CARLYLE REAL ESTATE LTD PARTNERSHIP XIV /IL/, 10-Q, 1998-08-14

CARLYLE REAL ESTATE LTD PARTNERSHIP XIV /IL/
10-Q, 1998-08-14
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended
June 30, 1998 Commission file number 0-15962

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 [ ]

<PAGE>

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

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

Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . 17

PART II OTHER INFORMATION

Item 5. Other Information. . . . . . . . . . . . . . . . 21

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 22

<PAGE>

<TABLE>
PART I. FINANCIAL INFORMATION

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

CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997

(UNAUDITED)

ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 27,265,218 21,051,953
Interest, rents and other receivables (net of allowance
for doubtful accounts of $68,750 and $27,963 at
June 30, 1998 and December 31, 1997, respectively). . . . . . . . 246,351 253,069
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 9,178 25,860
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 312,862 292,110
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . 27,833,609 21,622,992
------------ ------------
Investment property held for sale or disposition. . . . . . . . . . . 34,025,945 33,994,623
------------ ------------

Investment in unconsolidated ventures, at equity. . . . . . . . . . . 4,229,461 6,570,294
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 907,205 1,082,305
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . 564,369 559,255
------------ ------------
$ 67,560,589 63,829,469
============ ============

<PAGE>

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
JUNE 30, DECEMBER 31,
1998 1997
------------- -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 371,912 357,323
Accounts payable and other current liabilities. . . . . . . . . . . 934,928 1,394,605
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 1,420,030 1,345,828
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . 171,321 172,492
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 618,474 593,054
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . 3,516,665 3,863,302

Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 17,719 17,169
Investment in unconsolidated ventures, at equity. . . . . . . . . . . 5,788,165 5,650,592
Partnership's share of the maximum unfunded obligation
under the indemnification agreement . . . . . . . . . . . . . . . . 8,128,514 8,262,766
Long-term debt, less current portion. . . . . . . . . . . . . . . . . 53,447,914 51,768,623
------------ ------------
Commitments and contingencies

Total liabilities . . . . . . . . . . . . . . . . . . . . . . 70,898,977 69,562,452

Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . (15,005,068) (15,021,857)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (1,316,336) (1,316,336)
------------ ------------
(16,320,404) (16,337,193)
------------ ------------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . 351,746,836 351,746,836
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . (294,588,792) (296,966,598)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (44,176,028) (44,176,028)
------------ ------------
12,982,016 10,604,210
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . (3,338,388) (5,732,983)
------------ ------------
$ 67,560,589 63,829,469
============ ============

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

<PAGE>

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

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1998 1997 1998 1997
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . $ 2,035,137 2,064,511 4,493,410 4,311,360
Interest income . . . . . . . . . . . . . . . 286,021 262,921 570,802 466,310
Other income. . . . . . . . . . . . . . . . . -- 377,802 186,042 377,802
----------- ---------- ---------- ----------
2,321,158 2,705,234 5,250,254 5,155,472
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . 1,465,397 1,474,377 2,936,588 2,949,093
Property operating expenses . . . . . . . . . 1,100,777 946,638 2,119,865 1,892,201
Professional services . . . . . . . . . . . . 75,836 184,550 361,312 328,798
Amortization of deferred expenses . . . . . . 46,064 52,899 91,038 104,475
General and administrative. . . . . . . . . . 87,596 276,116 297,788 466,749
----------- ---------- ---------- ----------
2,775,670 2,934,580 5,806,591 5,741,316
----------- ---------- ---------- ----------
(454,512) (229,346) (556,337) (585,844)
Partnership's share of the reduction of the
maximum unfunded obligation under the
indemnification agreement . . . . . . . . . . 67,126 67,126 134,252 134,252
Partnership's share of operations
of unconsolidated ventures. . . . . . . . . . 420,615 103,597 183,511 (456,221)
----------- ---------- ---------- ----------
Earnings (loss) before gain on
sale of interest in uncon-
solidated venture . . . . . . . . . . 33,229 (58,623) (238,574) (907,813)

Gain on sale of interest in
unconsolidated venture. . . . . . . . . . . . 2,633,169 -- 2,633,169 --
----------- ---------- ---------- ----------
Net earnings (loss) . . . . . . . . . . $ 2,666,398 (58,623) 2,394,595 (907,813)
=========== ========== ========== ==========

<PAGE>

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

CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1998 1997 1998 1997
----------- ---------- ----------- ----------
Net earnings (loss) per limited
partnership interest:
Earnings (loss) before gain
on sale of interest in
unconsolidated venture . . . . . . . $ .08 (.14) (.57) (2.17)
Gain on sale of interest in
unconsolidated venture. . . . . . . 6.50 -- 6.50 --
----------- ---------- ---------- ----------

Net earnings (loss) . . . . . . . . . $ 6.58 (.14) 5.93 (2.17)
=========== ========== ========== ==========

Cash distributions per limited
partnership interest. . . . . . . . . $ -- -- -- --
=========== ========== ========== ==========

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

<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)

<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,394,595 (907,813)
Items not requiring (providing) cash or cash equivalents:
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 91,038 104,475
Long-term debt - deferred accrued interest. . . . . . . . . . . . . . . 1,868,966 1,868,966
Partnership's share of the reduction of the maximum
unfunded obligation under the indemnification agreement . . . . . . . (134,252) (134,252)
Partnership's share of operations of unconsolidated ventures. . . . . . (183,511) 456,221
Gain on sale of interest in unconsolidated venture. . . . . . . . . . . (2,633,169) --
Changes in:
Interest, rents and other receivables . . . . . . . . . . . . . . . . . 6,718 46,183
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,682 25,860
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,752) (7,366)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . (5,114) (47,438)
Accounts payable and other current liabilities. . . . . . . . . . . . . (459,677) (524,155)
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,202 35,774
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,171) (365)
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 25,420 5,392
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 550 251
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . 1,040,525 921,733
------------ -----------

<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1998 1997
------------ -----------
Cash flows from investing activities:
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (31,322) (245,498)
Partnership's distributions from unconsolidated ventures. . . . . . . . . 607,097 --
Partnership's contributions to unconsolidated ventures. . . . . . . . . . (38,992) (1,695)
Cash proceeds from sale of interest in unconsolidated venture . . . . . . 4,726,981 --
Refund (payment) of deferred expenses, net. . . . . . . . . . . . . . . . 84,062 (108,693)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . 5,347,826 (355,886)
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (175,086) (54,594)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . (175,086) (54,594)
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . . 6,213,265 511,253
Cash and cash equivalents, beginning of year. . . . . . . . . . . . 21,051,953 18,069,904
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . $ 27,265,218 18,581,157
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 1,068,793 1,080,492
============ ===========
Non-cash investing and financing activities:
Sale of interest in unconsolidated venture:
Gain on sale of interest in unconsolidated venture. . . . . . . . . $ 2,633,169 --
Basis in unconsolidated venture . . . . . . . . . . . . . . . . . . 2,093,812 --
------------ -----------
Cash proceeds from sale of interest in uncon-
solidated venture. . . . . . . . . . . . . . . . . . . . . . . . $ 4,726,981 --
============ ===========

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

<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1998 AND 1997

(UNAUDITED)

GENERAL

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1997 which are
included in the Partnership's 1997 Annual Report on Form 10-K as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
Capitalized terms used but not defined in this quarterly report have the
same meanings as in the Partnership's 1997 Annual Report on Form 10-K.

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

The Partnership adopted Statement of Financial Accounting Standards
No. 121 ("SFAS 121") "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" ("SFAS 121") as required in
the first quarter of 1996. The Partnership's policy is to consider a
property to be held for sale or disposition when the Partnership has
committed to a plan to sell or dispose of such property and active
marketing activity has commenced or is expected to commence in the near
term or the Partnership has concluded that it may dispose of the property
by no longer funding operating deficits or debt service requirements of the
property thus allowing the lender to realize upon its security. In
accordance with SFAS 121, any properties identified as "held for sale or
disposition" are no longer depreciated. As of December 31, 1996, the
Partnership has committed to a plan to sell the Louis Joliet Mall
investment property, its last remaining consolidated property. The net
results of operations for the six months ended June 30, 1998 and 1997 for
the consolidated property classified as held for sale or disposition for
the past two years were income of $1,336,977 and $1,271,579, respectively.
In addition, as of June 30, 1998, the Partnership has or had previously
committed to a plan to sell the Piper Jaffray Tower investment property.
Accordingly, this property has been classified as held for sale or
disposition. The accompanying consolidated financial statements include
earnings (losses) of $197,312 and ($467,013), as the Partnership's share of
total property losses of $8,440,815 and $9,333,605 for unconsolidated
properties for the six months ended June 30, 1998 and 1997, respectively,
which are held for sale or disposition or have been sold or disposed of
during the past two years.

Certain amounts in the 1997 financial statements have been
reclassified to conform with the 1998 presentation.

