CARLYLE REAL ESTATE LTD PARTNERSHIP XIV /IL/, 10-Q, 1994-05-16

CARLYLE REAL ESTATE LTD PARTNERSHIP XIV /IL/
10-Q, 1994-05-16
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 March 31, 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. . . . . . . . . . . . . . . . . . .

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

PART II OTHER INFORMATION

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

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

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

<TABLE>
PART I. FINANCIAL INFORMATION

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

CONSOLIDATED BALANCE SHEETS

MARCH 31, 1994 AND DECEMBER 31, 1993

(UNAUDITED)

ASSETS
------
<CAPTION>
MARCH 31, DECEMBER 31
1994 1993
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 411,338 2,830,985
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,556,176 16,190,375
Restricted funds (note 4(b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152,835 1,903,509
Interest, rents and other receivables (net of allowance for doubtful accounts of $949,989 and
$816,356 at March 31, 1994 and December 31, 1993, respectively). . . . . . . . . . . . . . . . . . 642,213 647,505
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,587 158,107
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601,945 540,794
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,580,094 22,271,275
------------ ------------
Investment properties, at cost:
Land and leasehold interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,788,810 10,788,810
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,772,111 147,556,586
------------ ------------
158,560,921 158,345,396
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,833,522 44,635,592
------------ ------------
Total investment properties, net of accumulated depreciation . . . . . . . . . . . . . . . . 112,727,399 113,709,804
------------ ------------
Investment in unconsolidated ventures, at equity (notes 1, 2 and 8). . . . . . . . . . . . . . . . . . 9,187,332 9,517,271
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,422,507 2,514,464
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,404,191 1,503,871
------------ ------------
$147,321,523 149,516,685
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
MARCH 31, DECEMBER 31,
1994 1993
------------ ------------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 49,832,685 28,107,327
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 903,143 835,762
Due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,486,658 2,447,554
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,992,077 3,729,532
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,175,492 804,760
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238,826 800,195
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,628,881 36,725,130
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305,904 292,009
Investment in unconsolidated ventures, at equity (notes 1, 2 and 8). . . . . . . . . . . . . . . . . . 153,697,517 148,714,348
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,408,689 1,412,837
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,923,615 98,747,743
------------ ------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289,964,606 285,892,067

Partners' capital accounts (deficits) (note 1):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,433,906) (19,183,198)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,235,319) (1,235,319)
------------ ------------
(20,668,225) (20,417,517)
------------ ------------
Limited partners:
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 351,746,836 351,746,836
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(437,566,313) (431,549,320)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36,155,381) (36,155,381)
------------ ------------
(121,974,858) (115,957,865)
------------ ------------
Total partners' capital accounts (deficits). . . . . . . . . . . . . . . . . . . . . . . . .(142,643,083) (136,375,382)
------------ ------------
Commitments and contingencies (notes 2, 3, 4 and 5)
$147,321,523 149,516,685
============ ============

<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 MONTHS ENDED MARCH 31, 1994 AND 1993

(UNAUDITED)

<CAPTION>
1994 1993
------------ ----------
<S> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 5,515,839 6,140,160
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204,458 56,150
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 6,419
----------- ----------
5,720,297 6,202,729
----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,362,084 4,750,227
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,197,930 1,463,470
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,892,546 3,016,407
Professional services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,497 301,815
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,502 102,665
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,330 102,621
----------- ----------
7,978,889 9,737,205
----------- ----------
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,258,592) (3,534,476)
Partnership's share of loss from operations of unconsolidated ventures (notes 1, 2 and 8). . . . . . . (4,009,109) (5,427,845)
Venture partner's share of venture's operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 25,586
----------- ----------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ (6,267,701) (8,936,735)
============ ==========
Net loss per limited partnership interest (note 1) . . . . . . . . . . . . . . . . . . . . .$ (15.00) (21.39)
============ ==========
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

