CARLYLE REAL ESTATE LTD PARTNERSHIP XIV /IL/, 10-Q, 1994-11-14

CARLYLE REAL ESTATE LTD PARTNERSHIP XIV /IL/
10-Q, 1994-11-14
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended September 30, 1994 Commission file number 2-88687

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

Illinois 36-3256340
(State of organization) (IRS Employer Identification No.)

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

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

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

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

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

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 28

PART II OTHER INFORMATION

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 41

Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . 41

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 42

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 43

<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 1994 AND DECEMBER 31, 1993

(UNAUDITED)

ASSETS
------

<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,920,911 2,830,985
Short-term investments (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,491,436 16,190,375
Restricted funds (note 4(b)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273,925 1,903,509
Interest, rents and other receivables (net of allowance
for doubtful accounts of $821,762 and $816,356 at
September 30, 1994 and December 31, 1993, respectively) . . . . . . . . . . . . . . . . 878,786 647,505
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377,864 158,107
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 644,829 540,794
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,587,751 22,271,275
------------ ------------
Investment properties, at cost:
Land and leasehold interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,788,810 10,788,810
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,670,408 147,556,586
------------ ------------
160,459,218 158,345,396
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,235,556 44,635,592
------------ ------------
Total investment properties, net of
accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,223,662 113,709,804
------------ ------------
Investment in unconsolidated ventures, at equity
(notes 1, 2 and 8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,796,536 9,517,271
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811,993 2,514,464
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,230,985 1,503,871
------------ ------------
$148,650,927 149,516,685
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 94,806,757 28,107,327
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 643,803 835,762
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,835,045 2,447,554
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,970,337 3,729,532
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 904,950 804,760
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438,342 800,195
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,599,234 36,725,130
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469,711 292,009
Investment in unconsolidated ventures, at
equity (notes 1, 2 and 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163,728,319 148,714,348
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400,391 1,412,837
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,263,332 98,747,743
------------ ------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301,460,987 285,892,067

Partners' capital accounts (deficits) (note 1):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,891,647) (19,183,198)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,235,319) (1,235,319)
------------ ------------
(21,125,966) (20,417,517)
------------ ------------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . . . . . . . . . . . . 351,746,836 351,746,836
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (447,275,549) (431,549,320)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36,155,381) (36,155,381)
------------ ------------
(131,684,094) (115,957,865)
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . . . . . . . . . . . . (152,810,060) (136,375,382)
------------ ------------
Commitments and contingencies (notes 2, 3, 4, 5 and 7)
$148,650,927 149,516,685
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)

<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
--------------------------- ---------------------------
1994 1993 1994 1993
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . . . $ 5,541,534 6,122,306 16,404,140 18,828,671
Interest income . . . . . . . . . . . . . . . . . . . 261,378 39,361 699,445 164,203
Other income (note 3(a)). . . . . . . . . . . . . . . -- -- 400,000 400,000
----------- ---------- ----------- ----------
5,802,912 6,161,667 17,503,585 19,392,874
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . . . . 3,239,370 4,632,220 9,987,757 14,063,676
Depreciation. . . . . . . . . . . . . . . . . . . . . 1,199,665 1,467,505 3,599,964 4,394,459
Property operating expenses . . . . . . . . . . . . . 2,893,900 2,829,780 8,529,627 9,046,333
Professional services . . . . . . . . . . . . . . . . 18,491 24,061 431,220 554,260
Amortization of deferred expenses . . . . . . . . . . 107,034 113,189 315,388 323,782
General and administrative. . . . . . . . . . . . . . 291,441 71,402 540,099 287,953
----------- ---------- ----------- ----------
7,749,901 9,138,157 23,404,055 28,670,463
----------- ---------- ----------- ----------
Operating loss. . . . . . . . . . . . . . . . . (1,946,989) (2,976,490) (5,900,470) (9,277,589)
Partnership's share of operations
of unconsolidated ventures
(notes 1, 2 and 8). . . . . . . . . . . . . . . . . . (4,394,381) (16,167,569) (12,236,290) (26,327,669)
Venture partner's share of
venture's operations. . . . . . . . . . . . . . . . . -- -- -- 22,472
----------- ---------- ----------- ----------
Net operating loss. . . . . . . . . . . . . . . (6,341,370) (19,144,059) (18,136,760) (35,582,786)
Gain on sale of interest in
unconsolidated venture
(note 2(b)) . . . . . . . . . . . . . . . . . . . . . 1,702,082 7,898,727 1,702,082 7,898,727
----------- ---------- ----------- ----------
Net loss. . . . . . . . . . . . . . . . . . . . $(4,639,288) (11,245,332) (16,434,678) (27,684,059)
=========== ========== =========== ==========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
--------------------------- ---------------------------
1994 1993 1994 1993
----------- ---------- ----------- -----------

Net loss per limited partner-
ship interest (note 1). . . . . . . . . . . . $ (10.98) (26.33) (39.21) (65.67)
=========== ========== =========== ==========
Cash distributions per
limited partnership
interest. . . . . . . . . . . . . . . . . . . $ -- -- -- --
=========== ========== =========== ==========

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(16,434,678) (27,684,059)
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,599,964 4,394,459
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 315,388 323,782
Amortization of deferred rental income. . . . . . . . . . . . . . . . . . . . . . . . . 110,515 110,515
Amortization of discount on long-term debt. . . . . . . . . . . . . . . . . . . . . . . 460,756 428,981
Partnership's share of operations of unconsolidated ventures. . . . . . . . . . . . . . 12,236,290 26,327,669
Venture partner's share of venture's operations . . . . . . . . . . . . . . . . . . . . -- (22,472)
Gain on sale of interest in unconsolidated venture (note 2(b)). . . . . . . . . . . . . (1,702,082) (7,898,727)
Changes in:
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,629,584 1,498,678
Interest, rents and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . (231,281) 2,891,281
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (219,757) (104,723)
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (104,035) (188,375)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272,886 218,263
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,662 84,634
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,870 --
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (361,853) (985,635)
Deferred interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,268,858 1,726,537
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,759,195) (660,704)
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,190 29,728
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,702 3,639
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,446) 20,867
------------ -----------
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . 542,338 514,338
------------ -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1994 1993
------------ -----------
Cash flows from investing activities:
Net purchases of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . (2,301,061) (52,808)
Additions to investment properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,113,822) (308,245)
Partnership's distributions from unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,980,081 --
Partnership's contributions to unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (779,583) (1,101,108)
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (723,432) (31,883)
------------ -----------
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . (937,817) (1,494,044)
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . (514,595) (525,228)
------------ -----------
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . (514,595) (525,228)
------------ -----------
Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 910,074 1,504,934
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . . . . . . . . . $ 9,017,338 12,568,862
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . . . . . . . . . $ -- --
============ ===========

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1993 which are
included in the Partnership's 1993 Annual Report on Form 10-K (File No. 2-
88687) filed on March 28, 1994 (the "Annual Report"), as certain footnote
disclosures which would substantially duplicate those contained in such
audited financial statements have been omitted from this report.

(1) BASIS OF ACCOUNTING

The accompanying consolidated financial statements include the
accounts of the Partnership and its consolidated venture, Mariners Pointe
Associates ("Mariners Pointe"). The effect of all significant transactions
between the Partnership and its consolidated venture has been eliminated.

The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's
interests in Orchard Associates (note 2(b)); JMB/Piper Jaffray Tower
Associates ("JMB/Piper") and JMB Piper Jaffray Tower Associates II
("JMB/Piper II"); 900 3rd Avenue Associates ("JMB/900"); 1090 Vermont
Avenue, N.W. Associates Limited Partnership ("1090 Vermont");
Maguire/Thomas Partners - South Tower ("South Tower"); and the
Partnership's indirect (through Carlyle-XIV Associates, L.P.) interest in
JMB/NYC Office Building Associates, L.P. ("JMB/NYC").

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

The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the ventures as described
above. Such adjustments are not recorded on the records of the
Partnership. The effect of these items is summarized as follows for the
nine months ended September 30:
<TABLE>
<CAPTION>

1994 1993
------------------------- ------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ----------- ---------
<S> <C> <C> <C> <C>
Net (loss). . . . . $(16,434,678) (17,409,300) (27,684,059) (103,628)
Net earnings
(loss) per
limited
partnership
interest . . . . . $ (39.21) (41.67) (65.67) 1.12
============ ========== ========== ==========
</TABLE>
The net earnings (loss) per limited partnership interest is based upon
the limited partnership interests outstanding at the end of each period.
Deficit capital accounts will result, through the duration of the
Partnership, in the recognition of net gain for financial reporting and
income tax purposes.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 its unconsolidated ventures are considered
cash flow from operating activities to the extent of the Partnership's
cumulative share of net earnings. In addition, the Partnership records
amounts held in U.S. government obligations at cost which approximates
market. For the purposes of these statements, the Partnership's policy is
to consider all such amounts held with original maturities of three months
or less ($1,784,869 and $1,555,066 at September 30, 1994 and December 31,
1993, respectively) as cash equivalents with any remaining amounts
(generally with original maturities of one year or less) reflected as
short-term investments being held to maturity.

As more fully discussed in note 2(c), due to the potential sale of the
2 Broadway building at a sales price significantly below its net carrying
value and due to discussions with the Olympia & York affiliates regarding
the reallocation of the unpaid first mortgage indebtedness currently
allocated to 2 Broadway, the 2 Broadway venture made a provision for value
impairment on such investment property of $192,627,560 at December 31,
1993. The provision for value impairment was allocated $136,534,366 and
$56,093,194 to the Olympia & York affiliates and to JMB/NYC, respectively.
Such provision was allocated to the partners to reflect their respective
ownership percentages before the effect of the non-recourse promissory
notes including the related accrued interest. The Partnership's share of
the provision was $28,046,598.

Due to the uncertainty of the South Tower venture's ability to recover
the net carrying value of the Wells Fargo Center - IBM Tower investment
property through future operations and sale, the South Tower venture made a
provision for value impairment on such investment property of $67,479,871.
Such provision at September 30, 1993 was recorded to effectively reduce the
net carrying value of the investment property to the then outstanding
balance of the related non-recourse financing. The Partnership's share of
such provision was $22,493,290.

