JMB INCOME PROPERTIES LTD X, 10-K405, 1998-03-30

JMB INCOME PROPERTIES LTD X
10-K405, 1998-03-30
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the fiscal year
ended December 31, 1997 Commission file no. 0-12140

JMB INCOME PROPERTIES, LTD. - X
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Illinois 36-3235999
(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 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 nonaffiliates
of the registrant. Not applicable.

Documents incorporated by reference: None

<PAGE>

TABLE OF CONTENTS

Page
----
PART I

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

Item 2. Properties . . . . . . . . . . . . . . . . . 4

Item 3. Legal Proceedings. . . . . . . . . . . . . . 6

Item 4. Submission of Matters to a
Vote of Security Holders . . . . . . . . . . 6

PART II

Item 5. Market for the Partnership's Limited
Partnership Interests and Related
Security Holder Matters. . . . . . . . . . . 6

Item 6. Selected Financial Data. . . . . . . . . . . 7

Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . 12

Item 7A. Quantitative and Qualitative
Disclosures About Market Risk. . . . . . . . 16

Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . 17

Item 9. Changes in and Disagreements
with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . 52

PART III

Item 10. Directors and Executive Officers
of the Partnership . . . . . . . . . . . . . 52

Item 11. Executive Compensation . . . . . . . . . . . 55

Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . 56

Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . 57

PART IV

Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . 57

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 59

<PAGE>

PART I

ITEM 1. BUSINESS

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, JMB Income Properties, Ltd. - X (the "Partnership"),
is a limited partnership formed in 1983 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 $150,000,000 in limited partnership interests (the
"Interests") commencing on June 29, 1983, pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933 (Registration No.
2-83599). A total of 150,000 Interests were sold to the public at $1,000
per Interest. The offering closed on November 1, 1983. No Limited Partner
has made any additional capital contribution after such date. The Limited
Partners of the Partnership share in their portion of the benefits of
ownership of the Partnership's real property investments according to the
number of Interests held.

The Partnership is engaged solely in the business of the acquisition,
operation, and sale and disposition of equity real estate investments.
Such equity investments are held by fee title and/or through joint venture
interests. The Partnership has one remaining real property investment
located in North Richland Hills, Texas. 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 October
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 its remaining
investment property as quickly as practicable and to wind up its affairs
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:

<PAGE>

<TABLE>
<CAPTION>
SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1997,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP
- ---------------------- ---------- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Pylon Plaza,
Phase I & II
office building
Boca Raton,
Florida . . . . . . 49,400 10/12/83 Phase I fee ownership of land and
sq.ft. 8/9/90 improvements
n.r.a. Phase II
12/9/91
2. North Hills Mall
shopping center
North Richland
Hills, Texas. . . . 221,000
sq.ft. 10/19/83 12% fee ownership of land and
g.l.a. improvements (b)(e)(f)
3. Pasadena Town Square
shopping center
Pasadena, Texas . . 245,000
sq.ft. 10/19/83 10/3/95 fee ownership of land and
g.l.a. improvements (g)
4. Collin Creek Mall
shopping center
Plano, Texas. . . . 332,000
sq.ft. 10/19/83 12/29/94 fee ownership of land and
g.l.a. improvements
5. Animas Valley Mall
shopping center
Farmington,
New Mexico. . . . . 460,000
sq.ft. 10/24/83 6/30/95 fee ownership of land and
g.l.a. improvements (through joint
venture partnership) (d)
6. Royal Executive Park
office complex
Rye Brook,
New York. . . . . . 270,000
sq.ft. 12/16/83 12/19/97 fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (c)(d)

<PAGE>

SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1997,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP
- ---------------------- ---------- -------- ---------------------- ---------------------

7. Towne Square Mall
shopping center
Owensboro,
Kentucky. . . . . . 357,000
sq.ft. 03/01/84 08/13/87 fee ownership of land and
g.l.a. improvements (through joint
venture partnership)
8. 40 Broad Street
office building
New York,
New York. . . . . . 247,800
sq.ft. 12/31/85 12/30/97 fee ownership of land and
n.r.a. improvements (through joint
venture partnership) (c)(d)

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

(a)The computation of this percentage for the property held at December 31, 1997 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 to Item 8 - Schedule III for the current outstanding principal balance
and a description of the long-term mortgage indebtedness secured by the Partnership's real property investment.

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

(d)Reference is made to the Notes for a description of the sale of this real property investment.

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

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

(g)The lender realized upon its security and took title to the property in 1995. Reference is made to the
Notes filed with this annual report.

</TABLE>

<PAGE>

The Partnership's real property investment is subject to competition
from similar types of properties (including, properties owned by affiliates
of the General Partners) in the vicinity in which it is located. Such
competition is generally for the retention of existing tenants.
Additionally, the Partnership is in competition for new tenants. Reference
is made to Item 7 below for a discussion of competitive conditions and
future renovation and capital improvement plans of the Partnership and its
investment property. 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
property in its market primarily on the basis of effective rents, tenant
allowances and service provided to tenants. In the opinion of the Managing
General Partner of the Partnership, the one investment property held at
December 31, 1997 is adequately insured.

Reference is made to the Notes for a schedule of minimum lease
payments to be received in each of the next five years, and in the
aggregate thereafter, under leases in effect at the Partnership's property
as of December 31, 1997.

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

On December 19, 1997, the Partnership, through its joint venture, sold
the Royal Executive Park I office complex located in Rye Brook, New York.
Reference is made to the Notes for a further description of such
transaction.

On December 30, 1997, the Partnership, through its joint venture, sold
the 40 Broad Street office building located in New York, New York.
Reference is made to the Notes for a further description of such
transaction.

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 occupancy levels by quarter during fiscal
years 1997 and 1996 for the Partnership's investment properties owned
during 1997:

<PAGE>

<TABLE>
<CAPTION>
1996 1997
------------------------- -------------------------
Principal At At At At At At At At
Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------- ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. North Hills Mall
North Richland Hills,
Texas (a) . . . . . . . . Retail 86% 88% 86% 88% 84% 82% 81% 78%

2. Royal Executive Park
Rye Brook, New York . . . Telecommuni-
cations 81% 81% 84% 84% 81% 83% 93% N/A

3. 40 Broad Street
New York, New York. . . . Financial
Services 75% 78% 81% 74% 82% 90% 88% N/A
<FN>
- --------------------

Reference is made to Item 6, Item 7 and 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 Partnership's interest in the property was sold and was not owned by the
Partnership at the end of the quarter.

(a) The percentage represents physical occupancy which includes temporary tenants. Occupancy without
temporary tenants is 74% at March 31, 1996, 75% at June 30, 1996, 72% at September 30, 1996 and 73% at December
31, 1996, 68% at March 31, 1997, 69% at June 30, 1997, 67% at September 30, 1997 and 67% at December 31, 1997.

</TABLE>

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

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

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

There were no matters submitted to a vote of holders during fiscal
years 1996 or 1997.

PART II

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

As of December 31, 1997, there were 13,718 record holders of Interests
of the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. Upon request,
the Managing 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 Managing 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 Managing General Partner has been received by the
Managing 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
distributions made to the Limited Partners.

Reference is made to Item 7 for a discussion of unsolicited tender
offers received from unaffiliated third parties.

<PAGE>

<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

YEARS ENDED DECEMBER 31, 1997, 1996, 1995, 1994 and 1993
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)

<CAPTION>
1997 1996 1995 1994 1993
----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Total income. . . . . . . $ 6,794,437 7,464,271 15,186,857 29,251,376 31,189,187
============ =========== =========== =========== ===========
Earnings (loss) before
gains on sale or
disposition of
investment properties
and extraordinary items. $ 3,240,011 (3,514,561) (7,313,908) (6,055,842) 4,595,704
Partnership's share of
gain on sale of invest-
ment properties of uncon-
solidated ventures . . . 13,684,709 -- -- -- --
Gains on sale of interest
in unconsolidated
venture and disposi-
tion of investment
properties. . . . . . . -- 50,826 3,832,429 64,571,942 150,443
Extraordinary items . . . -- -- 3,934,532 -- --
------------ ----------- ----------- ----------- -----------
Net earnings (loss) . . . $ 16,924,720 (3,463,735) 453,053 58,516,100 4,746,147
============ =========== =========== =========== ===========

<PAGE>

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

YEARS ENDED DECEMBER 31, 1997, 1996, 1995, 1994 and 1993
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)

<CAPTION>
1997 1996 1995 1994 1993
----------- ----------- ----------- ------------ ------------

Net earnings (loss)
per Interest (b):
Earnings (loss)
before gains on sale
or disposition of
investment properties
and extraordinary
items . . . . . . . . $ 20.74 (22.49) (46.81) (38.76) 29.41
Partnership's share of
gain on sale of invest-
ment properties of un-
consolidated ventures 90.32 -- -- -- --
Gains on sale of interest
in unconsolidated
venture and disposi-
tion of investment
properties. . . . . . -- .34 25.29 426.16 .99
Extraordinary items . . -- -- 25.97 -- --
------------ ----------- ----------- ----------- -----------
Net earnings (loss) . . . $ 111.06 (22.15) 4.45 387.40 30.40
============ =========== =========== =========== ===========
Total assets. . . . . . . $ 65,062,906 50,071,138 56,832,712 170,327,264 140,905,552
Long-term debt. . . . . . $ 7,624,586 7,762,151 7,890,281 -- 46,800,991
Cash distributions
per Interest (c). . . . $ 12.00 16.00 466.00 16.00 22.00
============ =========== =========== =========== ===========

<PAGE>

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

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

(b) The net earnings (loss) per Interest is based upon the number of
Interests outstanding at the end of each period (150,005).

(c) 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 Limited Partners since
the inception of the Partnership have not resulted in taxable income to
such Limited Partners and have therefore represented a return of capital.

</TABLE>

<PAGE>

<TABLE>

SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1997

<CAPTION>
Property
- --------

North Hills
Mall a) The gross leasable area ("GLA") occupancy rate and average base rent per square foot as
of December 31 for each of the last five years were as follows:

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

1993 . . . . . 99% $15.57
1994 . . . . . 95% 15.94
1995 . . . . . 92% 15.27
1996 . . . . . 88% 15.07
1997 . . . . . 78% 15.06
<FN>
(1) Average base rent per square foot is based on GLA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>

General Cinema 28,472 $347,000 6/2005 N/A
(Movie Theatre)

No other tenants comprise
more than 10% of the
GLA at the property.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of
leases for the next ten years at the North Hills Mall:

Annualized Percent of
Number of Approx. Total Base Rent Total 1997
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1998 5 7,453 167,000 6%
1999 7 11,671 229,261 9%
2000 3 7,098 163,000 6%
2001 4 10,048 155,970 6%
2002 4 7,099 164,910 6%
2003 5 10,453 154,558 6%
2004 4 17,485 252,331 10%
2005 7 45,827 774,008 30%
2006 2 2,764 89,500 3%
2007 1 422 24,358 1%

(1) Excludes leases that expire in 1998 for which renewal leases or leases with replacement tenants have been
executed as of January 9, 1998.

</TABLE>

<PAGE>

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 $135,651,000 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
investments and for working capital. A portion of such proceeds was
utilized to acquire the properties described in Item 1 above.

During 1996, 1997 and early 1998, some of the Limited Partners in the
Partnership received unsolicited tender offers from unaffiliated third
parties to purchase up to 4.9% of the Interests in the Partnership at
prices ranging from $150 to $225 per Interest. The Partnership recommended
against acceptance of these offers on the basis that, among other things,
the offer prices were inadequate. All of such offers have expired. As of
the date of this report, the Partnership is aware that approximately 5.34%
of the Interests in the Partnership have been purchased by such
unaffiliated third parties either pursuant to such tender offers or through
negotiated purchases. 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 other 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. The board of directors of JMB Realty
Corporation ("JMB") the Managing General Partner of the Partnership, 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 in the Partnership, including any and all responses to such
tender offer. The Special Committee has retained independent counsel to
advise it in connection with any potential tender offers for Interests and
has retained Lehman Brothers Inc. as financial advisor to assist the
Special Committee in evaluating and responding to any additional potential
tender offers for Interests.

At December 31, 1997, the Partnership had cash and cash equivalents of
approximately $39,301,000. In addition, in January, 1998 approximately
$10,424,000 was received by the Partnership representing its share of the
proceeds of the December 1997 sale of the 40 Broad Street office building
as discussed below and in the Notes. Such funds are available for
distributions to partners, including those paid in February 1998 as
discussed below, and for working capital requirements including tenant and
capital improvements, to the extent not funded from future operations, for
potential limited liability related to representations made pursuant to
sales of real estate investments in December, 1997 as more fully described
in the Notes, and to pay for the costs of a potential redevelopment of the
North Hills Mall, as discussed below. The Partnership has currently
budgeted in 1998 approximately $99,000 for tenant improvements and other
capital expenditures, exclusive of costs related to the potential
redevelopment of North Hills Mall. Actual amounts expended in 1998 may
vary depending on a number of factors including actual leasing activity,
results of property operations, liquidity considerations and other market
conditions over the course of the year. The source of capital for such
items and for both short-term and long-term future liquidity and
distributions is expected to be through existing working capital, net cash
generated by the Partnership's investment property and through the sale of
such investment. As more fully described in the Notes, the Partnership
sold Royal Executive Park I and 40 Broad Street office buildings in
December 1997. The Partnership's mortgage obligation for North Hills Mall
is a separate non-recourse loan secured individually by the property and
the Partnership is not personally liable for the payment of the mortgage
indebtedness.

<PAGE>

Currently, as more fully discussed below, the Partnership continues to
consider alternatives for the redevelopment of the North Hills Mall which,
if undertaken, may require the Partnership to commit a substantial amount
of capital. Any decision to commit additional amounts to this investment
property for any purpose will be based on, among other things, the
likelihood of the return of such additional investment plus a reasonable
profit thereon within the expected holding period of this asset as
discussed below. Commencing in 1996, in an effort to reduce partnership
operating expenses, the Partnership elected to make semi-annual, rather
than quarterly, distributions of available operating cash flow in May and
November of each year. In May and November 1997, the Partnership paid an
operating distribution of $900,030 ($6 per Interest) to the Limited
Partners. In February 1998, the Partnership made a distribution of sale
proceeds related to the sale of Royal Executive Park I and 40 Broad Street
office buildings of $28,500,950 ($190 per Interest) to the Limited
Partners. Future distributions from sales or property operations will
depend upon a combination of operating cash flow from the remaining
investment property and the longer term capital requirements of the
Partnership.

40 BROAD STREET

On December 30, 1997, the Partnership, through the 40 Broad Street
joint venture, sold the land and related improvements of the 40 Broad
Street office building for $34,735,000. Reference is made to the Notes for
a further description of such transaction. The proceeds from the sale were
approximately $33,155,000, of which the Partnership's share was
approximately $10,424,000. Such amount was distributed to the Partnership
in January 1998.

NORTH HILLS MALL

Occupancy of the center at the end of the year was 78%. Included in
this occupancy are temporary tenants that occupy approximately 11% of the
center's leasable square footage. The Partnership has been seeking a
replacement anchor department store for the existing Stripling & Cox store.

Based upon discussions with most major department store owners and given
the market and property operating conditions discussed more fully below, it
does not appear that the Partnership will be able to attract a traditional
department store anchor to the center in the near term.

North Hills Mall's major competition, Northeast Mall (located within a
mile from the center), has announced that it would be undertaking a major
redevelopment which would increase its mall space as well as add up to two
new anchor department stores. Completion is expected sometime in 1999.
Nordstrom's department store has committed to be one of those anchor
stores. Northeast Mall already has four anchor department store tenants.

In addition to the increased competition from Northeast Mall, over the
last several years a significant number of strip center developments have
been opened within a close proximity to the center. Many of these centers
include large retail "Big Box" tenants that have adversely affected the
center's tenant sales.

North Hills Mall has three anchor department stores, none of which are
owned by the Partnership. The operating agreements which require these
stores to remain open expire in 1999 and 2000. There is no certainty that
any of these stores will continue operations beyond the operating agreement
expiration dates.

<PAGE>

The effect of all these conditions is that mall sales have decreased
in recent years and the manager has had difficulty retaining and attracting
typical national or regional tenants. As indicated above, while the
occupancy of the center is 78%, only 67% is occupied by permanent tenants.
The center's operating cash flow has been and will continue to be reduced
due to increased vacancy and lower effective rental rates achieved on
releasing vacant space. If the Foley's store were to close in 1999 without
some form of replacement, it would be very difficult to lease space in the
center.

The Partnership continues to consider alternatives for the
redevelopment of the property to co-exist with the increased competition.
The goal is to develop a plan which will stabilize the center and allow the
Partnership to preserve as much value as possible.

While any redevelopment plan is likely to involve substantial costs,
the Partnership will not make additional investments in the property for a
redevelopment unless it believes that the incremental investment will be
returned with a reasonable profit thereon. There are no assurances that,
even if the Partnership desired to do so, a redevelopment or sale of the
property would occur. In the meantime, the center produces sufficient
operating cash flow to cover the required debt service and provide the
Partnership with a cash return.

ROYAL EXECUTIVE PARK

On December 19, 1997, the Partnership, through the Royal Executive
Park I joint venture, sold the land and related improvements of the Royal
Executive Park I office complex for $37,000,000. Reference is made to the
Notes for a further description of such transaction. The proceeds from the
sale were approximately $36,431,000, of which the Partnership's share was
approximately $18,179,000 and which was distributed to the Partnership in
December 1997. In addition, approximately $2,369,000 of remaining
operating cash at the property was distributed to the venture partners in
January 1998, of which the Partnership's share was approximately
$1,182,000.

GENERAL

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 remaining
investment property. The Partnership has decided to retain a portion of
the net sale proceeds from sales in recent years. These funds will be
available, if necessary or deemed appropriate by the General Partners, for
the programs to enhance the Partnership's property as discussed above. Due
to the factors outlined above, the Partnership has held certain of its
investment properties longer than originally anticipated in an effort to
maximize the return to the Limited Partners. Nonetheless, the affairs of
the Partnership are expected to be wound up no later than December 31,
1999, barring unforeseen economic developments.

RESULTS OF OPERATIONS

The decrease in the Partnership's investment in unconsolidated
ventures at December 31, 1997 as compared to December 31, 1996 is primarily
due to the sale in 1997 of the Royal Executive Park and 40 Broad Street
investment properties. The balance at December 31, 1997 consists primarily
of undistributed sale proceeds relating to the sale of the 40 Broad Street
investment property, which were distributed to the venture partners in
January 1998.

The decrease in accrued real estate taxes at December 31, 1997 as
compared to December 31, 1996 is primarily due to a reduced real estate tax
assessment in 1997 at the North Hills Mall investment property.

<PAGE>

The decrease in rental income and property operating expenses for the
year ended December 31, 1997 as compared to the year ended December 31,
1996 is primarily due to lower tenant occupancies in 1997 at the North
Hills Mall investment property. The decrease in rental income, mortgage
and other interest, depreciation and property operating expenses for the
year ended December 31, 1996 as compared to the year ended December 31,
1995 is primarily due to the sale of Animas Valley Mall and a related land
outparcel in June 1995 and the transfer of title to the lender of the
Pasadena Town Square investment property in October 1995.

The decrease in interest income for the year ended December 31, 1996
as compared to the year ended December 31, 1995 is primarily due to the
increase in the average balance in U.S. Government obligations in December
1994 due to the approximate $84 million of net sale proceeds from the sale
of Collin Creek Mall and the subsequent reduction in the average balance of
U.S. Government obligations through the distribution of $68.1 million of
those sales proceeds in February 1995.

The decrease in depreciation expense for the year ended December 31,
1997 as compared to the year ended December 31, 1996 is primarily due to
the North Hills Mall investment property being identified as held for sale
or disposition as of September 30, 1997 and, therefore, no longer subject
to depreciation beyond such date.

The increase in general and administrative expenses for the year ended
December 31, 1997 as compared to the year ended December 31, 1996 is
attributable primarily to an increase in reimbursable costs to affiliates
of the General Partners in 1997 and an increase in administrative costs
incurred in 1997 in connection with tender offer matters as discussed
above. The decrease in general and administrative expenses for the year
ended December 31, 1996 as compared to the year ended December 31, 1995 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 of $5,700,000 for the year ended
December 31, 1996 is due to the reduction of the net carrying value of the
North Hills Mall investment property as of December 31, 1996. The
provision for value impairment of $9,300,000 for the year ended
December 31, 1995 is due to the Partnership reduction of the net carrying
value of its investment in the Royal Executive Park venture as of
September 30, 1995.

The increase in Partnership's share of operations of unconsolidated
ventures for the year ended December 31, 1997 as compared to the years
ended December 31, 1996 and 1995 is primarily due to the Royal Executive
Park investment property being identified as held for sale or disposition
as of December 31, 1996, and the 40 Broad Street investment property being
identified as held for sale or disposition as of July 1, 1997, and
therefore, no longer subject to depreciation beyond such dates. In
addition, the increase is due to higher tenant occupancies in 1997 at the
Royal Executive Park and 40 Broad Street investment properties.