THREE MONTHS ENDED MARCH 31, 1994 AND 1993

(UNAUDITED)
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ (6,267,701) (8,936,735)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,197,930 1,463,470
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,502 102,665
Amortization of deferred rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,837 36,838
Amortization of discount on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,435 139,591
Partnership's share of loss from operations of unconsolidated ventures . . . . . . . . . . . . . . 4,009,109 5,427,845
Venture partner's share of loss from venture's operations. . . . . . . . . . . . . . . . . . . . . -- (25,586)
Changes in:
Restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,750,674 1,275,422
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,292 288,282
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57,480) (45,430)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (61,151) (83,030)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,680 74,302
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,381 346,780
Due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,104 --
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (561,369) (318,211)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,737,455) (208,011)
Deferred interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 937,221 567,988
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370,732 300,623
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,896 1,108
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,148) (10,422)
------------ -----------
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . 158,489 397,489
------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term investments . . . . . . . . . . . . . . . . . . . (3,365,801) 29,281
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (215,525) (100,436)
Partnership's distributions from unconsolidated ventures . . . . . . . . . . . . . . . . . . . . . . 1,621,000 --
Partnership's contributions to unconsolidated ventures . . . . . . . . . . . . . . . . . . . . . . . (317,000) (847,798)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (133,383) (7,560)
------------ -----------
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,410,709) (926,513)
------------ -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

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

Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (167,427) (152,997)
------------ ----------
Net cash used in financing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . (167,427) (152,997)
------------ ----------

Net decrease in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . $ (2,419,647) (682,021)
============ ==========

Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,030,882 4,250,659
============ ==========
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

MARCH 31, 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").

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 three months ended March 31:
<TABLE>
<CAPTION>
1994 1993
----------------------- ---------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
----------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Net loss . . . . . . . . . $6,267,701 7,163,940 8,936,735 6,893,110
Net (earnings) loss per
limited partnership
interest . . . . . . . . $ 15.00 17.15 21.39 16.50
========== ========= ========= ========
</TABLE>
The net 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 ($41,987 and $1,555,066
at March 31, 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 O&Y 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 O&Y affiliates
and to JMB/NYC, respectively. Such provision was allocated to the partners to
reflect their respective ownership percentages before the effect of the non-
recourse promissory notes including 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 March 31, 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) and may earn up to an additional $3,400,000 based upon
certain future earnings of the property (as defined).

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, potential future distributions to OOUV of the $4,300,000 and
$3,400,000 amounts as described above) in accordance with their pre-
contribution percentage interests. Upon receipt of all or a portion of these
contingent amounts, Orchard and the Partnership would expect to recognize
additional gain for Federal income tax and financial reporting purposes in the
year of such receipts. However, there can be no assurance that any portion of
these 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 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").

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 March 31, 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 $82,238,193
at March 31, 1994. During 1993 and for the three months ended March 31, 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.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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.

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 as 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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 March 31, 1994 is $48,522,601. The term of the agreement
expired on June 30, 1993. Therefore, effective July 1, 1993, JMB/NYC is
recording interest expense at 1-3/4% over the short-term U.S. Treasury
obligation rate plus any excess operating cash flow after capital costs of the
Three Joint Ventures, such sum not to be less than 7% nor exceed a 12-3/4% per
annum interest rate. The Olympia & York affiliates continue to dispute this
calculation for the period commencing July 1, 1993 and contend that the 12-
3/4% per annum fixed rate applies. Based upon the Olympia & York affiliates'
interpretation, interest expense for the Three Joint Ventures for the three
months ended March 31, 1994 was $29,373,012. Based upon the amount of
interest determined by JMB/NYC for the three months ended March 31, 1994,
interest expense for the Three Joint Ventures was $16,251,246. The effect of
recording interest calculated by JMB/NYC is to reduce the losses of the Three
Joint Ventures by $13,121,766 (of which the Partnership's share is $3,050,811)
for the three months ended March 31, 1994 and to correspondingly reduce what
would otherwise be JMB/NYC's funding obligation with respect to the Three
Joint Ventures.

O & Y and certain of its affiliates have been involved in bankruptcy
proceedings in the United States and Canada and similar proceedings in
England. The Olympia & York affiliates have not been directly involved in
these proceedings. During the quarter ended March 31, 1993, O & Y emerged
from bankruptcy protection in the Canadian proceedings. In addition, a
reorganization of the management of the company's United States operations has
been completed, and affiliates of O & Y are in the process of renegotiating or
restructuring a number of loans affecting various properties in the United
States in which they have an interest. The Partnership is unable to assess
and cannot presently determine to what extent these events may adversely
affect the willingness and ability of the Olympia & York affiliates either to
meet their own obligations to the 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, the Olympia & York affiliates, on behalf of the Three Joint
Ventures, continue to negotiate 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 in order to provide
for, among other things, a potential sale of the 2 Broadway building and a
fixed rate of interest on the loan during the remaining loan term until
maturity. In conjunction with the negotiations, the Olympia & York affiliates

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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. There is no assurance that a restructuring of the loan will be
obtained. Interest on the first mortgage loan is 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 June, 1994.
Since March 1994, the monthly 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 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 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
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 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.