<PAGE>

TRANSACTIONS WITH AFFILIATES

The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees and certain of its officers, and for
other direct expenses relating to the administration of the Partnership and
the operation of the Partnership's investments. Fees, commissions and
other expenses required to be paid by the Partnership to the General
Partners and their affiliates as of June 30, 1998 and for the six months
ended June 30, 1998 and 1997 were as follows:

Unpaid at
June 30,
1998 1997 1998
-------- ------- ---------
Property management
and leasing fees . . . . . . $156,247 143,951 --
Insurance commissions . . . . 30,066 34,107 --
Reimbursement (at cost)
for out-of-pocket salary
and salary-related
expenses related to the
on-site and other costs
for the Partnership and
its investment properties. . 59,828 65,340 41,457
-------- ------- ------
$246,141 243,398 41,457
======== ======= ======

The Partnership is obligated to fund, on demand, $400,000 and $400,000
to Carlyle Managers, Inc. and Carlyle Investors, Inc., respectively, for
additional paid-in capital (reflected in amounts due to affiliates in the
accompanying consolidated financial statements). As of June 30, 1998,
these obligations bore interest at 5.32% per annum and interest accrued on
these obligations was $578,573 after the Partnership made payments of
$4,000 in 1998.

The manager of Piper Jaffray Tower (which was an affiliate of the
Corporate General Partner through November 1994) had agreed to defer
receipt of its property management fees. Such fees deferred by the
affiliate were approximately $1,839,000 (of which approximately $919,500 is
the Partnership's share) at June 30, 1998.

JMB/NYC

As a result of the 1996 restructuring, JMB/NYC has an indirect limited
partnership interest which, before taking into account significant
preferences to other partners, equals approximately 4.9% of the reorganized
and restructured ventures owning 237 Park and 1290 Avenue of the Americas
(the "Properties"). Neither O&Y nor any of its affiliates has any direct
or indirect continuing interest in the Properties. The new ownership
structure gives control of the Properties to an unaffiliated real estate
investment trust ("REIT"), which is owned primarily by holders of the
mortgage debt which encumbered the Properties prior to the bankruptcy.
JMB/NYC has, under certain limited circumstances, through January 1, 2001
rights of consent regarding sale of the Properties or the consummation of
certain other transactions that significantly reduce indebtedness of the
Properties. In general, at any time on or after January 2, 2001, an
affiliate of the REIT has the right to purchase JMB/NYC's interest in the
Properties for certain amounts relating to the operations of the
Properties. There can be no assurance that such REIT affiliate will not
exercise such right on or after January 2, 2001. If such REIT affiliate
exercises such right to purchase, for the reasons discussed below, it is
unlikely that such purchase would result in any significant distributions
to the partners of the Partnership. Additionally, at any time, JMB/NYC has
the right to require such REIT affiliate to purchase the interest of
JMB/NYC in the Properties for the same price at which such REIT affiliate
can require JMB/NYC to sell such interest as described above.

<PAGE>

Pursuant to the indemnification agreement, the Affiliated Partners are
jointly and severally obligated to indemnify, through a date no later than
January 2, 2001, the REIT to the extent of $25 million to ensure their
compliance with the terms and conditions relating to JMB/NYC's indirect
limited partnership interest in the restructured and reorganized joint
ventures that own the Properties. The Affiliated Partners contributed
approximately $7.8 million (of which the Partnership's share was
approximately $3.9 million) to JMB/NYC which was deposited into an escrow
account as collateral for such indemnification. These funds have been
invested in stripped U.S. Government obligations with a maturity date of
February 15, 2001. The Partnership's share of the reduction of the maximum
unfunded obligation under the indemnification agreement recognized as
income, is a result of interest earned on amounts contributed by the
Partnership and held in escrow by JMB/NYC. Such income earned reduces the
Partnership's share of the maximum unfunded obligation under the
indemnification agreement, which is reflected as a liability in the
accompanying financial statements.

The provisions of the indemnification agreement generally prohibit the
Affiliated Partners from taking actions that could have an adverse effect
on the operations of the REIT. Compliance, therefore, is within the
control of the Affiliated Partners and non-compliance with such provisions
by either the Partnership or the other Affiliated Partners is highly
unlikely. Therefore, the Partnership expects its share of the collateral
to be returned (including interest earned) at the termination of the
indemnification agreement.

The Partnership has discontinued the application of the equity method
of accounting for the indirect interests in the Properties and additional
losses from the investment in unconsolidated venture will not be
recognized. Should the unconsolidated venture subsequently report income,
the Partnership will resume applying the equity method on its share of such
income only after such income exceeds net losses not previously recognized.

Due to the level of indebtedness remaining on the Properties, the
original purchase money notes payable by JMB/NYC and the significant
preference levels within the reorganized structure of the Joint Ventures,
it is unlikely that the Partnership will receive any significant
distributions from JMB/NYC in the future.

JMB/PIPER

Occupancy of the building at the end of the second quarter of 1998 was
89%.

During the third quarter of 1997, Popham informed Piper that effective
in November 1997, it would cease operations as Popham and consolidate with
another law firm, Hinshaw & Culberson ("Hinshaw"). In December, Piper
signed a non-binding letter of intent with Hinshaw to lease 31,920 square
feet of the Popham space for a term of five years, commencing January 1,
1998, at a market rental rate which exceeds Popham's modified rate which
became effective in August 1997. Popham had paid its modified rent through
the end of 1997. Commencing in January 1998, Hinshaw began paying rent in
accordance with the letter of intent. In addition, once a lease is
finalized with Hinshaw in accordance with the letter of intent, Piper had
agreed to terminate Popham's lease (for approximately 47,000 square feet)
effective December 31, 1997 with no further consideration. In May 1998,
Piper executed the lease with Hinshaw.

The property is subject to a mortgage loan in the original principal
amount of $100,000,000, of which approximately $95,741,000 is outstanding
as of June 30, 1998. The lender is essentially entitled to all operating
cash flow. Excess cash flow generated during 1997 of $385,523 was remitted
to the lender during the second quarter of 1998 from cash held by the
venture.

<PAGE>

In addition, the mortgage loan provides that upon sale or refinancing,
the lender is entitled to prepayment fees as well as a significant level of
proceeds in excess of the then unpaid principal balance prior to
JMB/Piper's receipt of proceeds. While the loan modification provides
JMB/Piper with an opportunity to retain an ownership position in the
property, under the current terms of the modified debt, there must be
significant additional improvement in current market and property operating
conditions resulting in a substantial increase in the value of the property
before JMB/Piper can share in sale or refinancing proceeds. Currently,
Piper generates enough operating cash flow to meet the required debt
service payments. However, Piper may not be able to pay the required debt
service over the next several years. JMB/Piper will not commit additional
capital to Piper unless, among other things, it believes that upon sale of
the property it will receive a return of such funds and a reasonable rate
of return thereon. If a funding requirement arises and none of the Piper
partners contribute the required capital, the lender would likely take
title to the property. Such disposition of the property would result in
JMB/Piper, and therefore the Partnership, recognizing a significant amount
of gain for financial reporting and Federal income tax purposes with no
corresponding distributable proceeds.

During 1997, JMB/Piper, on behalf of Piper, explored refinancing
alternatives with the lender. Although JMB/Piper had intended to pursue
further discussions with the lender concerning possible refinancing and/or
loan modification alternatives, it currently appears unlikely that an
agreement with respect to such a transaction will be made.

JMB/900

Occupancy of this building at the end of the second quarter of 1998
was 100%.

Progress Partners had been negotiating with the building's major
tenant, Schulte, Roth & Zabel (120,991 square feet with a lease expiration
date of May 31, 2000), for an early renewal and expansion of its lease.
However, in the second quarter of 1998, the tenant informed Progress
Partners of its intent to vacate all of its space upon the expiration of
its current lease.

Pursuant to the extension on the mortgage loan, net cash flow (as
defined) is paid into an escrow account controlled by the lender. The
escrow account, including interest earned thereon, will be used by Progress
Partners for payment of property taxes and releasing costs associated with
leases which expire in 1999 and 2000 (approximately 50% of the building
including the Schulte, Roth & Zabel lease discussed above). The remaining
proceeds in this escrow plus interest earned thereon, if any, will be
released to Progress Partners once 90% of such leased space has been
renewed or released. During 1998, approximately $4,834,000 has been
deposited into escrow from net cash flow from property operations.

JMB/900 is currently involved in litigation. In December, 1997, two
of the Venture Partners, JRA and PPI, filed for bankruptcy in order to
prevent the foreclosure of their interests by MDIFC. Since the bankruptcy
filing, an affiliate of PPI has effected a settlement with MDIFC by
purchasing its claims. JMB/900 has pursued its claims against the Venture
Partners in the bankruptcy forum and has sought to either foreclose on or
buy-out the interests of the Venture Partners in the venture, or to
otherwise dispose of those interests pursuant to a bankruptcy plan. The
Venture Partners have asserted claims against the venture and JMB/900
including claims for unpaid Guaranteed Payments in the purported amount of
$36 million. JMB/900 denies that such claims are due and owing and
contends that, in any event, such claims are offset by PPI's failure to pay
interest in the aggregate amount of approximately $36 million on a $20
million loan to PPI. To the extent that JMB/900 is required to make
contributions to pay for any part of the purported claim for Guaranteed

<PAGE>

Payments, a portion of the Guaranteed Payments actually paid may be
allocated to other unsecured creditors of PPI and JRA and, therefore,
JMB/900 may not be returned the full amount of the interest due on the $20
million loan. However, JMB/900's contributions would create a preferred
return level payable out of future net cash flow or net sale or refinancing
proceeds. Furthermore, JMB/900 has taken the position that to the extent
that is has not received annual distributions equal to the interest payable
on the $20,000,000 loan, JMB/900's preferred return deficiency is increased
by the amounts not received, but the Venture Partners have disputed this
characterization.