The decrease in Partnership's share of operations of unconsolidated
ventures for the year ended December 31, 1996 as compared to the year ended
December 31, 1995 for the Royal Executive Park venture is primarily due to
the Partnership's share of the $250,000 in estimated costs for
environmental clean-up of contaminated ground near the property's fuel oil
tanks and lower net effective rents earned upon renewal of leases at the 40
Broad Street investment property during 1996. This was partially offset by
the discontinuation of amortization of the original excess of the
Partnership's basis over its proportionate share of assets of the Royal
Executive Park venture in September 1995. The Partnership ceased such
amortization when a provision for value impairment of $9.3 million for such
investment was recorded in September 1995.

<PAGE>

The Partnership's share of gain on sale of investment properties of
unconsolidated ventures of $13,684,709 during 1997 is the result of the
sale of the Royal Executive Park and 40 Broad Street office buildings in
December 1997. The gain of $50,826 on sale of investment properties during
1996 is the result of the sale of the Partnership's remaining unencumbered
land outparcel at Pasadena Town Square in October 1996. The gain of
$3,832,429 on sale of investment properties during 1995 is the result of
the sale of the Animas Valley Mall and a related land outparcel in June
1995.

The extraordinary items of $3,934,532 for the year ended December 31,
1995 are due to the discharge of indebtedness of $2,219,608 and $1,714,924
at both the Animas Valley Mall and Pasadena Town Square investment
properties in 1995, respectively.

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 the Partnership 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 remaining commercial property have escalation clauses
covering increases in the cost of operating and maintaining the property as
well as real estate taxes. Therefore, there should be little effect on
operating earnings if the properties remain substantially occupied. In
addition, substantially all of the leases at the Partnership's remaining
investment contain provisions which entitle the Partnership to participate
in gross receipts of tenants above fixed minimum amounts.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

INDEX

Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1997 and 1996
Consolidated Statements of Operations, years ended December 31,
1997, 1996 and 1995
Consolidated Statements of Partners' Capital Accounts,
years ended December 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows, years ended December 31,
1997, 1996 and 1995
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.

ROYAL EXECUTIVE PARK I
(A GENERAL PARTNERSHIP)

INDEX

Independent Auditors' Report
Balance Sheets, December 31, 1997 and 1996
Statements of Operations, years ended December 31,
1997, 1996 and 1995
Statements of Partners' Capital Accounts,
years ended December 31, 1997, 1996 and 1995
Statements of Cash Flows, years ended December 31,
1997, 1996 and 1995
Notes to Financial Statements

SCHEDULES NOT FILED:

All schedules have been omitted as the required information is
inapplicable or the information is presented in the financial statements or
related notes.

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Partners
JMB INCOME PROPERTIES, LTD. - X:

We have audited the consolidated financial statements of JMB Income
Properties, Ltd. - X (a limited partnership) and consolidated venture 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
JMB Income Properties, Ltd. - X and consolidated venture as of December 31,
1997 and 1996, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 1997, 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 venture changed its 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 25, 1998

<PAGE>

<TABLE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996

ASSETS
------
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 39,301,294 21,269,359
Rents and other receivables, net of allowance for doubtful
accounts of $100,112 in 1997 and $68,817 in 1996. . . . . . . . . 284,974 300,707
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 30,426 31,563
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 761,465 721,351
------------ -----------

Total current assets. . . . . . . . . . . . . . . . . . . . 40,378,159 22,322,980
------------ -----------

Investment property - Schedule III:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,839,688
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . -- 19,314,167
------------ -----------

-- 21,153,855
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . -- 8,438,692
------------ -----------

Total investment property, net of accumulated depreciation. -- 12,715,163

Investment property held for sale or disposition. . . . . . . . . . . 12,177,898 --
------------ -----------

Total investment property . . . . . . . . . . . . . . . . . 12,177,898 12,715,163
------------ -----------

Investments in unconsolidated ventures, at equity . . . . . . . . . . 12,069,269 14,515,288
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 149,847 198,140
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . 287,733 319,567
------------ -----------

$ 65,062,906 50,071,138
============ ===========

<PAGE>

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------

1997 1996
------------ -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 137,564 128,130
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 350,052 286,682
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . 46,088 46,849
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 519,413 588,333
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . 1,053,117 1,049,994
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 14,800 13,250

Long-term debt, less current portion. . . . . . . . . . . . . . . . . 7,624,586 7,762,151
------------ -----------
Commitments and contingencies

Total liabilities . . . . . . . . . . . . . . . . . . . . . 8,692,503 8,825,395
------------ -----------
Partners' capital accounts:
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings . . . . . . . . . . . . . . . . . . . . 1,278,637 1,012,189
Cumulative cash distributions . . . . . . . . . . . . . . . . . (250,000) (250,000)
------------ -----------
1,029,637 763,189
------------ -----------
Limited partners (150,005 interests):
Capital contributions, net of offering costs. . . . . . . . . . 135,651,080 135,651,080
Cumulative net earnings . . . . . . . . . . . . . . . . . . . . 87,877,386 71,219,114
Cumulative cash distributions . . . . . . . . . . . . . . . . . (168,187,700) (166,387,640)
------------ -----------
55,340,766 40,482,554
------------ -----------
Total partners' capital accounts. . . . . . . . . . . . . . 56,370,403 41,245,743
------------ -----------

$ 65,062,906 50,071,138
============ ===========

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<CAPTION>
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . $ 5,709,682 6,430,478 13,190,501
Interest income . . . . . . . . . . . . . . . . . 1,084,755 1,033,793 1,996,356
----------- ----------- -----------
6,794,437 7,464,271 15,186,857
----------- ----------- -----------
Expenses:
Mortgage and other interest . . . . . . . . . . . 557,291 566,130 4,074,322
Depreciation. . . . . . . . . . . . . . . . . . . 602,937 793,548 1,690,411
Property operating expenses . . . . . . . . . . . 3,640,879 3,881,155 7,360,538
Professional services . . . . . . . . . . . . . . 176,831 222,333 270,316
Amortization of deferred expenses . . . . . . . . 48,758 55,994 48,422
General and administrative. . . . . . . . . . . . 461,020 342,253 517,989
Provisions for value impairment . . . . . . . . . -- 5,700,000 9,300,000
----------- ----------- -----------
5,487,716 11,561,413 23,261,998
----------- ----------- -----------
1,306,721 (4,097,142) (8,075,141)
Partnership's share of operations of
unconsolidated ventures . . . . . . . . . . . . . 1,933,290 582,581 761,233
----------- ----------- -----------
Earnings (loss) before gains on sale of investment
properties and extraordinary items. . . . . . . . 3,240,011 (3,514,561) (7,313,908)
Partnership's share of gain on sale of investment
properties of unconsolidated ventures . . . . . . 13,684,709 -- --
Gain on sale of investment property . . . . . . . . -- 50,826 3,832,429
----------- ----------- -----------
Earnings (loss) before extraordinary items. . . . . 16,924,720 (3,463,735) (3,481,479)
Extraordinary items . . . . . . . . . . . . . . . . -- -- 3,934,532
----------- ----------- -----------

Earnings (loss) . . . . . . . . . . $16,924,720 (3,463,735) 453,053
=========== =========== ===========

<PAGE>

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED

1997 1996 1995
------------ ------------ ------------
Net earnings (loss) per limited partnership
interest:
Earnings (loss) before gains on sale or
disposition of investment properties and
extraordinary items. . . . . . . . . . . . . $ 20.74 (22.49) (46.81)
Partnership's share of gain on sale of
investment properties of unconsolidated
ventures . . . . . . . . . . . . . . . . . . 90.32 -- --
Gains on sale of investment properties . . . . -- .34 25.29
----------- ----------- -----------
Earnings (loss) before extraordinary items . . 111.06 (22.15) (21.52)
Extraordinary items. . . . . . . . . . . . . . -- -- 25.97
----------- ----------- -----------
Net earnings (loss) . . . . . . . . $ 111.06 (22.15) 4.45
=========== =========== ===========

<FN>
See accompanying notes to consolidated financial statements
</TABLE>

<PAGE>

<TABLE>

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (150,005 INTERESTS)
--------------------------------------------------- ---------------------------------------------------
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
at Decem-
ber 31,
1994 . . . . $1,000 1,367,150 (250,000) 1,118,150 135,651,080 73,874,835 (94,085,230)115,440,685

Cash distri-
butions
($466 per
limited
partnership
interest). . -- -- -- -- -- -- (69,902,330)(69,902,330)
Net earnings
(loss) . . . -- (214,887) -- (214,887) -- 667,940 -- 667,940
------ --------- ---------- --------- ----------- ---------- ----------- ----------
Balance
at Decem-
ber 31,
1995 . . . . 1,000 1,152,263 (250,000) 903,263 135,651,080 74,542,775 (163,987,560) 46,206,295

Cash distri-
butions
($16.00 per
limited
partnership
interest). . -- -- -- -- -- -- (2,400,080) (2,400,080)
Net earnings
(loss) . . . -- (140,074) -- (140,074) -- (3,323,661) -- (3,323,661)
------ --------- ---------- --------- ----------- ---------- ----------- ----------

<PAGE>

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS - CONTINUED

GENERAL PARTNERS LIMITED PARTNERS (150,005 INTERESTS)
--------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- --------- ----------- ---------- ------------- ----------
Balance
at Decem-
ber 31,
1996 . . . . 1,000 1,012,189 (250,000) 763,189 135,651,080 71,219,114 (166,387,640) 40,482,554

Cash distri-
butions
($12 per
limited
partnership
interest). . -- -- -- -- -- -- (1,800,060) (1,800,060)
Net earnings
(loss) . . . -- 266,448 -- 266,448 -- 16,658,272 -- 16,658,272
------ --------- ---------- --------- ----------- ---------- ----------- ----------
Balance
at Decem-
ber 31,
1997 . . . . $1,000 1,278,637 (250,000) 1,029,637 135,651,080 87,877,386 (168,187,700) 55,340,766
====== ========= ========== ========= =========== ========== =========== ==========

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . $16,924,720 (3,463,735) 453,053
Items not requiring (providing) cash or
cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . 602,937 793,548 1,690,411
Amortization of deferred expenses . . . . . . . 48,758 55,994 48,422
Provisions for value impairment . . . . . . . . -- 5,700,000 9,300,000
Partnership's share of operations of
unconsolidated ventures, net of distributions (1,933,290) (48,101) 451,367
Partnership's share of gain on sale of invest-
ment properties of unconsolidated ventures. . (13,684,709) -- --
Gain on sale of investment properties . . . . . -- (50,826) (3,832,429)
Extraordinary items . . . . . . . . . . . . . . -- -- (3,934,532)
Changes in:
Rents and other receivables . . . . . . . . . . 15,733 184,371 (29,785)
Prepaid expenses. . . . . . . . . . . . . . . . 1,137 (1,921) 58,623
Escrow deposits . . . . . . . . . . . . . . . . (40,114) 51,480 35,190
Accrued rents receivable. . . . . . . . . . . . 31,834 29,775 27,557
Accounts payable. . . . . . . . . . . . . . . . 63,370 115,660 (229,578)
Accrued interest. . . . . . . . . . . . . . . . (761) (492,493) 834,600
Accrued real estate taxes . . . . . . . . . . . (68,920) (29,923) (295,413)
Tenant security deposits. . . . . . . . . . . . 1,550 (3,250) (3,344)
------------ ----------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . 1,962,245 2,840,579 4,574,142
------------ ----------- -----------
Cash flows from investing activities:
Net sales and maturities of short-term
investments . . . . . . . . . . . . . . . . . . -- -- 2,880,712
Cash sales proceeds from sale of investment
properties, net of selling expenses . . . . . . -- 541,650 27,785,046
Additions to investment properties
(net of changes in related payables). . . . . . (65,672) (548,309) (802,067)
Partnership's distributions from unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . 18,064,018 -- --
Partnership's contributions to
unconsolidated ventures . . . . . . . . . . . . -- (62,880) (124,750)
Payment of deferred expenses. . . . . . . . . . . (465) (45,735) (156,661)
------------ ----------- -----------

<PAGE>

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1997 1996 1995
----------- ----------- -----------
Net cash provided by (used in)
investing activities. . . . . . . . . . 17,997,881 (115,274) 29,582,280
------------ ----------- -----------
Cash flows from financing activities:
Bank overdrafts . . . . . . . . . . . . . . . . . -- (378,034) 378,034
Cash proceeds from refinancing of
long-term debt. . . . . . . . . . . . . . . . . -- -- 7,363,196
Payments of real estate escrow deposits from
refinancing . . . . . . . . . . . . . . . . . . -- -- 772,831
Payment of deferred refinancing expenses. . . . . -- -- 59,084
Principal payments on long-term debt. . . . . . . (128,131) (109,719) (35,881,814)
Distributions to limited partners . . . . . . . . (1,800,060) (2,400,080) (69,902,330)
------------ ----------- -----------
Net cash provided by (used in)
financing activities. . . . . . . . . . (1,928,191) (2,887,833) (97,210,999)
------------ ----------- -----------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . 18,031,935 (162,528) (63,054,577)
Cash and cash equivalents,
beginning of year . . . . . . . . . . . 21,269,359 21,431,887 84,486,464
------------ ----------- -----------
Cash and cash equivalents,
end of year . . . . . . . . . . . . . . $ 39,301,294 21,269,359 21,431,887
============ =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . $ 558,052 1,058,623 3,239,722
============ =========== ===========
Non-cash investing and financing activities:
Extraordinary item:
Disposition of investment property:
Balance due on mortgage note payable . . . . $ -- -- 14,399,992
Balance due on accrued interest cancelled. . -- -- 719,897
Reduction of investment property . . . . . . -- -- (13,555,611)
Reduction of accrued real estate taxes . . . -- -- 535,289
Reduction of accrued rent receivables. . . . -- -- (357,660)
Reduction of deferred expenses . . . . . . . -- -- (26,983)
------------ ----------- -----------
Non-cash gain recognized due to
lender realizing upon security. . . . . $ -- -- 1,714,924
============ =========== ===========

<PAGE>

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1997 1996 1995
----------- ----------- -----------

Sale of investment property:
Balance due on accrued interest cancelled. . $ -- -- 2,219,608
============ =========== ===========
Non-cash gain recognized on
sale of investment property . . . . . . $ -- -- 2,219,608
============ =========== ===========

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1997, 1996 AND 1995

OPERATIONS AND BASIS OF ACCOUNTING

GENERAL

The Partnership owns a shopping center in North Richland Hills, Texas.

Business activities consist of rentals to a variety of 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, barring unforeseen economic circumstances.

The accompanying consolidated financial statements include the
accounts of the Partnership and its majority-owned venture, Animas Valley
Mall Associates ("Animas") (prior to its sale in June 1995). The effect of
all transactions between the Partnership and the consolidated venture has
been eliminated in the consolidated financial statements. The equity
method of accounting has been applied in the accompanying consolidated
financial statements with respect to the Partnership's venture interests in
Royal Executive Park - I ("Royal Executive Park") and JMB-40 Broad Street
Associates ("Broad Street"). Accordingly, the accompanying consolidated
financial statements do not include the accounts of Royal Executive Park or
of Broad Street.

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 venture as described above.

Such GAAP and consolidation adjustments are not recorded on the records of
the Partnership. The net effect of these items for the years ended
December 31, 1997 and 1996 is summarized as follows:

<PAGE>

<TABLE>

1997 1996
------------------------------ ------------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets. . . . . . . . . . . . $65,062,906 69,319,908 50,071,138 61,599,239

Partners' capital accounts
(deficits):
General partners . . . . . . . 1,029,637 260,315 763,189 161,094
Limited partners . . . . . . . 55,340,766 68,860,500 40,482,554 61,296,744

Net earnings (loss):
General partners . . . . . . . 266,448 99,221 (140,074) (184)
Limited partners . . . . . . . 16,658,272 9,363,816 (3,323,661) 33,733

Net earnings (loss) per
limited partnership
interest. . . . . . . . . . . . . 111.06 62.42 (22.15) .22
=========== ========== =========== ===========

</TABLE>

<PAGE>

The net earnings (loss) per limited partnership interest is based upon
the number of limited partnership interests outstanding at the end of each
period (150,005).

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.

Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. The Partnership records amounts held in
U.S. Government obligations at cost, which approximates market. For the
purposes of these statements, the Partnership's policy is to consider all
such amounts held with original maturities of three months or less
($39,141,201 and $20,974,584 at December 31, 1997 and 1996, 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 loan fees are amortized over the term of the respective loan
agreement.

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

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 may be
required under applicable law to remit directly to the tax authorities
amounts representing withholding from distributions paid to partners.

The Partnership had acquired, either directly or through joint venture
arrangements, interests in three office buildings and five shopping
centers. Seven investment properties have been sold or disposed of by the
Partnership. The remaining investment property owned at December 31, 1997
is in operation. The cost of the investment property represents the total
cost to the Partnership plus miscellaneous acquisition costs.

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

YEARS
-----

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

Maintenance and repair expenses are charged to operations as incurred.

Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives.

<PAGE>

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 any impaired property, the
Partnership will 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 is not recognized for Federal income tax
purposes.

The results of operations for consolidated properties held for sale or
disposition as of December 31, 1997 or sold or disposed of during the past
three years were $939,683, ($4,779,938) and $105,392, respectively, for the
years ended December 31, 1997, 1996 and 1995. In addition, the
accompanying consolidated financial statements include $1,933,290, $399,985
and $447,964, respectively, of the Partnership's share of total property
operations of $4,334,974, $801,574 and $1,181,849 of unconsolidated
properties held for sale or disposition as of December 31, 1997 or sold or
disposed of in the past three years.

<PAGE>

During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. These standards became
effective for reporting periods after December 15, 1997. As the
Partnership's capital structure only has general and limited partnership
interests, the Partnership will not experience any significant impact on
its consolidated financial statements.

INVESTMENT PROPERTIES

NORTH HILLS MALL

During October 1983, the Partnership acquired an existing enclosed
mall regional shopping center in North Richland Hills (Fort Worth), Texas.
In 1985, the Partnership obtained a permanent loan in the amount of
$8,000,000, secured by the property. The Partnership's aggregate cash
investment, including additional capital improvements and other
expenditures, is approximately $14,690,000.

The Partnership and the mortgage lender agreed to extend the July 1,
1995 maturity date of the mortgage loan on the North Hills Mall until
December 1, 1995. During this extension, the Partnership made a cumulative
paydown of approximately $860,000. The interest rate of 12.5% on the
mortgage loan remained unchanged during this extension. On November 30,
1995, the Partnership refinanced the mortgage loan (with a then outstanding
balance of $6,972,974) with a new lender. The new mortgage loan had an
original principal balance of $8,000,000 and monthly principal and interest
payments of $57,182, which are based upon an interest rate per annum of
7.125% and a 25-year amortization schedule, through January 1, 2001 when
the remaining principal balance of $7,318,330 is due and payable.

The Partnership has been seeking a replacement anchor department store
for the existing Stripling & Cox store. Based upon discussions with most
major department store owners and given the market and property operating
conditions discussed more fully below, it does not appear that the
Partnership will be able to attract a traditional department store anchor
to the center in the near term.

North Hills Mall's major competition, Northeast Mall (located within a
mile from the center) has announced that it would be undertaking a major
redevelopment which would increase its mall space as well as add up to two
new anchor department stores. Completion is expected sometime in 1999.
Nordstrom's department store has committed to be one of those anchor
stores. Northeast already has four anchor department store tenants.

North Hills Mall has three anchor department stores, none of which are
owned by the Partnership. The operating agreements that require these
stores to remain open expire in 1999 and 2000. There is no certainty that
any of these stores will continue operations beyond the operating agreement
expiration dates.

The effect of all these conditions is that mall sales have decreased
in recent years and the manager has had difficulty retaining and attracting
typical national or regional tenants. As indicated above, while the
occupancy of the center is 78%, only 67% is occupied by permanent tenants.
The center's operating cash flow has been and will continue to be reduced
due to increased vacancy and lower effective rental rates achieved on re-
leasing vacant space. If the Foley's store were to close in 1999 without
some form of replacement, it would be very difficult to lease space in the
center.

<PAGE>

The Partnership continues to consider alternatives for the
redevelopment of the property to co-exist with the increased competition.
The goal is to develop a plan that will stabilize the center and allow the
Partnership to preserve as much value as possible.

Due to the property and anticipated market conditions outlined above,
there was uncertainty about the Partnerships ability to recover the net
carrying value of the North Hills Mall investment property through future
operations and sale, given the expected holding period not being in excess
of 1999. Therefore, as of December 31, 1996, the Partnership recorded, as
a matter of prudent accounting practice, a provision for value impairment
of such investment of $5,700,000. Such provision was recorded to reflect
the then estimated fair value of the property based upon an analysis of the
property's discounted estimated future cash flows over the projected
holding period. There can be no assurance that the estimated fair value of
the property would ultimately be realized by the Partnership in any future
sale or disposition transaction.