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Olympia & York affiliates have informed JMB/NYC that they have
received a written proposal for the sale of 2 Broadway for a net purchase
price of $15 million. The first mortgage lender has preliminarily agreed to
the concept of a sale of the building but has not approved the terms of any
proposed offer for purchase. Accordingly, a sale pursuant to the proposal
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 proposal or
any other proposal, if this proposal 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 proposal 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 related 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 related accrued
interest.

In the event of a dissolution and liquidation of a Joint Venture, the
terms of the joint venture partnership agreements between the Olympia & York
affiliates and JMB/NYC for the Three Joint Ventures provide that if there is a
deficit balance in the tax basis capital account of JMB/NYC, after the
allocation of profits or losses and the distribution of all liquidation
proceeds, then JMB/NYC generally would be required to contribute cash to the
Joint Venture in the amount of its deficit capital account balance. Taxable
gain arising from the sale or other disposition of a Joint Venture's property
generally would be allocated to the joint venture partner or partners then
having a deficit balance in its or their respective capital accounts in
accordance with the terms of the joint venture partnership agreement.
However, if such taxable gain is insufficient to eliminate the deficit balance
in its account in connection 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 $150,759,599 at March 31, 1994)
does not necessarily represent the amount, if any, the Partnership would be
required to pay to satisfy its deficit restoration obligation.

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

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.

(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 amounts otherwise payable to the
unaffiliated venture partners in accordance with the venture agreement to
JMB/900. 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.

(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 March 31, 1994 and December 31,

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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, 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 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 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. The underlying
mortgage loan matures on October 1, 1994. In this regard, the Partnership has
commenced discussions with the underlying lender for an extension of the
existing mortgage loan. In addition, the Partnership is exploring the
possibility of selling the property. There can be no assurance that the
Partnership will collect the amounts due from the joint venture partner in
satisfaction of its funding obligation, be able to refinance or extend the
existing mortgage loan, or sell the property.

(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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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
payments are reflected in other income only as collected. As of April 30,
1994, all scheduled payments have been received.

(b) Old Orchard Shopping Center

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

A 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.

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 March 31, 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 $8,586,171 as of March 31, 1994, equals $1,088,467. The Partnership is
currently in negotiations with the new lender regarding marketing the property
for sale with Phase I. Because the two Phases currently operate in tandem,
the Partnership believes the two Phases together would have a greater
individual market value than if marketed for sale independently. If the
Partnership is not successful in its discussions with the new Phase II lender,
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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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, will still consider marketing the
Phase I property for sale in the near future.

(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 or property operating conditions resulting in a significant increase in
value of the property. Accordingly, no additional contingent interest has
been accrued by the Partnership.

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. Such funds were withdrawn by the lender during the first quarter
of 1994. 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 Partnership is negotiating with the existing lender for
a possible restructuring and/or extension of the existing modified loan. 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. Therefore, if the Partnership is unsuccessful in obtaining
an acceptable restructuring and/or extension of the loan, the likely result
would be the Partnership no longer having an ownership interest in the
property. In such event, the Partnership would report a capital loss for
Federal income tax purposes and a gain for financial reporting purposes with
no distributable proceeds.

(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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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. Accordingly, $1,742,000 of proceeds (representing 3% of the
selling price of the Marketplace at South Street Seaport which was sold in
1988) has been deferred for the General Partners at March 31, 1994. 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.

(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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 Partner-
ship (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 March 31, 1994 and for the three months ended
March 31, 1994 and 1993 are as follows:

Unpaid at
1994 1993 March 31, 1994
-------- -------- ---------------
Property management and
leasing fees. . . . . . . . . $224,660 221,310 42,288
Insurance commissions
(refunds) . . . . . . . . . . (2,200) -- --
Reimbursement (at cost) for
out-of-pocket expenses. . . . 64,579 20,188 1,017
-------- ------- ------
$287,039 241,498 43,305
======== ======= ======

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 $32,018 and $169,566,
respectively, of which $169,566 was unpaid as of March 31, 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 5 above for a discussion of certain distributions
payable to the General Partners that have been deferred and subordinated
distributions payable to the General Partners under certain other
circumstances.