(2) VENTURE AGREEMENTS

(a) General

The Partnership at September 30, 1994 is a party to seven operating
joint venture agreements. Pursuant to such agreements, the Partnership
made initial capital contributions of approximately $192,607,000 (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. Five of the joint venture agreements
(JMB/NYC (through an interest in Carlyle-XIV Associates, L.P.), JMB/Piper,
JMB/Piper II, JMB/900 and South Tower) are, directly or indirectly, with
partnerships (JMB/Manhattan Associates, Ltd. ("JMB/Manhattan"), Carlyle
Real Estate Limited Partnership-XIII ("C-XIII") and Carlyle Real Estate
Limited Partnership-XV ("C-XV")) sponsored by the Corporate General Partner
or its affiliates. These five joint ventures have entered into a total of
six property joint venture agreements.

The Partnership has acquired, through the above ventures, interests in
one apartment complex and seven office buildings. The venture properties
have been financed under various long-term debt arrangements.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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

(b) Orchard Associates

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

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

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

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

The Partnership owns indirectly through Carlyle-XIV Associates, L.P.
and JMB/NYC, an interest in (i) the 237 Park Avenue Associates venture
which owns an existing 23-story office building, (ii) the 1290 Associates

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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

JMB/NYC is a joint venture among Carlyle-XIV Associates, L.P. (of
which the Partnership holds a 99% limited partnership interest), Property
Partners, L.P. and Carlyle-XIII Associates, L.P. as limited partners and
Carlyle Managers, Inc. as the sole general partner. Effective March 25,
1993, the Partnership became a 40% shareholder of Carlyle Managers, Inc.
Related to this investment, the Partnership has an obligation to fund, on
demand, $1,200,000 of additional paid-in capital to Carlyle Managers, Inc.
(reflected in amounts due to affiliates in the accompanying financial
statements). The terms of the JMB/NYC venture agreement generally provide
that JMB/NYC's share of the Three Joint Ventures' annual cash flow, sale or
refinancing proceeds, operating and capital costs (to the extent not
covered by cash flow from a property) and profit and loss will be
distributed to, contributed by or allocated to the Partnership in
proportion to its (indirect) share of capital contributions to JMB/NYC. In
March 1993, JMB/NYC, originally a general partnership, was converted to a
limited partnership, and the Partnership's interest in JMB/NYC, which
previously had been held directly, was contributed to Carlyle-XIV
Associates, L.P. As a result of these transactions, the Partnership
currently holds, indirectly as a limited partner of Carlyle-XIV Associates,
L.P., an approximate 50% limited partnership interest in JMB/NYC. The sole
general partner of Carlyle-XIV Associates, L.P. is Carlyle Investors, Inc.,
of which the Partnership became a 40% shareholder effective March 25, 1993.

Related to this investment, the Partnership has an obligation to fund, on
demand, $1,200,000 of additional paid-in capital (reflected in amounts due
to affiliates in the accompanying financial statements). The general
partner in each of JMB/NYC and Carlyle-XIV Associates, L.P. is an affiliate
of the Partnership. For financial reporting purposes, the allocation of
profits and losses of JMB/NYC to the Partnership is 50%.

JMB/NYC purchased a 46.5% interest in each of the Three Joint Ventures
for approximately $173,600,000, subject to a long-term first mortgage loan
which has been allocated among the individual Joint Ventures. A portion of
the purchase price is represented by four 12-3/4% promissory notes (the
"Purchase Notes") which have an aggregate outstanding principal balance of
$34,158,225 at September 30, 1994 and December 31, 1993. Such Purchase
Notes, which contain cross-default provisions, and are non-recourse to
JMB/NYC, are secured by JMB/NYC's interests in the Three Joint Ventures,
and such Purchase Note relating to the purchase of the interest in the
ventures owning the 2 Broadway Building is additionally secured by
JMB/NYC's interest in $19,000,000 of distributable sale proceeds from the
other two Joint Ventures. A default under the Purchase Notes would
include, among other things, a failure by JMB/NYC to repay a Purchase Note
upon acceleration of the maturity, and could cause an immediate
acceleration of the Purchase Notes for the other ventures. Beginning in
1992, the Purchase Notes provide for monthly interest only payments on the
principal and accrued interest based upon the level of distributions
payable to JMB/NYC discussed below. If there are no distributions payable
to JMB/NYC or if the distributions are insufficient to cover monthly
interest on the Purchase Notes, then the shortfall interest (as defined)
accrues and compounds monthly. Interest accruals total $89,858,379 at

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

September 30, 1994. During 1993 and for the nine months ended September
30, 1994, no payments were made on the Purchase Notes. All of the
principal and accrued interest on the Purchase Notes is due in 1999 or, if
earlier, on the sale or refinancing of the related property. As discussed
more fully below, the Olympia & York affiliates have informed JMB/NYC that
they have received a contract for the sale of the 2 Broadway Building at a
price which will not provide any proceeds to JMB/NYC to repay the related
Purchase Notes. Consequently, if the proposed sale is finalized,
$19,000,000 of the 2 Broadway Purchase Notes will be re-allocated and will
be payable out of JMB/NYC's share of distributable sale proceeds from the
other two Joint Ventures.

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

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

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

During the quarter ended March 31, 1993, an agreement was reached
between JMB/NYC and the Olympia & York affiliates which rescinded default
notices previously received by JMB/NYC alleging defaults for failing to
make capital contributions and eliminated the alleged operating deficit
funding obligation of JMB/NYC for the period January 1, 1992 through June
30, 1993. Pursuant to this agreement, during this period, JMB/NYC recorded
interest expense at 1-3/4% over the short-term U.S. Treasury obligation
rate (subject to a minimum rate of 7% per annum), which is the interest
rate on the underlying first mortgage loan. Under the terms of this
agreement, during this period, the amount of capital contributions that the
Olympia & York affiliates and JMB/NYC would have been required to make to
the Three Joint Ventures if the first mortgage loan bore interest at a rate
of 12-3/4% per annum (the Olympia & York affiliates' interpretation),
became a priority distribution level to the Olympia & York affiliates from
the Three Joint Ventures' annual cash flow or net sale or refinancing
proceeds. The agreement also entitles the Olympia & York affiliates to a
7% per annum return on such unpaid priority distribution level. It was
also agreed that during this period the excess available operating cash
flow after the payment of the priority distribution level discussed above
from any of the Three Joint Ventures would be advanced in the form of loans
to pay operating deficits and/or unpaid priority distribution level amounts
of any of the Three Joint Ventures. Such loans bear a market rate of
interest, have a final maturity of ten years from the date when made and
will be repayable only out of first available annual cash flow or net sale
or refinancing proceeds. The agreement also provides that except as
specifically agreed otherwise, the parties each reserves all rights and
claims with respect to each of the Three Joint Ventures and each of the
partners thereof, including, without limitation, the interpretation of or
rights under each of the joint venture partnership agreements for the Three
Joint Ventures. As a result of the above noted agreement with the Olympia
& York affiliates, the cumulative priority distribution level payable to
the Olympia & York affiliates at September 30, 1994 is $48,522,601. The
term of the agreement expired on June 30, 1993. Therefore, effective July
1, 1993, JMB/NYC is recording interest expense at 1-3/4% over the short-
term U.S. Treasury obligation rate plus any excess operating cash flow
after capital costs of the Three Joint Ventures, such sum not to be less
than a 7% nor exceed a 12-3/4% per annum interest rate. The Olympia & York
affiliates continue to dispute this calculation for the period commencing
July 1, 1993 and contend that the 12-3/4% per annum fixed rate applies.
Based upon the Olympia & York affiliates' interpretation, interest expense
for the Three Joint Ventures for the nine months ended September 30, 1994
was $87,736,582. Based upon the amount of interest determined by JMB/NYC
for the nine months ended September 30, 1994, interest expense for the
Three Joint Ventures was $55,727,569. The effect of recording interest
calculated by JMB/NYC is to reduce the losses of the Three Joint Ventures
by $32,009,013 (of which the Partnership's share is $7,442,096) for the
nine months ended September 30, 1994 and to correspondingly reduce what
would otherwise be JMB/NYC's funding obligation with respect to the Three
Joint Ventures.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Olympia & York affiliates either to meet their own obligations to the Joint
Ventures and JMB/NYC or to negotiate a restructuring of the joint venture
agreements, or otherwise reach an understanding with JMB/NYC regarding any
future funding obligation of JMB/NYC.

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

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

JMB/NYC continues to seek, among other things, a restructuring of the
joint venture agreements or otherwise to reach an acceptable understanding
regarding its funding obligations. If JMB/NYC is unable to achieve this,
based upon current and anticipated market conditions, JMB/NYC may decide
not to commit any additional amounts to the Three Joint Ventures. In
addition, it is possible that JMB/NYC may determine to litigate these
issues with the Olympia & York affiliates. A decision not to commit any
additional funds or an adverse litigation result could, under certain
circumstances, result in the loss of the interest in the related Joint

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Ventures. The loss of an interest in a particular Joint Venture could,
under certain circumstances, permit an acceleration of the maturity of the
related Purchase Note (each Purchase Note is secured by JMB/NYC's interest
in the related venture). Under certain circumstances, the failure to repay
a Purchase Note could constitute a default under, and permit an immediate
acceleration of, the maturity of the Purchase Notes for the other Joint
Ventures. In such event, JMB/NYC may decide not to repay, or may not have
sufficient funds to repay, any of the Purchase Notes and accrued interest
thereon. This could result in JMB/NYC no longer having an interest in any
of the related Joint Ventures, which would result in substantial net gain
for financial reporting and Federal income tax purposes to JMB/NYC (and
through JMB/NYC and the Partnership, to the Limited Partners) with no
distributable proceeds. In such event, JMB/NYC would then proceed to
terminate its affairs.

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

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

In the event of a dissolution and liquidation of a Joint Venture, the
terms of the joint venture partnership agreements between the Olympia &
York affiliates and JMB/NYC for the Three Joint Ventures provide that if
there is a deficit balance in the tax basis capital account of JMB/NYC,
after the allocation of profits or losses and the distribution of all
liquidation proceeds, then JMB/NYC generally would be required to
contribute cash to the Joint Venture in the amount of its deficit capital

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

account balance. Taxable gain arising from the sale or other disposition
of a Joint Venture's property generally would be allocated to the joint
venture partner or partners then having a deficit balance in its or their
respective capital accounts in accordance with the terms of the joint
venture partnership agreement. However, if such taxable gain is
insufficient to eliminate the deficit balance in its account in connection
with a liquidation of a Joint Venture, JMB/NYC would be required to
contribute funds to the Joint Venture (regardless of whether any proceeds
were received by JMB/NYC from the disposition of the Joint Venture's
property) to eliminate any remaining deficit capital account balance.