As the Partnership had committed to a plan to sell or dispose of the
property, North Hills Mall was classified as held for sale or disposition
as of September 30, 1997, and therefore has not been subject to continued
depreciation beyond such date.

PASADENA TOWN SQUARE MALL

During October 1983, the Partnership acquired an existing enclosed
mall regional shopping center in Pasadena (Houston), Texas known as
Pasadena Town Square Mall. In 1985, the Partnership obtained a permanent
loan in the amount of $15,150,000, secured by the property. The
Partnership's aggregate cash investment, including additional capital
improvements and other expenditures, was approximately $16,131,000.

The non-recourse first mortgage secured by the Pasadena Town Square
Mall investment property matured in January 1995. The Partnership
continued to remit debt service payments to the lender based on the cash
generated by the property while negotiating for an extension or refinancing
of the loan. In 1995, the lender appointed a receiver to oversee the
property management obligations being performed by an affiliate of the
General Partner. The lender notified the Partnership of its demand for
payment of all sums owed. Further negotiations with the lender to obtain a
loan refinancing and/or extension proved futile. The Partnership, after
taking into consideration the costs to retain and/or add another anchor
tenant and associated mall leasing difficulties, current and projected
local economic conditions, decreasing sales and increased competition from
new and recently renovated retail properties within the trade area of the
investment property, decided not to commit any significant further amounts
of capital to this property.

Effective October 3, 1995, due to the Partnership's default in the
payment of all amounts owed, the mortgage lender concluded proceedings to
realize upon its mortgage security and obtained title to the property.
Although the Partnership no longer had an ownership interest in Pasadena
Town Square Mall, it had retained ownership of an approximately two acre
unencumbered unimproved land outparcel adjacent to the property. The
Partnership recognized an extraordinary gain of $1,714,924 on the discharge
of indebtedness for financial reporting purposes in 1995. The Partnership
recognized a gain of $3,584,938 for Federal income tax purposes in 1995
without any net realizable proceeds. Previously, due to the factors
discussed above, and due to the uncertainty of the Partnership's ability to

<PAGE>

recover the net carrying value of the Pasadena Town Square investment
property through future operations and sale, the Partnership at December
31, 1994, recorded as a matter of prudent accounting practice, a provision
for value impairment of such investment of $8,434,103. Such provisions
were recorded to reduce the net carrying value of the investment property
to the then outstanding balance of the related non-recourse financing.

During October 1996, a sale was finalized for an approximate two acre
unencumbered, unimproved out-parcel of land at a price of $550,000, before
closing costs and prorations, which was paid in cash at closing. The
Partnership recognized a gain of approximately $51,000 for both financial
reporting and Federal income tax purposes in 1996.

VENTURE AGREEMENTS - GENERAL

The Partnership at December 31, 1997 is still a party to the Royal
Executive Park and Broad Street joint venture agreements as the period
during which the joint ventures are liable for representations and
warranties contained in the Purchase and Sale Agreements extends until late
1998 as discussed below. Pursuant to such joint venture agreements, the
Partnership made initial capital contributions of approximately $47,313,000
(before legal and other acquisition costs and its share of operating
deficits as discussed below). 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 had acquired, through the above ventures, two office
buildings. The venture properties were financed under various long-term
debt arrangements as described in the notes. 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 its 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.

ANIMAS VALLEY MALL

The Partnership had acquired its interest in the Animas Valley Mall by
a $9,000,000 contribution in cash to a joint venture with the developer in
October 1983.

On June 30, 1995, the Partnership, through Animas Valley Mall
Associates, sold the land, building, related improvements and personal
property of the Animas Valley Mall and related land outparcel located in
Farmington, New Mexico. The purchaser was not affiliated with the
Partnership or its General Partners and the sale price was determined by
arm's-length negotiations. The aggregate sale price of the above was
$27,800,000 (before selling costs and prorations), all of which was paid in
cash at closing. A majority of the cash proceeds ($27,000,000) was
utilized to retire the first mortgage secured by the improved property.
The Partnership recognized a gain of $3,832,429 on the sale of the
investment property and an extraordinary gain of $2,219,608 on the
forgiveness of debt for financial reporting purposes in 1995. The
Partnership recognized a gain of $2,920,143 for Federal income tax purposes
in 1995.

Operating profits and losses were allocated to the Partnership and the
joint venture partner according to their respective contributions to fund
operating deficits with any remaining losses allocated to the Partnership.
In April 1992, the Partnership and its joint venture partner settled
certain legal disputes regarding the joint venture agreement and management
of the property. Under the terms of the settlement, the Partnership
agreed, among other things to pay the unaffiliated venture partner a
certain settlement amount in connection with the disposition of the
property. On June 16, 1995, the joint venture acquired a 99% interest in
RIC Wausau Associates, L.L.C., a Wisconsin limited liability company
("LLC"), which owns an unimproved land parcel, for the sum of $75,000. On

<PAGE>

June 22, 1995, this interest in the LLC was assigned via a tax-free
exchange to the unaffiliated joint venture partner in return for the
relinquishment of its entire interest in the joint venture, including any
right to the settlement payment upon disposition discussed above.
Concurrently, the Partnership admitted the General Partner of the
Partnership into the joint venture with a 1% interest.

In April 1992, the joint venture finalized a modification of the
existing long-term mortgage note secured by the Animas Valley Mall. Under
the terms of the modification, the joint venture, commencing with the
January 1991 payment, was obligated to pay debt service of interest only
installments at a rate of 10.25% per annum, through the original term of
the note, with the deferred interest (2.25%) accruing at 12.5% and payable
monthly to the extent of any cash flow (as defined) or upon the earlier of
the sale of the property or maturity of the note in January 1994. The
joint venture paid debt service through February 1994 in accordance with
these modified terms. In addition, under the terms of the modification,
the joint venture was required to make monthly real estate tax escrow
deposits. In April 1994, the joint venture and the existing lender
finalized an amendment to the loan (effective March 1, 1994) providing for
the extension of its maturity to March 1995 and lowering the pay and
accrual rate on the principal balance to 8% per annum. Any excess cash
flow generated by the property during this period was payable to the lender
quarterly towards interest accrued as of December 31, 1994 (approximately
$2,200,000). As of the date of sale, no excess cash flow was paid to the
lender. The lender agreed to further extend the maturity date to July 1,
1995 and subsequently to September 1, 1995 under the prior modification
terms. The lender agreed to allow the joint venture to retain any net sale
proceeds in excess of the $27,000,000 (as defined).

ROYAL EXECUTIVE PARK

In December 1983, the Partnership acquired through a joint venture
with the developer, an interest in a completed three-building office
complex in Rye Brook, New York known as Royal Executive Park.

The Partnership contributed the sum of $25,948,000 to the joint
venture which was used to repay an interim construction loan secured by the
property. The developer was obligated to contribute to the joint venture
amounts required to complete construction including tenant improvements.
The acquisition of the venture interest resulted in an excess of the
Partnership's basis in the property over its proportionate share of the
venture's assets of approximately $10,000,000. Such excess was being
amortized over the remaining useful life of the joint venture's property
through an adjustment of the Partnership's share of the joint venture's
operations. As discussed below, the Partnership recorded a provision for
value impairment at September 30, 1995.

Annual cash flow is distributed 49.9% to the Partnership and 50.1% to
the joint venture partner. However, since the joint venture partner did
not receive $2,605,200 of cash flow for each of the initial five years, the
joint venture partner was entitled to receive such deficiency, up to
$400,000 from annual cash flow, if any, available for distribution to the
partners after the Partnership and the joint venture partners have received
$2,594,800 and $2,605,200, respectively, per annum. Operating profits and
losses are generally allocated to the joint venture partners in the same
ratio that annual cash flow is distributed to the partners.

The joint venture agreement further provides that proceeds from sale
or refinancing of the complex will be distributed 49.9% to the Partnership
and 50.1% to the joint venture partner.

<PAGE>

certain leasing responsibilities for the property. In December 1994, such
affiliate further assigned such property management and leasing
responsibilities to an unaffiliated third party.

In response to the uncertainty of the Partnership's ability to recover
the net carrying value of the Royal Executive Park joint venture investment
through future operations and sale during the estimated holding period, as
of September 30, 1995, the Partnership recorded as a matter of prudent
accounting practice, a provision for value impairment of such investment of
$9,300,000. Such provisions were recorded to reduce the net carrying value
of the joint venture investment to its then estimated fair value. As the
joint venture had committed to a plan to sell or dispose of the property,
the Royal Executive Park office building was classified as held for sale as
of December 31, 1996 and, therefore, has not been subject to continued
depreciation beyond that date.

On December 19, 1997, the Partnership, through the Royal Executive
Park joint venture, sold the land, buildings, related improvements and
personal property of the Royal Executive Park office complex to an
unaffiliated third party for a sale price of $37,000,000 (before selling
expenses and prorations). The sale resulted in a gain in 1997 of
$10,736,881 and $28,437,135 for financial reporting and Federal income tax
purposes, respectively, of which $7,252,278 and $12,360,718 of gain was
allocated to the Partnership, respectively. In addition, in connection
with the sale of the property, as is customary in such transactions, the
joint venture agreed to certain representations, warranties and covenants
with a stipulated survival period that expires November 15, 1998. Although
it is not expected, the joint venture and the Partnership may ultimately
have some liability under such representations, warranties and covenants,
but such liability has been limited in the sale agreement to actual damages
in an amount not to exceed $2,000,000 in the aggregate.

Concurrently with the sale of Royal Executive Park-I, two other office
parks, Royal Executive Park II ("Royal II") and Royal Executive Park III
("Royal III") were sold. Royal II was owned by a joint venture between JMB
Income Properties-XI (a partnership sponsored by the Partnership's General
Partner) and the Partnership's unaffiliated venture partner in Royal
Executive Park-I. Royal III was owned entirely by the unaffiliated venture
partner in Royal Executive Park-I and Royal II. The purchase price for
each office park was separately negotiated with the buyer.

The joint venture determined that one of the property's underground
storage tanks had discharged an amount of fuel oil into the ground. The
joint venture believes that such discharge had been the result of normal
operations of the property and not the result of actions of tenants or
other third parties. The joint venture received a cost estimate of
approximately $200,000 for remediation of the contaminated soil, of which
approximately $87,000 was incurred through the date of sale. As part of
the sale agreement discussed above, the purchaser is required to hold the
joint venture harmless for any future clean-up costs or claims resulting
from the contaminated soil.

40 BROAD STREET

During December 1985, the Partnership acquired, through a joint
venture partnership (the "Affiliated Joint Venture") with JMB Income
Properties, Ltd.-XII ("JMB Income-XII", a partnership sponsored by the
Managing General Partner of the Partnership) a 31.44% interest in an
existing 24-story office building located at 40 Broad Street in New York,
New York. The Affiliated Joint Venture's purchase price for the building
was $65,100,000 (net of prorations and miscellaneous closing costs), of
which the Partnership provided approximately $20,470,000, which was paid in
cash at closing.

The Partnership was allocated or distributed profits and losses, cash
flow from operations and sale or refinancing proceeds in the ratio of its
capital contributions to the Affiliated Joint Venture which is 31.44%. The
Partnership and JMB Income - XII are current with respect to their required
capital contributions to Broad Street.

<PAGE>

The property was managed by an unaffiliated third party for a fee
calculated as 2% of gross receipts of the property.

On December 30, 1997, the Partnership, through the Affiliated Joint
Venture, sold the land, building, related improvements and personal
property of the 40 Broad Street office building to an unaffiliated third
party for a sale price of $34,735,000 (before selling expenses and
prorations). The sale resulted in a gain of $20,532,803 (predominantly due
to provisions for value impairment totaling approximately $52,000,000
recorded in 1990 and 1991, of which the Partnership's share was
approximately $16,349,000) and a loss of $9,703,264 in 1997 for financial
reporting and Federal income tax purposes, respectively, of which
$6,432,431 of gain and $3,050,706 of loss was allocated to the Partnership,
respectively. In addition, in connection with the sale of the property, as
is customary in such transactions, the Affiliated Joint Venture agreed to
certain representations, warranties and covenants with a stipulated
survival period that expires December 1, 1998. Although it is not
expected, the Venture and the Partnership may ultimately have some
liability under such representations, warranties and covenants, but such
liability has been limited in the sale agreement to actual damages in an
amount not to exceed $1,500,000 in the aggregate.

LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1997 and
1996:
1997 1996
---------- ---------
7-1/8% mortgage note, secured
by the North Hills Mall in North
Richland Hills (Fort Worth), Texas;
payable in monthly installments of
$57,182 (including interest) until
January 1, 2001 when the outstanding
balance of $7,318,330 is due and
payable. . . . . . . . . . . . . . . . $7,762,150 7,890,281
---------- ----------
Total debt . . . . . . . . . . . . 7,762,150 7,890,281
Less current portion of
long-term debt . . . . . . . . . 137,564 128,130
---------- ----------
Total long-term debt. . . . . $7,624,586 7,762,151
========== ==========

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

1998 . . . . . . . . $ 137,564
1999 . . . . . . . . 147,692
2000 . . . . . . . . 158,565
2001 . . . . . . . . 7,318,329
2002 . . . . . . . . --
==========

PARTNERSHIP AGREEMENT

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

The General Partners are not required to make any capital contribu-
tions except under certain limited circumstances upon termination of the
Partnership. Distributions of "cash flows" of the Partnership are

<PAGE>

allocated 90% to the Limited Partners and 10% to the General Partners.
However, portions of such distributions to the General Partners are
subordinated to the Limited Partners' receipt of a stipulated return on
capital. Through December 31, 1997, $10,353,187 of distributable cash has
been deferred by the General Partners.

The Partnership Agreement provides that the General Partners shall
receive as a distribution from the sale of a real property by the
Partnership 3% of the selling price and any cumulative deferrals of their
10% distribution of disbursable cash, subject to certain limitations. Any
remaining proceeds (net after expenses and retained working capital) will
be distributed 85% to the Limited Partners and 15% to the General
Partners. However, the Limited Partners shall receive 100% of such net
sale proceeds until the Limited Partners (i) have received cash
distributions of sale or refinancing proceeds in an amount equal to the
Limited Partners' aggregate initial capital investment in the Partnership,
and (ii) have received cumulative cash distributions from the Partnership's
operations which, when combined with sale or refinancing proceeds
previously distributed, equal a 10% annual return on the Limited Partners'
average capital investment for each year (their initial capital investment
as reduced by sale or refinancing proceeds previously distributed)
commencing with the first fiscal quarter of 1984.

MANAGEMENT AGREEMENTS

The North Hills Mall, Pasadena Town Square (prior to the lender
realizing upon its security in October 1995) and Animas Valley Mall (prior
to its sale in June 1995) are/were managed by an affiliate of the General
Partners pursuant to management agreements that provide for leasing
commissions and an annual fee based upon a percentage of rental income of
the property, the aggregate of such commission and fee not to exceed 6% of
the gross receipts of the property. The Royal Executive Park office
building had been managed by an affiliate of the joint venture partner
under an agreement which provided for fees equal to 2% of the base rent
paid by tenants. Effective July 1, 1994, an affiliate of the General
Partner of the Partnership assumed the property management responsibilities
for the joint venture. The new manager essentially assumed the previous
management agreement with the exception that a portion of the 2% management
fee was paid to the previous manager annually by the new manager as
compensation to the previous manager for relinquishing management of the
property. In addition, the affiliate of the General Partners assumed the
leasing responsibilities for the property.

LEASES - AS PROPERTY LESSOR

At December 31, 1997, the Partnership's principal asset is one
shopping center. The Partnership has determined that all leases relating
to this property are properly classified as operating leases; therefore,
rental income is reported when earned. Leases with tenants range in term
from one to thirty years and provide for fixed minimum rent and partial
reimbursement of operating costs. In addition, leases provide for
additional rent based upon percentages of tenants' sales volumes. A
substantial portion of the ability of retail tenants to honor their leases
is dependent upon the retail economic sector.

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

1998 . . . . . . . . . . $ 2,201,808
1999 . . . . . . . . . . 2,036,455
2000 . . . . . . . . . . 1,829,806
2001 . . . . . . . . . . 1,685,536
2002 . . . . . . . . . . 1,536,598
Thereafter . . . . . . . 3,496,419
-----------
Total . . . . . . . $12,786,622
===========

<PAGE>

Contingent rent (based on sales by property tenants) included in
consolidated rental income was as follows for the years ended December 31,
1997, 1996 and 1995:

1995 . . . . . . . . . . $331,841
1996 . . . . . . . . . . 276,538
1997 . . . . . . . . . . 229,640

TRANSACTIONS WITH AFFILIATES

The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Managing 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 investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of December 31, 1997, 1996 and 1995 are as follows:

UNPAID AT
DECEMBER 31,
1997 1996 1995 1997
-------- -------- -------- ------------
Property management
and leasing fees . . . . $113,526 146,329 295,394 --
Insurance commissions . . 11,351 3,546 24,677 --
Reimbursement (at cost)
for accounting
services . . . . . . . . 15,212 10,145 90,169 6,031
Reimbursement (at cost)
for portfolio manage-
ment services. . . . . . 78,283 44,567 66,668 22,758
Reimbursement (at cost)
for legal services . . . 5,935 3,910 8,021 1,150
Reimbursement (at cost)
for administrative
charges and other
out-of-pocket expenses . 20,762 8,824 148,818 --
-------- ------- ------- ------
$245,069 217,321 633,747 29,939
======== ======= ======= ======

The General Partners have deferred (in accordance with the Partnership
agreement) payment of certain of their distributions of net cash flow from
the Partnership. Accordingly, $10,353,187 (approximately $69 per interest)
of distributable cash has been deferred by the General Partners. These
amounts, together with the unpaid fees and expenses set forth in the table
above, do not bear interest and may be paid in future periods in accordance
with the Partnership agreement to the extent of sufficient distributable
proceeds from property operations, sales or refinancings. The Partnership
does not expect that the subordination requirements of the Partnership
agreement will be satisfied over the expected remaining term of the
Partnership to permit payment of the majority of these amounts.

<PAGE>

INVESTMENTS IN UNCONSOLIDATED VENTURES

Summary financial information for Royal Executive Park and 40 Broad
Street as of and for the years ended December 31, 1997 and 1996 are as
follows:

1997 1996
------------ -----------

Current assets. . . . . . . . . . $37,275,270 3,143,859
Current liabilities . . . . . . . (231,710) (499,199)
----------- -----------
Working capital. . . . . . . 37,043,560 2,644,660
----------- -----------
Investment property, net. . . . . -- 30,220,549
Other assets, net . . . . . . . . -- 5,234,760
Other liabilities, net. . . . . . -- (112,672)
Venture partners' equity. . . . . (24,974,587) (12,338,930)
----------- -----------
Partners' capital. . . . . . $12,068,973 25,648,367
=========== ===========
Represented by:
Invested capital . . . . . . $50,335,311 50,335,311
Cumulative cash
distributions. . . . . . . (55,266,333) (37,202,315)
Cumulative net earnings. . . 16,999,995 12,515,371
----------- -----------
$12,068,973 25,648,367
=========== ===========

Total income. . . . . . . . . . . $11,512,114 10,666,093
=========== ===========
Expenses applicable
to operations . . . . . . . . . $ 7,507,140 9,283,744
=========== ===========
Gain on disposition
of investment properties. . . . $24,814,170 --
=========== ===========
Net earnings. . . . . . . . . . . $28,819,144 1,382,349
=========== ===========

Also, for the year ended December 31, 1995, total income, expenses
applicable to operations, gain on disposition of investment property and
net earnings were $11,140,197, $8,961,945, $0 and $2,178,252, respectively,
for the unconsolidated ventures listed above.

<PAGE>

<TABLE>
SCHEDULE III
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1997

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

SHOPPING
CENTER:
North Richland
Hills,
Texas (C). . $7,762,151 3,170,275 9,829,725 9,484,442 1,839,688 19,379,839 21,219,527
---------- --------- --------- --------- --------- ---------- ----------

Total . $7,762,151 3,170,275 9,829,725 9,484,442 1,839,688 19,379,839 21,219,527
========== ========= ========= ========= ========= ========== ==========

</TABLE>

<PAGE>

<TABLE>
SCHEDULE III - CONTINUED
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1997
ACCUMULATED DATE OF DATE OPERATION REAL ESTATE
DESCRIPTION DEPRECIATION(F) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
- ----------- ---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>

SHOPPING CENTER:
North Richland Hills,
Texas (C) . . . . . . . . $9,041,629 1979 10/19/83 5-30 years 543,328
---------- -------

Total . . . . . . . . . $9,041,629 543,328
========== =======

<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, 1997 for Federal income tax
purposes was approximately $26,165,000.
(C) Reflects reallocation of initial costs between land and buildings and improvements.
(D) The Partnership recorded a provision for value impairment of $5,700,000 in 1996,
which was recorded as a reduction in land, building improvements, deferred expenses and accrued
rents receivable.