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 aggregated
approximately $1,919,000 at March 31, 1994.

Effective January 1, 1994, certain officers and directors of the
Corporate General Partner acquired interests in a company which, among other
things provide 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 three months ended March 31, 1994 were approximately $2,900, all of which
have been paid.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

(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 three months ended March 31, 1994 and 1993 are as follows:

1994 1993
----------- ----------
Total income from properties (uncon-
solidated). . . . . . . . . . . . . . . . . . $62,325,520 69,222,124
=========== ==========
Operating loss of ventures. . . . . . . . . . . $14,240,660 13,495,545
=========== ==========
Partnership's share of operating loss . . . . . $ 4,009,109 5,427,845
=========== ==========

(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 March 31, 1994
and for the three months ended March 31, 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 March 31, 1994, the Partnership and its consolidated ventures had cash
and cash equivalents of approximately $411,000. Such funds and short-term
investments of approximately $19,556,000 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, Louisiana Tower and Wilshire Bundy Plaza related to releasing
costs and underlying mortgage obligations, 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.
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 March 31, 1994, the current portion of the long-term indebtedness
of the Partnership and its consolidated ventures was approximately
$49,833,000, including the entire indebtedness encumbering Louisiana Tower,
Mariner's Pointe Apartments, Brittany Downs Apartments - Phase II and the
Partnership's interest in the Wells Fargo South Tower office building.
Reference is made to Notes 2(f), 2(h), 4(a) and 4(b).

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 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 March 31, 1994, the manager has
deferred approximately $1,919,000 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
March 31, 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 $8,586,171 as of
March 31, 1994, equals $1,088,467. The Partnership is currently in
negotiations with the lender regarding marketing the property for sale with
Phase I. Because the two Phases currently operate in tandem, the Partnership
believes the two Phases together would have a greater individual market value
than if marketed for sale independently. If the Partnership is not successful
in its discussions with the Phase II lender, 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, will
still consider marketing the Phase I property for sale in the near future.

JMB/NYC

At the 2 Broadway building, occupancy during the quarter remained at 30%.

The Downtown Manhattan office leasing market remains depressed due to the
significant supply of, and the relatively weak demand for, tenant space. As
previously reported, Merrill Lynch, Pierce, Fenner & Smith, Incorporated's
lease of approximately 497,000 square feet of space (31% of the building's
total space) expired in August 1993. A majority of the remaining tenant
roster at the property includes several major financial services 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.
The Bear Stearns Co.'s lease of approximately 186,000 square feet of space
(12% of the building's total space), which expired in April 1994, was not
renewed. 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 written proposal for the sale of the 2 Broadway building.

Occupancy at 1290 Avenue of the Americas decreased to 90%, down from 98%
in the previous quarter primarily due to the move-out of various tenants upon
lease expiration including AC Nielson Company (59,347 square feet or
approximately 3% of the building's leasable space) and New York Telephone Co.
(34,114 square feet or approximately 2% of the building's leasable space). It
is expected that the property will continue to be adversely affected by low
effective rental rates achieved upon re-leasing of space under existing leases
which expire over the next few years and may be adversely affected by an
increased vacancy rate over the next few years. Negotiations are currently
being conducted with a number of tenants who in the aggregate occupy in excess
of 300,000 square feet for the renewal of their leases that expire in early
1994 and 1995. John Blair & Co. ("Blair"), a major lessee at 1290 Avenue of
the Americas (leased space approximates 253,000 square feet or 13% of the
building), has filed for Chapter 11 bankruptcy. Because much of the Blair
space is subleased, the 1290 venture is collecting approximately 70% of the
monthly rent due under the leases from the subtenants. There is uncertainty
regarding the collection of the balance of the monthly rents from Blair.
Accordingly, 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.

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
three months ended March 31, 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 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 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 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. 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 written proposal for the sale of 2 Broadway for a net purchase
price of $15 million. The first mortgage lender has preliminarily agreed to
the concept of a sale of the building but has not approved the terms of any
proposed offer for purchase. Accordingly, a sale pursuant to the proposal
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 proposal or
any other proposal, if this proposal 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 proposal 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 related 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 related 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, the Olympia & York affiliates, on behalf of the Three Joint
Ventures, continue to negotiate 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 in order to provide
for, among other things, a fixed rate of interest on the loan during the
remaining loan term until maturity. In conjunction with the negotiations, 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. There is no assurance that a
restructuring of the loan will be obtained. Interest on the first mortgage
loan is 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.