The Partnership's liability for such contribution, if any, would be
its share, if any, of the liability of JMB/NYC and would depend upon, among
other things, the amounts of JMB/NYC's and the Olympia & York affiliates'
respective capital accounts at the time of a sale or other disposition of
Joint Venture property, the amount of JMB/NYC's share of the taxable gain
attributable to such sale or other disposition of the Joint Venture
property and the timing of the dissolution and liquidation of the Joint
Venture. In such event, the Partnership could be required to sell or
dispose of its other assets in order to satisfy any obligation attributable
to it as a partner of JMB/NYC to make such contribution. Although the
amount of such liability could be material, the Limited Partners of the
Partnership would not be required to make additional contributions of
capital to satisfy such obligation of the Partnership. The Partnership's
deficit investment balance in JMB/NYC as reflected in the balance sheet
(aggregating $154,319,024 at September 30, 1994) does not necessarily
represent the amount, if any, the Partnership would be required to pay to
satisfy its deficit restoration obligation.

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The properties are being managed by an affiliate of the Olympia & York
affiliates under a long-term agreement for a management fee equal to 1% of
gross receipts. An affiliate of the Olympia & York affiliates performs
certain maintenance and repair work and construction of certain tenant
improvements at the investment properties. Additionally, the Olympia &
York affiliates have lease agreements and occupy approximately 95,000
square feet of space at 237 Park Avenue at rental rates which approximate
market.

(d) JMB/Piper

In August 1992, the venture signed an agreement with the lender,
effective April 1, 1991, to modify the terms of the mortgage notes which
are secured by the investment property. The principal balance of the
mortgage notes has been consolidated into one note in the amount of
$100,000,000. Under the terms of the modification, commencing on April 1,
1991 and continuing through and including January 30, 2020, fixed interest
will accrue and is payable on a monthly basis at a $10,250,000 per annum
level. Contingent interest is payable in annual installments on April 1
and is computed at 50% of gross receipts, as defined, for each fiscal year
in excess of $15,200,000; none was due for 1991, 1992 or 1993. In
addition, to the extent the investment property generates cash flow after
payment of the fixed interest on the mortgage, contingent interest, leasing
and capital costs, and 25% of the ground rent, such amount will be paid to
the lender as a reduction of the principal balance of the mortgage loan.
The excess cash flow generated by the property in 1992 totalled $923,362
and was remitted to the lender during the third quarter of 1993. During
1993, the excess cash flow generated under this agreement was $1,390,910
and was remitted to the lender during the second quarter of 1994. The
mortgage note provides for the lender to earn a minimum internal rate of
return which increases over the term of the note. Accordingly, for
financial reporting purposes, interest expense has been accrued at a rate
of 13.59% per annum which is the estimated minimum internal rate of return
per annum assuming the note is held to maturity. On a monthly basis, the
venture deposits the property management fee into an escrow account to be
used for future leasing costs to the extent cash flow is not sufficient to
cover such items. The manager of the property (which is an affiliate of
the Corporate General Partner) has agreed to defer receipt of its
management fee until a later date. As of September 30, 1994, the manager
has deferred approximately $2,222,000 of management fees. In order for the
Partnership to share in future net sale or refinancing proceeds, there must
be a significant improvement in current market and property operating
conditions resulting in a significant increase in value of the property.

During the fourth quarter of 1993, the joint venture finalized a lease
amendment with Popham, Haik, Schnobrich & Kaufman, Ltd. (104,843 square
feet). The amendment provides for the extension of the lease term from
February 1, 1997 to January 31, 2003 in exchange for a rent reduction
effective February 1, 1994. In addition, the tenant will lease an
additional 10,670 square feet effective August 1, 1995. The rental rate on
the expansion space approximates market, which is significantly lower than
the reduced rental rate on the tenant's current occupied space.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

During the second quarter of 1994, the manager reached an agreement
with Piper Jaffray, Inc. (275,758 square feet) to expand its leased space
by 3,362 square feet in July 1995 and 19,851 square feet in December 1995.
Such space is currently leased to tenants whose leases expire just prior to
the effective dates for Piper's expansions. The expansion space lease
expiration date will be coterminous with Piper's existing lease expiration
date of March 2000 and the net effective rental rate approximates market.

(e) JMB/900

As a result of certain defaults by one of the unaffiliated joint
venture partners, an affiliate of the General Partners assumed management
responsibility for the property as of August 1987 for a fee computed as a
percentage of certain revenues.

Through December 31, 1991, it was necessary for JMB/900 to contribute
approximately $4,364,000 ($1,457,000 of which was contributed by the
Partnership) to pay past due real estate taxes and to pay certain costs
which were the responsibility of one of the unaffiliated joint venture
partners under the terms of the joint venture agreement, to the extent such
funds were not available from the investment property.

In July 1989, JMB/900 filed a lawsuit in Federal court against the
former manager and one of the unaffiliated venture partners to recover the
amounts contributed and to recover certain other joint venture obligations
on which the unaffiliated partner has defaulted. This lawsuit was
dismissed on jurisdictional grounds. Subsequently, however, the Federal
Deposit Insurance Corp. ("FDIC") filed a complaint, since amended, in a
lawsuit against the joint venture partner, the Partnership and affiliated
partner and the joint venture, which has enabled the Partnership and
affiliated partner to refile its previously asserted claims against the
joint venture partner as part of that lawsuit in Federal court. There is
no assurance that JMB/900 will recover the amounts of its claims as a
result of the litigation. Due to the uncertainty, no amounts in addition
to the amounts advanced to date, noted above, have been recorded in the
financial statements. Settlement discussions with one of the venture
partners and the FDIC continue. In addition, it appears that the
unaffiliated venture partners may not have the financial capabilities to
repay amounts advanced on their behalf. Consequently, a final settlement
will likely involve redirecting to JMB/900 amounts otherwise payable to the
unaffiliated venture partners in accordance with the venture agreement.
There are no assurances that a settlement will be finalized and that the
Partnership and affiliated partner will be able to recover any amounts from
the unaffiliated venture partners.

JMB/900, on behalf of the joint venture, has entered into a non-
binding letter of intent with the existing lender for the extension of its
mortgage loan (in the amount of $90,006,750 at maturity) which matures in
December 1994. The proposed terms of the extension would extend the loan
for seven years with monthly payments of principal and interest based on an
interest rate of 9.375% per annum and a 30 year principal amortization
schedule. The current interest rate is 13% per annum. In addition, net
cash flow after debt service and capital will be paid into an escrow
account controlled by the lender to be used, including interest earned
thereon, by the joint venture for releasing costs associated with leases
which expire in 1999 and 2000 (approximately 240,000 square feet of space).

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

the loan extension, and consummation of the proposed transaction is subject
to the satisfaction of various conditions, including approval by the
unaffiliated venture partners. Therefore, there can be no assurance that a
loan extension will be consummated on these or any terms.

(f) South Tower

The mortgage note secured by the property, as well as the promissory
note secured by the Partnership's interest in the joint venture are
scheduled to mature in December 1994. The promissory note secured by the
Partnership's interest in the joint venture is classified at September 30,
1994 and December 31, 1993 as a current liability in the accompanying
consolidated financial statements. The Partnership and the joint venture
have been in discussions with the respective lenders regarding an extension
of the mortgage note and the promissory note. In view of, among other
things, current and anticipated market and leasing conditions affecting the
property, including uncertainty regarding the amount of space, if any,
which IBM will renew when its lease expires in December 1998, there is no
assurance that the joint venture or the Partnership will be able to
refinance these notes when they mature. The Partnership may then decide
not to commit any significant amounts to the property. This may result in
the Partnership no longer having an ownership interest in the property,
which would result in a gain for financial reporting and for Federal income
tax purposes with no corresponding distributable proceeds.

(g) 1090 Vermont

Through 1993, the Partnership and joint venture partner contributed a
total of $4,076,000 ($2,038,000 for the Partnership) to the joint venture
to cover releasing costs and costs of a lobby renovation. The Partnership
and joint venture partner had agreed that the contributions made to the
joint venture would be repaid along with a return thereon out of first
available proceeds from property operations, sale or refinancing. During
the fourth quarter of 1993, the joint venture finalized a refinancing of
the existing mortgage loan with a new loan in the amount of $17,750,000.
The refinancing resulted in net proceeds of approximately $2,259,000 for
the joint venture. Of such proceeds, $1,785,560 (of which the
Partnership's share was $889,064) was distributed to the venture partners
in December 1993 as a partial return of the additional capital contributed.

The remaining net proceeds are being retained by the joint venture as
working capital. The new loan provides for interest only monthly payments
for the entire ten-year term. The interest rate for the first five years
is 8.01% per annum. The fixed interest rate thereafter until maturity will
be 2.8% per annum over the five-year Treasury rate at the beginning of such
five-year period. In addition to providing refinancing proceeds to the
joint venture, the debt service payments due under the new loan are
significantly lower than the payments due under the prior loan.

(h) Mariners Pointe

Under the terms of the joint venture agreement, the joint venture
partner is obligated to contribute 22.3% of annual cash operating deficits.

The Partnership had made a request for capital from the joint venture
partner for its share of the 1992 deficit. The joint venture partner's
obligation to make the capital contribution is secured by its interest in
the joint venture as well as personal guarantees by certain of its
principals. The joint venture partner has not made the required
contribution, however, the Partnership is currently negotiating with the

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

joint venture partner to obtain its interest in the joint venture and
receive certain amounts in satisfaction of its funding obligation. There
can be no assurance that the Partnership will collect any or all of the
amounts due from the joint venture partner in satisfaction of its funding
obligation.

The underlying mortgage loan was scheduled to mature in October, 1994.

See note 4(c) regarding the extension of such loan.

(3) DISPOSITION OF INVESTMENT PROPERTIES

(a) Turtle Creek

Under the terms of the Turtle Creek venture agreement, through
December 1990, the joint venture partner was obligated to make capital
contributions to the venture to fund operating deficits including debt
service of the property and to pay the Partnership a preferential return.
The joint venture partner defaulted on such obligations. Due to the non-
payment of debt service, the lender, on March 7, 1989, concluded
proceedings to realize on its security and took title to the property.