</TABLE>

<PAGE>

<TABLE> SCHEDULE III - CONTINUED
JMB INCOME PROPERTIES, LTD. - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

(E) Reconciliation of real estate owned at December 31, 1997, 1996 and 1995:

<CAPTION>
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . $ 21,153,855 26,646,460 89,097,178
Additions. . . . . . . . . . . . . . . . . . . . 65,672 548,309 802,067
Reductions during period . . . . . . . . . . . . -- (490,824) (63,252,785)
Provisions for value impairment. . . . . . . . . -- (5,550,090) --
------------ ------------ ------------

Balance at end of period . . . . . . . . . . . . $ 21,219,527 21,153,855 26,646,460
============ ============ ============

(F) Reconciliation of accumulated depreciation:

Balance at beginning of period . . . . . . . . . $ 8,438,692 7,645,144 31,896,865
Depreciation expense . . . . . . . . . . . . . . 602,937 793,548 1,690,411
Reductions during period . . . . . . . . . . . . -- -- (25,942,132)
------------ ------------ ------------

Balance at end of period . . . . . . . . . . . . $ 9,041,629 8,438,692 7,645,144
============ ============ ============

</TABLE>

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Partners
ROYAL EXECUTIVE PARK I:

We have audited the financial statements of the Royal Executive Park I
(a general partnership) as listed in the accompanying index. These
financial statements are the responsibility of the General Partners of the
Partnership. Our responsibility is to express an opinion on these
financial statements 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 financial statements referred to above present
fairly, in all material respects, the financial position of the Royal
Executive Park I as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the years in the three-year
period ended December 31, 1997, in conformity with generally accepted
accounting principles.

As discussed in the Notes to the financial statements, in 1996 the
Partnership changed its 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 25, 1998

<PAGE>

<TABLE>
ROYAL EXECUTIVE PARK I
(A GENERAL PARTNERSHIP)

BALANCE SHEETS

DECEMBER 31, 1997 AND 1996

ASSETS
------

<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 2,353,165 1,677,256
Rents and other receivables . . . . . . . . . . . . . . . . . . . 115,245 3,928
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . -- 12,299
------------ -----------

Total current assets. . . . . . . . . . . . . . . . . . . 2,468,410 1,693,483
------------ -----------

Property held for sale or disposition . . . . . . . . . . . . . . -- 20,726,756
------------ -----------

Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . -- 2,004,573
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . -- 1,210,987
------------ -----------

$ 2,468,410 25,635,799
============ ===========

<PAGE>

ROYAL EXECUTIVE PARK I
(A GENERAL PARTNERSHIP)

BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------

1997 1996
------------ ------------

Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . $ 181,710 345,784
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . -- 13
------------ -----------

Total current liabilities . . . . . . . . . . . . . . . . 181,710 345,797
------------ -----------
Commitments and contingencies

Total liabilities . . . . . . . . . . . . . . . . . . . . 181,710 345,797
------------ -----------
Partners' capital accounts:
JMB Income Properties, Ltd. - X:
Capital contributions . . . . . . . . . . . . . . . . . . . . . 27,426,476 27,426,476
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . 18,449,370 21,116,921
Cumulative cash distributions . . . . . . . . . . . . . . . . . (44,734,430) (26,670,412)
------------ -----------

1,141,416 21,872,985
------------ -----------

Venture partner capital accounts. . . . . . . . . . . . . . . . 1,145,284 3,417,017
------------ -----------

Total partners' capital accounts. . . . . . . . . . . . . 2,286,700 25,290,002
------------ -----------

$ 2,468,410 25,635,799
============ ===========

<FN>
See accompanying notes to financial statements.
</TABLE>

<PAGE>

<TABLE>
ROYAL EXECUTIVE PARK I
(A GENERAL PARTNERSHIP)

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997, 1996 and 1995

<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . $ 5,674,322 5,095,643 5,154,336
Interest income . . . . . . . . . . . . . . . . . 106,750 34,670 46,251
----------- ------------ ------------

5,781,072 5,130,313 5,200,587
----------- ------------ ------------

Expenses:
Depreciation. . . . . . . . . . . . . . . . . . . -- 672,009 678,555
Property operating expenses . . . . . . . . . . . 2,972,860 3,342,848 3,034,027
Amortization of deferred expenses . . . . . . . . 330,000 313,882 306,156
----------- ------------ ------------

3,302,860 4,328,739 4,018,738
----------- ------------ ------------

Earnings before gain on sale of investment
property. . . . . . . . . . . . . . . . 2,478,212 801,574 1,181,849

Gain on sale of investment property . . . . . . . . 10,736,881 -- --
----------- ------------ ------------

Net earnings (loss) . . . . . . . . . . . $13,215,093 801,574 1,181,849
=========== ============ ============

<FN>
See accompanying notes to financial statements.
</TABLE>

<PAGE>

<TABLE>
ROYAL EXECUTIVE PARK I
(A GENERAL PARTNERSHIP)

STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

VENTURE
JMB-X PARTNERS
----------- -----------
<S> <C> <C>
Balance at December 31, 1994. . . . . . $21,656,707 3,199,872

Cash contributions. . . . . . . . . . . 124,750 125,250
Cash distributions. . . . . . . . . . . (898,200) (901,800)
Net earnings (loss) . . . . . . . . . . 589,743 592,106
----------- -----------

Balance at December 31, 1995. . . . . . 21,473,000 3,015,428

Cash contributions. . . . . . . . . . . -- --
Cash distributions. . . . . . . . . . . -- --
Net earnings (loss) . . . . . . . . . . 399,985 401,589
----------- -----------

Balance at December 31, 1996. . . . . . 21,872,985 3,417,017

Cash contributions. . . . . . . . . . . -- --
Cash distributions. . . . . . . . . . . (18,064,018) (18,154,377)
Net earnings (loss) . . . . . . . . . . (2,667,551) 15,882,644
----------- -----------

Balance at December 31, 1997. . . . . . $ 1,141,416 1,145,284
=========== ===========

<FN>
See accompanying notes to financial statements.
</TABLE>

<PAGE>

<TABLE>
ROYAL EXECUTIVE PARK I
(A GENERAL PARTNERSHIP)

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1996 and 1995

<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . $13,215,093 801,574 1,181,849
Items not requiring (providing) cash or
cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . -- 672,009 678,555
Amortization of deferred expenses . . . . . . . 330,000 313,882 306,156
Gain on sale of investment property . . . . . . (10,736,881) -- --
Changes in:
Rents and other receivables . . . . . . . . . . (111,317) 10,439 248,322
Prepaid expenses. . . . . . . . . . . . . . . . 12,299 (983) 4,370
Accrued rents receivable. . . . . . . . . . . . (535,865) (310,471) (306,471)
Accounts payable. . . . . . . . . . . . . . . . (164,074) 242,213 22,467
Unearned rents. . . . . . . . . . . . . . . . . (13) (18,965) 14,551
------------ ----------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . 2,009,242 1,709,698 2,149,799
------------ ----------- -----------
Cash flows from investing activities:
Cash sale proceeds from sale of investment
property, net of selling expenses . . . . . . . 36,431,715 -- --
Additions to investment properties. . . . . . . . (1,151,544) (485,790) (222,889)
Payment of deferred expenses. . . . . . . . . . . (395,109) (17,304) (296,181)
------------ ----------- -----------
Net cash provided by (used in)
investing activities. . . . . . . . . . 34,885,062 (503,094) (519,070)
------------ ----------- -----------
Cash flows from financing activities:
Capital contributions by partners . . . . . . . . -- -- 250,000
Distributions to partners . . . . . . . . . . . . (36,218,395) -- (1,800,000)
------------ ----------- -----------
Net cash provided by (used in)
financing activities. . . . . . . . . . (36,218,395) -- (1,550,000)
------------ ----------- -----------

<PAGE>

ROYAL EXECUTIVE PARK I
(A GENERAL PARTNERSHIP)

STATEMENTS OF CASH FLOWS - CONTINUED

1997 1996 1995
----------- ----------- -----------

Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . 675,909 1,206,604 80,729
Cash and cash equivalents,
beginning of year . . . . . . . . . . . 1,677,256 470,652 389,923
------------ ----------- -----------
Cash and cash equivalents,
end of year . . . . . . . . . . . . . . $ 2,353,165 1,677,256 470,652
============ =========== ===========

Supplemental disclosure of cash
flow information:
Cash paid for mortgage and
other interest. . . . . . . . . . . . . . . . . $ -- -- --
============ =========== ===========
Non-cash investing and
financing activities. . . . . . . . . . . . . . $ -- -- --
============ =========== ===========

<FN>
See accompanying notes to financial statements.
</TABLE>

<PAGE>

ROYAL EXECUTIVE PARK I
(A GENERAL PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997, 1996 AND 1995

OPERATIONS AND BASIS OF ACCOUNTING

The accompanying financial statements have been prepared for the
purpose of complying with Rule 3.09 of Regulation S-X of the Securities and
Exchange Commission. They include the accounts of the unconsolidated joint
venture, Royal Executive Park I ("Venture"), in which JMB Income
Properties, Ltd. - X and an unaffiliated venture are the partners.

Royal Executive Park I held an equity investment in commercial real
estate property in the City of Rye Brook, New York. Business activities
consisted of rentals to a variety of commercial companies, and the ultimate
sale or disposition of such real estate.

The Royal Executive Park I office building was classified as held for
sale as of December 31, 1996 and, therefore, has not been subject to
continued depreciation beyond that date.

On December 19, 1997, the Venture sold the land and related
improvements of the Royal Executive Park I office complex for $37,000,000.
A description of the sale of the property is contained in the Notes of the
financial statements of JMB Income-X. Such notes are incorporated herein
by reference.

The accounting policies of the Venture are the same as those of the
Partnership. Accordingly, reference is made to the Notes to the
Partnership's financial statements filed with this annual report. Such
notes are incorporated herein by reference.

VENTURE AGREEMENTS

A description of the Venture agreement and the management agreement is
contained in the Notes to Consolidated Financial Statements of the
Partnership for the year ended December 31, 1997. Such note is
incorporated herein by reference.

The Venture has determined that one of the property's underground
storage tanks had discharged an amount of fuel oil into the ground. The
Venture believes that such discharge had been the result of normal
operations of the property and not the result of actions of tenants or
other third parties. The Venture has received a cost estimate of
approximately $200,000 for remediation of the contaminated soil, of which
approximately $87,000 was incurred through the date of sale. As part of
the sale agreement, the purchaser is required to hold the Venture harmless
for any future clean-up costs or claims resulting from the contaminated
soil.

TRANSACTIONS WITH AFFILIATES

The property was managed by an affiliate of the joint venture partner
under an agreement which provided for fees equal to 2% of the base rent
paid by tenants. Effective July 1, 1994, an affiliate of the General
Partner of the Partnership assumed the property management responsibilities
for the joint venture on essentially the same terms. In addition,
effective July 1, 1994, the same affiliate of the General Partner assumed
certain leasing responsibilities for the property. In December 1994, such
affiliate further assigned such property management and leasing
responsibilities to an unaffiliated third party.

<PAGE>

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

There were no changes of or disagreements with, auditors during fiscal
year 1997 and 1996.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

The Managing General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware corporation. Substantially all of the
outstanding stock is owned, directly or indirectly, by certain of its
officers, directors and members of their families and affiliates. JMB has
responsibility for all aspects of the Partnership's operations, subject to
the requirement that sales of real property must be approved by the
Associate General Partner of the Partnership, Income Associates-X, an
Illinois limited partnership with ABPP Associates, L.P. as its sole general
partner. ABPP Associates, L.P. is an Illinois limited partnership with JMB
as its general partner. The limited partners of the Associate General
Partner are generally officers, directors and affiliates of JMB or its
affiliates. 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
and/or for the sale of property. 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 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 Managing
General Partner of the Partnership are as follows at December 31, 1997:

<PAGE>

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 2/17/84
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 Managing General Partner to be held on
June 3, 1998. 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 Managing General Partner to be held on June 3,
1998. 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-XI
("Carlyle-XI"), Carlyle Real Estate Limited Partnership-XII
("Carlyle-XII"), Carlyle Real Estate Limited Partnership-XIII
("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV ("Carlyle-
- -XIV"), Carlyle Real Estate Limited Partnership-XV ("Carlyle-XV"), Carlyle
Real Estate Limited Partnership-XVI ("Carlyle-XVI"), Carlyle Real Estate
Limited Partnership-XVII ("Carlyle-XVII"), JMB Mortgage Partners, Ltd.-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.-VII
("JMB Income-VII"), 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")) 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-XI, Carlyle-XII,
Carlyle-XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-XVII, JMB
Income-VII, 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.

<PAGE>

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

Judd D. Malkin (age 60) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Malkin has been associated with JMB since
October, 1969. Mr. Malkin is also 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 60) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Bluhm has been associated with JMB since
August, 1970. Mr. Bluhm is also a principal of Walton Street Real Estate
Fund I, L.P. and 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 59) 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 56) has been associated with JMB since July,
1972. He is a member of the Bar of the State of Illinois.

A. Lee Sacks (age 64) has been associated with JMB since December,
1972. He is also President and a director of JMB Insurance Agency, Inc.

John G. Schreiber (age 51) 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 Advisors L.P.,
an affiliate of the Blackstone Group, L.P. In addition, Mr. Schreiber is a
director of USC, Inc., a trustee of Amli Residential Property Trust and a
director of a number of investment companies advised or managed by T. Rowe
Price Associates and its affiliates. He holds a Masters degree in Business
Administration from Harvard University Graduate School of Business.

H. Rigel Barber (age 48) 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 50) 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 the
Harvard University Graduate School of Business and is a Certified Public
Accountant.

Gary Nickele (age 45) 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 49) 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 62) has been associated with JMB since March, 1973.
He is a Certified Public Accountant.

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

The Partnership has no officers or directors. The General Partners of
the Partnership are entitled to receive a share of cash distributions, when
and as cash distributions are made to the Limited Partners, and a share of
profits or losses. Reference is made to the Notes for a description of
such transactions, distributions and allocations. In 1997, 1996 and 1995,
no cash distributions were paid to the General Partners.

Affiliates of the Managing General Partner provided property
management services to the Partnership in 1997 for the North Hills Mall in
North Richland, Texas. Fees are calculated at 4% of fixed and percentage
rents from North Hills Mall. In 1997, such affiliate earned property
management and leasing fees amounting to $113,526, of which all was paid as
of December 31, 1997. As set forth in the Prospectus of the Partnership,
the Managing 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 receipts 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 Managing General
Partner, earned and received insurance brokerage commissions in 1997
aggregating $11,351 in connection with the provision of insurance coverage
for certain of the real property investments of the Partnership. Such
commissions are at rates set by insurance companies for the classes of
coverage provided.

The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses and salaries
relating to the administration of the partnership and operation of the
Partnership's real property investments. In 1997, the Managing General
Partner incurred such out-of-pocket expenses and salaries in the amount of
$114,257 of which $85,468 was paid at December 31, 1997.

The Partnership is permitted to engaged in various transactions
involving affiliates of the Managing General Partner of the Partnership, as
described in Item 10 and Exhibit 21 hereto.

<PAGE>

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 Managing 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 JMB Realty Corporation 5 Interests Less than 1%
Interests directly

Limited Partnership Managing General Partner, 5 Interests Less than 1%
Interests its officers and directors directly
and the Associate General
Partner as a group

<FN>
No officer or directors of the Managing 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 arrangements, known to the Partnership, the operations of which may at a subsequent date
result in a change in control of the Partnership.

</TABLE>

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There were no significant transactions or business relationships with
the Managing 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 and Supplementary Data (See
Index to Financial Statements filed with this annual report)

2. Exhibits.

3-A.* The Prospectus of the Partnership dated June 29, 1983 as
supplemented September 12, 1983 and October 21, 1983, as filed with the
Commission pursuant to Rules 424(b) and 424(c), is hereby incorporated
herein by reference. Copies of pages 8-12, 57-59 and A-7 to A-11 are
hereby incorporated herein by reference.

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

3-C. 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 by reference to the
Partnership's Report on Form 10Q/A (File No. 0-12140) dated November 25,
1996.

4-A. Document relating to the mortgage loan secured by the
North Hills Mall in North Richland Hills, Texas, is hereby incorporated by
reference to the Partnership's Report on Form 10-K (File No. 0-12432) dated
December 31, 1995.

10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the 40 Broad Street office building in New
York, New York are hereby incorporated by reference to the Partnership's
Report on Form 8-K (File No. 0-12432) dated December 31, 1985.

10-B. Acquisition documents relating to the purchase by the
Partnership of an interest in the Royal Executive Park office complex in
Rye Brook, New York are hereby incorporated by reference to the
Partnership's Report on Form 8-K (File No. 0-12432) dated December 30,
1983.

10-C. Acquisition documents relating to the purchase by the
Partnership of the North Hills Mall in North Richland Hills, Texas are
hereby incorporated by reference to the Partnership's Registration
Statement on Post-Effective Amendment No. 2 to Form S-11 (File No. 2-83599)
dated June 29, 1983.

<PAGE>

10-D. Sale documents relating to the sale of the Collin Creek
Mall in Plano, Texas are hereby incorporated by reference to the
Partnership's report on Form 8-K (File No. 0-12140) dated January 13, 1995.

10-E. Sale documents relating to the sale of the Animas Valley
Mall and a related land outparcel sale in Farmington, New Mexico are hereby
incorporated by reference to the Partnership's report on Form 8-K (File No.
0-12140) dated July 14, 1995.

10-F. Documents describing the transferred title of the
Partnership's interest in the Pasadena Town Square Shopping Center are
hereby incorporated by reference to the Partnership's report for September
30, 1995 on Form 10-Q (File No. 0-12140) dated November 9, 1995.

10-G. Sale documents relating to the sale of the 40 Broad
Street office building in New York, New York are hereby incorporated by
reference to the Partnership's report for December 30, 1997 on Form 8-K
(File No. 0-12140) dated February 27, 1998.

10-H. Sale-Purchase Agreement with exhibits dated December 5,
1997 relating to the sale of the Royal Executive Park office complex in Rye
Brook, New York between Royal Executive Park I, Royal Executive Park II,
Royal Executive Park III and Reckson Operating Partnership, L.P. are filed
herewith.

21. List of Subsidiaries.

24. Powers of Attorney.

27. Financial Data Schedule.

___________

* Previously filed as Exhibits 3-A and 3-B, respectively, to the
Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-12432)
dated March 19, 1993.

(b) The following Report on Form 8-K was filed since the
beginning of the last quarter of the period covered by this report.

The Partnership's Report on Form 8-K (File No. 0-12140)
for December 30, 1997 dated February 27, 1998 describing the sale of the 40
Broad Street office building was filed.

No annual report or proxy material for the fiscal year 1997 has been
sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing.

<PAGE>

SIGNATURES

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

JMB INCOME PROPERTIES, LTD. - X

By: JMB Realty Corporation
Managing General Partner

GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 25, 1998

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
Managing General Partner

JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and
Chief Financial Officer
Date: March 25, 1998

NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 25, 1998

H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 25, 1998

GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 25, 1998

GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 25, 1998

A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 25, 1998

By: STUART C. NATHAN*
Stuart C. Nathan, Executive Vice President
and Director
Date: March 25, 1998

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

GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 25, 1998

<PAGE>

EXHIBIT INDEX

DOCUMENT
INCORPORATED
BY REFERENCE Page
------------ ----
3-A. Pages 8-12, 57-59 and A-7 to
A-11 of the Prospectus of the
Partnership dated June 29, 1983,
as supplemented September 12,
1983 and October 21, 1983 Yes --

3-B. Amended and Restated Agreement of
Limited Partnership Yes --

3-C. Acknowledgement of rights and
duties of the General Partners of
the Partnership Yes --

4-A. Mortgage loan documents related
to North Hills Mall Yes --

10-A. Acquisition documents related to
the 40 Broad Street office building Yes --

10-B. Acquisition documents related to
the Royal Executive Park office
complex Yes --

10-C. Acquisition documents related to
the North Hills Mall Yes --

10-D. Sale documents related to the
Collin Creek Mall Yes --

10-E. Sale documents related to the
Animas Valley Mall Yes --

10-F. Documents describing the
transferred title of the
Partnership's interest in the
Pasadena Town Square Shopping
Center Yes

10-G. Sale documents related to
the 40 Broad Street office
building Yes --

10-H. Purchase-Sale Agreement related to
the Royal Executive Park
office complex No --

21. List of Subsidiaries No

24. Powers of Attorney No

27. Financial Data Schedule No

EXHIBIT 10-H
- ------------
(J-X)

SALE-PURCHASE AGREEMENT
-----------------------

BETWEEN

ROYAL EXECUTIVE PARK I
ROYAL EXECUTIVE PARK II
AND
ROYAL EXECUTIVE PARK III,

SELLERS,

AND

RECKSON OPERATING PARTNERSHIP, L.P.

BUYER.