In order to avoid the risks and further expenses of litigation, and
without any admission of liability, in July 1998 JMB/900 entered into an
agreement (the "Settlement Agreement") with the Venture Partners and a
judgment creditor of JRA and PPI (such judgment creditor and the Venture
Partners are hereinafter collectively referred to as the "Progress
Parties") for the settlement and release of claims and causes of action by
and against JMB/900 and the Progress Parties. In addition to the
settlement and release of these claims and causes of action, the Settlement
Agreement generally provides for, among other things, agreement on certain
terms and conditions for sale of the building and subsequent winding up of
the joint venture. In addition, under the terms of the Settlement
Agreement, JRA and PPI will seek dismissal of their respective bankruptcy
cases or, in the absence of such dismissal, will seek bankruptcy court
approval of the Settlement Agreement. JMB/900 will seek to (a) obtain a
settlement and release of claims and causes of action (i) against the
Federal Deposit Insurance Corporation ("FDIC") and (ii) by the FDIC against
JMB/900 and each of the Progress Parties and certain of their related
parties, and (b) purchase the interests of the FDIC in P-C 900 in
connection with the settlement with the FDIC.

In general, certain terms and conditions of the Settlement Agreement
are to be effective immediately while others (such as the release of the
Venture Partners' claim to the Guaranteed Payments, JMB/900's claim to the
$20 million note payable and accrued interest thereon, as well as other
claims and causes of action in litigation) are conditioned upon the
occurrence of certain events or the satisfaction of specified conditions.
In addition, the entire Settlement Agreement will be of no further force or
effect unless, among other things, the bankruptcy proceedings involving JRA
and PPI are dismissed or the bankruptcy court approves the Settlement
Agreement by a specified date and JMB/900 acquires the interest of the FDIC
in PC-900 and enters into a settlement and release with the FDIC by
December 1, 1998. Although the releases by the parties of their respective
claims and causes of action is not effective until certain events occur or
conditions are satisfied, the parties have agreed not to pursue such claims
and causes of action unless the events do not occur or the conditions are
not satisfied and the Settlement Agreement terminates by its terms.

Under the terms of the Settlement Agreement, for an initial period
ending not later than January 14, 1999, the Progress Parties will have
authority and responsibility for marketing and selling the building,
subject to certain approval rights of JMB/900 with respect to the terms and
conditions of a sale contract for the building (including a specified
minimum sale price). The Progress Parties have authorized the judgment
creditor of JRA and PPI to take all actions on behalf of the Progress
Parties in respect of a sale of the building and any other matters on their
behalf under the Settlement Agreement. In the event that a sale of the
building has not been concluded by the end of the initial period, JMB/900
will have authority and responsibility for marketing and selling the
building, provided that the sale price is equal to or greater than a
specified minimum amount. Current arrangements for management of the
building will remain in effect until its sale.

<PAGE>

Under the terms of the Settlement Agreement, the joint venture will
not make distributions to JMB/900 or the Venture Partners until the joint
venture has sold the building and paid, obtained a release from or
established reserves for the payment of its expenses and liabilities. When
made, distributions of the joint venture generally are to be made as
follows: (1) JMB/900 is to be paid an amount equal to that paid to acquire
the FDIC's interest in PC-900; (2) up to the next $60 million of
distributions are to be made 77.5% to JMB/900 and 22.5% to the Progress
Parties, and (3) any additional distributions are to be made 70% to JMB/900
and 30% to the Progress Parties. In addition, to the extent that cash is
not currently distributed to JMB/900 and the Venture Partners, profits or
losses from operations of the joint venture are to be allocated 70% to
JMB/900 and 30% to the Progress Parties. To the extent that the joint
venture's operating income exceeds the cash being distributed, operating
income will be allocated in the same manner that an equal amount of cash
from the sale of the building would be distributed (i.e., generally in
either the 77.5% and 22.5% ratio or the 70% and 30% ratio).

The Settlement Agreement expressly provides that JMB/900 will have no
further obligation to make any capital contributions to the joint venture
and that the Venture Partners will have no right to any Guaranteed Payments
from the joint venture. In addition, JMB/900 will release its claim for
payment of the $20 million loan and accrued interest thereon. After sale
of the building JMB/900 will be responsible for winding up the joint
venture. Under the Settlement Agreement, certain legal fees and expenses
incurred by either JMB/900 or the Progress Parties will be reimbursed by
the joint venture.

There is no assurance that all requisite conditions will be satisfied
for effectiveness of all terms and conditions of the Settlement Agreement
or that all conditions will occur or be effected for the Settlement
Agreement (or any provisions thereof) to remain in force and effect.
Similarly, there is no assurance that JMB/900 will be able to effect a
settlement and release with the FDIC of claims and causes of action and a
purchase of the FDIC's interest in PC-900.

As the Partnership has committed to a plan to sell or dispose of the
property, 900 Third Avenue Building was classified as held for sale or
disposition as of July 1, 1998, and therefore, will not be subject to
continued depreciation beyond such date.

LOUIS JOLIET MALL

Occupancy of this mall at the end of the second quarter of 1998 was
83% (excluding the effect of the move-out of General Cinema, Inc. in 1994).

The Partnership has negotiated a lease with a replacement operator for
General Cinema, Inc. (approximately 5% of the mall space) which continues
to pay rent on its vacated space in accordance with its lease that expires
in December 1998. In connection with the new lease, the Partnership will
contribute $700,000 to reconfigure the current four screen cinema to a six
screen cinema. A significant portion of the mall's vacant space is
contained in three large spaces which have been very difficult to lease due
to their size and location within the mall. The manager is exploring the
opportunity to lease some of this space to larger "big box" space users
which in the past have not occupied mall space. Given their size, these
types of tenants generally pay lower rents than typical regional and
national mall tenants. In addition, the Partnership would likely need to
commit substantial capital toward the build-out of this space for these
users. The Partnership will not commit additional capital to this property
for build out or other leasing costs unless, among other things, it
believes that upon sale of the property, the Partnership will receive a
return of such funds and a reasonable rate of return thereon.

<PAGE>

During 1997, the Partnership agreed to dismiss the litigation
regarding the lease termination for a former tenant, Al Baskin Co., with
the resolution as to the amount of the Partnership's claim against the
former tenant, and the acceptance of such claim by the bankruptcy estate.
The Partnership's claim in the amount of $315,000 (reduced from a maximum
amount of approximately $415,000) had been accepted as an unsecured claim
by the bankruptcy estate. In May 1997, the Partnership, upon disposition
of its claim, received approximately $108,000 representing its share of
available proceeds from the bankruptcy estate.

As the Partnership had committed to a plan to sell or dispose of the
property, Louis Joliet Mall was classified as held for sale or disposition
as of December 31, 1996, and therefore has not been subject to continued
depreciation beyond such date. The Partnership has begun marketing the
property for sale. However, there can be no assurance that a sale will be
consummated.

WELLS FARGO CENTER (SOUTH TOWER)

The mortgage note secured by the property (with a balance of
approximately $176,347,000 as of June 30, 1998), as extended, matures
September, 2003. All excess cash flow is being escrowed for future tenant
improvements and principal payments. In addition, upon sale or refinancing
of the property subsequent to September 1, 1999, the mortgage loan requires
payment of participation interest (as defined) of any excess proceeds.

A promissory note secured by the Partnership's interest in the joint
venture, which has an adjusted principal balance of approximately
$21,988,000, and accrued interest of approximately $6,230,000 at June 30,
1998 is due September 2003. The note accrues interest at 17% per annum.
The loan requires payments of cash flow distributed by the venture from
either property operations or sales proceeds as well as a portion of the
property management fee paid to the venture partner. The loan is secured
solely by the Partnership's interest in the joint venture.

Due to the significant level of indebtedness, it is unlikely that the
Partnership will receive any significant future proceeds from operations,
sale or refinancing. The disposition of the Partnership's ownership
interest in the property is therefore expected to result in a gain for
Federal income tax purposes with no corresponding distributable proceeds.
The Partnership has decided not to commit any significant additional
amounts to the property.

1090 VERMONT

The Partnership had been marketing the Property for sale (on behalf of
the Venture). On November 26, 1997, the Partnership obtained a non-binding
letter of intent to sell the Property to an unaffiliated third party.
Pursuant to the Venture Agreement, the Venture Partner had the right of
first refusal to purchase the Partnership's interest in the Venture. The
Venture Partner had 30 days from the date of notice to notify the
Partnership it was exercising its right, and 120 days from that date to
close such sale. The Venture Partner was required to purchase the
Partnership's interest for the same amount it would have received from the
sale of the Property to the proposed third party less payment of the
outstanding mortgage obligation. On December 30, 1997, the Partnership
properly notified the Venture Partner of its intent to sell the Property
for $27,000,000. On January 30, 1998, the Venture Partner exercised its
right to first refusal to purchase the Partnership's interest, and on
May 29, 1998, the Venture Partner purchased the Partnership's interest in
the Venture.