1090 Vermont Avenue Building

During the first 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 (reference is made to Note 2(b)). The Partnership is
currently retaining its share of the net proceeds from the sale for working
capital purposes.

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.

Wilshire Bundy Plaza

Occupancy at the Wilshire Bundy Plaza remained at 87% during the first
quarter of 1994. 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 (60,500
square feet or approximately 21% of the building's leasable space) and Bozell,
Jacobs, Kenyan & Eckhardt (51,000 square feet or approximately 18% of the
building's leasable space) who 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 (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. 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.<PAGE>
900 Third Avenue Building

During the quarter, occupancy of this building decreased to 94%, down
from 95% at the end of 1993. The midtown Manhattan market remains depressed.
16% of the leases at the property expire during 1994 through 1996. Although
the joint venture is in discussions with the existing lender for a possible
refinancing and extension of its mortgage loan in the principal amount of
$90,411,000 which matures in December 1994, there can be no assurance that the
joint venture will be successful in such discussions. 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.

Louis Joliet Mall

Occupancy of this mall decreased to 75% during the first quarter of 1994
from 82% at the end of 1993 primarily due to the move out of Osco Drugs
(12,407 square feet or approximately 4% of the mall space) pursuant to early
termination provisions contained in its lease. 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 June 30, 1994. The Partnership believes the
tenant's position is without merit and intends to enforce the original terms
of the lease.

Plans are being finalized for an enhancement program for the center to be
undertaken in 1994 at a cost of approximately $2,500,000. The enhancement
program includes new flooring, signage and mall entranceways. Costs are
expected to be funded from the property's operating cash flow and the
Partnership's working capital reserve.

The owner of Carson Pirie Scott filed for protection under Chapter 11 of
the United States Bankruptcy Code in October 1991. However, Carson Pirie
Scott, which owns its store, has continued to operate since this filing and
has affirmed its obligation to continue operations in the future in accordance
with existing agreements related to the center.

Louisiana Tower

Occupancy at Louisiana Tower decreased to 83% during the first quarter,
down from 90% at the end of 1993 due primarily to the termination of the Sonat
lease (14,461 square feet or approximately 4% of the building's leasable
space). The property is operating at a small deficit as a result of the 1990
debt restructuring as more fully discussed in Note 4(b). The Partnership is
negotiating with the existing lender for a possible restructuring and/or
extension of the existing modified loan. 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.
Therefore, if the Partnership is unsuccessful in obtaining an acceptable
restructuring and/or extension of the loan, the likely result would be the
Partnership no longer having an ownership interest in the property. In such
event, the Partnership would recognize a loss for Federal income tax purposes
and a gain for financial reporting purposes. There can be no assurances that
the Partnership will receive a restructuring and/or extension of the loan from
the existing lender.

Mariners Pointe Apartments

Occupancy at the Mariners Pointe Apartments decreased to 84% during the
first quarter, down from 90% at the end of 1993. 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.

The mortgage loan secured by this property is scheduled to mature October 1,
1994. In this regard, the Partnership has commenced discussions with the
underlying lender for an extension of the existing mortgage loan. In
addition, the Partnership is exploring the possibility of selling the
property. There can be no assurance that the Partnership will collect the
amounts due from the joint venture partner in satisfaction of its funding
obligation, be able to refinance or extend its existing mortgage loan when it
matures, or 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 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 on the Limited Partners' investment.

RESULTS OF OPERATIONS

At March 31, 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 March 31, 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 an operating distribution ($896,000) from the South Tower, an
unconsolidated venture of the Partnership.

The decrease in restricted funds and accrued interest at March 31, 1994
as compared to December 31, 1993 is due primarily to the annual remittance on
March 31 to the lender of net cash flow 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 the current portion of long-term debt at March 31, 1994
as compared to December 31, 1993 is primarily due to the reclassification of
the debt secured by the Louisiana Tower which matures in January, 1995.

The increase in accrued real estate taxes at March 31, 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 decrease in unearned rents at March 31, 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.

Rental income decreased for the three months ended March 31, 1994 as
compared to the three months ended March 31, 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 months ended March 31, 1994 as
compared to March 31, 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
and the refinancing of 1090 Vermont Avenue during the third and fourth quarter
of 1993, respectively.