PREMISES
--------

ROYAL EXECUTIVE PARK PHASES 1, 2 AND 3
RYE BROOK, NEW YORK

DATED AS OF DECEMBER 5, 1997

Handsman & Kaminsky
609 Fifth Avenue, 6th Floor
New York, New York 10017
(212) 750-3636

<PAGE>

SALE-PURCHASE AGREEMENT (the "Agreement"), made as of the 5th day of
December, 1997, among ROYAL EXECUTIVE PARK I ("REP I"), ROYAL EXECUTIVE
PARK II ("REP II") and ROYAL EXECUTIVE PARK III ("REP III"), each a general
partnership formed under the laws of the State of New York (individually, a
"Seller" and collectively, the "Sellers"), having an office c/o London &
Leeds Development Corporation, One Wall Street Court, New York, New York
10005, and RECKSON OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership, having an office at 225 Broadhollow Road, Melvillle, New York
11747-0983 ("Buyer").

W I T N E S S E T H :
---------------------

1. SALE-PURCHASE.

In consideration of the mutual covenants and agreements hereinafter
set forth, each Seller agrees to sell and convey to Buyer, and Buyer agrees
to purchase from Sellers, all of such Seller's right, title and interest in
and to (a) those certain plots, pieces or parcels of land located in the
Village of Rye Brook, Towns of Rye and Harrison, County of Westchester and
State of New York and partly in the Town of Greenwich, County of Fairfield
and State of Connecticut, more particularly described on Exhibits "A-1"
through "A-3" annexed hereto and made a part hereof (collectively, the
"Land"); (b) all easements, rights of way, privileges, permits,
governmental grants of authority, appurtenances and other rights pertaining
thereto; (c) all buildings and improvements thereon (collectively, the
"Buildings"), and all fixtures, machinery, personal property and equipment
used in connection therewith which are owned by such Seller and currently
located on the Land or in the Buildings, except trade fixtures and property
owned by space or other tenants, if any; and (d) all right, title and
interest, if any, of such Seller in and to any land lying in the bed of any
street, road or avenue opened or proposed, public or private, in front of
or adjoining the Land to the center line thereof (the Land, the Buildings
and other rights, improvements and property heretofore mentioned being
hereinafter collectively referred to as the "Property")(the portion of the
Property on the Land described on Exhibit "A-1" is hereinafter referred to
as "Phase 1", the portion of the Property on the Land described on Exhibit
"A-2" is hereinafter referred to as "Phase 2", the portion of the Property
on the Land described on Exhibit "A-3" is hereinafter referred to as "Phase
3") .

2. PURCHASE PRICE.

A. The purchase price for the Property (the "Purchase Price") is
EIGHTY-ONE MILLION UNITED STATES DOLLARS ($81,000,000.00), payable as
follows:

(i) TWO MILLION DOLLARS ($2,000,000.00) (the "Initial
Downpayment"), simultaneously with the execution and delivery of this
Agreement, at the option of Buyer, either by (1) a good certified or
official bank check, payable to the order of Commonwealth Land Title
Insurance Company as Escrow Agent ("Escrow Agent"), or (2) federal funds
wire transfer of immediately available funds to a bank account designated
by Escrow Agent;

(ii) TWO MILLION DOLLARS ($2,000,000.00) (the "Additional
Downpayment"), not later than the expiration of the Review Period
(hereinafter defined), time being of the essence, at the option of Buyer,
either by (1) a good certified or official bank check, payable to the order
of Escrow Agent, or (2) federal funds wire transfer of immediately
available funds to a bank account designated by Escrow Agent (the Initial
Downpayment and, once paid to the Escrow Agent, the Additional Downpayment
are hereinafter referred to as the "Escrow Deposit"); and

<PAGE>

(iii) SEVENTY-SEVEN MILLION DOLLARS ($77,000,000.00) (the
"Balance of the Purchase Price"), on the Closing Date (hereinafter
defined), by federal funds wire transfer of immediately available funds to
a bank account or accounts designated by Sellers.

B. The Escrow Deposit shall be held and disbursed by the Escrow
Agent in accordance with the provisions of Paragraph 3 of this Agreement.
For purposes hereof, the Escrow Deposit, together with all interest earned
thereon, is hereinafter collectively referred to as the "Deposit".

C. The aggregate amount of the Purchase Price shall be allocated
among Phases 1, 2, and 3 comprising the Property as follows:

Phase 1 $37,000,000
Phase 2 $36,000,000
Phase 3 $ 8,000,000

Notwithstanding the foregoing allocations, the Property will be purchased
and sold only in its entirety and no individual Phase or Phases thereof may
be separately purchased.

3. ESCROW.

The Deposit shall be held by the Escrow Agent, in trust, on the terms
hereinafter set forth:

A. The Escrow Agent shall deposit the Escrow Deposit in treasury
bills, treasury backed repurchase agreements or as otherwise directed in
writing by Sellers and Buyer.

B. The Escrow Agent shall not commingle the Deposit with any other
funds of the Escrow Agent or others and shall promptly advise Buyer and
Sellers of the number of any bank account in which the Escrow Deposit has
been deposited.

C. If the Closing takes place under this Agreement (the "Closing"),
then, on the Closing Date, the Escrow Agent shall deliver the Deposit to,
or upon the instructions of, Sellers. In such event, any interest earned on
the Escrow Deposit shall be credited against the Balance of the Purchase
Price due from Buyer hereunder.

D. If this Agreement is terminated in accordance with the terms
hereof, then the Escrow Agent shall pay the Deposit to, or upon the
instructions of, the party entitled thereto in accordance with the
provisions of this Agreement.

E. If the Closing does not take place under this Agreement by reason
of the failure of either party to comply with its obligations hereunder,
then the Escrow Agent shall pay the Deposit to the party entitled thereto
in accordance with the provisions of this Agreement.

F. It is agreed that the duties of the Escrow Agent are only as
herein specifically provided, and, subject to the provisions of
subparagraph G below, are purely ministerial in nature, and that the Escrow
Agent shall incur no liability whatever except for willful misconduct or
gross negligence, as long as the Escrow Agent has acted in good faith.
Sellers and Buyer each release the Escrow Agent from any act done or
omitted to be done by the Escrow Agent in good faith in the performance of
its duties hereunder. Each of the Sellers and Buyer jointly and severally
agrees to indemnify and hold the Escrow Agent harmless from any and all
costs, expenses, claims or actions which may be incurred or asserted by or
against the Escrow Agent, including without limitation claims or actions by
any of them (except to the extent resulting from the Escrow Agent's willful
misconduct or gross negligence).

<PAGE>

G. The Escrow Agent is acting as a stakeholder only with respect to
the Deposit. If there is any dispute as to whether the Escrow Agent is
obligated to deliver the Escrow Deposit or interest earned thereon or as to
the party whom said Escrow Deposit and interest earned thereon is to be
delivered, the Escrow Agent shall not make any delivery, but in such event
the Escrow Agent shall hold same until receipt by the Escrow Agent of an
authorization in writing, signed by all the parties having interest in such
dispute, directing the disposition of same, or in the absence of such auth-
orization the Escrow Agent shall hold the Deposit until the final
determination of the rights of the parties in an appropriate proceeding.
If such written authorization is not given, or proceedings for such
determination are not begun within thirty (30) days of the Closing Date and
diligently continued, the Escrow Agent may, but is not required to, bring
an appropriate action or proceeding for leave to deposit the Deposit in
court pending such determination. The Escrow Agent shall be reimbursed for
all costs and expenses of such action or proceeding including, without
limitation, reasonable attorneys' fees and disbursements, by the party
determined not to be entitled to the Deposit. Upon making delivery of the
Deposit in the manner herein provided, the Escrow Agent shall have no
further liability hereunder.

H. The Escrow Agent has executed this Agreement in order to confirm
that the Escrow Agent will hold the Deposit in escrow, pursuant to the
provisions hereof.

4. PERMITTED EXCEPTIONS.

The Property shall be conveyed to Buyer subject to the following
(collectively, the "Permitted Exceptions"):

(i) Zoning regulations and ordinances, municipal building
restrictions, environmental quality or land use restrictions or regulations
and all other laws, ordinances, regulations, restrictions or other action
of any public authority or other body having or exercising jurisdiction
over the Property;

(ii) Consents by Sellers or any former owner of the Property for the
erection of any structure or structures on, under or above any street or
streets on which the Property may abut;

(iii) Any state of facts as would be shown by an accurate
current survey or inspection of the Property, provided the same do not
interfere with or prohibit the use of the Property as presently utilized,
except that to the extent that improvements (a) on any parcel adjacent to
the Property shall encroach upon the Property, such encroachment shall not
be or be deemed to be an objection to title if such encroachment does not
materially interfere with the present use and maintenance of the Property;
and (b) on the Property shall encroach on any adjacent parcel or any street
abutting the Property, such encroachment shall not be or be deemed to be an
objection to title if the Title Company (as hereinafter defined) shall
insure (without additional cost to Buyer) that such encroachment may remain
as long as the relevant Building shall stand;

(iv) Covenants, restrictions, reservations, conditions, easements
and agreements of record, as set forth on Exhibits B-1, B-2 and B-3 hereof
or otherwise furnished to Buyer during the Review Period;

(v) Utility and telephone company rights and easements of record to
maintain, install or remove poles, wires, cables, pipes, boxes and other
facilities and equipment in, over and upon the Property;

(vi) The lien of franchise taxes of any corporation in the chain of
title to the Property, or the lien of any judgment, transfer tax,
inheritance tax, estate tax or any other similar lien, provided the Title
Company will, at the Closing, insure (at no additional cost to Buyer) Buyer
against collection of such judgment, taxes or liens from the Property;

<PAGE>

(vii) Rights of tenants, licensees or other permittees of the
Property set forth in Exhibit "F" annexed hereto (and subtenant and
licensees thereof) under the terms and conditions of all leases, options or
rights of first refusal to purchase and the other agreements affecting any
space in the Property (collectively, the "Leases");

(viii) Easements that affect any land in the bed of any street,
road, or avenue, opened or proposed, in front of or adjoining the Property,
provided same are not violated by the existing Buildings and the present
use thereof;

(ix) Liens for taxes not yet due and payable, water charges, sewer
rents and other governmental charges for which adjustment is to be made at
the Closing;

(x) Rights and easements for the installation, maintenance and
replacement of water mains and sewer lines and facilities and equipment in,
over and upon the Property, provided same are not violated by existing
Buildings and the present use thereof;

(xi) Mechanic's liens arising out of work performed or materials
furnished to any tenants of the Buildings of which Sellers have no
knowledge as of the date hereof;

(xii) Financing statements and agreements made by, or judgments
entered against, any tenant of the Buildings of which Sellers have no
knowledge as of the date hereof;

(xiii) Any violations of law or municipal ordinances, orders or
requirements which have been noted in or issued by, the departments of
building, fire, labor, health or other Federal, State, County or Municipal
departments having jurisdiction against or affecting the Property and any
other violations, whether or not of record; and

(xiv) the matters set forth on Exhibit "B-1" through "B-3" annexed
hereto and made a part hereof.

5. CLOSING DATE.

The Closing shall take place at 10:00 A.M. at the offices of Handsman
& Kaminsky LLP, 609 Fifth Avenue, 6th Floor, New York, New York 10017, on
December 19, 1997, or on such other date fixed by Sellers in accordance
with the provisions of Paragraph 10 hereof (each of the aforesaid dates, as
adjourned by mutual agreement of the parties, being referred to herein as
the "Closing Date"). By giving notice to the other party, either party
may adjourn the Closing Date to a date not more than three (3) business
days after such scheduled Closing Date. Time shall be of the essence as to
Buyer's obligation to close title hereunder by the aforesaid Closing Date,
as same may be so adjourned. The respective attorneys of the parties
hereto, as herein identified, are hereby authorized to agree (on behalf of
their respective clients) in writing to adjournments of the Closing.

6. VIOLATIONS.

Buyer agrees that title to the Property shall be conveyed subject to,
and Sellers shall have no obligation in respect of, any and all violations
of law or municipal ordinances, orders or requirements, whether or not of
record. Upon request made by Buyer, Sellers shall furnish Buyer with any
required authorization to make violation searches.

<PAGE>

7. REVIEW PERIOD.

A. PROPERTY DUE DILIGENCE SCHEDULE. Buyer acknowledges that it has
completed and approved its local market reviews and studies. Buyer shall
have until 5:00 p.m., eastern standard time, on December 15, 1997 (the
"Review Period"), time being of the essence, to complete its other reviews
and inspections of the Property, which reviews and inspections may include
an analysis of, but not limited to (i) the tenant leases, contracts, survey
and title documents affecting the Property, (ii) using non-invasive tests
and observations, the environmental and physical condition of the Property
and the Property's compliance with applicable law and (iii) the financial
condition of the Property. On or before the end of the Review Period (time
being of the essence), Buyer either (x) will notify Sellers and Escrow
Agent in writing that Buyer elects to proceed with this transaction or (y)
will notify Sellers and Escrow Agent in writing that Buyer for any reason
whatsoever is not interested in purchasing the Property, whereupon in the
case of the failure to receive the notice in clause (x) on or before the
end of the Review Period or the receipt of the notice in clause (y) on or
before the end of the Review Period, the Escrow Agent shall immediately
return the Deposit to Buyer and except as otherwise provided herein neither
party shall have any further rights or obligations hereunder. If Buyer
fails to deliver such notice to Sellers prior to the expiration of the
Review Period time being of essence, then Buyer shall conclusively be
deemed to have terminated this Agreement and such failure to notify shall
have the same force and effect as if actual written notice to terminate
this Agreement were received by Sellers. Buyer acknowledges that Sellers
have informed it of certain existing environmental conditions at the
Property, including without limitation the matters set forth in that
certain project report numbered T-1775 (the "Report"), dated June 30, 1997,
prepared by TETHYS Consultants, Inc., of Harrisburg Pennsylvania and
certain incidents of oil spillage, Buyer understands that, if Buyer elects
to proceed, Buyer shall assume and indemnify Sellers from and against all
loss, cost, damage, liability and expense, including, without limitation,
reasonable attorneys' fees and disbursements, arising from or relating to
the remediation (or a request for remediation by any governmental
authority) of the matters contained in such Report or with respect to such
oil spillage incidents (and any other environmental matters of which Buyer
has received written notice prior to the expiration of the Review Period or
any other environmental matters arising after the Closing), provided,
however, that if Sellers (as opposed to a third party) shall notify Buyer
of any such additional environmental matters later than December 12, 1997,
then the Review Period shall be extended until December 17, 1997 and the
Closing shall occur within four (4) business days thereafter, as designated
by Buyer (time being of the essence as to such dates), provided, however,
that either party may adjourn the Closing by notice to the other party for
not more than three (3) business days thereafter for any reason whatsoever,
time being of the essence as to Buyer's obligation to close by such date.
Buyer covenants that it will diligently perform and prosecute to completion
as soon as reasonably practicable following the Closing, at its sole cost
and expense, all work necessary to remedy the environmental conditions set
forth in the Report or in connection with the aforesaid oil spillage
incidents in accordance with applicable laws and regulations and to deliver
documentary evidence of such compliance to Sellers, in form reasonably
satisfactory to Sellers and Sellers' consultants. Buyer will commence its
due diligence promptly upon the receipt of a fully executed counterpart of
this Agreement and diligently work toward its completion. Buyer hereby
waives any and all rights of contribution or other rights or remedies
against Sellers under the Comprehensive Environmental Response Compensation
and Liability Act or any other applicable environmental laws, rules or
regulations. Buyer shall promptly notify Sellers if at any time during the
Review Period Buyer determines that Buyer is not interested in purchasing
Property. If Buyer shall determine to not proceed with this transaction as
aforesaid, then upon written request of Sellers, Buyer shall promptly
provide Sellers with complete copies of all materials arising from Buyer's

<PAGE>

due diligence activities other than Buyer's internally generated analyses,
reports and memoranda. Buyer agrees to indemnify and hold harmless Sellers
from and against all loss, cost, damage, expense or other liability
resulting from the conduct of Buyer's inspections, tests, investigations or
other due diligence, which indemnity shall survive the termination of this
Agreement.

B. INSPECTION. Subject to the rights of tenants, employees
(including without limitation Tenant's employees and employees of Service
Providers (hereinafter defined)) and workers at the Property, Sellers shall
permit Buyer reasonable access to the Property and appropriate documents in
order to complete its due diligence inspections and reviews. All
inspections and reviews will be conducted at reasonable times agreed upon
in advance by Sellers and Buyer, and at Sellers' election, Sellers may have
a representative present at such inspections and reviews. Buyer will
conduct its inspections and reviews in such a manner so as not to cause any
damage, interruption, loss, cost or expense to, or claims against Sellers
or the Property, and Buyer will indemnify, defend and hold Sellers,
tenants, licensees, any of the respective direct or indirect partners of
Sellers, any of their respective advisors, shareholders, officers,
directors, trustees, beneficiaries, employees, agents and contractors and
the Property harmless from and against any such damage, interruption, loss,
cost or expense or claim. During the Review Period, Buyer shall not
interview or discuss any matter with the union or non-union employees of
Sellers, the Service Providers or the property management company at the
Property (other than, upon prior notice to Sellers and the senior property
manager on site). Additionally, during the Review Period Buyer shall not
interview or discuss any matter with Tenants at the Property, provided,
however, that Buyer, with Sellers' representative present, may interview
MCI Telecommunications Corporation ("MCI"), Market Data, Entex Information
Services, Inc. and Compass Group USA, Inc. (such tenants are hereinafter
referred to as the "Major Tenants") regarding their respective tenancies
and the condition of the Property. Sellers, upon reasonable prior notice,
shall reasonably cooperate with Buyer in conducting such interviews. Buyer
shall make no invasive tests of the Property or any part thereof without
the Sellers' express written consent in each instance (which consent shall
not be unreasonably withheld).

C. CONFIDENTIALITY. Except to the extent required by Buyer's legal
or other regulatory requirements, prior to Closing, Buyer (for itself and
its agents, legal or financial advisors, or prospective lenders) agrees to
keep all information obtained by or on behalf of Buyer with respect to the
Property, Sellers and any tenant leases or in connection with Buyer's due
diligence, in confidence, and not to disclose any such information to any
person, governmental entity or other entity other than Buyer or its agents,
legal or financial advisors, or prospective lenders, without Sellers' prior
written consent in each instance, it being understood that in cases where
disclosure is required by legal or regulatory requirements applicable to
Buyer, Buyer will describe the Property in general terms and not disclose
or reference information that could be used to identify the specific
location of the Property or the identity of the Sellers or any partner of
any Seller. Buyer agrees that it shall not directly or indirectly engage
in or authorize any discussions with MCI, or any affiliate thereof,
regarding the purchase and/or sale of the Property or any portion thereof,
provided, however, that Buyer may interview MCI solely for the purposes
specified in paragraph B above in accordance therewith. Sellers shall
refrain from negotiating with any other prospective buyer of all or any
portion of the Property (other than MCI) until November 26, 1997.

<PAGE>

D. "AS-IS" SALE; DISCLAIMER.

(i) The Property will be sold to Buyer in its "AS IS" condition
and Buyer shall rely upon Buyer's own due diligence in determining whether
the Property is suitable for purchase by Buyer. Buyer represents, warrants
and agrees (a) that Buyer shall have examined the Property and all of the
articles of personal property and fixtures (if any) included as part of the
Property prior to the expiration of the Review Period, (b) at the
expiration of such Review Period, Buyer will be familiar with the physical
and environmental condition of the Property and the operation thereof, the
revenues and expenses of the Property, the zoning and other laws,
regulations and rules applicable to the Property and the compliance of the
Property therewith, the Leases and the rents payable thereunder and the
quantity, quality and condition of the articles of personal property and
fixtures agreed to be sold with the Property and any other matters related
to the Property or the transactions contemplated hereby which Buyer deemed
relevant in connection with its decision to proceed with this transaction
(the "Pertinent Matters"), and (c) that no Seller nor any of Sellers'
employees, agents or attorneys nor any of their respective direct or
indirect partners, nor any of their respective officers, directors,
advisors, employees, agents, trustees, shareholders, beneficiaries,
contractors or representatives is making or shall be deemed to have made
any express or implied representation or warranty of any kind or nature,
and, in particular, that no representations or warranties have been made
with respect to the Pertinent Matters, except as and solely to the extent
herein specifically set forth. Subject to the provisions of Paragraph 14
hereof, Buyer agrees to accept the Property "as is", in its present
condition, subject to reasonable use, wear, tear and natural deterioration
between the date hereof and the Closing Date, and further agrees that
Sellers shall not be liable for any latent or patent defects in the
Property or bound in any manner by guarantees, promises, projections,
operating statements, set-ups, or other information pertaining to the
Property made, furnished or claimed to have been made or furnished by
Sellers or any other person or entity, including any employee, agent,
attorney or other person representing or purporting to represent Sellers,
whether verbally or in writing, except as and solely to the extent that the
same is expressly set forth herein.