The joint venture partner's obligations to the Partnership were
guaranteed by certain of the joint venture partner's principals. After
filing a lawsuit against the joint venture partner and certain of the joint
venture partner's principals, on April 3, 1992, the Partnership entered
into a settlement agreement whereby the Partnership is scheduled to receive
total payments of $4,075,000. The Partnership received $650,000 of this
amount upon execution of the agreement. The remainder of the settlement
amount is represented by a promissory note issued to the Partnership in the
amount of $3,425,000. The note provides for monthly interest payments over
a six-year period at interest rates which vary from 4.8613% to 5.3684% per
annum. In addition, the note provides for annual principal payments of
$400,000 due every April for five years with a final payment in the amount
of $1,425,000 due on the sixth anniversary of the date of issuance of the
note. Due to the uncertainty of collection of the remaining settlement
amounts, settlement principal payments are reflected in other income only
as collected. As of the date of this report, all scheduled principal and
interest payments have been received.

(b) Old Orchard Shopping Center

A summary description of the sale is contained in note 2(b).

A summary description of the dispositions is contained in note 6.

(4) LONG-TERM DEBT

(a) Brittany Downs Apartments - Phase I and II

In June 1993, the Partnership refinanced the Brittany Downs Apartments
Phase I $7,090,000 mortgage loan resulting in a reduction of the effective
interest rate on the loan from 8.0% per annum to 6.2% per annum.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Brittany Downs Apartments Phase II does not produce sufficient cash
flow to cover its required debt service payments and, consequently, the
Partnership has been paying a reduced amount of debt service since November
1990. As a result, the Partnership was negotiating with the RTC to obtain
a loan modification to reduce the property's required debt service
payments. During the fourth quarter 1992, the RTC sold the Phase II
mortgage loans. The new underlying lender has placed the Partnership in
default for failure to pay the required debt service. Accordingly, the
balances of the Phase II first mortgage note, the second mortgage note, and
related accrued interest have been classified as current liabilities in the
accompanying consolidated financial statements at September 30, 1994 and
December 31, 1993. Based upon the notice of default, the total amount of
interest in arrears on the existing mortgage notes for Brittany Downs
Apartment Phase II in the principal amount of $8,625,597 as of
September 30, 1994, equals $1,061,817.

As previously reported, the Partnership has been marketing the two
Phases together for sale. During the quarter, the Partnership entered into
a non-binding letter of intent for the sale of the two Phases. In
addition, the Partnership has entered into an agreement with the lender for
Phase II whereby the Partnership would retain net proceeds in excess of
$8,150,000, if any, from the sale of the Phase II property. The two Phases
together represent approximately 1% of the Partnership's original cash
investment in real properties. The prospective purchaser has completed its
due diligence review with respect to the property. The Partnership and the
prospective purchaser have reached an agreement in principal for the sale
of the property and are negotiating the terms of a binding agreement. If a
binding agreement is signed, the closing of the transaction would be in
late November 1994 and would, if consummated on the proposed terms, result
in a gain to the Partnership for financial reporting and Federal income tax
purposes. There can be no assurance that a binding sale agreement will be
consummated on any terms.

If the Partnership is not successful in completing this proposed
transaction, the Partnership has decided, based upon an analysis of current
and anticipated market conditions and the probability of large future cash
deficits, not to commit additional funds to the Phase II property. This
would result in the Partnership no longer having an ownership interest in
the Phase II property and could result in gain for financial reporting and
Federal income tax purposes to the Partnership with no distributable
proceeds from the disposition. The Partnership, however, would continue
marketing the Phase I property for sale.

(b) Louisiana Tower

During 1988, Louisiana Tower restructured its existing mortgage note
with the lender. Under the terms of the agreement, Louisiana Tower paid
the lender a total of $13,000,000, representing a principal reduction of
$10,775,000 and an interest rate reduction fee of $2,225,000. In return,
the interest rate on the remaining non-recourse note balance of $22,225,000
was lowered from 12.5% to 9.0% per annum. The lender is also entitled to
additional contingent interest equal to 30% of the net sale or refinancing
proceeds (as defined) in excess of $35,225,000. In order for the lender to
realize this additional contingent interest and for the Partnership to
share in future net sale or refinancing proceeds, there must be a
significant improvement in current market and property operating conditions
resulting in a significant increase in value of the property. Accordingly,
no additional contingent interest has been accrued by the Partnership.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In 1990, the Partnership signed an agreement with the underlying
lender to provide additional debt restructuring in order to reduce current
and anticipated deficits resulting from the termination of a major tenant's
lease and costs associated with leasing. The terms of the agreement
require debt service payments in an amount equal to the monthly cash flow
generated by the property (before payment of property management fees) plus
$100,000 per annum for a five-year period commencing with the January 1990
payment. The cash flow of the property is escrowed monthly and remitted to
the lender annually on March 31. For calendar 1993, excess cash flows of
$973,118 were deposited in escrow and included in the March 31, 1994
remittance to the lender of net annual cash flow (as defined). The
difference between the above pay rate and the contract pay rate of 9% per
annum on the principal balance will accrue at 9% per annum compounded
monthly until maturity when the principal and accrued interest is due and
payable. The existing modification period expires and the loan matures in
January 1995. The Partnership has decided that it will not commit any
significant amounts of capital to this property due to the fact that the
recovery of such amounts would be unlikely. Consequently, commencing in
June 1994, the Partnership ceased making the required debt service payments
to the underlying lender and commenced discussions with it to provide
further modifications to the loan in order to eliminate a deficit funding
obligation. The underlying lender informed the Partnership that it is
unwilling to provide further modifications to the loan. The lender is
currently pursuing a course of significantly reducing its holdings in
commercial real estate loans. The lender can achieve this through a sale
of the loan or through obtaining title to the underlying real estate and
subsequently selling it. The lender has informed the Partnership that it
will pursue the latter method for divesting itself of this real estate
investment. Under either scenario, however, the lender would receive
significantly less than the full amount of its loan due to the depressed
value of the property. Subsequent to the end of the third quarter, the
lender began foreclosure proceedings. A receiver has been appointed for
the property and the existing manager (an affiliate of the General
Partners) continues to manage the property on the receiver's behalf. Title
to the property is expected to transfer to the lender in late 1994 or early
1995. This property represents approximately 5% of the Partnership's
original cash investment in real properties. The Partnership will
recognize a gain for Federal income tax and financial reporting purposes in
late 1994 or early 1995 in connection with this proposed transaction with
no distributable proceeds.

During the third quarter, the Partnership obtained a two year
extension of the existing $6,500,000 mortgage loan which matured on
October 1, 1994. Under terms of the loan extension, the loan bears
interest at 2.75% above the floating weekly tax exempt rate. The initial
weekly tax exempt interest rate as of October 1, 1994 was 3.75% per annum
for an interest rate of 6.5% per annum as of that date. Prior to the
extension, the loan bore interest of 10.875% per annum.

(d) Wilshire Bundy Plaza

The Partnership has commenced discussions with the existing lender for
a possible debt modification on its mortgage loan which matures April 1996
in order to reduce its debt service and cover its releasing costs over the
next several years. In this regard, the Partnership has suspended debt
service payments commencing with the November 1, 1994 payment in the amount
of $415,922. Accordingly, the principal balance of the property's
underlying mortgage loan ($41,330,329) has been classified as a current

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

liability in the accompanying consolidated financial statements as of
September 30, 1994. If the Partnership is unsuccessful in obtaining such
modification, it may decide not to commit additional amounts to the
property, which could result in a disposition of the property and a
recognition of gain for financial reporting and Federal income tax purposes
with no distributable proceeds.

(e) Louis Joliet Mall

The second mortgage loan matures on September 1, 1995. In this
regard, the Partnership is currently seeking replacement financing.
Accordingly, the principal balance of the property's second mortgage loan
($10,000,000) has been classified as a current liability in the
accompanying consolidated financial statements as of September 30, 1994.
There can be no assurance that the Partnership will be able to refinance
the second mortgage loan upon its maturity.

(5) PARTNERSHIP AGREEMENT

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

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

The Partnership Agreement provides that subject to certain conditions,
the General Partners shall receive as a distribution from the sale of a
real property by the Partnership up to 3% of the selling price, and that
the remaining proceeds (net after expenses and retained working capital) be
distributed 85% to the Limited Partners and 15% to the General Partners.
However, prior to such distributions being made, the Limited Partners are
entitled to receive 99% of net sale or refinancing proceeds and the General
Partners shall receive 1% until the Limited Partners have received (i) cash
distributions of sale or refinancing proceeds in an amount equal to the
Limited Partners' aggregate initial capital investment in the Partnership
and (ii) cumulative cash distributions from the Partnership's operations
which, when combined with the sale or refinancing proceeds previously
distributed, equal a 6% annual return on the Limited Partners' average
adjusted capital investment for each year (their initial capital investment
reduced by sale or refinancing proceeds previously distributed) commencing
with the third fiscal quarter of 1985. If upon the completion of the
liquidation of the Partnership and the distribution of all Partnership
funds, the Limited Partners have not received the amounts in (i) and (ii)
above, the General Partners will be required to return all or a portion of
the 1% distribution of sale or refinancing proceeds described above in an
amount equal to such deficiency in payments to the Limited Partners
pursuant to (i) and (ii) above.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(6) MANAGEMENT AGREEMENTS

Scottsdale Financial Centers I & II

On October 1, 1993, the RTC sold the mortgage note underlying
Scottsdale Financial Center II and the Partnership simultaneously
transferred title to the purchaser of the note. On December 17, 1993, the
Partnership relinquished its ownership interest in Scottsdale Financial
Center I in a similar transaction.

A judicial hearing was held in early 1991 concerning, among other
things, an alleged default by the Partnership on the mortgage loans secured
by the Scottsdale Financial Center I and II investment properties. The
judge issued an order rendering the Partnership's rights of offset
unenforceable against the RTC acting as receiver of the lender. The court
entered a judgment pursuant to this order in February 1992. However, per
the judgment, the Partnership was not required to return the guaranteed
payments received from the manager (an affiliate of the lender) since
acquisition of the properties, which totalled approximately $1,900,000 for
both properties.