<PAGE>

The Partnership received cash at closing of approximately $4,700,000
after payment of closing costs. The Property was classified as held for
sale as of December 31, 1996 and has not been subject to continued
depreciation from such date for financial reporting purposes. In addition,
as a result of the sale, the Partnership recognized a gain for financial
reporting purposes of approximately $2,600,000 and expects to recognize a
gain for Federal income tax purposes in 1998 of $4,600,000. The
Partnership has no future liability for any representations, warranties and
covenants as a result of the sale.

YERBA BUENA OFFICE BUILDING

In June 1992, title to the Yerba Buena Office Building in San
Francisco, California was transferred to the lender by the joint venture (a
partnership comprised of the Partnership, two other limited partnerships
sponsored by the Partnership's Corporate General Partner and four
unaffiliated limited partners). In return for a smooth transition of title
and management of the property, the joint venture was able to negotiate the
right to share in future sale proceeds, if any, above certain specified
levels. In addition, the joint venture had a right of first opportunity to
purchase the property during the time frame of June 1995 through May 1998
should the lender wish to market the property for sale. The lender sold
the property to an unaffiliated third party during 1996. The sale price
did not generate a level of distributable proceeds where the joint venture
would have been entitled to a share. However, the joint venture was not
given an opportunity to purchase the property on the same terms it was sold
for. The joint venture has filed a suit against the lender for breach of
its obligation. In June 1998 the court granted the lender's motion for
summary judgment and dismissed the lawsuit. The joint venture currently
intends to appeal the court's order dismissing the lawsuit. There is no
assurance that such an appeal will be successful or that the joint venture
will recover any amounts in connection with the lawsuit.

UNCONSOLIDATED VENTURES - SUMMARY INFORMATION

Summary income statement information for JMB/Piper and JMB/Piper II,
for the six months ended June 30, 1998 and 1997 are as follows:

1998 1997
---------- ----------
Total income from properties
(unconsolidated). . . . . . . . . . . $10,280,715 10,979,792
=========== ==========
Operating loss of ventures. . . . . . . $ 9,023,677 9,221,415
=========== ==========
Partnership's share of
operating loss. . . . . . . . . . . . $ 94,119 410,918
=========== ==========

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 June 30, 1998
and for the three and six months ended June 30, 1998 and 1997.

<PAGE>

PART I. FINANCIAL INFORMATION

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

Reference is made to the notes to the accompanying consolidated
financial statements for additional information concerning certain of the
Partnership's investment properties.

At June 30, 1998, the Partnership had cash and cash equivalents of
approximately $27,265,000. Such funds are available for working capital
requirements and distributions to the Holders of Interests. The
Partnership has currently budgeted in 1998 approximately $1,827,000 for
tenant improvements and other capital expenditures including $700,000 that
the Partnership has agreed to contribute to reconfigure the four screen
cinema at the Louis Joliet Mall to a six screen cinema. Such items and the
Partnership's share of such similar items for its unconsolidated ventures
in 1998 is currently budgeted to be approximately $2,562,000. The decrease
in budgeted capital expenditures is due to the sale of the Partnership's
interest in 1090 Vermont and a change in leasing estimates at the Piper
Jaffray building. Actual amounts expended in 1998 may vary depending on a
number of factors including actual leasing activity, results of property
operations, liquidity considerations and other market conditions over the
course of the year. The Partnership may also use a portion of its working
capital reserve for certain additional tenants improvements and capital
expenditures for certain "big box" space users who may become tenants. The
Partnership will not commit working capital funds for these additional
tenant improvements and capital expenditures unless, among other things,
the Partnership believes that upon sale of the property, the Partnership
will receive a return of the incremental funds and a reasonable rate of
return thereon. With regard to the Piper Jaffray Tower, although JMB/Piper
had intended to pursue further discussions with the lender concerning
possible refinancing and/or loan modification alternatives, it currently
appears unlikely that an agreement with respect to such a transaction will
be made.

The source of capital for such items and for both short-term and long-
term future liquidity and distributions to partners is dependent upon
existing working capital, net cash generated by the Partnership's
investment properties and the sale or refinancing of such investments. The
venture partner in the 1090 Vermont venture exercised its right of first
refusal and purchased the Partnership's interest in the venture in May
1998. The Partnership received cash at closing of approximately $4,700,000
after payment of closing costs. Due to property specific concerns
discussed in the Notes to the consolidated financial statements, the
Partnership currently considers only Louis Joliet Mall and 900 Third Avenue
to be potential significant sources of future cash generated from sales.
The Partnership suspended operating distributions beginning with the fourth
quarter 1991 distribution payable in February 1992.

The Partnership expects to distribute approximately $15,000,000 ($35/
interest) of sales proceeds to the Holders of Interest in the third quarter
of 1998.

<PAGE>

cases or, in the absence of such dismissal, will seek bankruptcy court
approval of the Settlement Agreement. JMB/900 will seek to (a) obtain a
settlement and release of claims and causes of action (i) against the
Federal Deposit Insurance Corporation ("FDIC") and (ii) by the FDIC against
JMB/900 and each of the Progress Parties and certain of their related
parties, and (b) purchase the interests of the FDIC in P-C 900 in
connection with the settlement with the FDIC.

<PAGE>

The Partnership has held certain of its investment properties longer
than originally anticipated in an effort to maximize the return of their
investment to the Holders of Interests. Certain of the properties have
been classified by the Partnership or its ventures as held for sale or
disposition, and therefore, will no longer be subject to continued
depreciation. The Partnership currently expects that it will sell or
dispose of its remaining investment properties, with the possible exception
of its indirect interests in the 237 Park Avenue and the 1290 Avenue of the
Americas investment properties and the Partnership's interest in the Wells
Fargo Center - South Tower and Piper Jaffray Tower, no later than the end
of 1999, barring unforeseen economic developments.

Although the Partnership remains hopeful that it will be able to
distribute sale proceeds from the disposition of the 900 Third Avenue, and
Louis Joliet Mall investment properties, aggregate distributions of sale
and refinancing proceeds received by Holders of Interest over the entire
term of the Partnership will be substantially less than one-fourth of their
original investment. However, in connection with sales or other
dispositions (including transfers to lenders) of properties (or interests
therein) owned by the Partnership or its joint ventures, Holders of
Interests may be allocated substantial gain for Federal income tax
purposes, regardless of whether any proceeds are distributable from such
sales or other dispositions. In particular, the Piper Jaffray Tower, 237
Park Avenue, 1290 Avenue of the Americas and the Wells Fargo Center - South
Tower investment properties continue to suffer from the effects of the high
levels of debt secured by each property and provide no cash flow to the
Partnership. While loan and joint venture modifications have been obtained
which enable the Partnership to retain an ownership interest in these
properties, it is currently unlikely under existing arrangements that the
Partnership will receive significant proceeds from operations or sales of
these properties. However, upon disposition, the Partnership, and
therefore the Holders of Interest will recognize a significant amount of
taxable income with no distributable proceeds. For certain Holders of
Interests, such taxable gain may be offset by their suspended passive
activity losses (if any). Each Holder's tax consequences will depend on
such Holder's own tax situation.

RESULTS OF OPERATIONS

The decrease in accounts payable and other current liabilities at
June 30, 1998 as compared to December 31, 1997 is primarily due to the
timing of redemptions of gift certificates at the Louis Joliet Mall.

The increase in interest income for the three and six months ended
June 30, 1998 as compared to the same period in 1997 is primarily due to
the temporary investment of proceeds related to the sale of the
Partnership's interest in 1090 Vermont.

The decrease in other income for the three and six months ended
June 30, 1998 as compared with the same period in 1997 is primarily due to
the discounted payoff of the Turtle Creek note in December of 1997. This
amount is partially offset by the 1998 sale of stock that was received in
the settlement of claims against a tenant in bankruptcy related to the
Partnership's interest in the Old Orchard venture (sold in August 1993).

The increase in property operating expenses for the three and six
months ended June 30, 1998 as compared to the same periods in 1997 is
primarily due to an increase in contract costs for security and cleaning at
the Louis Joliet Mall.

<PAGE>

The decrease in general and administrative expenses for the three and
six months ended June 30, 1998 as compared to the same periods in 1997 is
primarily due to a decrease in certain expenses related to the
administration of the Partnership.

The increase in Partnership's share of operations of unconsolidated
venture for the three and six months ended June 30, 1998 as compared to the
same period in 1997 is primarily due to the classification of the Piper
Jaffray Tower as held for sale as of September 30, 1997, and therefore, not
subject to continued depreciation.

The gain on sale of interest in unconsolidated venture for the three
and six months ended June 30, 1998 and related decrease in investment in
unconsolidated ventures, at equity is due to the sale of the Partnership's
interest in 1090 Vermont in May 1998. Additionally, the decrease is also
due the Partnership's receipt of approximately $600,000 of undistributed
operating cash flow in 1998.

<PAGE>

<TABLE>

PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION
OCCUPANCY

The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties owned during 1998.