Mortgage and other interest, depreciation, property operating expenses,
professional services and general and administrative costs decreased for the
three months ended March 31, 1994 as compared to March 31, 1993 primarily due
to the disposition of the Scottsdale Financial Centers Phase I and II during
the fourth quarter of 1993. Partially offsetting the decrease in property
operating expenses for the three months ended March 31, 1994 as compared to
the three months ended March 31, 1993 is the collection and settlement in 1993
of amounts due from certain tenants at the Wilshire Bundy Plaza which had been
previously written off and the recording of an additional provision for
doubtful accounts in 1994 related to certain other tenants at the Wilshire
Bundy Plaza.

Amortization of deferred expenses increased for the three months ended
March 31, 1994 as compared to the three months ended March 31, 1993 primarily
due to an increase in leasing activity at certain of the Partnership's
investment properties and the amortization of the related lease commissions.

The decrease in the Partnership's share of the loss from operations of
unconsolidated ventures for the three months ended March 31, 1994 as compared
to the three months ended March 31, 1993 is primarily due to (i) the
Partnership's unconsolidated venture recording a $192,627,560 provision for
value impairment at 2 Broadway at December 31, 1993, which reduced the net
carrying value of the property, as more fully discussed in Note 1, and,
therefore, reduced the subsequent depreciation expense related to that
investment property, (ii) the expiration in July, 1993 of the agreement with
the Olympia & York affiliates, as more fully discussed in Note 2(c), whereby,
from January 1992 through June 1993, the Olympia & York Affiliates were
allocated gross income to the extent of the distributions of excess monthly
cash flow received with the balance of operating losses allocated 46.5% to
JMB/NYC and 53.5% to the Olympia & York affiliates, (iii) the change in the
method of calculating interest expense as a result of the expiration of the
above-noted agreement (see Note 2(c)), and (iv) a significant decrease in
occupancy at 2 Broadway and 1290 Avenue of the Americas during 1993 and 1994
resulting in a significant decrease in excess monthly cash flow after capital
costs which is recognized in 1994 as additional interest expense by JMB/NYC.

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) (tenth paragraph) and 4(a) 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 and the 237 Park Avenue, 1290 Avenue of the
Americas and 2 Broadway Office Buildings which discussions are hereby
incorporated by reference.
<TABLE>
PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

OCCUPANCY

The following is a listing of approximate occupancy levels by quarter for the Partnership's investment properties.

<CAPTION>
1993 1994
------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Scottsdale Financial Center I
Scottsdale, Arizona (a) . . . . . . 13% 9% 9% N/A N/A
2. Scottsdale Financial Center II
Scottsdale, Arizona (a) . . . . . . 77% 81% 81% N/A N/A
3. Wilshire Bundy Plaza
Los Angeles, California . . . . . . 91% 89% 89% 87% 87%
4. Brittany Downs Apartments
Phase I and II
Thornton (Denver), Colorado . . . . 97% 97% 98% 95% 96%
5. Mariners Pointe Apartments
Stockton, California. . . . . . . . 88% 93% 93% 90% 84%
6. Old Orchard Shopping Center
Skokie (Chicago), Illinois (b). . . 62% 53% N/A N/A N/A
7. 237 Park Avenue Building
New York, New York. . . . . . . . . 99% 99% 99% 98% 98%
8. 1290 Avenue of the Americas Building
New York, New York. . . . . . . . . 97% 95% 95% 98% 90%
9. 2 Broadway Building
New York, New York. . . . . . . . . 59% 59% 29% 30% 30%
10. 1090 Vermont Avenue Building
Washington, D.C.. . . . . . . . . . 99% 99% 99% 99% 99%
11. Louisiana Tower
Shreveport, Louisiana . . . . . . .
90% 90% 90% 90% 83%
12. Piper Jaffray Tower
Minneapolis, Minnesota. . . . . . . 97% 98% 98% 98% 99%

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

13. 900 Third Avenue Building
New York, New York. . . . . . . . . 91% 94% 94% 95% 94%
14. Wells Fargo Center South Tower
Los Angeles, California . . . . . . 98% 98% 98% 98% 97%
15. Louis Joliet Mall
Joliet, Illinois. . . . . . . . . . 89% 86% 85% 82% 75%

<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

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.

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.

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

(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: May 11, 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: May 11, 1994