Both the Partnership and the RTC had filed a notice of appeal from the
judgment order of the court. During the appeal process, the RTC was
entitled to obtain title to the properties and the cash reserves on hand.
Accordingly, during the second quarter, 1992, the RTC withdrew the cash
reserves on hand at the properties. During the quarter ended March 31,
1993, the Partnership reached an agreement with the RTC for the settlement
of the disputes through a dismissal of their respective appeals. In April
1993, in accordance with the settlement, the Partnership returned $320,000,
which represented certain amounts (plus interest thereon) which were
withdrawn from the property operating accounts subsequent to the date of
the alleged default by the Partnership and set aside in a segregated
interest bearing account. However, the Partnership was not required to
return the $1.9 million of guaranteed payments it had previously received.
As a result of the transfers of title discussed above, the Partnership
recognized a gain of $18,382,769 and $7,920,092 in 1993 for financial
reporting and Federal income tax purposes, respectively, without any
corresponding distributable proceeds.

(7) TRANSACTIONS WITH AFFILIATES

Fees, commissions and other expenses required to be paid by the
Partnership (or in the case of certain property management fees and out-of-
pocket expenses, by the Partnership's consolidated ventures) to the
Corporate General Partner and its affiliates as of September 30, 1994 and
for the nine months ended September 30, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
Unpaid at
September 30,
1994 1993 1994
<S> -------- ------- -------------
Property management <C> <C> <C>
and leasing fees . . . . . . . $794,430 665,689 49,012
Insurance commissions
(refunds). . . . . . . . . . . 65,039 81,159 --
Reimbursement (at cost)
for out-of-pocket
expenses . . . . . . . . . . . 66,012 60,467 523
-------- ------- ------
$925,481 807,315 49,535
======== ======= ======
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Corporate General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees of
the Corporate General Partner and its affiliates relating to the
administration of the Partnership and the operation of Partnership
investment properties. In 1994 and 1993, such costs aggregated $100,926
and $249,086, respectively, of which $249,086 was unpaid as of September
30, 1994. All amounts deferred or currently due to the Corporate General
Partner and its affiliates do not bear interest and are expected to be
repaid in future periods.

Reference is made to note 2(c) regarding the Partnership's obligation
to fund, on demand, $1,200,000 and $1,200,000 to Carlyle Managers, Inc. and
Carlyle Investors, Inc., respectively, for additional paid-in capital.
These amounts, plus accrued interest, aggregate $2,536,424 and are
reflected in amounts due to affiliates in the accompanying consolidated
financial statements.

The manager of Piper Jaffray Tower (which is an affiliate of the
Corporate General Partner) has agreed to defer receipt of its property
management fees as more fully discussed in note 2(d). Such fees were
approximately $2,222,000 at September 30, 1994.

Effective January 1, 1994, certain officers and directors of the
Corporate General Partner acquired interests in a company which, among
other things, has provided and continues to provide certain property
management services to certain properties owned by the Partnership. Such
acquisition had no effect on the fees payable by the Partnership under any
existing agreements with such company. The fees earned by such company
from the Partnership for the nine months ended September 30, 1994 were
approximately $8,700, all of which have been paid.

Certain of the Partnership's properties are managed by affiliates of
the General Partners. In October 1994 one of the affiliated property
managers agreed to sell substantially all of its assets to an unaffiliated
third party. In addition, substantially all of the management personnel of
the property manager will also become management personnel of the purchaser
or its affiliates if the sale is completed. The sale is subject to certain
closing conditions. In the event that the sale is completed, it is
expected that the successor to the affiliated property manager's assets
would act as the property manager of Wilshire Bundy Plaza, Piper Jaffray
Tower, 900 Third Avenue, Louisiana Tower, Brittany Downs Apartments Phase I
and Phase II and Mariners Pointe Apartments after the sale on the same
terms that existed prior to the sale.

(8) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION

Summary income statement information for Orchard Associates (note
2(b)), JMB/NYC, JMB/Piper, JMB/Piper II, South Tower, JMB/900 and 1090
Vermont for the nine months ended September 30, 1994 and 1993 are as
follows:

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

<TABLE>
<CAPTION>
1994 1993
<S> ------------ ----------
Total income from properties <C> <C>
(unconsolidated). . . . . . . . . . . . . . . . . . $196,485,734 223,671,627
============ ===========
Operating loss of ventures. . . . . . . . . . . . . . $ 26,184,946 85,892,887
============ ===========
Partnership's share of
operating loss. . . . . . . . . . . . . . . . . . . $ 12,236,290 26,327,669
============ ===========
Partnership's share of
gain on sale of
interest. . . . . . . . . . . . . . . . . . . . . . $ 1,702,082 7,898,727
============ ===========
</TABLE>
(9) ADJUSTMENTS

In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
1994 and for the three and nine months ended September 30, 1994 and 1993.

PART I. FINANCIAL INFORMATION

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

LIQUIDITY AND CAPITAL RESOURCES

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

At September 30, 1994, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $1,921,000. Such funds and
short-term investments of approximately $18,491,000 are available for
distributions to partners and working capital requirements including the
Partnership's potential funding obligations at the Louis Joliet Mall for
mall enhancement program costs and the cash operating deficits currently
being incurred at the Mariners Pointe Apartments. The Partnership and its
consolidated ventures have currently budgeted in 1994 approximately
$5,676,000 for tenant improvements and other capital expenditures,
including approximately $2,500,000 for a mall enhancement program at Louis
Joliet Mall as discussed below. The Partnership's share of such items and
its share of such similar items for its unconsolidated ventures in 1994 is
currently budgeted to be approximately $7,611,000. Actual amounts expended
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 to partners is dependent upon net cash generated by the
Partnership's investment properties and the sale or refinancing of such
investments, as well as the Partnership's cash and short-term investments.
Due to the above situations and the property specific concerns discussed
below, the Partnership suspended distributions beginning with the fourth
quarter 1991 distribution payable in February 1992.

As of September 30, 1994, the current portion of the long-term
indebtedness of the Partnership and its consolidated ventures was
approximately $94,807,000, including the entire indebtedness encumbering
Louisiana Tower, Brittany Downs Apartments - Phase II, Wilshire Bundy
Plaza, the Partnership's interest in the Wells Fargo South Tower office
building and the second mortgage on Louis Joliet Mall. Reference is made
to Notes 2(f), 4(a), 4(b), 4(d) and 4(e).

Piper Jaffray Tower

The Minneapolis office market remains competitive due to the
significant amount of new office building developments, which has caused
effective rental rates achieved at Piper Jaffray Tower to be below
expectations. During the fourth quarter of 1993, the joint venture
finalized a lease amendment with Popham, Haik, Schnobrich & Kaufman, Ltd.
(104,843 square feet). The amendment provides for the extension of the
lease term from February 1, 1997 to January 31, 2003 in exchange for a rent
reduction effective February 1, 1994. In addition, the tenant will lease
an additional 10,670 square feet effective August 1, 1995. The rental rate
on the expansion space approximates market, which is significantly lower
than the reduced rental rate on the tenant's current occupied space.

Pursuant to the modification of the mortgage loan made in August,
1992, to the extent the investment property generates cash flow after
leasing and capital costs, and 25% of the ground rent, such amount will be
paid to the lender as a reduction of the principal balance of the mortgage
loan. The excess cash flow generated by the property in 1992 totalled
$923,362 and was remitted to the lender during the third quarter of 1993.
During 1993, the excess cash flow generated under this agreement was
$1,390,910 and was remitted to the lender in May 1994. The mortgage note
provides for the lender to earn a minimum internal rate of return which
increases over the term of the note. Accordingly, for financial reporting
purposes, interest expense has been accrued at a rate of 13.59% per annum
which is the estimated minimum internal rate of return per annum assuming
the note is held to maturity. On a monthly basis, the venture deposits the
property management fee into an escrow account to be used, plus interest
earned thereon, for future leasing costs as approved by the lender to the
extent cash flow is not sufficient to cover such items. To date, no escrow
funds have been required to be used for leasing costs. The manager of the
property (which is an affiliate of the Corporate General Partner) has
agreed to defer receipt of its management fee until a later date. As of
September 30, 1994, the manager has deferred approximately $2,222,000 of
management fees. In order for the Partnership to share in future net sale
or refinancing proceeds, there must be a significant improvement in current
market and property operating conditions resulting in a significant
increase in value of the property. Reference is made to Note 2(d) for
further discussion of this investment property.

Brittany Downs Apartments - Phase I and II

Brittany Downs Apartments Phase II does not produce sufficient cash
flow to cover its required debt service payments and, consequently, the
Partnership has been paying a reduced amount of debt service since November
1990. The lender has placed the Partnership in default for failure to pay
the required debt service. Accordingly, the balances of the Phase II first
mortgage note, the second mortgage note, and related accrued interest have
been classified as current liabilities in the accompanying consolidated
financial statements at September 30, 1994 and December 31, 1993. Based on
the notice of default, the total amount of interest in arrears on the
existing mortgage notes for Brittany Downs Apartment Phase II in the
principal amount of $8,625,597 as of September 30, 1994, equals $1,061,817.

JMB/NYC

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

Occupancy at 1290 Avenue of the Americas remained at 91% during the
quarter. It is expected that the property will continue to be adversely
affected by low effective rental rates achieved upon releasing of space
under existing leases which expire over the next few years and may be
adversely affected by an increased vacancy rate over the next few years.
Although approximately 20% of the building's space under tenant leases will
expire by the end of 1995, negotiations are currently being conducted with
a number of prospective tenants in the financial services industry to lease
a significant portion of the current and anticipated vacant space. There
can be no assurances that such negotiations will be successful. During the
third quarter, a lease with Alex Brown (approximately 78,000 square feet or
approximately 40% of the building's leasable space) was executed. The
lease has an eighteen year term and the tenant is expected to take
occupancy during the fourth quarter. John Blair & Co. (which had leased
253,193 square feet or approximately 13% of the building's leasable space)
filed for Chapter 11 bankruptcy protection in 1993. Because much of the
John Blair space had been subleased, the Joint Venture had been collecting
approximately 70% of the monthly rent due from John Blair from the
subtenants. Due to the uncertainty regarding the collection of the balance
of the monthly rents from Blair, a provision for doubtful accounts related
to rents and other receivables and accrued rents receivable aggregating
$7,659,366 was recorded at December 31, 1993 related to this tenant.
During the quarter, a settlement was reached whereby the Joint Venture
received a $7,000,000 lease termination fee which included settlement of
past due amounts. In conjunction with the settlement, effective July 1,
1994, John Blair is released from all future lease obligations and the
Joint Venture now has direct leases with the original Blair subtenants.
Such subtenants occupy 228,398 square feet or approximately 11% of the
building's leasable space. As a result of the settlement, the provision
for doubtful accounts at June 30, 1994 related to Blair is $0 at June 30,
1994.