<CAPTION>
1997 1998
------------------------------------- ------------------------------
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. 237 Park Avenue Building
New York, New York . . . . . * * * * * *
2. 1290 Avenue of the
Americas Building
New York, New York . . . . . * * * * * *
3. 1090 Vermont Avenue
Building
Washington, D.C. . . . . . . 84% 84% 91% 93% 93% N/A
4. Piper Jaffray Tower
Minneapolis, Minnesota . . . 98% 98% 93% 93% 91% 89%
5. 900 Third Avenue Building
New York, New York . . . . . 98% 98% 97% 97% 97% 100%
6. Wells Fargo Center
South Tower
Los Angeles, California. . . 93% 90% 90% 90% 90% 90%
7. Louis Joliet Mall
Joliet, Illinois . . . . . . 82% 80% 82% 84% 83% 83%

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

An "*" indicates that the joint venture which owns the property was restructured, and therefore, such
information is not meaningful for the Partnership. Reference is made to the Notes for further information
regarding the reorganized and restructured ventures.

An "N/A" indicates that the property, or the Partnership's interest in the property was sold or was not owned
by the Partnership at the end of the period.

</TABLE>

<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3-A.* Amended and Restated Agreement of Limited
Partnership.

3-B.* Assignment Agreement by and among the Partnership,
the General Partners and the Initial Limited Partner.

3-C. Acknowledgement of rights and duties of the General
Partners of the Partnership between ABPP Associates, L.P. (a successor
Associated General Partner of the Partnership) and JMB Realty Corporation
as of December 31, 1995 is incorporated herein by reference to the
Partnership's Report for September 30, 1996 on Form 10-Q (File No. 0-15962)
dated November 8, 1996.

4-A. Long-term debt documents relating to the refinancing
of the first mortgage loan secured by the 1090 Vermont office building in
Washington, D.C. are hereby incorporated by reference to the Partnership's
Report on Form 10-K (File No. 0-15962) dated March 27, 1995.

4-B. Long-term debt documents relating to the September
1995 refinancing of the first and second mortgage loans secured by the
Louis Joliet Mall are hereby incorporated by reference to the Partnership's
Report on Form 10-Q (File No. 0-15962) dated November 9, 1995.

4-C. Documents relating to the modification and extension
of the mortgage loan secured by Wells Fargo-South Tower is hereby
incorporated by reference to the Partnership's Report for December 31, 1996
on Form 10-K (File No. 0-15962) dated March 21, 1997.

4-D. Amended and restated promissory note between Wells
Fargo Bank and the Partnership is hereby incorporated by reference to the
Partnership's Report for December 31, 1996 on Form 10-K (File No. 0-15962)
dated March 21, 1997.

4-E. Loan modification agreement of Wells Fargo Bank is
hereby incorporated by reference to the Partnership's Report for December
31, 1996 on Form 10-K (File No. 0-15962) dated March 21, 1997.

10-A. 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 (File No. 0-15962) dated June 4, 1984.

10-B. 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 (File No. 0-15962) dated June 4, 1984.

<PAGE>

10-C. 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 (File No. 0-15962) dated June 4, 1984.

10-D. 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. 0-15962) dated May 14, 1993.

10-E. Second Amended and Restated Articles of Partnership
of JMB/NYC Office Building Associates, L.P. is hereby incorporated by
reference to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 0-15962) dated March 28, 1994.

10-F. 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. 0-15962) dated March 28, 1994.

10-G. $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. 0-15962) dated March 28, 1994.

10-H. $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. 0-15962) dated March 28, 1994.

10-I. Assumption Agreements dated October 14, 1994 made by
237 Park Avenue Associates and by 1290 Associates in favor and for the
benefit of O&Y Equity Company, L.P., O&Y NY Building Corp. and JMB/NYC
Office Building Associates, L.P., are hereby incorporated by reference to
the Partnership's Report for December 31, 1994 on Form 10-K (File No. 0-
15962) dated March 27, 1995.

10-J. Lockbox and forbearance agreements related to the
mortgage note secured by the Wells Fargo Building, are hereby incorporated
by reference to the Partnership's Report for December 31, 1994 on Form 10-K
(File No. 0-15962) dated March 27, 1995.

10-K. Amendment No. 1 to the Agreement of Limited
Partnership of Carlyle-XIV Associates, L.P. dated January 1, 1994 by and
between Carlyle Investors, Inc. a Delaware corporation, as general partner,
and Carlyle Real Estate Limited Partnership-XIV, an Illinois limited
partnership, as limited partner, is hereby incorporated by reference to the
Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-15962)
dated May 11, 1995.

<PAGE>

10-L. Amendment No. 1 to the Second Amended and Restated
Articles of Partnership of JMB/NYC Office Building Associates, L.P. dated
January 1, 1994 by and between Carlyle Managers, Inc. a Delaware
corporation, as general partner, and Carlyle-XIII Associates, L.P. a
Delaware limited partnership, Carlyle-XIV Associates, L.P. a Delaware
limited partnership and Property Partners, L.P. a Delaware limited
partnership, as the limited partners, is hereby incorporated by reference
to the Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-
15962) dated May 11, 1995.

10-M. Agreement of Conversion of 1290 Associates into 1290
Associates, L.L.C. dated October 10, 1995 among JMB/NYC Office Building
Associates, L.P., an Illinois limited partnership, O&Y Equity Company,
L.P., a Delaware limited partnership and O&Y NY Building Corp., a Delaware
corporation, is hereby incorporated by reference to the Partnership's
Report for December 31, 1995 on Form 10-K (File No. 0-15962) dated March
25, 1996.

10-N. Agreement of Conversion of 237 Park Avenue Associates
into 237 Park Avenue Associates, L.L.C., dated October 10, 1995 among
JMB/NYC Office Building Associates, L.P., an Illinois limited partnership,
O&Y Equity Company, L.P., a Delaware limited partnership and O&Y NY
Building Corp., a Delaware corporation, is hereby incorporated by reference
to the Partnership's Report for December 31, 1995 on Form 10-K (File No. 0-
15962) dated March 25, 1996.

10-O. Disclosure Statement for the Second Amended Joint
Plan of Reorganization of 237 Park Avenue Associates, L.L.C. and 1290
Associates, L.L.C. dated August 9, 1996, is hereby incorporated by
reference to the Partnership's Report for September 30, 1996 on Form 10-Q
(File No. 0-15962) dated November 8, 1996.

10-P. Documents relating to the operating agreement of
Maguire Thomas Partners-South Tower, L.L.C. are incorporated herein by
reference to the Partnership's Report for December 31, 1996 on Form 10-K
(File No. 0-15962) dated March 21, 1997.

10-Q. Consent of Director of Carlyle-XIV Managers, Inc.
(known as Carlyle Managers, Inc.) dated October 31, 1996, is hereby
incorporated by reference to the Partnership's Report for December 31, 1996
on Form 10-K (File No. 0-15962) dated March 21, 1997.

10-R. Consent of Director of Carlyle-XIII, Managers, Inc.
(known as Carlyle Investors, Inc.) dated October 31, 1996, is hereby
incorporated by reference to the Partnership's Report for December 31, 1996
on Form 10-K (File No. 0-15962) dated March 21, 1997.

10-S. Allonge to demand note between Carlyle Real Estate
Limited Partnership-XIV and Carlyle Managers, Inc. dated October 31, 1996,
is hereby incorporated by reference to the Partnership's Report for
December 31, 1996 on Form 10-K (File No. 0-15962) dated March 21, 1997.

<PAGE>

10-T. Allonge to demand note between Carlyle Real Estate
Limited Partnership-XIV and Carlyle Investors, Inc., dated October 31,
1996, is hereby incorporated by reference to the Partnership's Report for
December 31, 1996 on Form 10-K (File No. 0-15962) dated March 21, 1997.

10-U. Indemnification agreement between Property Partners,
L.P., Carlyle-XIII Associates, L.P. and Carlyle-XIV Associates, L.P. dated
as of October 10, 1996, is hereby incorporated by reference to the
Partnership's Report for December 31, 1996 on Form 10-K (File No. 0-15962)
dated March 21, 1997.

10-V. Agreement of Limited Partnership of 237/1290 Lower
Tier Associates, L.P. dated as of October 10, 1996, is hereby incorporated
by reference to the Partnership's Report for December 31, 1996 on Form 10-K
(File No. 0-15962) dated March 21, 1997.

10-W. Amended and Restated Limited Partnership Agreement of
237/1290 Upper Tier Associates, L.P. dated as of October 10, 1996, is
hereby incorporated by reference to the Partnership's Report for December
31, 1996 on Form 10-K (File No. 0-15962) dated March 21, 1997.

10-X. Purchase Agreement between Carlyle Real Estate
Partnership - XIV and The John Ackridge Company dated as of May 29, 1998,
is hereby filed herewith.

10-Y. First Amendment to Amended and Restated Agreement of
Limited Partnership of 1090 Vermont Avenue, N.W. Associates Limited
Partnership dated as of May 29, 1998, is hereby filed herewith.

27. Financial Data Schedule.

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

* Previously filed as Exhibits 3-B, 3-C and 10-H to the
Partnership's Report for December 31, 1992 on Form 10-K of the Securities
Exchange Act (File No. 0-15962) filed on March 30, 1993 and hereby
incorporated herein by reference.

(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.