(ii) Except as and solely to the extent otherwise provided
herein, Buyer hereby acknowledges and agrees that it shall not be entitled
to, and shall not, rely on Sellers, its agents, employees or
representatives, and Sellers hereby disclaim any representations or
warranties of any kind, either express or implied, either under common law,
by statute, or otherwise, as to (a) the quality, nature, adequacy or
physical condition of the Property including, but not limited to, any
structural elements, foundation, roof, appurtenances, access, landscaping,
parking facilities or any electrical, mechanical, heating, ventilating and
air-conditioning, plumbing, sewage or utility systems, facilities or
appliances at the Property; (b) the quality, nature, adequacy or physical
condition of soils and ground water or the existence of ground water at the
Property; (c) the existence, quality, nature, adequacy or physical
condition of any utilities serving the Property; (d) the development
potential of the Property, its value, its profitability, its habitability,
merchantability or fitness, suitability or adequacy of the Property for any
particular purpose; (e) the zoning or other legal status of the Property;
(f) the compliance of the Property or its operations with any applicable
codes, statute, law, ordinance, rule, regulation, covenant, permit,
authorization, standard, condition or restriction of any governmental or
regulatory; (g) the presence or absence of asbestos containing material,
radon, urea formaldehyde or other potentially hazardous substances, wastes,
chemicals, pollutants or contaminants, including without limitation those
identified under the Comprehensive Environmental Response, Compensation,
and Liability Act , 42 U.S.C. Section 9601 et seq.; (h) the quality of any
labor or materials relating in any way to the Property; (i) the square
footage or acreage of the Property; (j) the leasing, physical or financial

<PAGE>

status of the Property or the Property's compliance with applicable laws;
(k) the accuracy or completeness of any information or data provided or to
be provided by Sellers including, without limitation, copies of any reports
or documents prepared for Sellers whether by third parties or otherwise
which may be included with such information; or (l) any other matter
relating to the Property or Sellers.

(iii) Buyer acknowledges and agrees that Sellers have not made,
do not make and will not make any representation or warranty with regard to
the past, present or future condition or compliance of the Property, or
compliance of past owners and operators of the Property, with respect to
any past, present or future environmental laws or land use laws, rules,
regulations, orders or requirements.

(iv) Buyer acknowledges and agrees that by the expiration of
the Review Period, Buyer will have had an adequate opportunity to make such
legal, factual and other inquiries and investigations as Buyer deems
necessary, desirable or appropriate with respect to the Property. Such
inquiries and investigations of Buyer shall be deemed to include an
environmental audit of the Property, an inspection of the physical
components and general condition of all portions of the Property, such
state of facts as an accurate survey and inspection would show, the present
and future zoning and land use ordinances, resolutions and regulations of
the city, town, county and state where the Property is located and the
value and marketability of the Property.

E. TENANT PURCHASE RIGHTS. Buyer acknowledges and understands that
its rights to purchase and hold title to the Property hereunder are subject
to (a) the continuing rights of MCI Telecommunications Corporation ("MCI")
and MCI International ("MCI International") to acquire certain portions of
the Property pursuant to the terms of their respective Leases at the
Property, and (b) New York Telephone's continuing right to acquire a
portion of Phase III pursuant to the terms of its lease at the Property.
Sellers represent to Buyer that they have previously delivered the right of
first refusal notices required by the terms of the MCI Lease. Buyer
acknowledges that it has reviewed the terms of the MCI International Lease,
has determined that the transaction contemplated by this Agreement is not
subject to the purchase right contained therein and agrees not to raise an
objection to title on account of such purchase right. If MCI shall
exercise its right to purchase any portion of the Property, then thereafter
neither Buyer nor Sellers shall have any further rights or obligations
hereunder (except for those matters which expressly survive the termination
hereof) and the Deposit immediately will be returned to Buyer. As a
condition precedent to Buyer's obligation to close on the Closing Date, REP
II shall deliver to Buyer and to Buyer's title insurance companies copies
of the notices which REP II caused to be delivered to MCI pursuant to MCI's
right of first refusal, which copies shall be certified as true and correct
by the general partners of REP II, which certification shall include the
date such notices were sent by REP II and the method(s) of delivery thereof
and that to the best of REP II's knowledge such notices substantially
comply with the right of first refusal notice requirements of the MCI
lease. It shall be a condition of Closing that Buyer's Title Insurance
Company agree to omit or issue affirmative insurance that the instant
transaction is not subject to the MCI right of first refusal, provided
however that in no event shall any Seller pay any additional premium for
such omission or affirmative insurance. In lieu of the Sellers' compliance
with the preceding two sentences, Sellers may deliver to Buyer a written
notice from MCI stating to the effect that MCI has received notice of the
instant transaction and is not exercising MCI's right of first refusal in
connection therewith, whereupon the provisions of the preceding two
sentences shall be deemed satisfied and Buyer shall raise no objection to
title based upon the MCI right of first refusal.

F. SURVIVAL. The provisions of this Paragraph 7 shall survive
the termination of this Agreement and the Closing.

<PAGE>

8. APPORTIONMENTS AND PAYMENTS.

A. The following are to be apportioned between Sellers and Buyer
as of the Closing Date and the net amount thereof shall either be paid by
Buyer to Sellers (with such amount to be paid to Sellers by Buyer's good
certified or official bank check, payable to the order of Sellers, or wire
transfer of immediately available funds), or credited by Sellers against
the Balance of the Purchase Price, as the case may be, at the Closing:

(i) real property taxes;

(ii) water charges;

(iii) sewer taxes and rents;

(iv) annual permit, license and inspection fees, if any, on
the basis of the fiscal year for which levied, if rights thereunder with
respect thereto are transferable to Buyer;

(v) fuel, steam and all other utilities;

(vi) fixed, additional and escalation rents (including,
without limitation, common area maintenance payments) payable under any
Leases (as hereinafter defined) between Sellers and space tenants
(collectively the "Rent"), if, as and when collected;

(vii) interest and permitted administrative charges, if any, on
tenants' security deposits;

(viii) supplies on hand in the Property in unopened cartons,
at Sellers' cost;

(ix) wages, vacation pay, pension and welfare benefits and
other fringe benefits of all persons employed at the Property;

(x) amounts payable under any Contracts (as hereinafter
defined) assumed by Buyer; and

(xi) all other items customarily apportioned in connection
with similar conveyances in the County of Westchester, State of New York.

B. If the Closing Date shall occur before the real property taxes,
water rates and charges and sewer taxes and rents are finally fixed, the
apportionments thereof made at the Closing shall be upon the basis of the
tax or water rates for the preceding year applied to the latest assessed
valuation, but after the real property taxes, water rates and charges and
sewer taxes and rents are finally fixed, Sellers and Buyer shall make a
recalculation of the apportionment of same, and Sellers or Buyer, as the
case may be, shall make an appropriate payment to the other based on such
recalculation.

C. Sellers shall arrange for a final reading of all master utility
meters (covering steam, gas, electricity and water and the derivative sewer
charges based on meters). Sellers and Buyer shall jointly execute a letter
to each of such utility companies advising such utility companies of the
termination of Sellers' responsibility for such charges for utilities
furnished to the Property from and after the Closing Date. If a bill is
obtained from any of such utility companies before the Closing Date,
Sellers shall pay such bill on or before the Closing and deliver proof of
payment thereof to Buyer. If such bill shall not have been obtained before
the Closing, Sellers shall pay all such utility, water and sewer charges as
evidenced by the last bill or bills relating to the period prior to the
Closing Date and Buyer shall pay all such utility charges relating to the
period after the Closing Date. Any bill which shall be rendered which
shall cover a period both before and after the Closing Date shall be
apportioned between Buyer and Sellers as of the Closing Date. An amount
equal to all security deposits, prepayments or credits accrued with Service

<PAGE>

Providers under the assigned Contracts, or with utilities, water and sewer
companies or other parties relating to the Property shall be paid to
Sellers by Buyer at the Closing, provided that if such security deposits,
prepayments or credits shall not be transferable to Buyer, Buyer shall
cooperate with Sellers' efforts to collect and enjoy such amounts.

D. The amount of any unpaid taxes, assessments, water rates and
charges and sewer taxes and rents which Sellers are obligated to pay and
discharge, with interest and penalties thereon to the second business day
after the Closing Date, may, at the option of Sellers, be allowed to Buyer
out of the Balance of the Purchase Price, provided that official bills
therefor, with interest and penalties thereon, are furnished by Sellers at
the Closing. If there are any other liens or encumbrances which Sellers
are obligated to pay and discharge, Sellers may use any remaining portion
of the Balance of the Purchase Price to satisfy the same, provided that
Sellers shall deliver to Buyer, at the Closing, instruments in recordable
form sufficient to satisfy such liens and encumbrances of record, together
with a check for the cost of recording or filing said instruments. Buyer,
if request is made at least three (3) business days prior to the Closing,
agrees to provide Sellers at the Closing, with separate certified and/or
official bank checks, payable as directed by Sellers, to facilitate the
satisfaction of any of the aforesaid taxes, assessments, water rates and
charges, sewer taxes and rents, liens and encumbrances.

E. If Sellers receive Rent payments from tenants at the Property
after the Closing Date which are for any period subsequent to the Closing
Date, Sellers shall remit to Buyer the amount of such Rent. If any past-
due Rent is owing as of the Closing Date, or if any Rent for the period
prior to the Closing Date shall have accrued although the same is not then
due and payable, Buyer agrees that the first monies received by Buyer from
tenants owing such past-due or accrued Rent, in an amount not exceeding one
month's Rent shall be received by Buyer, as trustee for Sellers, on account
or in payment of, such past-due or accrued Rent, and Buyer shall forthwith
remit to Sellers the amount of such past-due or accrued Rent out of such
first monies received by Buyer (the "General Rule"). Buyer acknowledges
that MCI International currently owes Sellers approximately $141,691.15 for
certain items of additional rental under its Lease and for certain sidewalk
repair work performed at the Property. If Sellers shall not have been paid
such amounts from MCI International prior to Closing, then Buyer shall
forthwith remit to Sellers, out of the first monies received by Buyer from
MCI International an amount equal to the lesser of (i) $141,691.15 or (ii)
the amount of one month's fixed and escalation Rent under the MCI
International Lease, it being understood that Sellers shall not receive
monies under the General Rule in payment of said $141,691.15 by MCI
International to the extent that Sellers have been paid monies on account
of such $141,691.15 under this sentence. Buyer agrees that Sellers shall
be entitled to retain any monies paid by J.B. Hanauer & Co. ("Hanauer") in
connection with the release of such tenant from its obligations under its
Lease or otherwise. Nothing herein contained shall preclude Sellers from
asserting separate and independent claims against such tenants, but only if
each such claim to be asserted exceeds $5,000.00, including, but not
limited to, the institution of such actions as Sellers shall deem necessary
or advisable for the purpose of collecting such past due rentals, the right
(but not the obligation) to do any of which is hereby reserved by Sellers.
Buyer shall cooperate with Sellers to collect any Rents (including, without
limitation, escalation additional rents) owing to Sellers in accordance
herewith.

<PAGE>

F. Subject to the provisions of subparagraph E above, to the
extent that Rent cannot be determined on the Closing Date, or is collected
after the Closing Date for any period prior thereto, the amount of such
Rent for the period ending on the Closing Date, and all accountings showing
the calculations thereof, shall be paid and furnished to Sellers by Buyer
if, as and when received after the Closing Date. The portion of the Rent
consisting of additional rent and escalation rent shall be apportioned on a
calendar year or fiscal year basis (depending upon which is appropriate
under each Lease) so that the amount thereof under any of the Leases to
which Sellers shall be entitled shall be an amount which bears the same
ratio to the total additional and escalation rents due thereunder for the
current period as the number of days in said period which shall have
elapsed prior to the Closing Date bears to the total number of days in said
period. In furtherance thereof, Buyer shall pay to Sellers all escalation
additional Rent (i.e., tax, operating expense and other escalation
additional Rent) payable under the Leases which relate to the period from
January 1, 1997 through the actual Closing Date as and when collected by
Buyer. Escalation additional Rent for calendar year 1997 shall be billed
by Buyer on or about April 1, 1998, and Buyer shall pay to Sellers any
portion thereof to which Sellers are entitled as aforesaid, as and when
collected by Buyer. Sellers agree to make available for Buyer's
examination, all records, statements and accounts bearing on or relating to
Rent and, on the Closing Date, to furnish Buyer with a comprehensive and
complete statement of prepaid Rent and uncollected Rent. Subsequent to the
Closing and until all apportionments shall have been finally determined,
Buyer agrees to make available for Sellers' examination, all records,
statements and accounts bearing on or relating to Rent. Any prepaid Rents
received by Sellers on or before the Closing Date covering any period of
time subsequent thereto shall be credited to Buyer at the Closing.

G. At the Closing, Sellers shall deliver to Buyer a good certified
or official bank check, payable to the order of Buyer (or grant Buyer a
credit against the Balance of the Purchase Price due at Closing), in the
aggregate amount of any security deposits held under any Leases between
Sellers and space tenants, together with any accrued interest earned
thereon and credited to Sellers' security deposit account (adjusted
pursuant to Paragraph 8(A) hereof). Buyer shall execute a receipt for the
amount of all security deposits so paid over. If any tenant of the
Property having a security deposit is in default under the terms of its
Lease and either (x) notices of default and termination of such tenant's
Lease shall have been duly given or (y) such estoppel certificate executed
by the tenant acknowledges that the security deposit held by the landlord
under the Lease has been reduced by reason of the tenant's default or fails
to state a claim that the landlord is in default of such tenant's Lease by
reason of such reduction in the security deposit, Sellers may retain so
much of the security deposited by such tenant and the interest accrued
thereon as shall be sufficient to cover Sellers' loss by reason of such
tenant's default.

H. At the Closing, Sellers shall pay their own counsel fees, deed
stamps, transfer taxes and such other closing costs as are customarily paid
by a seller and Sellers shall execute and deliver any appropriate return or
form as may be required in connection therewith. Buyer shall pay its
counsel fees, title insurance and survey costs, sales taxes (if any) and
such other closing costs as are customarily paid by a buyer and execute and
deliver any appropriate return or form as may be required in connection
therewith. In addition, any costs relating to Buyer's due diligence,
including, without limitation, those relating to appraisers, inspectors,
auditors and environmental or engineering consultants, shall be Buyer's
sole responsibility. Sellers shall have the option to grant to Buyer a
credit against the Balance of the Purchase Price, at the Closing, in an
amount equal to the amount of any deed stamps and transfer taxes payable by
Sellers. If such adjustment is made by Sellers, Buyer agrees to pay the
amount of such deed stamps and transfer taxes.

<PAGE>

I. Fuel oil, if any, owned by Sellers and on the Property on the
date as of which adjustments shall be made, shall be adjusted at the cost
price thereof to Sellers, as reflected in Sellers's last bill, plus taxes
paid thereon. The amount of fuel oil is to be estimated in writing by the
fuel company currently supplying fuel to the Property, as of a date which
is not more than three (3) business days prior to the Closing Date.

J. If, on the Closing Date, the Property or any part thereof shall
be affected by any assessments which are payable in installments, then
installments payable prior to the Closing Date shall be paid by Sellers
(subject to apportionment as provided for herein), and installments payable
after the Closing Date shall be paid by Buyer (subject to apportionment as
provided herein). Any such installments payable by Buyer shall not be
objections to title whether or not the same constitute liens on the Closing
Date.

K. Sellers have instituted prior to the Closing Date tax reduction
proceedings seeking to reduce the assessed valuation of the Property (a
"tax reduction proceeding") for certain periods before and after the
Closing Date. Subsequent to the Closing, Sellers shall be permitted to
continue such tax reduction proceedings, whether in the name of Sellers or
Buyer. Any refund of taxes which results from a tax reduction proceeding
commenced by Sellers ("refund") shall be the sole property of Sellers,
except that Buyer shall be entitled to that portion of the refund (after
deduction from the full refund of all of Sellers' expenses incurred in
connection therewith, including without limitation attorneys' fees and
expenses) which is refundable to tenants under the Leases, and that portion
of such refund which relates to the period subsequent to the Closing.
Sellers shall have the right to settle any tax reduction proceeding without
Buyer's consent, except to the extent Buyer will be bound by any settlement
for any tax year following the Closing and for any tax reduction proceeding
relating solely to the tax year in which the Closing occurs, for which
Buyer's prior written consent shall be required, which consent Buyer agrees
not to unreasonably withhold or delay. Buyer shall execute and deliver any
documents that may be reasonably required by Sellers in connection with
such tax reduction proceeding and any recovery had thereunder, all without
charge or expense to Sellers.

L. The parties hereto agree that any errors or omissions in
computing apportionments at the Closing shall be corrected promptly after
their discovery. In furtherance thereof, the parties agree to recalculate
apportionments and make appropriate payments to each other on or about the
ninetieth (90) day following the Closing.

M. The parties hereto agree that Buyer's attorneys shall be "the
real estate reporting person" with respect to this transaction who is
responsible for the completion of form 1099S or such other successor form
as may be prescribed by the Internal Revenue Service and for fulfilling all
of the obligations and requirements of Section 6045(e) of the Internal
Revenue Code of 1986, as amended.

N. Sellers shall be responsible for paying $771,450 on account of
tenant improvement work in connection with Compass Group USA, Inc. Lease,
and $13,617 representing brokerage commission in connection with the
failure of MCI to exercise a right of termination in the MCI Lease. In
addition, Sellers shall be responsible for all brokerage commissions which
were due and payable or which accrued prior to the date of Closing, it
being understood by way of example that if a lease is signed prior to the
Closing and the brokerage agreement provides for the payment of a $20,000
brokerage commission in two instalments of $10,000, the first instalment
payable before the Closing and the second instalment payable after the
Closing, the Sellers shall nevertheless be responsible for the payment of
both $10,000 instalments, unless the second instalment relates to
circumstances (such as the tenant's failure to terminate or exercise of an

<PAGE>

expansion or renewal right) which by their nature will not occur until
after the Closing in which latter case the Sellers shall pay the first
$10,000 instalment and the Buyer shall pay the second $10,000 instalment.
Notwithstanding the foregoing example, in all cases where a brokerage
commission is claimed with respect to a current or future Lease and the
right to earn the commission is or may be affected by events that occur or
fail to occur subsequent to the Closing, Buyer shall be responsible for all
such commissions.