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

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

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

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

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

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

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

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

1090 Vermont Avenue Building

During the quarter, occupancy of this office building remained at 99%.

Through 1993, the Partnership and joint venture partners contributed a
total of $4,076,000 ($2,038,000 by the Partnership) to the joint venture to
cover releasing costs and costs of a lobby renovation. The Partnership and
joint venture partner had agreed that the contributions made to the joint
venture would be repaid along with a return thereon out of first available
proceeds from property operations, sale or refinancing. During the fourth
quarter of 1993, the joint venture finalized a refinancing of the existing
mortgage loan with a new loan in the amount of $17,750,000. The
refinancing resulted in net proceeds of approximately $2,259,000 for the
joint venture. Of such proceeds, $1,785,560 (of which the Partnership's
share was $889,064) was distributed to the venture partners in December
1993 as a partial return of the additional capital contributed. The
remaining proceeds are being retained by the joint venture as working
capital. The new loan provides for interest only monthly payments for the
entire ten-year term. The interest rate for the first five years is 8.01%
per annum. The fixed interest rate thereafter until maturity will be 2.8%
per annum over the five-year Treasury rate at the beginning of such five-
year period. In addition to providing refinancing proceeds to the joint
venture, the debt service payments due under the new loan are significantly
lower than the payments due under the prior loan. Consequently, the
property is expected to produce cash flow for the joint venture in 1994.

Old Orchard Shopping Center

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

Scottsdale Financial Centers I and II

As a result of the transfers of title discussed above, the Partnership
recognized a gain of $18,382,769 and $7,920,092 in 1993 for financial
reporting and Federal income tax purposes, respectively, without any
corresponding distributable proceeds.<PAGE>
Wilshire Bundy Plaza

Occupancy at the Wilshire Bundy Plaza decreased to 80% during the
quarter, primarily due to Dun & Bradstreet (60,500 square feet or
approximately 21% of the buildings leasable space expiring March 1995)
vacating approximately 35,000 square feet of its space. Dun & Bradstreet
will continue to pay rent on this space in accordance with its lease. The
building experienced only minor cosmetic damage as a result of the January
1994 earthquake in southern California. From 1994 through 1996,
approximately 60% of the building's square feet under tenant leases
expires. Included in such expirations are Dun & Bradstreet and Bozell,
Jacobs, Kenyan & Eckhardt (51,000 square feet or approximately 18% of the
building's leasable space) who have informed the Partnership that they will
not be renewing their leases which expire in March 1995 and May 1996,
respectively. In addition, several tenants have approached the Partnership
seeking space and/or rent reductions. The Partnership is working with its
existing tenants and aggressively seeking replacement tenants for current
and future vacant space. The West Los Angeles office market (the
competitive market for the building) is extremely competitive with a
current vacancy rate of approximately 22%. While office building
development in this market is virtually at a standstill, the Partnership
does not expect a significant improvement in the competitive market
conditions for several years.

As a result of these market conditions, it is expected that in 1994
and for several years beyond, the property will not generate enough cash
flow to cover the required debt service on its mortgage loan due to high
releasing costs expected to be incurred and lower anticipated effective
rental rates expected to be achieved in connection with releasing of the
space under current leases that expires. The building may also experience
increased vacancy during the releasing period. The Partnership has
commenced discussions with the existing lender for a possible debt
modification on its mortgage loan which matures April 1996 in order to
reduce its debt service and cover its releasing costs over the next several
years. In this regard, the Partnership has suspended debt service payments
commencing with the November 1, 1994 payment in the amount of $415,922.
Accordingly, the principal balance of the property's underlying mortgage
loan ($41,330,329) has been classified as a current liability in the
accompanying consolidated financial statements as of September 30, 1994.
If the Partnership is unsuccessful in obtaining such modification, it may
decide not to commit additional amounts to the property, which could result
in a disposition of the property and a recognition of gain for financial
reporting and Federal income tax purposes with no distributable proceeds.

Wells Fargo Center

The Wells Fargo Center operates in the Downtown Los Angeles office
market, which has become extremely competitive over the last several years
with the addition of several new buildings that has resulted in a high
vacancy rate of approximately 25% in the marketplace. In 1992, two major
law firm tenants occupying approximately 11% of the building's space
approached the joint venture indicating that they were experiencing
financial difficulties and desired to give back a portion of their leased
space in lieu of ceasing business altogether. The joint venture reached
agreements which resulted in a reduction of the space leased by each of
these tenants. The Partnership is also aware that a major tenant, IBM,
leasing approximately 58% of the tenant space in the Wells Fargo Building,
is sub-leasing or attempting to sub-lease approximately one-half of its
space which is scheduled to expire in December 1998. The Partnership
expects that the competitive market conditions will have an adverse affect
on the building through lower effective rental rates achieved on releasing
of existing space which expires or is given back over the next several
years. The Partnership's share of distributions from the joint venture for
1992 and 1993 were insufficient to cover the debt service on the promissory
note secured by the Partnership's interest in the joint venture. Such
shortfall was due to rental concessions granted to facilitate leasing of
space taken back from the two tenants noted above and the expansion of one
of the other major tenants in the building. The property is expected to
produce cash flow in 1994. The mortgage note secured by the property, as
well as the promissory note secured by the Partnership's interest in the
joint venture are scheduled to mature in December 1994. The promissory
note secured by the Partnership's interest in the joint venture has been
classified at September 30, 1994 and December 31, 1993 as a current
liability in the accompanying consolidated financial statements. In view
of, among other things, current and anticipated market and leasing
conditions affecting the property, including uncertainty regarding the
amount of space, if any, which IBM will renew when its lease expires in
December 1998, the South Tower Venture, as a matter of prudent accounting
practice, recorded a provision for value impairment of $67,479,871 (of
which $22,493,290 has been allocated to the Partnership and was reflected
in the Partnership's share of operations of unconsolidated ventures). Such
provision, made as of August 31, 1993, was recorded to reduce the net
carrying value of the Wells Fargo Center to the then outstanding balance of
the related non-recourse debt. The Partnership and the joint venture have
been in discussion with the respective lenders regarding an extension of
the mortgage note and the promissory note. There is no assurance that the
joint venture or the Partnership will be able to refinance these notes when
they mature in December of 1994. In the absence of an extension or
refinancing of the notes, the Partnership may decide not to commit any
significant additional amounts to the property. This would likely result
in the Partnership no longer having an ownership interest in the property,
and would result in a gain for financial reporting and for Federal income
tax purposes with no corresponding distributable proceeds. The property
did not sustain any significant damage as a result of the January 1994
earthquake in southern California.

900 Third Avenue Building

During the quarter, occupancy of this building remained at 94%. The
midtown Manhattan market remains depressed and 16% of the leases at the
property expire during 1994 through 1996. The property is expected to
operate at a deficit in 1994 due to certain leasing costs expected to be
incurred. Such deficit would be paid by cash reserves currently held by
the joint venture. Commencing later this year through 1996, approximately
80,000 square feet (approximately 16% of the buildings leasable square
footage) under lease expires. The property's operating cash flow will be
adversely affected by lower rental rates achieved and leasing costs
incurred upon releasing this space and may be adversely affected by
increased vacancy during the releasing period.

The remaining proceeds in this escrow, if any, will be released to the
joint venture once 90% of such leased space has been renewed or released.
The letter of intent contemplates a closing for this extension by the end
of November 1994 with the terms being effective upon the current maturity
date in December 1994. The letter of intent is non-binding with respect to
the loan extension, and consummation of the proposed transaction is subject
to the satisfaction of various conditions, including approval by the
unaffiliated venture partners. Therefore, there can be no assurance that a
loan extension will be consummated on these or any terms.

Louis Joliet Mall

Occupancy of this mall increased to 76% during the quarter from 72% at
the end of the second quarter. During the third quarter of 1993, Al Baskin
Co. (19,960 square feet or approximately 7% of the mall space) informed the
Partnership that even though its lease does not contain provisions allowing
it to terminate its lease, it believed it had the right and intended to
terminate its lease effective December 31, 1993 (original lease expiration
of December 31, 2003). In response, during the fourth quarter of 1993, the
Partnership filed an anticipatory breach lawsuit against the tenant in
order to prevent the tenant from vacating its space and cease paying rent
to the Partnership. The Partnership and tenant have entered into a
temporary agreement under which the tenant will continue to operate its
store and pay rent through December 31, 1994. As of the date of this
report, all rent and costs due from the tenant under the lease have been
received. The Partnership believes the tenant's position is without merit
and intends to enforce the original terms of the lease.

Work continues on an enhancement program for the center to be
completed in November 1994 at a cost of approximately $2,500,000. The
enhancement program includes new flooring, signage and mall entranceways.
Costs are being funded from the property's operating cash flow and the
Partnership's working capital reserve. As a result of the mall enhancement
and current leasing activity, the mall has signed letters of intent from
several tenants which it expects will increase occupancy at the center to
approximately 84% by year-end.

Louisiana Tower

Occupancy at Louisiana Tower increased to 88% during the quarter, up
from 86% at the end of the second quarter. The property is operating at a
small deficit as a result of the 1990 debt modification as more fully
discussed in Note 4(b). The existing modification period expires and the
loan matures in January 1995. The Partnership has decided that it will not
commit any significant amounts of capital to this property due to the fact
that the recovery of such amounts would be unlikely. Consequently,
commencing in June 1994, the Partnership ceased making the required debt
service payments to the underlying lender and commenced discussions with it
to provide further modifications to the loan in order to eliminate a
deficit funding obligation. The underlying lender informed the Partnership
that it is unwilling to provide further modifications to the loan. The
lender is currently pursuing a course of significantly reducing its
holdings in commercial real estate loans. The lender can achieve this
through a sale of the loan or through obtaining title to the underlying
real estate and subsequently selling it. The lender has informed the
Partnership that it will pursue the latter method for divesting itself of
this real estate investment. Under either scenario, however, the lender
would receive significantly less than the full amount of its loan due to
the depressed value of the property. Subsequent to the end of the third
quarter, the lender began foreclosure proceedings. A receiver has been
appointed for the property and the existing manager (an affiliate of the
General Partners) continues to manage the property on the receiver's
behalf. Title to the property is expected to transfer to the lender in
late 1994 or early 1995. This property represents approximately 5% of the
Partnership's original cash investment in real properties. The Partnership
will recognize a gain for Federal income tax and financial reporting
purposes in late 1994 or early 1995 in connection with this proposed
transaction with no distributable proceeds.

