limitation, reasonable counsel fees) of any nature whatsoever, contingent
or otherwise, foreseen or unforeseen, which Indemnitee may or shall incur
as a result of any of JMB LP, its officers, directors, partners (including
without limitation any Indemnitor), stockholders, agents or affiliates
(collectively, the "Controlled Entities") intentionally interfering with,
impeding or preventing (including, without limitation, the filing by JMB LP
of a voluntary petition under the Bankruptcy Code or any other federal or
state bankruptcy or insolvency statute or any Controlled Entity joining in
an involuntary petition against JMB LP under the Bankruptcy Code or such
other statute) (x) the exercise by the Indemnitee of the Purchase Right (as
defined in Section 12.2A of the Lower Tier Partnership Agreement) or (y)
any disposition, mortgage, pledge, encumbrance, hypothecation or exchange
of the Properties by the Property Owning Partnerships or the Property
Owning Partnership Interests (as defined in Lower Tier Partnership
Agreement) by the Lower Tier Partnership or the merger or other combination
of the Property Owning Partnerships or the Lower Tier Partnership with or
into another entity, in accordance with the terms of the Lower Tier
Partnership Agreement, provided that such disposition, mortgage, pledge,
encumbrance, hypothecation, exchange, merger or other combination does not
constitute an Adverse Transaction as defined in the agreement of limited
partnership of the Lower Tier Partnership ("Prohibited Actions"), and
provided that any such Prohibited Action is not revoked or rescinded within
the time period provided in paragraph 3 below.

3. In the event that any Indemnitor or Controlled Entity takes any
Prohibited Action (including, without limitation, the filing by or against
JMB LP of a petition under the Bankruptcy Code or any other federal or
state bankruptcy or insolvency statute), the Indemnitors (x) acknowledge
(and Indemnitee, by its acceptance of this Indemnification Agreement,
acknowledges) that the damage to be suffered by Indemnitee shall be
difficult or impossible to ascertain and (y) if the Prohibited Action is
not revoked or rescinded within sixty (60) days after notice by Indemnitee
to Indemnitors so as to permit the consummation of the transaction
described in clause (x) or (y) of paragraph 2 above unimpeded by any
actions by JMB LP or any of the Controlled Entities, absolutely and
unconditionally agree to pay to Indemnitee upon demand the Maximum
Indemnitors' Liability Amount (as hereinafter defined) as full liquidated
damages for, and in satisfaction of, the undersigned's obligations under
this Indemnification Agreement, including but not limited to the
Indemnitors' obligations under paragraph 2 hereof. The Indemnitor
acknowledges and agrees that (and Indemnitee, by its acceptance of this
Indemnification Agreement, acknowledges and agrees that) the payment of the
Maximum Indemnitors' Liability Amount is a fair and reasonable remedy for
Indemnitee if any of the events set forth in paragraph 2 of this
Indemnification Agreement shall occur, as any such event will result in
Indemnitee incurring damages which cannot now be determined with any degree
of certainty. The foregoing shall not limit the remedies Indemnitee may
have against any other party, including without limitation, JMB LP and the
right of the Indemnitors to seek injunctive relief with respect to the
Prohibited Action or specific performance of the underlying obligation.

4. The term "Maximum Indemnitors' Liability Amount" as used in this
Indemnification Agreement shall mean an amount equal to $25,000,000,
provided that the Maximum Indemnitors' Liability Amount shall be reduced on
a dollar for dollar basis for each dollar actually received by Indemnitee
in respect of the JMB Collateral (as defined in the Lower Tier Partnership
Agreement).

5. The Indemnitors hereby consent that from time to time, before or
after the taking of any Prohibited Action by any Indemnitor or Controlled
Party, with or without further notice to or assent from the Indemnitors,
any security at any time held by or available to Indemnitee with respect to
any obligation of JMB LP, or any security at any time held by or available
to Indemnitee for any obligation of any other person or party secondarily
or otherwise responsible for the compliance by JMB LP of its obligations
under the Upper Tier and Lower Tier Partnership Agreements (hereinafter
referred to as the "Obligations"), may be exchanged, surrendered or
released and any obligation JMB LP, or of any such other person or party,
may be changed, altered, renewed, extended, continued, surrendered,
compromised, waived or released in whole or in part, or any default with
respect thereto waived, and Indemnitee may release, in whole or in part,
the JMB Collateral or any balance of any deposit account or credit on its
books in favor of JMB LP, or of any such other person or party, and may
generally deal with JMB LP or any such security or other person or party as
Indemnitee may see fit; and the Indemnitors shall remain bound under this
Indemnification Agreement notwithstanding any such exchange, surrender,
release, change, alteration, renewal, extension, continuance, compromise,
waiver, inaction or other dealing.