<PAGE>

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: August 12, 1998

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: August 12, 1998

EXHIBIT 10-X
- ------------
(Carlyle-XIV)

May 29, 1998

The John Akridge Company
601 Thirteenth Street
Suite 300
Washington, D.C. 20005

Attention: Mr. Alan Wasserbach

Re: Sale of Partnership Interest
1090 Vermont Avenue, N.W. Associates Limited Partnership

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Agreement of Limited
Partnership of 1090 Vermont Avenue, N.W. Associates Limited Partnership
(the "Partnership") dated as of September 26, 1984, by and among Carlyle
Real Estate Limited Partnership-XIV, an Illinois limited partnership
("Carlyle"), The John Akridge Company, a Virginia corporation ("JACO") and
those parties designated therein as limited partners (which partnership
agreement, together with any amendments thereto, is herein called the
"Partnership Agreement").

A. On December 30, 1997, Carlyle notified JACO of its desire
to consummate a sale of the Business Property for a purchase price of
Twenty Seven Million Dollars ($27,000,000) pursuant to Section 6.2C of the
Partnership Agreement.

B. On January 30, 1998, JACO notified Carlyle of its
election (i) to exercise its right of first refusal to purchase the
Business Property pursuant to Section 6.2C of the Partnership Agreement,
and (ii) to acquire from Carlyle, pursuant to Section 6.2D(1) of the
Partnership Agreement, in lieu of purchasing the Business Property, all of
the interests of Carlyle in the Partnership for a purchase price equal to
the amount of distributions which would have been made to Carlyle if the
sale of the Business Property had been consummated and the proceeds of such
sale (and all other Partnership cash) distributed in accordance with
Article III of the Partnership Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual
undertakings of the parties hereto, it is hereby agreed as follows:

1. CERTAIN DEFINITIONS.

A. DEFINITIONS IN PARTNERSHIP AGREEMENT. Unless
otherwise expressly defined in this letter agreement, all defined terms
used in this letter agreement shall have the meaning set forth in the
Partnership Agreement.

B. PRORATION AMOUNT. As used herein, means the net
amount of the credit (or debit) to (or from) Carlyle as a result of the
allocation of income and expenses to the "Old Partnership" (as such term is
hereinafter defined) by reason of the prorations hereinafter provided for.

2. PURCHASE AND SALE. Carlyle shall sell to JACO, and JACO
shall purchase from Carlyle, all of Carlyle's right, title and interest in
and to the Partnership (the "Carlyle Interest"), upon the terms, covenants
and conditions hereinafter set forth.

<PAGE>

3. PURCHASE PRICE. The purchase price (the "Purchase
Price") of the Carlyle Interest will be an amount equal to that which
Carlyle would receive had the Business Property been sold for a purchase
price equal to $27,000,000 and the Partnership dissolved and wound up
following such sale and the proceeds of such sale distributed to the
partners thereof in accordance with the terms of the Partnership Agreement.

Carlyle and JACO agree that if the "Closing Date" (as hereinafter defined)
is on May 29, 1998, the Purchase Price shall be $4,890,109 (the calculation
of which has been agreed to by JACO and Carlyle and is set forth on
Exhibit "B" hereto), which shall be adjusted by the Proration Amount (the
amount to be paid as aforesaid being herein called the "Closing Payment").
The Closing Payment shall be paid on the Closing Date by wire transfer to
Carlyle of immediately available federal funds in accordance with wiring
instructions to be provided by Carlyle in connection with the closing
hereunder.

4. PAYMENT OF PURCHASE PRICE. The Closing Payment shall be
paid to Carlyle by wire transfer of immediately available federal funds on
the Closing Date.

5. CLOSING. The closing of the sale and purchase herein
provided shall be consummated on May 29, 1998 or as soon thereafter as JACO
and Carlyle shall agree, but in no event later than May 31, 1998 (the
"Closing Date"). On or before 2:00 p.m. Central time on the Closing Date,
(a) JACO shall deliver to Carlyle (i) the Closing Payment by wire transfer
of immediately available federal funds, (ii) two (2) duly executed and
acknowledged counterpart originals of the assignment and assumption of
partnership interest covering the Carlyle Interest, in the form of Exhibit
"A" attached hereto ("Assignment and Assumption"), (iii) two (2) duly
executed and acknowledged counterpart originals of a first amendment to the
Partnership Agreement acknowledging the withdrawal of Carlyle from the
Partnership and the admission of JACO (or TMF 1090 LLC, if this agreement
is assigned thereto by JACO) to the Partnership (the "First Amendment To
Partnership Agreement"), substantially in the form of Exhibit "C" attached
hereto, (iv) resolutions and incumbency certificates evidencing its
authority to execute and consummate the transactions contemplated herein,
and (v) a recertification of its representations and warranties given
pursuant to Section 7 hereof, and (b) Carlyle shall deliver to JACO (i) two
(2) duly executed and acknowledged counterpart originals of the Assignment
and Assumption, (ii) a recertification of its representations and
warranties given pursuant to Section 7 hereof, (iii) two (2) duly executed
and acknowledged counterpart originals of the First Amendment To
Partnership Agreement, and (iv) resolutions and incumbency certificates
evidencing its authority to execute and consummate the transactions
contemplated herein

6. PRORATIONS.

A. ITEMS TO BE PRORATED. All rent and other items of
income, as well as real estate taxes and assessments on the Property which
are due in 1998 and all other normal and customary expenses in connection
with the ownership and operation of the Business Property and the
Partnership shall be prorated on the Closing Date, computed as of the
Closing Date, to allocate such income and expenses of the Partnership
between the Partnership as it was constituted immediately prior to the sale
of the Carlyle Partnership Interest (the "Old Partnership") hereunder and
the Partnership as it is constituted immediately following the sale of the
Carlyle Interest hereunder. The Purchase Price shall be adjusted to
reflect the Proration Amount. The Proration Amount shall not reflect, nor
shall the Purchase Price be otherwise adjusted for any items of income
attributable to the period prior to the Closing Date but unpaid as of such
date (including without limitation, any rent, operating expense
reimbursements or other items of income), which amounts shall be handled as
set forth in Section 6B hereof.

<PAGE>

B. CALCULATIONS OF PRORATION AMOUNT AND ACCRUAL
AMOUNT. The Proration Amount determined under subparagraph A above and the
Proration Amount shall be determined on the basis of a written statement or
statements prepared and approved by JACO and Carlyle prior to the Closing
Date. JACO and Carlyle shall determine the manner in which the Proration
Amount is to be calculated in a fair, equitable and reasonable manner.
JACO and Carlyle shall cooperate with each other in good faith in
connection with the determinations and computations required hereunder.
JACO shall cause the Partnership to use diligent good faith efforts to
collect any delinquent rent, operating expense reimbursements and other
items of income which may be attributable to the period prior to the
Closing Date but unpaid as of the date thereof to be collected as soon as
reasonably possible after the Closing Date (and to promptly remit Carlyle's
share thereof upon receipt). In the event any prorations, credits,
apportionments or computations made under subparagraph D above shall prove
to be incorrect for any reason, then each of JACO and Carlyle shall be
entitled to an adjustment to correct the same, provided that any party
entitled to such adjustment make written demand on such other party from
whom it is entitled to such adjustment not later than October 15, 1998 (and
all such adjustments shall be finalized no later than November 15, 1998).
Notwithstanding the foregoing to the contrary, (i) any item which cannot be
finally prorated or determined because of the unavailability of information
shall be tentatively prorated or determined on the basis of the best data
then available and reprorated after the information is available, and (ii)
to the extent that the Partnership (a) receives a refund of real estate
taxes for any period prior to the Closing Date, or (b) is not actually
required to pay to Steelcase all or any portion of the tenant improvement
allowance currently owing to Steelcase in the amount of Two Hundred Six
Thousand Nine Hundred Twenty Dollars ($206,920), then the Proration Amount
shall be adjusted accordingly and JACO shall cause the Partnership to pay
to Carlyle any amounts then owing to Carlyle as a result of such
adjustment. In connection therewith, for one (1) year after the Closing
Date JACO shall continue to provide Carlyle full access to all books and
records of the Partnership and to all other financial information as may be
reasonably required in connection with the foregoing determinations.
Notwithstanding the foregoing, JACO and Carlyle hereby agree that, for ease
of administration and other reasons, they will work in good faith to
attempt to determine a final closing amount which will encompass all
prorations, credits and other determinations to be made under this section,
such that no post-closing adjustments for such items will be required.

C. CLOSING COSTS. Carlyle shall pay its own legal
fees in connection with the transactions under this Agreement. JACO shall
pay its own legal fees in connection with the transactions under this
Agreement, together with all closing costs, if any, which may be incurred
in connection with the transactions contemplated in this Agreement,
including all documentary, filing, recording, conveyance, transfer,
intangible and other taxes, if any, recording or filing charges for any
instruments or documents which may be recorded or filed, if any, and all
title, survey or escrow fees, if any.

D. PROFITS AND LOSSES OF THE PARTNERSHIP PRIOR TO
CLOSING; TAX RETURNS. Subject to the provisions set forth in subparagraph
B above, the parties confirm that profits and losses of the Partnership for
the period from January 1, 1998 through the Closing Date shall be allocated
for tax reporting purposes pursuant to the applicable provisions of the
Partnership Agreement. JACO will cooperate with Carlyle in providing and
preparing such information and items as may be reasonably required in order
to timely prepare and deliver tax returns and other similar items after the
Closing Date (and, in connection therewith, for one (1) year after the
Closing Date JACO shall continue to provide Carlyle full access to all
books and records of the Partnership and to all other financial information
as may be reasonably required in connection with such determinations).