Mariners Pointe Apartments

Occupancy at the Mariners Pointe Apartments increased to 96% during
the quarter, up from 86% at the end of the second quarter. As a result of
certain capital improvement projects, the property has been operating at a
small deficit. Under the terms of the joint venture agreement, the joint
venture partner was obligated to contribute 22.3% of such deficit. The
Partnership had made a request for capital from the joint venture partner
for its share of the 1992 deficit. The joint venture partner's obligation
to make the capital contribution is secured by its interest in the joint
venture as well as personal guarantees by certain of its principals. The
joint venture partner has not made the required contribution, however the
Partnership is currently negotiating with the joint venture partner to
obtain its interest in the joint venture and receive certain amounts in
satisfaction of its funding obligation. During the third quarter, the
Partnership obtained a two year extension of the existing $6,500,000
mortgage loan which matured on October 1, 1994. Under terms of the loan
extension, the loan bears interest at 2.75% above the floating weekly tax
exempt rate. The initial weekly tax exempt interest rate as of October 1,
1994 was 3.75% per annum for an interest rate of 6.5% per annum on that
date. Prior to the extension, the loan bore interest of 10.875% per annum.

The Partnership is currently marketing the property for sale. There can be
no assurance that the Partnership will collect any or all of the amounts
due from the joint venture partner in satisfaction of its funding
obligation or will sell the property.

General

To the extent that additional payments related to certain properties
are required or if properties do not produce adequate amounts of cash to
meet their needs, the Partnership may utilize the working capital which it
maintains and/or pursue outside financing sources. However, based upon
current market conditions, the Partnership may decide not to, or may not be
able to, commit additional funds to certain of its investment properties.
This would result in the Partnership no longer having an ownership interest
in such property, and generally would result in taxable income to the
Partnership with no corresponding distributable proceeds. The
Partnership's and the ventures' mortgage obligations are all non-recourse.
Therefore, the Partnership and its ventures are not personally obligated to
pay mortgage indebtedness.

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

Though the economy has recently shown signs of improvement and
financing is generally becoming more available for certain types of high-
quality properties in healthy markets, real estate lenders are typically
requiring a lower loan-to-value ratio for mortgage financing than in the
past. This has made it difficult for owners to refinance real estate
assets at their current debt levels unless the value of the underlying
property has appreciated significantly. As a consequence, and due to the
weakness of some of the local real estate markets in which the
Partnership's properties operate, the Partnership is taking steps to
preserve its working capital. The Partnership continues to carefully
analyze all expenditures and defer certain capital projects when
appropriate and has sought or is seeking loan modifications where
appropriate. In addition, the Partnership suspended its distributions from
operations, effective with the distribution for the fourth quarter of 1991,
to improve its cash reserve. By conserving working capital, the
Partnership will be in a better position to meet future needs of its
properties since external sources of capital are very limited.

Due to the issues discussed above, it is likely that the Partnership
will hold certain of its investment properties longer than originally
anticipated in order to maximize the return to the Limited Partners. Also,
in light of the current severely depressed real estate markets, it
currently appears that the Partnership's goal of capital appreciation will
not be achieved. Although the Partnership expects to distribute from sale
proceeds some portion of the Limited Partners' original capital, without a
dramatic improvement in market conditions, the Limited Partners will
receive substantially less than half of their original investment.
However, the Partnership continues its efforts to maximize the return of
the Limited Partners' investment. In addition, in connection with sales or
other dispositions (including transfers to lenders) of properties (or
interests therein) owned by the Partnership or its joint ventures, the
Limited Partners may be allocated substantial gain for Federal income tax
purposes.

RESULTS OF OPERATIONS

At September 30, 1994 and 1993, the Partnership owned twelve and
fifteen investment properties, respectively, all of which were operating.
Reference is made to Note 6 of Notes to Consolidated Financial Statements
filed with the Partnership's 1993 Annual Report for a description of
agreements which the Partnership has entered into with sellers or
affiliates of sellers of the Partnership's properties for the operation and
management of such properties.

The decrease in cash and cash equivalents and the related increase in
short-term investments at September 30, 1994 as compared to December 31,
1993 is primarily due to the investment of cash on hand in U.S. Government
securities and receipt of operating distributions in 1994 from South Tower
($1,918,000) and 1090 Vermont ($375,000), and the Partnership's share of
sale proceeds relating to Old Orchard ($1,702,000) (Note 2(b)). This
increase is partially offset by the Partnership's fundings of the operating
deficits incurred at Mariners Pointe Apartments and Louisiana Tower during
1994.

The decrease in restricted funds and the corresponding decrease in
accrued interest at September 30, 1994 as compared to December 31, 1993 is
due primarily to the $1,482,930 remittance on March 31 to the lender of net
annual cash flow (as defined) generated by the Louisiana Tower as debt
service pursuant to the agreement signed November, 1990 as more fully
discussed in Note 4(b).

The increase in interest, rents and other receivables and the decrease
in unearned rents at September 30, 1994 as compared to December 31, 1993 is
due primarily to the timing of certain rental collections at the Wilshire
Bundy Plaza and the Louisiana Tower investment properties.

The increase in prepaid expenses at September 30, 1994 as compared to
December 31, 1993 is primarily due to the timing of payment of certain
property operating expenses (including insurance premiums) at certain of
the Partnership's investment properties.

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

The increase in buildings and improvements as of September 30, 1994 as
compared to December 31, 1993 is primarily due to (i) tenant improvement
costs related to 1993 leasing activity at Wilshire Bundy, (ii) tenant
improvement costs at Louisiana Tower and (iii) approximately $1,000,000 of
mall enhancement program costs at Louis Joliet Mall.

The increase in deferred expenses at September 30, 1994 as compared to
December 1993 is primarily due to the capitalization of approximately
$360,000 of costs relating to the extension of the Mariner's Pointe
mortgage loan (Note 4(c)).

The increase in the current portion of long-term debt and the
corresponding decrease in long-term debt, less current portion at September
30, 1994 as compared to December 31, 1993 is primarily due to the
reclassification of (i) the debt (with a principal balance of $22,045,977
at September 30, 1994) secured by the Louisiana Tower which matures in
January, 1995, (ii) the debt (with a principal balance of $41,330,329 at
September 30, 1994) secured by the Wilshire Bundy Plaza for which the
Partnership has suspended debt service as of November 1, 1994, and (iii)
the second mortgage secured by the Louis Joliet Mall (with a principal
balance of $10,000,000 at September 30, 1994) which matures in September,
1995, partially offset by (iv) the reclassification of the debt secured by
Mariners Pointe Apartments (with a principal balance of $6,500,000 at
September 30, 1994) which was extended during September 1994 (Note 4(c)).

The increase in due to affiliates at September 30, 1994 as compared to
December 31, 1993 is primarily due to interest accruing on the
Partnership's obligation to fund, on demand, $1,200,000 and $1,200,000 to
Carlyle Managers, Inc. and Carlyle Investors, Inc., respectively, for
additional paid-in capital (as more fully discussed in Note 2(c)) and
reimbursement owed for certain unpaid out-of-pocket expenses of the
Corporate General Partner.

The increase in the Partnership's aggregate deficit investment in
unconsolidated ventures at September 30, 1994 as compared to December 31,
1993 is due primarily to losses from the Partnership's indirect investment
in JMB/NYC resulting from (i) interest accruals on the Purchase Notes and
(ii) a significant decrease in occupancy at 2 Broadway and 1290 Avenue of
the Americas in 1993 and 1994. In addition, although the 1290 Associates
venture received a $7,000,000 lease termination fee during the second
quarter from a major tenant at 1290 Avenue of the Americas, this income is
offset by a significant increase in excess monthly cash flow after capital
costs which is recognized as additional interest expense by JMB/NYC.
Reference is made to Note 2(c).

Rental income decreased for the three and nine months ended September
30, 1994 as compared to the three and nine months ended September 30, 1993
primarily due to the disposition of the Scottsdale Financial Centers Phase
I and II during the fourth quarter of 1993 and a decrease in occupancy in
1994 at Louis Joliet Mall, Louisiana Tower and Mariners Pointe Apartments.

Interest income increased for the three and nine months ended
September 30, 1994 as compared to the three and nine months ended September
30, 1993 primarily due to an increase in the average balance of U.S.
Government obligations in 1994 resulting from the receipt and retention of
proceeds relating to the sale of the Old Orchard Shopping Center (Note
2(b)) and the refinancing of 1090 Vermont Avenue (Note 2(g)) during the
third and fourth quarter of 1993, respectively, and the receipt in 1994 of
operating distributions from South Tower and 1090 Vermont and the
Partnership's share of additional sale proceeds relating to Old Orchard.

Mortgage and other interest, depreciation and professional services
decreased for the three and nine months ended September 30, 1994 as
compared to the three and nine months ended September 30, 1993 primarily
due to the disposition of the Scottsdale Financial Centers Phase I and II
during the fourth quarter of 1993.

Property operating expenses decreased for the nine months ended
September 30, 1994 as compared to the nine months ended September 30, 1993
primarily due to the disposition of the Scottsdale Financial Centers Phase
I and II during the fourth quarter of 1993. Property operating expenses
increased for the three months ended September 30, 1994 as compared to the
three months ended September 30, 1993 primarily due to the effect of an
adjustment to the allowance for doubtful accounts relating to the
collection and settlement in 1993 of approximately $410,000 due from
certain tenants at the Wilshire Bundy Plaza which had previously been
reserved for in 1992, partially offset by the disposition of the Scottsdale
Financial Centers Phase I and II during the fourth quarter of 1993.

The decrease in the Partnership's share of the loss from operations of
unconsolidated ventures for the three and nine months ended September 30,
1994 as compared to the three and nine months ended September 30, 1993 is
primarily due to JMB/NYC recording a $192,627,560 provision for value
impairment at 2 Broadway at December 31, 1993, which reduced the subsequent
depreciation expense related to that investment property. (Reference is
made to Note 2(c)).