6. This is an agreement to pay liquidated damages and not an
agreement of collection and Indemnitor further waives any right to require
that any action be brought against JMB LP or any other person or party or
to require that resort be had to any security or to any balance of any
deposit account or credit on the books of Indemnitee in favor of JMB LP or
any other person or party.

7. Each reference herein to Indemnitee shall be deemed to include
its successors and assigns in whose favor the provisions of this
Indemnification Agreement shall also inure. This Indemnification Agreement
shall be binding upon, and shall inure to the benefit of, Indemnitee and
each Indemnitor and the respective heirs, executors, administrators, legal
representatives, successors and assigns of Indemnitee and each Indemnitor;
provided, however, that the Indemnitors shall in no event or under any
circumstance have the right without obtaining the prior written consent of
Indemnitee to assign or transfer the Indemnitors' obligations and
liabilities under this Indemnification Agreement, in whole or in part, to
any other person, party or entity.

8. The term "Indemnitor" as used herein shall, if this
Indemnification Agreement is signed by more than one party, mean the
"Indemnitors and each of them" and each undertaking herein contained shall
be their joint and several undertaking, provided, however, that in the next
succeeding paragraph hereof the term "Indemnitor" shall mean the
"Indemnitors or any of them".

9. No delay on the part of Indemnitee in exercising any right or
remedy under this Indemnification Agreement or failure to exercise the same
shall operate as a waiver in whole or in part of any such right or remedy.
No notice to or demand on the Indemnitor shall be deemed to be a waiver of
the obligation of the Indemnitor or of the right of Indemnitee to take
further action without notice or demand as provided in this Indemnification
Agreement.

10. This Indemnification Agreement may only be modified, amended,
changed or terminated by an agreement in writing signed by Indemnitee and
the Indemnitors. No waiver of any term, covenant or provision of this
Indemnification Agreement shall be effective unless given in writing by
Indemnitee and if so given by Indemnitee shall only be effective in the
specific instance in which given.

11. The indemnitors acknowledge that this Indemnification Agreement
and the Indemnitors' obligations under this Indemnification Agreement are
and shall at all times continue to be absolute and unconditional in all
respects. This Indemnification Agreement sets forth the entire agreement
and understanding of Indemnitee and the Indemnitors, and, except as
otherwise herein set forth, the Indemnitors absolutely, unconditionally and
irrevocably waive any and all right to assert any offset, counterclaim or
crossclaim of any nature whatsoever with respect to this Indemnification
Agreement or the obligations of the Indemnitors under this Indemnification
Agreement or the obligations of any other person or party (including,
without limitation, JMB LP) relating to this Indemnification Agreement or
the obligations of the Indemnitors hereunder in any action or proceeding
brought by Indemnitee to enforce the obligations of the Indemnitors under
this Indemnification Agreement. Nothing contained in this paragraph 11
shall limit the right of the Indemnitors to assert a defense or maintain a
separate action against Indemnitee with respect to any matter irrespective
of whether it relates to this Indemnification Agreement or the obligations
of the Indemnitors under this Indemnification Agreement. The Indemnitors
acknowledge and Indemnitee, by its acceptance hereof, acknowledges that no
oral or other agreements, understandings, representations or warranties
exist with respect to this Indemnification Agreement or with respect to the
obligations of the Indemnitors under this Indemnification Agreement except
as specifically set forth in this Indemnification Agreement or otherwise in
writing by Indemnitee and the Indemnitors.

12. THE INDEMNITORS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE,
AND INDEMNITEE BY ITS ACCEPTANCE OF THIS INDEMNIFICATION AGREEMENT
IRREVOCABLY AND UNCONDITIONALLY WAIVES, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF OR
OTHERWISE RELATING TO THIS INDEMNIFICATION AGREEMENT.

13. If at any time (i) any payment, or portion thereof, made by, or
for the account of, the Indemnitors on account of the obligations under
this Indemnification Agreement, or (ii) any transaction described in clause
(x) or (y) of paragraph 2 hereof, or (iii) the consummation of the transfer
of the interest of JMB LP in the Upper Tier Partnership pursuant to the JMB
Put Right under Section 7.7 of the partnership agreement of the Upper Tier
Partnership or of the interest of the Upper Tier Partnership in the Lower
Tier Partnership pursuant to the Put Right under Section 12.2C of the
partnership agreement of the Lower Tier Partnership, is set aside by any
court or trustee having jurisdiction as a voidable preference, fraudulent
transfer or otherwise as being subject to avoidance or recovery under the
provisions of the Bankruptcy Code or under any other applicable Federal or
state bankruptcy law or similar law, the Indemnitor hereby agrees that this
Indemnification Agreement (x) shall continue and remain in full force and
effect, or (y) if previously terminated as a result of the Indemnitors
having fulfilled its obligations hereunder in full or as a result of
Indemnitee having released the Indemnitors from their obligations and
liabilities hereunder, shall without further act or instrument be
reinstated and shall thereafter remain in full force and effect, in either
case with the same force and effect as though such payment or transaction
had not been made, and if applicable, as if such previous termination had
not occurred.