<PAGE>

7. REPRESENTATIONS AND WARRANTIES.

A. REPRESENTATIONS AND WARRANTIES OF CARLYLE. Carlyle
hereby represents and warrants to JACO as follows (which representations
and warranties Carlyle shall also make as of the Closing Date):

(1) Except as set forth in subparagraphs A(2)
through A(6) below, the sale of the Carlyle Interest is and will be made on
an "as is" basis, without representations and warranties of any kind or
nature, express, implied, or otherwise, including, but not limited to, any
representation or warranty concerning title to the Business Property, the
physical condition of the Business Property (including, but not limited to,
the condition of the soil or the improvements), the environmental condition
of the Business Property (including, but not limited to, the presence or
absence of hazardous substances on or respecting the Business Property),
the compliance of the Business Property with applicable laws and
regulations (including, but not limited to, zoning and building codes or
the status of development or use rights respecting the Business Property),
the financial condition of the Business Property or the Partnership or any
other representation or warranty respecting any income, expenses, charges,
liens or encumbrances, rights or claims on, affecting or pertaining to the
Partnership or the Business Property or any part thereof. JACO
acknowledges that JACO is an existing partner in the Partnership, and is
also affiliated with The John Akridge Management Company ("Manager"), the
manager of the Business Property. JACO acknowledges that, except as to
matters specifically set forth in subparagraphs A(2) through A(6) below,
JACO will acquire the Carlyle Interest solely on the basis of (a) its own
physical and financial examination of the Business Property (JACO having
completed all such due diligence reviews, examinations and inspections
deemed necessary by JACO) and (b) information and knowledge in its
possession and in the possession of Manager. As a result of its existing
interest in the Partnership and/or its affiliations with Manager, as
applicable, JACO is not relying upon, and has no need to rely upon, any
knowledge or information in the possession of Carlyle with respect to any
of the foregoing matters except as set forth herein.

(2) Carlyle is a limited partnership, duly
organized, validly existing and in good standing under the laws of the
State of Illinois.

(3) Carlyle is duly authorized, and qualified
under any and all applicable laws, regulations, ordinances and orders to do
all things required of it, under and in connection with this Agreement.

(4) Carlyle has the right, power and authority to
enter into and perform the terms of this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Carlyle, consummation of the transactions contemplated herein,
and compliance with the terms hereof do not conflict with or violate any
provision of any organization document of Carlyle, and no such actions will
conflict with, result in the breach of, constitute a default under, or
require any consent or approval under any agreement, instrument, or
document to which the Carlyle is a part or by which it may be bound.

(5) This Agreement and all agreements,
instruments and documents herein provided to be executed or to be caused to
be executed by Carlyle are (or, in the case of agreements, instruments and
documents executed as of the Closing Date, will be as of the Closing Date)
duly authorized, executed and delivered by, and binding upon, Carlyle.

(6) Carlyle owns the Carlyle Interest, and such
Carlyle Interest as of the Closing Date shall be, free and clear of any and
all liens, pledges, charges, encumbrances, security interests, rights,
options, claims and demands.

<PAGE>

B. REPRESENTATIONS AND WARRANTIES OF JACO. JACO
hereby represent and warrant to Carlyle as follows (which representations
and warranties JACO shall also make as of the Closing Date):

(1) JACO is a corporation, duly organized,
validly existing and in good standing under the laws of the State of
Virginia.

(2) JACO has the right, power and authority to
enter into and perform the terms of this Agreement and to consummate the
transactions contemplated hereby.

(3) This Agreement and all agreements,
instruments and documents herein provided to be executed or to be caused to
be executed by JACO is (or, in the case of agreements, instruments and
documents executed as of the Closing Date, will be as of the Closing Date)
duly authorized, executed and delivered by, and binding upon, JACO.

(4) JACO owns the interest of JACO in the
Partnership, as such interest is described in the Partnership Agreement
(the "JACO Interest"), and such JACO Interest as of the Closing Date shall
be, free and clear of any and all liens, pledges, charges, encumbrances,
security interests, rights, options, claims and demands.

8. INDEMNIFICATION.

A. INDEMNIFICATION BY JACO AND THE PARTNERSHIP. As of
the Closing Date, JACO, shall hold harmless, indemnify and defend Carlyle
from and against all claims, rights, demands, obligations, liabilities,
costs and expenses (including reasonable attorneys' fees) of any kind or
nature accruing on or after the Closing Date and related to the Partnership
Agreement, the Partnership, the Business Property and any agreements,
contracts or other matters respecting the same (and JACO shall release
Carlyle from all such matters). In addition, JACO shall hold harmless,
indemnify and defend Carlyle from and against any loss or damage to Carlyle
resulting from any inaccuracy in or breach of any representation and
warranty of JACO under this Agreement (or any agreement executed in
connection herewith) or resulting from any breach or default by JACO under
this Agreement (or any agreement executed in connection herewith).

B. INDEMNIFICATION BY CARLYLE. Carlyle shall hold
harmless, indemnify and defend JACO from and against any loss or damage to
JACO resulting from any inaccuracy in or breach of any representation and
warranty of Carlyle under this Agreement (or any agreement executed in
connection herewith) or resulting from any breach or default by Carlyle
under this Agreement (or any agreement executed in connection herewith).

9. BROKERAGE MATTERS. Carlyle represents and warrants to
JACO, and JACO represents and warrants to Carlyle, that no broker or finder
has been engaged by it, respectively, in connection with any of the
transactions contemplated by this letter agreement or to its knowledge is
in any way connected with any of such transactions.

10. NO PERSONAL LIABILITY. No constituent partner in or
agent of Carlyle, JACO or TMF 1090 LLC, as applicable, nor any advisor,
trustee, member, director, officer, employee, beneficiary, shareholder,
participant, representative or agent of any corporation or trust that is or
becomes a constituent partner in Carlyle (including, but not limited to,
JMB Realty Corporation), JACO or TMF 1090 LLC, as applicable, shall have
any personal liability, directly or indirectly, under or in connection with
this Agreement or any agreement made or entered into under or pursuant to
the provisions of this Agreement, or any amendment or amendments to any of
the foregoing made at any time or times, heretofore or hereafter, and (a)
JACO, TMF 1090 LLC, the Partnership and its or their successors and assigns

<PAGE>

and, without limitation, all other persons and entities, shall look solely
to the assets of Carlyle for the payment of any claim or for any
performance, and JACO, on behalf of itself, TMF 1090 LLC, the Partnership
and its or their successors and assigns, hereby waives any and all such
personal liability, and (b) Carlyle and its successors and assigns and,
without limitation, all other persons and entities, shall look solely to
the assets of JACO and TMF 1090 LLC for the payment of any claim or for any
performance, and Carlyle, on behalf of itself and its successors and
assigns, hereby waives any and all such personal liability.
Notwithstanding anything to the contrary contained in this Agreement,
neither the negative capital account of any constituent partner in Carlyle,
JACO or TMF 1090 LLC, as applicable, or in any other constituent partner of
Carlyle, JACO or TMF 1090 LLC, as applicable, nor any obligation of any
constituent partner in Carlyle, JACO or TMF 1090 LLC, as applicable, or in
any other constituent partner of Carlyle, JACO or TMF 1090 LLC, as
applicable, to restore a negative capital account or to contribute capital
to Carlyle, JACO or TMF 1090 LLC, as applicable, or to any other
constituent partner of Carlyle, JACO or TMF 1090 LLC, as applicable, shall
at any time be deemed to be the property or an asset of Carlyle, JACO or
TMF 1090 LLC, as applicable, or any such other constituent partner (and
neither Carlyle, on the one hand, nor JACO nor TMF 1090 LLC nor the
Partnership, on the otherhand, nor any of their respective successors or
assigns shall have any right to collect, enforce or proceed against or with
respect to any such negative capital account of a partner's obligation to
restore or contribute).

11. SUCCESSORS AND ASSIGNS. JACO shall be entitled to assign
its rights and obligations under this Agreement to TMF 1090 LLC, a Delaware
limited liability company, but JACO shall not be released from its
obligations hereunder. No transfer or assignment in violation of the
provisions hereof shall be valid or enforceable. Subject to the foregoing,
this Agreement and the terms and provisions hereof shall inure to the
benefit of and be binding upon such assignee

12. NO RELEASE OF PARTNERSHIP OBLIGATIONS. Notwithstanding
anything to the contrary in this Agreement, nothing contained herein shall
release JACO or Carlyle from their respective obligations with respect to
the Old Partnership (under the partnership agreement for the Old
Partnership or any "Collateral Agreement" [as defined in the foregoing
partnership agreement]) which arise or accrue on or before the Closing
Date.

13. FURTHER ASSURANCES. The parties hereto agree to execute,
acknowledge and deliver any and all additional papers, documents and other
assurances and shall perform any and all acts and things reasonably
necessary in connection with the performance of the obligations hereunder
and to carry out the intent of the parties hereto (provided the same do not
increase costs, liability or obligations in a manner not otherwise provided
for herein).

14. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, provided each of the parties hereto executes at
least one counterpart; each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts, together, shall
constitute but one agreement.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this
letter agreement as of the day and year first above written.