The decrease in venture partner's share of venture's operations for
the nine months ended September 30, 1994 as compared to 1993 is due to the
suspension of profit and loss allocations to the venture partner of
Mariners Pointe during the third quarter of 1993 due to default on its
obligations to fund its share of the 1992 deficits at the Mariners Pointe
Apartments and the Partnership's ongoing negotiations to obtain the venture
partner's interest in the joint venture, as more fully discussed in Note
2(h).

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Reference is made to Note 2(e) for a discussion of certain litigation
involving the Partnership.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Reference is made to Notes 2(c) (ninth paragraph), 4(a), 4(b) and 4(d)
and the Liquidity and Capital Resources section of Management's Discussion
and Analysis of Financial Condition and Results of Operations included with
this Report for a discussion of defaults (or alleged defaults) under,
and/or current attempts to obtain modifications of, mortgage loans secured
by the Brittany Downs Apartments Phase II, the 237 Park Avenue, 1290 Avenue
of the Americas, 2 Broadway Office Buildings, the Louisiana Tower and the
Wilshire Bundy Plaza, which discussions are hereby incorporated by
reference.<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY

The following is a listing of approximate occupancy levels by quarter for the Partnership's investment properties.
<CAPTION>
1993 1994
------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ----- ---- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Scottsdale Financial Center I
Scottsdale, Arizona (a). . . . . . . . . . . . 13% 9% 9% N/A N/A N/A N/A
2. Scottsdale Financial Center II
Scottsdale, Arizona (a). . . . . . . . . . . . 77% 81% 81% N/A N/A N/A N/A
3. Wilshire Bundy Plaza
Los Angeles, California. . . . . . . . . . . . 91% 89% 89% 87% 87% 87% 80%
4. Brittany Downs Apartments
Phase I and II
Thornton (Denver), Colorado. . . . . . . . . . 97% 97% 98% 95% 96% 96% 96%
5. Mariners Pointe Apartments
Stockton, California . . . . . . . . . . . . . 88% 93% 93% 90% 84% 86% 96%
6. Old Orchard Shopping Center
Skokie (Chicago), Illinois (b) . . . . . . . . 62% 53% N/A N/A N/A N/A N/A
7. 237 Park Avenue Building
New York, New York . . . . . . . . . . . . . . 99% 99% 99% 98% 98% 98% 98%
8. 1290 Avenue of the Americas Building
New York, New York . . . . . . . . . . . . . . 97% 95% 95% 98% 90% 91% 91%
9. 2 Broadway Building
New York, New York . . . . . . . . . . . . . . 59% 59% 29% 30% 30% 19% 19%
10. 1090 Vermont Avenue Building
Washington, D.C. . . . . . . . . . . . . . . . 99% 99% 99% 99% 99% 99% 99%
11. Louisiana Tower
Shreveport, Louisiana. . . . . . . . . . . . . 90% 90% 90% 90% 83% 86% 88%
12. Piper Jaffray Tower
Minneapolis, Minnesota . . . . . . . . . . . . 97% 98% 98% 98% 99% 99% 98%
13. 900 Third Avenue Building
New York, New York . . . . . . . . . . . . . . 91% 94% 94% 95% 94% 94% 94%
14. Wells Fargo Center South Tower
Los Angeles, California. . . . . . . . . . . . 98% 98% 98% 98% 97% 97% 97%
15. Louis Joliet Mall
Joliet, Illinois . . . . . . . . . . . . . . . 89% 86% 85% 82% 75% 72% 76%
<FN>
- - ----------------
An "N/A" indicates that the property was sold or the Partnership's interest in the property was sold and
was not owned by the Partnership at the end of the quarter.
(a) Reference is made to Note 6.
(b) Reference is made to Note 2(b).
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

4-A. Long-term debt documents relating to the first
mortgage loan secured by the Wilshire Bundy Plaza in Los Angeles,
California are hereby incorporated by reference to the Partnership's report
on Form 8-K (File No. 2-88687) dated February 19, 1986.

4-B. Long-term debt documents relating to the first
mortgage loan secured by the 2 Broadway, 1290 Avenue of the Americas and
237 Park Avenue Buildings are hereby incorporated by reference to the
Partnership's Post-Effective Amendment #1 to the Partnership's Registration
Statement on Form S-11 (File No. 2-88687) dated June 4, 1984.

4-C. Long-term debt documents relating to the first
mortgage loan secured by the Louisiana Tower in Shreveport, Louisiana are
hereby incorporated by reference to the Partnership's Post-Effective
Amendment #4 to the Partnership's Registration Statement on Form S-11 (File
No. 2-88687) dated June 4, 1984.

4-D. Long-term debt documents relating to the first and
second mortgage loans secured by the Louis Joliet Mall in Joliet, Illinois
are hereby incorporated by reference to the Partnership's report on Form 8-
K (File No. 2-88687) dated August 1, 1985.

4-E. Long-term debt documents relating to the refinancing
of the first mortgage loan secured by the 1090 Vermont office building in
Washington, D.C. are hereby incorporated by reference to the Partnership's
report for December 31, 1993 on Form 10-K (File No. 2-88687) dated March
28, 1994.

10-A. Acquisition documents relating to the purchase by the
Partnership of the Wilshire Bundy Plaza in Los Angeles, California are
hereby incorporated by reference to the Partnership's report on Form 8-K
(File No. 2-88687) dated February 19, 1986.

10-B. Acquisition documents relating to the purchase by the
Partnership of an interest in the 1290 Avenue of the Americas Building in
New York, New York are hereby incorporated by reference to the
Partnership's Post-Effective Amendment #1 to the Partnership's Registration
Statement on Form S-11 (No. 2-88687) dated June 4, 1984.

10-C. Acquisition documents relating to the purchase by the
Partnership of an interest in the 237 Park Avenue Building in New York, New
York are hereby incorporated by reference to the Partnership's Post-
Effective Amendment #1 to the Partnership's Registration Statement on Form
S-11 (No. 2-88687) dated June 4, 1984.

10-D. Acquisition documents relating to the purchase by the
Partnership of an interest in the 2 Broadway Building in New York, New York
are hereby incorporated by reference to the Partnership's Post-Effective
Amendment #1 to the Partnership's Registration Statement on Form S-11 (No.
2-88687) dated June 4, 1984.

10-E. Acquisition documents relating to the purchase by the
Partnership of an interest in the Wells Fargo Center - IBM Tower in Los
Angeles, California are hereby incorporated by reference to the
Partnership's Post-Effective Amendment #5 to the Partnership's Registration
Statement on Form S-11 (No. 2-88687) dated June 4, 1984.

10-F. Acquisition documents relating to the purchase by the
Partnership of an interest in the Louisiana Tower in Shreveport, Louisiana
are hereby incorporated by reference to the Partnership's Post-Effective
Amendment #2 to the Partnership's Registration Statement on Form S-11 (No.
2-88687) dated June 4, 1984.

10-G. Acquisition documents relating to the purchase by the
Partnership of the Louis Joliet Mall in Joliet, Illinois are hereby
incorporated by reference to the Partnership's report on Form 8-K (File No.
2-88687) dated August 1, 1985.

10-H. Agreement dated March 25, 1993 between JMB/NYC and
the Olympia & York affiliates regarding JMB/NYC's deficit funding
obligations from January 1, 1992 through June 30, 1993 is hereby
incorporated by reference to the Partnership's report for December 31, 1992
on Form 10-K (File No. 2-88687) dated March 30, 1993.

10-I. Settlement Agreement dated March 12, 1993 between the
Resolution Trust Corporation and Carlyle-XIV is hereby incorporated by
reference to the Partnership's report on Form 10-Q (File No. 2-88687) dated
May 14, 1993.

10-J. Agreement of Limited Partnership of Carlyle-XIV
Associates, L.P. is hereby incorporated by reference to the Partnership's
report on Form 10-Q (File No. 2-88687) dated May 14, 1993.

10-K. Second Amended and Restated Articles of Partnership
of JMB/NYC Office Building Associates, is hereby incorporated by reference
to the Partnership's report for December 31, 1993 on Form 10-K (File No. 2-
88687) dated March 28, 1994.

10-L. Documents relating to the sale by the Partnership of
its interest in the Old Orchard Urban Venture are hereby incorporated by
reference to the Partnership's report on Form 8-K (File No. 2-88687) for
August 30, 1993, dated November 12, 1993.

10-M. Amended and Restated Certificate of Incorporation of
Carlyle-XIV Managers, Inc., (known as Carlyle Managers, Inc.) is hereby
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No. 2-88687) dated March 28, 1994.

10-N. Amended and Restated Certificate of Incorporation of
Carlyle-XIII Managers, Inc., (known as Carlyle Investors, Inc.), is hereby
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No. 2-88687) dated March 28, 1994.

10-O. $1,200,000 demand note between Carlyle-XIV
Associates, L.P. and Carlyle Managers, Inc., is hereby incorporated by
reference to the Partnership's report for December 31, 1993 on Form 10-K
(File No. 2-88687) dated March 28, 1994.

10-P. $1,200,000 demand note between Carlyle-XIV
Associates, L.P. and Carlyle Investors, Inc., is hereby incorporated by
reference to the Partnership's report for December 31, 1993 on Form 10-K
(File No. 2-88687) dated March 28, 1994.

27. Financial Data Schedule

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

(b) No reports on Form 8-K have been filed for the quarter
covered by this report.
SIGNATURES

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV

BY: JMB Realty Corporation
(Corporate General Partner)

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

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

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

<ARTICLE> 5

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

<CIK> 0000737291
<NAME> CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV

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

<CASH> $ 1,920,911
<SECURITIES> 18,491,436
<RECEIVABLES> 2,175,404
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,587,751
<PP&E> 160,459,218
<DEPRECIATION> (48,235,556)
<TOTAL-ASSETS> 148,650,927
<CURRENT-LIABILITIES> (101,599,234)
<BONDS> (34,263,332)
<COMMON> 0
0
0
<OTHER-SE> 152,810,060
<TOTAL-LIABILITY-AND-EQUITY> (148,650,927)
<SALES> (16,404,140)
<TOTAL-REVENUES> (17,503,585)
<CGS> 0
<TOTAL-COSTS> 12,444,979
<OTHER-EXPENSES> 971,319
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,987,757
<INCOME-PRETAX> 5,900,470
<INCOME-TAX> 0
<INCOME-CONTINUING> 18,136,760
<DISCONTINUED> (1,702,082)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,434,678
<EPS-PRIMARY> 39.21
<EPS-DILUTED> 0

</TABLE>