O. The provisions of this Paragraph 8 shall survive the Closing
Date.

9. CLOSING DOCUMENTS.

A. At the Closing, and upon payment by Buyer of the Balance
of the Purchase Price (plus any other sums which Buyer has agreed herein to
pay to Sellers at the Closing, but less any credits to which Buyer may be
entitled to hereunder), each Seller shall deliver to Buyer the following
with respect to the portion of the Property owned by such Seller:

(i) A bargain and sale deed (without covenants) from each
Seller (collectively, the "Deeds"), in proper statutory form for recording,
which shall be duly executed and acknowledged so as to convey to Buyer
title to that portion of the Property owned by each Seller, subject to the
Permitted Exceptions. Specifically, subject to and in accordance with the
terms hereof, REP I shall convey title, to that portion of the Property
described on Exhibit "A-1" annexed hereto, REP II shall convey title to
that portion of the Property described on Exhibit "A-2" annexed hereto and
REP III shall convey title to that portion of the Property described on
Exhibit "A-3" annexed hereto;

(ii) An assignment and assumption of the Leases, in the form
attached hereto as Exhibit "C";

(iii) An assignment and assumption of Contracts in the form
attached hereto as Exhibit "D". Sellers, at Buyer's written request, shall
terminate by notice given at the Closing any Contracts (other than all
applicable brokerage or commission agreements with respect to tenants or
Leases at the Property, none of which shall be terminable by Buyer) which
Buyer elects not to assume, it being understood that Buyer shall be
responsible for and indemnify Sellers against any amounts due under such
terminated Contracts for the period subsequent to the Closing through the
effective date of termination, it being further understood that Buyer shall
notify Sellers as to which Contracts it elects not to assume by the Closing
Date;

(iv) Notices executed by Sellers addressed to all tenants in
the Buildings, advising them of the within sale, the assignment of their
respective Lease security deposit (including interest) (if held by such
Seller) and the assumption by Buyer of the obligations as landlord
thereunder, directing them to send Rent to Buyer or Buyer's managing agent,
and containing such other information as may be required in order to
relieve such Sellers from any liability to such tenants with respect to the
security deposits delivered to Buyer, which notices Buyer shall mail, at
Buyer's sole cost and expense, to each tenant by certified mail, return
receipt requested;

<PAGE>

(v) As a condition to Closing, Sellers shall deliver executed
estoppel certificates, substantially in the form of the estoppel
certificate attached hereto as Exhibit "E" or in the form required by the
applicable lease with no material omissions therefrom or material changes
thereto or new provisions or statements added thereto, any of which are
materially adverse to the rights or interests of the landlord under the
lease of the tenant giving such certificate, from the Major Tenants
(including MCI and MCI International and their affiliates that have a Lease
to occupy space at the Property ) and from tenants occupying not less than
fifty percent (50%) of the balance of the leased space at the Property;
provided, however, that Sellers shall request estoppel certificates from
all tenants in the Building. In the event an estoppel certificate
delivered by a tenant does not conform to the form of the estoppel
certificate attached hereto and if such non-conforming matter can be
remedied by the performance of work or the payment of money, Sellers shall
have the right but not the obligation to cure the non-conforming matter set
forth in such estoppel certificate, by either performing or causing to be
performed the work, paying the money, or by granting Buyer a credit against
the Purchase Price in an amount reasonably necessary to perform such work,
as reasonably determined by the parties. Additionally, if Sellers shall be
unable to deliver an estoppel certificate for any tenant of the Building by
the Closing Date other than the Major Tenants, for which Sellers shall be
required to deliver an estoppel certificate, then Sellers shall have the
right but not the obligation to deliver to Buyer, in substitution for such
estoppel certificate, a certificate from Sellers (a "Sellers'
Certificate"), certifying as to the matters set forth in the form of the
estoppel certificate attached hereto as Exhibit "E" which shall survive the
Closing until November 15, 1998; provided, however, that if Sellers shall
deliver a partially completed estoppel certificate from a particular
tenant, then such Sellers' Certificate shall cover only those matters set
forth in the estoppel certificate which were not confirmed by the
respective tenant. If Sellers deliver an estoppel certificate for a
required tenant subsequent to the Closing Date, then such Sellers'
Certificate shall be deemed canceled to the extent of the matters confirmed
in such estoppel certificate, provided, however, that if the required
estoppel certificate shall have been fully completed, then the Sellers'
Certificate with respect thereto shall be canceled in full;

(vi) Original or certified copies of all Leases, amendments
and other documents relating thereto, rent records and related documents in
the possession or under the control of Sellers (which documents may be
delivered at the Property). Such records shall include a schedule of all
cash security deposits, including any interest thereon, held by Sellers on
the Closing Date under the Leases together with appropriate instruments of
transfer or assignment with respect to any lease securities which are other
than cash and a schedule updating the Lease Schedule and setting forth all
arrears in rents and all prepayments of rents;

(vii) Such affidavits and indemnities as the Title
Company may reasonably require in order to omit from its title insurance
policy all exceptions for (a) judgments, bankruptcies or other returns
against persons or entities whose names are the same as or similar to
Sellers' names; (b) parties in possession (other than tenants pursuant to
the Leases and other occupants under the Contracts); and (c) mechanics'
liens;

(viii) Sellers shall make all tenant files and records
including without limitation all tenant correspondence and billing for
escalations and files and records for the Buildings available to Buyer for
copying, which obligation shall survive the Closing;

<PAGE>

(ix) Original (or photocopies, if originals are
unavailable to Sellers) of all site plans, surveys, soil and substrata
studies, architectural drawings, plans and specifications, engineering
plans and studies, floor plans, landscape plans and other plans or studies
of any kind in the possession or under the control of Sellers that relate
(a) to the Land, the Buildings, including without limitation as-built plans
for tenant improvements, or (b) otherwise to the Property. Sellers shall
also deliver (i) original (or photocopies, if originals are unavailable to
Sellers) of all then effective assignable guaranties and warranties made by
any person for the benefit of Sellers and in the possession or under the
control of Sellers, with respect to the Property or any of its components,
together with an instrument in form and substance reasonably satisfactory
to Buyer assigning the same to Buyer, and (ii) all certificates, licenses,
permits, authorizations and approvals issued for or with respect to the
Property by governmental and quasi-governmental authorities having
jurisdiction, except that photocopies may by substituted if the originals
are posted at the Property.

(x) All keys in Sellers' possession to all entrance
doors to, and any equipment and utility rooms located in, the Property
(appropriately tagged for identification); and

(xi) An executed Affidavit of Non-Foreign Status,
certifying that each Seller is not a "foreign person" pursuant to Section
1445 of the Internal Revenue Code;

B. At the Closing, Buyer shall deliver to Sellers a duly executed
and acknowledged agreement in form and substance reasonably satisfactory to
Sellers whereby Buyer shall (i) assume all of Sellers' obligations under
the Leases (arising from and after the Closing), and (ii) agree to
indemnify Sellers against, and hold Sellers harmless from, any liability,
damages, claims, losses, costs and expenses (including attorneys' fees)
arising from or relating to (x) the Leases or the obligations or
responsibilities of the landlord thereunder with respect only to the period
subsequent to the Closing and the security deposits delivered under such
Leases (but only to the extent same have been delivered to Buyer) and (y)
the Pertinent Matters.

C. The parties acknowledge and agree that no portion of the
Purchase Price is for or allocated to any personal property (if any)
located at the Property. However, if any governmental body deems any part
of the Purchase Price to have been paid for any personal property
transferred hereunder, then Buyer shall pay all such sales tax so payable,
which payment shall be made at the Closing. The provisions of this
subparagraph shall survive the Closing.

10. Title Insurance.

A. Buyer shall order from a reputable title insurance company
which is licensed to do business in the States of Connecticut and New York
(the "Title Company"), within five (5) days after the execution of this
Agreement, time being of the essence, a title report with respect to the
Property and request the Title Company to deliver to the Sellers a copy
thereof promptly upon receipt of the same, but, in all events, not later
than the expiration of the Review Period, time being of essence. If such
title report discloses title defects or exceptions to title which are not
included within the Permitted Exceptions and if, by reason of such title
defects or exceptions, the Sellers shall be unable to convey title to the
Property in accordance with the provisions of this Agreement, then the
Sellers shall have the right, but not the obligation, to attempt to cause
the Title Company to omit such defects or exceptions from the title
insurance policy to be issued to the Buyer and, for such purpose, the
Sellers shall be entitled to one or more adjournments of the Closing for a
period not exceeding sixty (60) days in the aggregate. If the Sellers
refuse or are unable to eliminate any such title defects or exceptions and
convey title to the Property in accordance with the terms of this Agreement

<PAGE>

by the Closing, as the same may be adjourned as aforesaid, then the Buyer,
as its sole and exclusive remedy, may elect by written notice to the
Sellers to either (i) reject title to the Property and terminate this
Agreement, or (ii) accept title to the Property subject to such defects or
exceptions without any abatement of the Purchase Price or liability on the
part of the Sellers. If Buyer shall reject title under subsection (i)
above, then neither party shall have any liability whatsoever to the other
hereunder except that Buyer shall be entitled to a prompt refund of the
Deposit and the net cost of any title commitments and survey charges not
exceeding $15,000.00 in the aggregate. The existence of any condition to
which Buyer agrees to take subject under this Agreement shall not be deemed
or construed to render Sellers' title unmarketable, and notwithstanding
that such conditions may render title unmarketable, Buyer shall not have
the right to reject title by reason thereof, the Purchase Price shall not
in any respect be reduced, and Buyer shall not be entitled to damages
therefor. Anything contained in this subparagraph to the contrary
notwithstanding, the Buyer shall accept such title to the Property as the
Title Company shall be willing to insure, subject only to the Permitted
Exceptions. Notwithstanding anything to the contrary contained herein,
Sellers shall be obligated to remove any title exceptions for mortgages
made by Sellers, tax liens against Sellers or imposed upon the Property,
judgment liens against Sellers, or mechanics liens for work performed at
the request of Sellers and which in each case may be removed by the payment
of a liquidated sum and any title exception (other than the Permitted
Exceptions) created by Sellers' voluntary acts after the date hereof.

B. If a search of the title discloses judgments, bankruptcies or
other returns entered against any other person or entity having a name the
same as or similar to that of Sellers, Sellers shall, at the Closing,
deliver to Buyer affidavits showing that such judgments, bankruptcies or
other returns are not against Sellers.

C. Except as provided in paragraph A above, the Sellers do not
agree to undertake, and nothing herein contained shall be construed to
require Sellers to bring any action or proceeding or otherwise to incur any
expense whatsoever to render title to the Property either acceptable to
Buyer, insurable, or to be in accordance with the provisions of this
Agreement.

D. Except as provided in paragraph A above, the premium for
Buyer's title insurance policy to be issued by the Title Company pursuant
to the Commitment, and all related charges and survey costs incurred in
connection with the Commitment or such policy, shall be paid by Buyer.

11. THE LEASES.

A. Buyer acknowledges that Buyer has examined the Leases set
forth on the lease schedule (the "Lease Schedule") annexed hereto as
Exhibit "F". Sellers represent and warrant that, except as disclosed to
Buyer prior to the end of the Review Period, to the Sellers' actual
knowledge, (i) the Leases set forth on such Lease Schedule constitute all
of the agreements (other than any subleases and the Contracts) which relate
to, affect the occupancy of, or create and/or affect the rights to the
occupancy of, the Property or any portion thereof, and all amendments,
renewals, extensions and modifications thereof, (ii) except as set forth in
the Leases (and any subleases and Contracts), no person or firm has any
right to occupy any portion of the Property, (iii) all of the Leases are in
full force and effect and other than as set forth on the Lease Schedule,
none of them have been modified, amended or extended and no renewal or
expansion options have been granted to tenants except as specifically set
forth in the Leases, (iv) except for MCI, MCI International and New York
Telephone, no tenant has an option to purchase the Property or any part
thereof, (v) except as set forth therein, the rents set forth on the Lease
Schedule are being collected on a current basis and there are no arrearages

<PAGE>

in excess of one month, (vi) except as set forth in the Leases, no tenant
is entitled to rental concessions or abatements for any period subsequent
to the Closing Date, (vii) Sellers have not sent written notice to any
tenant of the Property claiming that such tenant is in default, which
default remains uncured, other than the unpaid Rent sums set forth on the
Lease Schedule, (viii) no action or proceeding instituted against Sellers
by any tenant of the Property is currently pending in any court, except
with respect to claims involving personal injury or property damage which
are covered by insurance and described on Exhibit "G", (ix) there are no
security deposits or prepaid rent in the nature of a security deposit other
than those set forth in the Lease Schedule or the Leases, (x) no rent has
been paid more than thirty (30) days in advance under any of the Leases,
(xi) all tenant improvement work required to be completed or paid for by
Sellers has been or prior to the Closing Date will be completed or paid
for, as the case may be, and (xii) except as set forth in the Leases and on
Exhibits F (Lease Schedules) and H (Contracts), there are no unpaid leasing
commissions or any liability therefor arising from options to expand or
renew contained in any of the Leases.

B. Except as is otherwise provided herein, Sellers agree that
Sellers will not make any modifications of the Leases which affect the
period subsequent to the Closing without the prior written consent of
Buyer, which consent Buyer agrees not to unreasonably withhold or delay.
Buyer acknowledges that Hanauer previously assigned its Lease to American
Progressive Life and Health Insurance Company of N.Y. by Assignment and
Assumption of Lease Agreement, dated September 29, 1997. By Consent to
Assignment, dated October 8, 1997, REP II consented to such assignment.
Buyer agrees that REP II shall have the right to release Hanauer from its
obligations under its Lease and the aforesaid Assignment and Consent and
REP II may receive any amounts payable in connection therewith.

C. The right and privilege is reserved to Sellers to institute
termination and eviction proceedings against any tenant prior to the
Closing based upon such tenant's failure to observe or perform any of its
obligations pursuant to its Lease, but notice thereof shall be given to the
attorneys for Buyer. Sellers do not guarantee or undertake that any tenant
of the Property will be in occupancy on the Closing or that any of the
Leases will be in force or effect on the Closing. Buyer agrees that the
vacating of any portion of the Property by any tenant, or the removal of
any tenant by eviction proceedings, or the termination of any of the
tenants' occupancies, by reason of defaults arising under the Lease or
otherwise, prior to the Closing, shall not give rise to any claim on the
part of Buyer or affect the obligations of Buyer hereunder in any manner
whatsoever.

D. If any of the rentable space in the Property is currently
vacant or becomes vacant between the date of this Agreement and the
Closing, the same shall not be relet, nor shall any extension or renewal of
any lease be made, nor shall any modification of the terms of any lease or
rental agreement be made (other than the Weston Insurance Brokerage, Inc.
Amendment of Lease) and Hanauer release, except with the prior written
consent of Buyer, which shall not be unreasonably withheld or delayed.

12. ACCEPTANCE OF DEED; REPRESENTATIONS AND WARRANTIES.

A. The acceptance of the Deeds by Buyer shall be deemed to be an
acknowledgment by Buyer that Sellers have fully performed, discharged and
complied with all of Sellers' obligations, representations, warranties,
covenants and agreements hereunder, that Sellers are discharged therefrom
and that Sellers shall have no further liability with respect thereto,
except for (i) the post-closing adjustments (if any) required hereunder,
and (ii) those, if any, which are herein specifically stated to survive the
Closing.

<PAGE>

B. Sellers and Buyer represent and warrant to each other that the
execution, delivery and performance of this Agreement have been duly
authorized and, except as otherwise provided herein, no other action or
approval is required in order to enable each respective party to consummate
the transaction contemplated by this Agreement.

C. Each Seller as to its portion of the Property to its actual
knowledge hereby represents and warrants to Buyer that:

(i) Such Seller has full right, power and authority in
accordance with law to sell and convey its interest in the Property to
Buyer as provided herein, subject to the purchase rights set forth in
Paragraph 7 above.

(ii) Sellers know of no pending or threatened actions or
proceedings regarding condemnation of the Property or any part thereof.

(iii) Except as set forth on Exhibit "G" annexed hereto,
pending tax certiorari proceedings, matters in the Report and the oil
spillage incidents referenced in Paragraph 7(A), there is no action, suit,
litigation, claim, administrative or governmental or quasi-governmental
investigation or proceeding pending against or relating to the Property.

(iv) Exhibit "H" annexed hereto lists all service,
maintenance, supply and management contracts (collectively, the
"Contracts") known to Sellers affecting the Property, and the information
set forth therein is accurate and complete as of the date hereof. Except
as otherwise specifically set forth in Exhibit "H" or elsewhere in this
Agreement (1) all of the Contracts are in full force and effect and none of
them have been modified, amended or extended, (2) Sellers have not sent
written notice to, or received written notice from, any management company,
maintenance or service provider (collectively, the "Service Providers")
claiming default under any Contracts, and (3) no action or proceeding
instituted by Sellers against any Service Providers or by any Service
Providers against Sellers is currently pending in any court.

(v) There are no employees of Seller employed at the Property
and no union contracts affecting the Property except as noted on Exhibit H
(Contracts).

(vi) As of the Closing Date, there will be no outstanding
rights of first refusal, rights of first offer, options or similar rights
to purchase all or any portion of the Property other than the respective
MCI, MCI International and New York Telephone's continuing options to
purchase a portion of the Property or portions thereof as set forth in its
lease, copies of which will be delivered to Buyer for its review during the
Review Period.

During the Review Period Sellers may notify Buyer of any matter that is the
subject of any Seller's representation or warranty (including, without
limitation, any matter related to brokerage or other Contracts and the
Leases), which noticed matter will be deemed an exception to such
representation or warranty and shall be deemed included in the appropriate
obligations to be assumed by Buyer, provided, however, that if Sellers (as
opposed to a third party) shall notify Buyer of any such additional matters
later than December 12, 1997, then the Review Period shall be extended
until December 17, 1997, and the Closing shall occur within four (4)
business days thereafter, as designated by Buyer (time being of the essence
as to such dates), provided, however, that either party may adjourn the
Closing by notice to the other party for not more than three (3) business
days thereafter for any reason whatsoever, time being of the essence as to
Buyer's obligation to close by such date

<PAGE>

D. Anything to the contrary contained in this Agreement
notwithstanding, the covenants, representations and warranties of each
Seller shall survive until November 15, 1998, whereupon all covenants,
representations and warranties of Sellers shall be deemed fully observed,
paid and performed, and Buyer shall have no further rights or remedies with
respect thereto, except for the breach of those covenants, representations
and warranties that are the subject of (x) a notice given on or before
November 15, 1998, from Buyer to Sellers in writing that describes with
specificity the nature of the breach and the damages arising therefrom, and
(y) litigation of the breach described in such notice that is duly
commenced on or before the fifteenth (15th) day) after the notice is given
pursuant to clause (x) and at all times prosecuted diligently thereafter,
as to which notice and litigation dates time shall be of the essence.

E. For purposes of this Agreement, all references to "knows,"
"known" or "knowledge" of any of the Sellers shall mean the actual
knowledge without further inquiry as of the date of the relevant
representation or warranty of the following individuals:

For REP I: Douglas Welker or Thomas J. Collins,
For REP II: Douglas Welker or Thomas J. Collins, and
For REP III: Thomas J. Collins,

it being understood that each Seller currently relies upon the knowledge of
such individuals as representatives of the general partner of each Seller
who are generally familiar with major current matters affecting the
Property owned by such Seller (other than matters known to the property
manager, the property engineer or other specialists entrusted with specific
matters or responsibilities concerning the Property, to the extent that (x)
the knowledge of such specialists has not been imparted to Messrs. Welker
or Collins in writing and (y) such writing is not disclosed to the Buyer
prior to the end of the Review Period).

13. BROKER

Buyer represents and warrants to Sellers that Buyer has had no
dealings with respect to this transaction with any real estate broker, firm
or salesman, or any other person or corporation, except Richard Ellis LLC,
Inc. (the "Broker"), and Sellers agree to pay the brokerage commission due
to the Broker in accordance with the terms of a separate written agreement
with said Broker. Buyer agrees to indemnify Sellers against, and defend
Sellers and save Sellers harmless from and against any and all claims, and
Sellers' reasonable expenses related thereto (including attorneys' fees),
for brokerage commissions, fees or other compensation by any person, firm
or corporation (other than the Broker) who shall allege to have acted in
this transaction with Buyer or dealt with Buyer in connection herewith.
Sellers agree to indemnify Buyer against, and defend Buyer and save Buyer
harmless from any and all claims, and Buyer's reasonable expenses related
thereto (including reasonable attorneys' fees), for brokerage commissions,
fees or other compensation by any person, firm or corporation who shall
allege to have acted in this transaction with Sellers or dealt with Sellers
in connection herewith. The provisions of this Paragraph shall survive the
Closing and any termination of this Agreement.

14. CONDEMNATION AND DESTRUCTION.

A. If, prior to the Closing Date, all or any significant portion
of the Property is taken by eminent domain or is the subject of a pending
taking which has not been consummated (collectively, a "Taking"), Sellers
shall notify Buyer of such fact and Buyer shall have the option to
terminate this Agreement upon notice to Sellers given not later than ten
(10) business days after receipt of Sellers's notice, time being of the
essence. If this Agreement is terminated, as aforesaid, then the Deposit

<PAGE>

shall be returned to Buyer, and thereupon neither party shall have any
further rights or obligations to the other hereunder except such
obligations as survive termination of this Agreement. If Buyer elects not
to terminate this Agreement as aforesaid, or if an "insignificant portion"
(i.e., any Taking which does not materially interfere with access to the
Property and does not serve to decrease in any material respect the size of
any of the Buildings) of the Property is taken by eminent domain, there
shall be no abatement of the Purchase Price, but Sellers shall assign and
turn over at the Closing, and Buyer shall be entitled to receive and keep,
all awards for such taking by eminent domain.

B. If, prior to the Closing, a material part of any of the
Buildings is destroyed or damaged by fire or other casualty ("material"
being deemed to be any destruction greater than "immaterial", as defined
below, or permitting Tenants paying Rents of more than ten percent (10%) of
the aggregate Rents of the Property to terminate their leases), Sellers
shall notify Buyer of such fact and Buyer shall have the option to
terminate this Agreement upon notice to Sellers given not later than twenty
(20) days after receipt of Sellers's notice. If this Agreement is
terminated as aforesaid, then the Deposit shall be returned to Buyer, and
thereupon neither party shall have any further rights or obligations to the
other hereunder except such obligations as survive the termination of this
Agreement. If Buyer elects not to terminate this Agreement as aforesaid,
or if there is damage to or destruction of an "immaterial" part of any of
the Buildings by fire or other casualty, then Sellers shall assign and turn
over, and Buyer shall be entitled to receive and keep, all insurance
proceeds paid or to be paid, and relating to the damage to the Property
caused by such casualty (the "Proceeds"), which remain after payment or
reimbursement is made for the work (if any) performed by Sellers in
connection with such casualty together with a check for the deductible
amount under Sellers' insurance policy (if any), without further abatement
of the Purchase Price, provided, however, that in no event shall Sellers be
obligated to restore any portion of the Property that is damaged by
casualty. Sellers agree to maintain in force and effect until the Closing
Date any existing casualty insurance coverage on the Property. Sellers
represent and warrant to Buyer that its existing casualty insurance covers
the Buildings for 100% of the replacement value thereof (less a reasonable
deductible). An "immaterial" part of the Buildings shall be deemed to have
been damaged or destroyed if either (i) the cost of repair or replacement
shall be $2,500,000 or less, or (ii) the damage to the Buildings may be
repaired (without regard to the cost therefor) within the period expiring
one hundred twenty (120) days after the Closing Date as scheduled prior to
such casualty, as reasonably determined by a reputable architect who is
jointly selected by Sellers and Buyer.