14. The Indemnitor hereby waives all defenses it may have based upon
any election of remedies by Indemnitee which destroys or impairs the
Indemnitors' subrogation rights or the Indemnitors' right to proceed
against JMB LP or any other person for reimbursement. The foregoing
waivers include any requirement of law that Indemnitee exhaust any security
for the Obligations before proceeding under this Indemnification Agreement.

In addition to the foregoing, the Indemnitors hereby waive and relinquish
the following rights and remedies accorded by applicable law to
Indenmnitors and agree not to assert or take advantage of any such rights
or remedies: (a) any defense that may arise by reason of the incapacity,
lack of authority, death or disability of any other person or persons; (b)
demand, protest and, except as set forth therein, notice of any kind; (c)
any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; and (d) any duty on
the part of Indemnitee to disclose to the Indemnitors any facts Indemnitee
may now or hereafter know about JMB LP, regardless of whether Indemnitee
has reason to believe that any such facts materially increase the risk
beyond that which the Indemnitor intends to assume or has reason to believe
that such facts are unknown to Indemnitors or has a reasonable opportunity
to communicate such facts to Indemnitors.

15. Any notice, request or demand given or made under this
Indemnification Agreement shall be in writing and shall be hand delivered
or sent by Federal Express or other reputable overnight national courier
service, and shall be deemed given when received at the following address
whether hand delivered or sent by Federal Express or other reputable
overnight national courier service:

If to Indemnitee:

c/o Victor Capital Group, L.P.
885 Third Avenue - 12th Floor
New York, New York 10022

Attention: John Klopp

With a copy to:

Battle Fowler LLP
75 East 55th Street
New York, New York 10022

Attention: Kenneth Friedman

If to the Indemnitors:

900 North Michigan Avenue - 19th Floor
Chicago, IL 60611

Attention: Stuart C. Nathan
Gary Nickele

With a copy to:

Pircher, Nichols & Meeks
1999 Avenue of the Americas
Los Angeles, California 90067

Attention: Leo Pircher

Each party to this Indemnification Agreement may designate a change of
address
by notice given to the other party fifteen (15) days prior to the date such
change of address is to become effective.

16. This Indemnification Agreement is, and shall be deemed to be,
a contract entered into under and pursuant to the laws of the State of New
York and shall be in all respects governed, construed, applied and enforced
in
accordance with the laws of the State of New York. No defense given or
allowed by laws of any other state or country shall be interposed in any
action or proceeding hereon unless such defense is also given or allowed by
the laws of the State of New York.

17. The Indemnitor agrees to submit to personal jurisdiction in the
State of New York in any action or proceeding arising out of this
Indemnification Agreement and, furtherance of such agreement, the
Indemnitor hereby agrees and consents that without limiting other methods
of obtaining jurisdiction, personal jurisdiction over the Indemnitor in any
such action or proceeding may be obtained within or without the
jurisdiction of any federal court located in New York (and any such court
shall have jurisdiction over the subject matter hereof) and tat any process
or notice of motion or other application to any such court in connection
with any such action or proceeding may be served upon the Indemnitor, by
registered or certified mail to or by personal service at the last known
address of the Indemnitor, whether such address be within or without the
jurisdiction of any such court. In addition to and in furtherance of the
foregoing, the foregoing, the Indemnitor hereby consents to venue being
held in either of the Southern District of New York.

18. This Indemnification Agreement may be executed in one or more
counterparts by some or all of the parties hereto, each of which
counterparts shall be an original and all of which together shall
constitute a single indemnification agreement. The failure of any party
listed below to execute this Indemnification Agreement, or any counterpart
hereof, shall not relieve the other signatories from their obligations
hereunder.

19. Except as set forth in paragraph 13 of this Indemnification
Agreement, the obligations and liabilities of the Indemnitors under this
Indemnification Agreement shall terminate on the earlier to occur of (i)
the date upon which the transactions described in clause (x) of paragraph 2
hereof have been consummated, (ii) the date upon which the Properties have
been sold or transferred by the Property Owning Partnerships or the
Property Owning Partnership Interests have been sold or transferred by the
Lower Tier Partnership in accordance with the provisions of the Lower Tier
Partnership Agreement, or (iii) the date upon which the interest of JMB LP
in the Upper Tier Partnership or of the Upper Tier Partnership in the Lower
Tier Partnership has been transferred pursuant to the JMB Put Right under
Section 7.7 of the partnership agreement of the Upper Tier Partnership or
the Put Right under Section 12.2C of the partnership agreement of the Lower
Tier Partnership.