15. DEFAULTS.

A. If Sellers shall tender the Deeds in compliance with the
Sellers' obligations hereunder, and Buyer shall fail or refuse to close
title hereunder as required by the terms of this Agreement, then the Escrow
Agent shall deliver the Deposit to Sellers (pro rata in proportion to the
allocation of the Purchase Price set forth in Paragraph 2(C)), and the
Sellers shall be entitled to retain the Deposit, free of any claim thereto
of Buyer, as liquidated damages, as their sole and exclusive remedy
hereunder, and neither party shall have any further rights or obligations
to the other hereunder (other than those obligations which expressly
survive the closing or termination hereof). In connection with the
foregoing, the parties recognize that Sellers will incur expense in
connection with the transaction contemplated by this Agreement and that the
Property will be removed from the market; further, that it is extremely
difficult and impracticable to ascertain the extent of detriment to Sellers
caused by the breach by Buyer under this Agreement and the failure of the
consummation of the transaction contemplated by this Agreement or the
amount of compensation Sellers should receive as a result of Buyer's breach
or default. In the event the sale of the Property shall not be consummated
on account of Buyer's default, then the retention of the Deposit shall be
Sellers' sole and exclusive remedy under this Agreement by reason of such
default.

<PAGE>

B. If the transaction herein provided shall not be closed by
reason of Sellers' default under this Agreement or the failure to satisfy
the conditions set forth in this Agreement or the termination of this
Agreement in accordance with the terms hereof, then the Deposit shall be
returned to Buyer, and neither party shall have any further obligation or
liability to the other; provided, however, if the transaction hereunder
shall fail to close solely by reason of a material or wilful default by
Sellers, Buyer shall have fully performed its obligations hereunder and
shall be ready, willing and able to close, then Buyer shall be entitled to
specifically enforce this Agreement; and provided further however, if
Sellers shall willfully take actions so as to attempt to prevent the
availability of a specific performance to Buyer, then Buyer shall, at its
option, in lieu of specific performance, be entitled to a return of the
Deposit and reimbursement of its actual out-of-pocket costs paid to third
parties in connection with the transactions hereunder (such reimbursement
not to exceed $50,000 in the aggregate). Except as set forth above, no
other actions, for damages or otherwise, shall be permitted in connection
with any default by Sellers. Notwithstanding anything to the contrary
contained herein, if the closing of the transaction hereunder shall have
occurred (and Buyer shall not have waived, relinquished or released any
applicable rights in further limitation), the aggregate liability of
Sellers arising to or in connection with the representations, warranties,
indemnifications, covenants or other obligations (whether express or
implied) of Sellers under this Agreement (or any document executed or
delivered in connection herewith) shall not exceed $2,000,000.00, which
amount shall be maintained by Sellers in Sellers' names until November 15,
1998, at which time, if no claim has been asserted by Buyer against
Sellers, Sellers may distribute such funds. If a claim has been timely
made such funds (up to the amount that might be necessary to satisfy such
claim) shall continue to be held by Sellers until resolution of the claim.

C. The liability of Sellers hereunder for damages or otherwise
shall be limited to Sellers' interest in the Property including, without
limitation, the proceeds of any insurance policies covering or relating to
the Property, any awards payable in connection with any condemnation of the
Property or any part thereof, and any other rights, privileges, licenses,
claims, causes of actions or other interests, sums or receivables
appurtenant to the Property. Sellers shall have no personal liability
beyond Sellers' interest in the Property, and no other property or assets
of Sellers shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Buyer's claims. In no event shall
Sellers' officers, partners, trustees, directors, agents, employees or
shareholders have personal liability in connection with the transactions
hereunder or otherwise. No constituent partner in or agent of Sellers, nor
any advisor, trustee, director, officer, employee, beneficiary,
shareholder, participant, representative or agent of any corporation or
trust that is or becomes a constituent partner in Sellers (including, but
not limited to, JMB Realty Corporation or London & Leeds Development
Corporation or any affiliates thereof) shall have any personal liability,
directly or indirectly, under or in connection with this Agreement or any
agreement made or entered into under or pursuant to the provisions of this
Agreement, or any amendment or amendments to any of the foregoing made at
any time or times, heretofore or hereafter, and Buyer and its successors
and assigns and, without limitation, all other persons and entities, shall
look solely to Sellers' interest in the Property for payment of any claim
or for any performance, and Buyer, on behalf of itself and its successors
and assigns, hereby waives any and all such personal liability.
Notwithstanding anything to the contrary contained in this Agreement,
neither the negative capital account of any constituent partner in Sellers,
nor any obligation of any constituent partner in Sellers to restore a
negative capital account or to contribute capital to Sellers (or any
constituent partner of Sellers), shall at any time be deemed to be the
property or an asset of Sellers or any constituent partner thereof, and
neither Buyer nor any of its successors or assigns shall have any right to
collect, enforce or proceed against or with respect to any such negative
capital account or partner's obligation to restore or contribute.

<PAGE>

16. ENTIRE AGREEMENT.

This Agreement contains all of the terms agreed upon between the
parties with respect to the subject matter hereof, and all understandings
and agreements heretofore had or made between the parties hereto are merged
in this Agreement which alone fully and completely expresses the agreement
of said parties.

17. AMENDMENTS.

This Agreement may not be changed, modified, supplemented or
terminated, nor may any obligations hereunder be waived, except by an
instrument executed by the party hereto which is or will be affected by the
terms of such change, modification, supplementation or termination.

18. WAIVER.

No waiver by either party of any failure or refusal by the other
party to comply with its obligations shall be deemed a waiver of any other
or subsequent failure or refusal to so comply.

19. SUCCESSORS AND ASSIGNS.

The covenants, agreements, representations, and warranties herein
contained shall inure to the benefit of, and shall bind, the heirs,
administrators, successors and permitted assigns of the respective parties
hereto. Anything contained herein to the contrary notwithstanding, each
Seller shall be responsible only for, and be deemed to make, the covenants,
conditions, representations and warranties of Sellers solely with respect
to and to the extent of such Seller's interest in each of Phase 1, Phase 2
or Phase 3.

20. PARTIAL INVALIDITY.

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

21. GOVERNING LAW.

A. This Agreement shall be governed by, interpreted under, and
construed and enforced in accordance with, the laws of the State of New
York applicable to agreements made and to be performed wholly within said
State without regard to principles of conflicts of laws.

B. Sellers and Buyer hereby irrevocably consent and agree that any
legal action, suit or proceeding arising out of or in any way connected
with this Agreement shall be instituted or brought in the courts of the
State of New York, in the County of New York, or in the United States
District Court serving such jurisdiction, and by execution and delivery of
this Agreement, Sellers and Buyer hereby irrevocably accept and submit, for
itself and in respect of its property, generally and unconditionally, to
the exclusive jurisdiction of either of such courts, and to all proceedings
in such courts. In addition to any method provided by applicable law,
Sellers and Buyer irrevocably consent to service of any summons and/or
legal process by registered or certified United States mail, postage
prepaid, in accordance with the provisions of Paragraph 25 hereof, such
method of service to constitute, in every respect, sufficient and effective
service of process in any such legal action or proceeding.

C. If any action or proceeding is brought by Sellers against Buyer
(or Buyer against Sellers) in connection with this Agreement and the
transactions contemplated hereby, then the losing party shall pay the
reasonable attorneys' fees and disbursements incurred by the prevailing
party in connection with such action or proceeding.

<PAGE>

22. ASSIGNMENT.

Buyer may not assign Buyer's interest in this Agreement without the
prior written consent of Sellers, except that Sellers' consent shall not be
required for an assignment to any Affiliate (hereinafter defined) of Buyer.

As used herein, "Affiliate" shall mean any subsidiary corporation or
partnership or other entity, at least a majority of which is owned,
directly or indirectly, by Buyer. No assignment of Buyer's interest under
this Agreement shall release Buyer from any of its obligations hereunder.
Except as aforesaid, the parties hereto do not intend to confer any right
or benefit hereunder to or on any other person, firm or corporation other
than the parties hereto.

23. PARAGRAPH HEADINGS.

The headings of the various paragraphs of this Agreement have been
inserted solely for the purposes of convenience, are not part of this
Agreement and shall not be deemed in any manner to modify, explain, expand
or restrict any of the provisions of this Agreement.

24. BINDING EFFECT.

This Agreement does not constitute an offer to sell and shall not
bind Sellers unless and until Sellers, in Sellers' sole discretion, elect
to be bound hereby by executing and unconditionally delivering to Buyer an
original or an original counterpart hereof.

25. NOTICES.

All notices, demands or requests (collectively, "notices") made
pursuant to, under or by virtue of this Agreement must be in writing and
sent to the party or parties to whom or to which such notice, demand or
request is being sent, by certified mail, return receipt requested or
delivered by hand with receipt acknowledged in writing or by facsimile
(followed the next business day with a copy delivered by national overnight
courier) or national overnight courier, as follows:

To Sellers:

c/o London & Leeds Development Corporation
One Wall Street Court
New York, New York 10005
Attn: Thomas J. Collins, Esq.
Facsimile: 212-344-5166

with a copy to:

Edward A. Kaminsky, Esq.
Handsman & Kaminsky LLP
609 Fifth Avenue, Sixth Floor
New York, New York 10017
Facsimile: 212-750-4699

and

c/o JMB Realty Corporation
900 North Michigan Avenue - Suite 1900
Chicago, Illinois 60611
Attn: Gary Nickele, Esq.
Facsimile: 312-915-1023

<PAGE>

with a copy to:

Pircher, Nichols & Meeks
1999 Avenue of the Stars - Suite 2600
Los Angeles, California 90067
Attn: Gary M. Laughlin, Esq.
Facsimile: 310-201-8922

To Buyer:

c/o Reckson Associates Realty Corporation
225 Broad Hollow Road
Melville, New York 11747
Attn: Jason Barnett, Esq.
Facsimile: 516-694-6952

with a copy to:

Herrick Feinstein LLP
Two Park Avenue - 20th Floor
New York, New York 10016
Attn: Richard Brown, Esq.
Facsimile: 212-889-7577

To Escrow Agent:

c/o Commonwealth Land Title Insurance Company
655 Third Avenue
New York, New York 10017
Attn: William N. Deatley
Facsimile: 212-986-3049

All notices (i) shall be deemed given when received in accordance herewith
and (ii) may be given either by a party or such party's attorney-at-law.
Notices also may be given by telephone facsimile transmission, provided
that an original copy of said transmission shall be sent to the addressee
by nationally utilized overnight delivery services following such
transmission. Telephone facsimiles shall be deemed delivered on the date of
such transmission. Extensions of time and/or adjournments of dates may be
granted by a party or such party's attorney-at-law as identified herein.

26. NO RECORDING OR NOTICE OF PENDENCY.

The parties agree that neither this Agreement nor any memorandum or
notice thereof shall be recorded and Buyer agrees not to file any notice of
pendency against the Property unless (i) Sellers shall have defaulted in
its obligations hereunder, (ii) Buyer shall have given Sellers written
notice of same, and (iii) Sellers shall have failed to remedy same within
thirty (30) days of said notice. In such event, Sellers shall timely
provide Buyer with any acknowledgments necessary for recordation.

<PAGE>

27. SELLERS' COVENANT.

Sellers covenant and agree to continue to operate the Property
between the date hereof and the Closing Date in a manner substantially
equivalent to that manner in which the Property was operated by the Sellers
in the past, provided however that in no event shall Sellers be obligated
to make any capital expenditure at the Property.

IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date above set forth.

SELLERS:

Tax ID#13-3120808 ROYAL EXECUTIVE PARK I
By: JMB Income Properties, LTD.-X,
a limited partnership, general partner
By: JMB Realty Corporation, a Delaware
Corporation, general partner

By:
Name:
Title:

By: London & Leeds-Rye
Corporation, general partner

By:
Thomas J. Collins, vice president

Tax ID #13-3202306 ROYAL EXECUTIVE PARK II
By: JMB Income Properties, Ltd-XI,
a limited partnership,
general partner

By: JMB Realty Corporation,
a Delaware Corporation,
managing general partner

By:
Name:
Title:

By: London & Leeds-Rye
Corporation, General Partner

By:
Thomas J. Collins, vice president

Tax ID #13-3379584 ROYAL EXECUTIVE PARK III
By: London & Leeds-Rye
Corporation, General Partner

By:
Thomas J. Collins, vice president

BUYER:

Tax ID #- RECKSON OPERATING PARTNERSHIP, L.P.

By:
Name:
Title:

<PAGE>

As to its obligations under
Paragraph 3 hereof

Commonwealth Land Title Insurance Company, Escrow Agent

By:________________
Name: Melvyn Mitzner
Title:

<PAGE>

Exhibit A-1
-----------

Legal Description - Phase 1

<PAGE>

Exhibit A-2
- ----------

Legal Description - Phase 2

<PAGE>

Exhibit A-3
- -----------

Legal Description - Phase 3

<PAGE>

Exhibit B-1, B-2 & B-3
- ----------------------

Permitted Exceptions

The standard printed exceptions and exceptions numbered 1 through 7, 14
through 17, 20 through 23, and 25 through 27 as shown on the Title Report,
dated November 24, 1997, of Commonwealth Land Title Insurance Company
(Title No. WP971062), and

Exceptions numbered 13 through 15 as shown on the Title Report, dated
November 24, 1997, of First American Title Insurance Company of New York
(Title No. 221-W-6813).

Together with all matters disclosed to Buyer prior to the end of the Review
Period.

<PAGE>

Exhibit "C"
-----------

ASSIGNMENT AND ASSUMPTION OF LEASES

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which is hereby acknowledged, [ROYAL EXECUTIVE PARK I][ROYAL EXECUTIVE PARK
II][ROYAL EXECUTIVE PARK III], having an office c/o London & Leeds
Development Corporation, One Wall Street Court, New York, New York 10005
("Assignor") hereby sells, assigns and transfers to RECKSON OPERATING
PARTNERSHIP, L.P., a New York limited partnership, having an office at 225
Broadhollow Road, Melville, New York 11747-0983 ("Assignee") all its
rights, title and interest in and to all the leases affecting the premises
located at 6 International Drive, Royal Executive Park, Rye Brook, New York
10573 (collectively, the "Leases") and more particularly described on
Schedule A attached hereto, with all security deposits and interest
received thereon relating to said Leases listed on Schedule A attached
hereto.

This Assignment is made without recourse to Assignor and without
covenant or warranty, express or implied, by Assignor, except as otherwise
set forth herein or in the Sale-Purchase Agreement pursuant to which this
Assignment is made.

TO HAVE AND TO HOLD the Leases and said security deposits and
interest received thereon unto the Assignee and its successors and
assignees forever.

Assignee hereby accepts said assignment and agrees to assume all of
the obligations of "Landlord" under the Leases arising from and after the
date hereof. Assignee hereby agrees to indemnify and hold harmless
Assignor from any and all liabilities accruing under said Leases from and
after the date hereof. Assignor hereby agrees to indemnify and hold
harmless Assignee from any and all liabilities accruing under said Leases
prior to the date hereof, subject to the provisions and limitations on
Assignor's liability as set forth in the Sale-Purchase Agreement pursuant
to which this Assignment is made (including without limitation Paragraph 15
(B) thereof).

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this
Assignment as of the __ day of December, 1997.

ASSIGNOR:

[ROYAL EXECUTIVE PARK I
By: JMB Income Properties, LTD.-X,
a limited partnership, general partner
By: JMB Realty Corporation, a Delaware
Corporation, general partner

By:
Name:
Title:

By: London & Leeds-Rye
Corporation, general partner

By:
Thomas J. Collins, vice president]

<PAGE>

[ROYAL EXECUTIVE PARK II
By: JMB Income Properties, Ltd-XI,
a limited partnership, general partner
By: JMB Realty Corporation, a Delaware
Corporation, managing general partner

By:
Name:
Title:

By: London & Leeds-Rye
Corporation, General Partner

By:
Thomas J. Collins, vice president]

[ROYAL EXECUTIVE PARK III
By: London & Leeds-Rye
Corporation, General Partner

By: Thomas J. Collins, vice president]

ASSIGNEE:

RECKSON OPERATING PARTNERSHIP, L.P.

By:
Name:
Title:

<PAGE>

Schedule A
- ----------

Leases

<PAGE>

Exhibit "D"
-----------

ASSIGNMENT AND ASSUMPTION OF CONTRACTS

1. All of Assignor's interest in and to those certain contracts
listed on Schedule A, attached hereto (the "Contracts") between Assignor
and those certain contractors (the "Contractors"), which contracts relate
to the operation and maintenance of buildings located at Rye Brook, New
York, commonly known as Phase [I][II][III] of the Royal Executive Park
(collectively, the "Premises").

2. Assignee hereby assumes, from and after the date hereof, the
performance of all of the terms, covenants and conditions of the Contracts
herein sold, assigned and transferred by Assignor which are the owner's
obligation thereunder and are to be performed by the owner from and after
the date hereof, and will defend with counsel approved by Assignor, save
harmless and indemnify Assignor from and against all claims, demands and
liabilities and all costs and expenses arising out of any failure of
Assignee to so perform from and after the date hereof or arising out of any
breach of this Assignment.

4. Assignor hereby agrees to defend, with counsel approved by
Assignee, save harmless and indemnify Assignee from and against all claims,
demands and liabilities and all costs and expenses arising out of any
failure of Assignor to perform any obligations of the owner thereunder
arising under any of the Contracts prior to the date hereof, subject to the
provisions and limitations on Assignor's liability as set forth in the
Sale-Purchase Agreement pursuant to which this Assignment is made
(including without limitation Paragraph 15 (B) thereof).

5. With respect to any actions now or hereafter being made against
Assignor in connection with any of the Contracts, Assignor reserves all
rights to the extent necessary to defend against any claims brought by any
third parties and to assert counterclaims against such third parties, in
circumstances where such third parties have asserted claims against
Assignor (whether such claims are in response to a suit brought by Assignee
or otherwise).

6. Assignor and Assignee from time to time will execute and
deliver all such instruments and take all such action as the other may
reasonably request in order further to effectuate the purposes of this
instrument and to carry out the terms hereof.

This Assignment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

<PAGE>

IN WITNESS WHEREOF, Assignor and Assignee have dully executed this
Assignment the __ day of December, 1997.

ASSIGNOR:

[ ROYAL EXECUTIVE PARK I
By: JMB Income Properties, LTD.-X,
a limited partnership, general partner
By: JMB Realty Corporation, a Delaware
Corporation, general partner

By:
Name:
Title:

By: London & Leeds-Rye
Corporation, general partner

By: Thomas J. Collins,
vice president]

[ROYAL EXECUTIVE PARK II
By: JMB Income Properties, Ltd-XI,
a limited partnership, general partner
By: JMB Realty Corporation, a Delaware
Corporation, managing general partner

By:
Name:
Title:

By: London & Leeds-Rye
Corporation, General Partner

By: Thomas J. Collins,
vice president]

[ROYAL EXECUTIVE PARK III
By: London & Leeds-Rye
Corporation, General Partner

By: Thomas J. Collins, vice president]

ASSIGNEE:

RECKSON OPERATING PARTNERSHIP, L.P.

By:
Name:
Title:

<PAGE>

Schedule A
- ----------

Contracts

<PAGE>

Exhibit E
- ---------

Form of Tenant Estoppel Certificate
- ----------------------------------

<PAGE>

Exhibit F
- ----------

Lease Schedule
- -------------

<PAGE>

Exhibit G
- ---------

Pending Actions
- ---------------

<PAGE>

Exhibit H
---------

ROYAL EXECUTIVE PARK I & II CONTRACT LIST

EXHIBIT 21

LIST OF SUBSIDIARIES

The Partnership is a general partner in JMB-40 Broad Street
Associates, an Illinois general partnership which held title to the 40
Broad Street Building prior to its sale in December, 1997. The Partnership
is a general partner in Royal Executive Park-I, a New York general
partnership which held title to the Royal Executive Park Office Complex
prior to its sale in December, 1997. Reference is made to the Notes for a
summary description of the terms of such partnership agreements. The
Partnership's interest in the foregoing joint venture partnerships, and the
results of their 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 managing general partner of JMB INCOME PROPERTIES,
LTD. - X, 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, 1997, 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 30th day of January, 1998.

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, 1997,
and any and all amendments thereto, the 30th day of January, 1998.

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

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

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

<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 30th day of January, 1998.

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, 1997 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-31-1997
<PERIOD-END> DEC-31-1997

<CASH> 39,301,294
<SECURITIES> 0
<RECEIVABLES> 1,076,865
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 40,378,159
<PP&E> 12,177,898
<DEPRECIATION> 0
<TOTAL-ASSETS> 65,062,906
<CURRENT-LIABILITIES> 1,053,117
<BONDS> 7,624,586
<COMMON> 0
0
0
<OTHER-SE> 56,370,403
<TOTAL-LIABILITY-AND-EQUITY> 65,062,906
<SALES> 5,709,682
<TOTAL-REVENUES> 6,794,437
<CGS> 0
<TOTAL-COSTS> 4,292,574
<OTHER-EXPENSES> 637,851
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 557,291
<INCOME-PRETAX> 3,240,011
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,240,011
<DISCONTINUED> 13,684,709
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,924,720
<EPS-PRIMARY> 111.06
<EPS-DILUTED> 111.06

</TABLE>