20. If any term, covenant, condition or provision of this
Indemnification Agreement or the application thereof to any circumstance or
to the Indemnitors shall be invalid or unenforceable to any extent, the
remaining terms, covenants, conditions and provisions of this
Indemnification Agreement shall not be effected thereby and shall remain
valid and enforceable to the fullest extent permitted by law.

21. Notwithstanding any provision in this Indemnification Agreement,
no present or future partner, officer, director or shareholder of the
Indemnitors shall have any personal liability under this Indemnification
Agreement, provided, however, that the foregoing shall not limit or impair
any rights of Indemnitee (i) to enforce this Indemnification Agreement
against the Indemnitors and any assets of the Indemnitors, (ii) to seek and
enforce other equitable relief against the Indemnitors or against any such
partner, officer, director or shareholder, or (iii) to initiate proceedings
at law or in equity for the purpose of determining any rights of the
Indemnitee hereunder, so long as, in each such case, the same cannot result
in in personal liability of any present or future partner, officer,
director or shareholder of Indemnitors.

IN WITNESS WHEREOF, the Indemnitors have duly executed this
Indemnification Agreement the day and year first above set forth.

PROPERTY PARTNERS, L.P.
By: CARLYLE INVESTORS, INC.
as its general partner

By: ____________________
Name: Stuart C. Nathan
Title: President

CARLYLE - XIII ASSOCIATES, L.P.

By: CARLYLE INVESTORS, INC.
as its general partner

By: ______________________________
Name: Stuart C. Nathan
Title: President

CARLYLE - XIV ASSOCIATES, L.P.

By: CARLYLE INVESTORS, INC.
as its general partner

By: ______________________________
Name: Stuart C. Nathan
Title: President

EXHIBIT 10-W
- -------------
(C-XIII)

FILED ON PAPER IN ACCORDANCE WITH RULE 201 OF REGULATION S-T, THESE
AGREEMENTS ARE BEING FILED IN PAPER PURSUANT TO A TEMPORARY HARDSHIP
EXEMPTION.

EXHIBIT 10-X
- ------------
(C-XIII)

FILED ON PAPER IN ACCORDANCE WITH RULE 201 OF REGULATION S-T, THESE
AGREEMENTS ARE BEING FILED IN PAPER PURSUANT TO A TEMPORARY HARDSHIP
EXEMPTION.

EXHIBIT 21

LIST OF SUBSIDIARIES

The Partnership is a partner of Sherry Lane Associates, a general
partnership which holds title to the Sherry Lane Place Office Building in
Dallas, Texas. The Partnership is a partner of Copley Place Associates, a
limited partnership which holds title to Copley Place in Boston,
Massachusetts. The developer of the property is a partner in the joint
venture. The developer of the property is a partner in the joint venture.
The Partnership is a 20% shareholder in Carlyle Managers, Inc. and 20%
shareholder in Carlyle Investors, Inc. Reference is made to the Notes for
a description of the terms of such joint venture partnerships. The
Partnership's interest in the joint ventures and the results of its
operations are included in the Consolidated Financial Statements of the
Partnership filed with this annual report.

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the corporate general partner of CARLYLE REAL ESTATE
LIMITED PARTNERSHIP - XIII, do hereby nominate, constitute and appoint GARY
NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officers a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1996, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 22nd day of January, 1997.

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

GLENN E. EMIG
- -----------------------
Glenn E. Emig Chief Operating Officer

The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1996,
and any and all amendments thereto, the 22nd day of January, 1997.

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

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

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

EXHIBIT 24

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 22nd day of January, 1997.

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

JUDD D. MALKIN
- ----------------------- Chairman and Chief Financial Officer
Judd D. Malkin

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

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

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

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

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

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996

<CASH> 6,030,217
<SECURITIES> 374,085
<RECEIVABLES> 15,330,082
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,734,384
<PP&E> 238,208,441
<DEPRECIATION> 0
<TOTAL-ASSETS> 280,595,580
<CURRENT-LIABILITIES> 67,445,869
<BONDS> 384,098,834
<COMMON> 0
0
0
<OTHER-SE> (176,015,574)
<TOTAL-LIABILITY-AND-EQUITY>280,595,580
<SALES> 68,293,433
<TOTAL-REVENUES> 69,093,943
<CGS> 0
<TOTAL-COSTS> 51,021,847
<OTHER-EXPENSES> 1,019,829
<LOSS-PROVISION> 17,600,000
<INTEREST-EXPENSE> 39,959,842
<INCOME-PRETAX> (40,507,575)
<INCOME-TAX> 0
<INCOME-CONTINUING> 42,099,222
<DISCONTINUED> 5,484,249
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 47,583,471
<EPS-PRIMARY> 125.25
<EPS-DILUTED> 125.25

</TABLE>