Very truly yours,
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIV,
an Illinois limited partnership

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

By:_____________________________
Name:__________________________
Title:___________________________

ACCEPTED AND AGREED TO AS OF
THE DATE FIRST WRITTEN ABOVE:

THE JOHN AKRIDGE COMPANY,
a Virginia corporation

By:_____________________________
Name:__________________________
Title:___________________________

<PAGE>

EXHIBIT "A"

ASSIGNMENT AND ASSUMPTION

See Attached

<PAGE>

ASSIGNMENT AND ASSUMPTION OF PARTNERSHIP INTEREST
-------------------------------------------------

FOR VALUABLE CONSIDERATION, receipt whereof is hereby acknowledged, the
undersigned, CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIV, an Illinois
limited partnership ("Assignor"), hereby sells, transfers, assigns and
conveys to TMF 1090 LLC, a Delaware limited liability company ("Assignee"),
all of Assignor's right, title and interest in and to the interest of
Assignor in 1090 VERMONT AVENUE, N.W. ASSOCIATES LIMITED PARTNERSHIP, a
District of Columbia limited partnership ("Partnership"), being a 49%
general partnership interest in the Partnership and a 1% limited
partnership interest in the Partnership, as such interest is described in
the "Partnership Agreement", including, but not limited to, Assignor's
interest in the capital and profits and losses of the Partnership from and
after the "Effective Date" of this Assignment. As used herein,
"Partnership Agreement" means that certain amended and restated partnership
agreement of the Partnership dated as of September 26, 1984, captioned
"AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF 1090 VERMONT
AVENUE, N.W. ASSOCIATES LIMITED PARTNERSHIP", by and among Assignor, The
John Akridge Company, a Virginia corporation ("JACO") and those parties
designated therein as limited partners, together with all other amendments
or modifications thereof entered into prior hereto.
This Assignment and Assumption of Partnership Interest is given pursuant to
that certain letter agreement ("Agreement"), dated as of May 29, 1998,
between Assignor and Assignee as successor in interest to JACO.
The covenants, agreements, representations, warranties and
limitations provided in the Agreement with respect to the partnership
interest conveyed hereunder are hereby incorporated herein by this
reference as if herein set out in full, shall survive the closing of the
transaction contemplated in the Agreement (subject to the limitations
provided therein) and shall inure to the benefit of and shall be binding
upon Assignor and Assignee, and their respective successors and assigns.
Except as set forth in said Agreement, said partnership interest is
assigned without warranty or representation, express or implied.
Assignee hereby assumes and agrees to perform all obligations
of Assignor under the Partnership Agreement arising or accruing on or after
the Effective Date of this Assignment.
This Assignment may be executed in any number of counterparts,
provided each of the parties hereto executes at least one counterpart; each
such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts, together, shall constitute but one Assignment.
IN WITNESS WHEREOF, Assignor has executed this Assignment and
Assumption on May 28, 1998, but effective as of May 29, 1998 (the
"Effective Date").

<PAGE>

ASSIGNOR:
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIV,
an Illinois limited partnership

By JMB REALTY CORPORATION,
a Delaware corporation,
General Partner

By ___________________________
Name: __________________
Title: ___________________

[SIGNATURES CONTINUED ON NEXT PAGE]

ASSIGNEE:

TMF 1090 LLC,
a Delaware limited liability company

By: The Monument Fund, LLC,
a Delaware limited liability company,
Its Sole Member

By: Monument Akridge, L.L.C.,
a Delaware limited liability company,
Its Managing Member

By: JACo Manager, L.L.C.,
a Delaware limited liability company,
Its Managing Member

By: JACo Manager, Inc. of Delaware,
a Delaware corporation,
Its Managing Member

By:_____________________________
Name:__________________________
Title:___________________________

<PAGE>

EXHIBIT B
- ---------

1090 VERMONT AVENUE
SALES CALCULATION AND DISTRIBUTION OF PROCEEDS

Sales Price $ 27,000,000.00
Area Above Grade Rentable 140,000.00
Price Per Square Foot 192.86

Assume Sale of 1090 Vermont Avenue
Gross Sales Price $ 27,000,000.00
Less: Existing Debt ($ 17,750,000.00)
Cost of Sale ($ 861,500.00)
Net Sale Proceeds ($ 8,388,500.00)
Partnership Cash 0
---------------
Sale Proceeds and Cash for Distribution $ 8,388,500.00
---------------

*Customary prorations at settlement

Distribution of Sale Proceeds
1st Accrued Interest on Partner Loan
Carlyle $ 243,595.00
Akridge $ 243,595.00
2nd Outstanding Partner Loan
Carlyle $ 1,004,515.00
0
Akridge $ 1,004,515.00
0
3rd Unpaid Preferred Returns
(thru April 30, 1998)
Unpaid since Dec. 1989 Carlyle $ 506,718.00
Akridge
4th Capital Balances Carlyle $ 885,000.00
Akridge $ 0
---------------
Total $ 3,887,938.00
---------------
0
5th Balance to Distribute $ 4,500,562.00
0
50.00% Carlyle $ 2,250,281.00

50.00% JACO Partners $ 2,250,281.00
---------------

Total Distributions $ 8,388,500.00
Summary of Distribution Carlyle $ 4,890,109.00
JACO Partners $ 2,250,281.00
Akridge $ 1,248,110.00
---------------
TOTAL $ 8,388,500.00
---------------
0

<PAGE>

EXHIBIT "C"

FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF
1090 VERMONT AVENUE, N.W. ASSOCIATES LIMITED PARTNERSHIP

See Attached

EXHIBIT 10-Y
- ------------
(Carlyle-XIV)

FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF 1090 VERMONT AVENUE, N.W.
ASSOCIATES LIMITED PARTNERSHIP

THIS FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF 1090 VERMONT AVENUE, N.W. ASSOCIATES LIMITED PARTNERSHIP
("Amendment") is made this 29th day of May, 1998 by and among Carlyle Real
Estate Limited Partnership-XIV, an Illinois limited partnership
("Carlyle"), The John Akridge Company, a Virginia corporation ("JACo"),
John E. Akridge, III, an individual ("JEA"), Henry E. Bowden, an individual
("Bowden"), Vermont & L Ltd., a District of Columbia limited partnership
("V&L"), Alan W. Wasserbach, an individual ("Wasserbach"; Carlyle, JACo,
JEA, Bowden, V&L, and Wasserbach are sometimes hereinafter referred to
collectively as the "Partners"), and TMF 1090 LLC, a Delaware limited
liability company ("TMF 1090"), as the newly admitted general and limited
partner hereunder.

WHEREAS, the Partners are partners in 1090 Vermont Avenue, N.W.
Associates Limited Partnership, a District of Columbia limited partnership
(the "Partnership");

WHEREAS, the Partners entered into that certain Amended and Restated
Agreement of Limited Partnership of 1090 Vermont Avenue, N.W. Associates
Limited Partnership dated as of September 26, 1984 ("Partnership
Agreement") in connection with certain real property located at 1090
Vermont Avenue, N.W., in Washington, D.C. as more particularly described in
the Partnership Agreement;

WHEREAS, JACo has a right to acquire all of Carlyle's partnership
interests in the Partnership pursuant to that certain Letter Agreement by
and between Carlyle and JACo dated May 29, 1998 (the "Purchase Agreement");

WHEREAS, concurrently herewith JACo is assigning all of its right,
title and interest in and to the Purchase Agreement to TMF 1090 pursuant to
that certain Assignment of Partnership Interest Purchase Agreement by and
between JACo and TMF 1090 dated May 29, 1998;

WHEREAS, Carlyle desires to withdraw as a general partner and as a
limited partner from the Partnership; and

WHEREAS, the Partners desire to admit TMF 1090 to the Partnership.

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. All capitalized terms used but not defined herein shall have
the meanings set forth in the Partnership Agreement.

2. Pursuant to Section 7.5 of the Partnership Agreement, Carlyle
and JACo as the General Partners hereby consent to the withdrawal of
Carlyle from the Partnership as a general partner and as a limited partner,
and hereby agree that effective as of the date hereof, Carlyle shall no
longer be a General Partner or Limited Partner of the Partnership.

3. TMF 1090 is hereby admitted as a General Partner and as a
Limited Partner of the Partnership and shall have all the rights,
obligations and responsibilities of Carlyle arising or accruing after the
date hereof under the Partnership Agreement granted to a General Partner or
Limited Partner, respectively. Any references to Carlyle in the
Partnership Agreement with respect to the period from and after the date
hereof shall be deemed to mean TMF 1090 as admitted to the Partnership
hereunder.

<PAGE>

4. TMF 1090 hereby accepts the rights, responsibilities and
obligations of Carlyle arising or accruing after the date hereof under the
Partnership Agreement and agrees to assume and to be bound by the terms
thereof.

5. This Amendment is being entered into pursuant to the Purchase
Agreement. The covenants, agreements, representations, warranties and
limitations provided in the Purchase Agreement are hereby incorporated
herein by this reference as if herein set out in full, shall survive the
closing of the transaction contemplated in the Purchase Agreement (subject
to the limitations provided therein) and shall inure to the benefit of and
shall be binding upon JACo and TMF 1090, on the one hand, and Carlyle, on
the other hand, and their respective successors and assigns.

6. Except as modified herein, all terms, covenants and conditions
of the Amendment shall remain in full force and effect. All references in
the Partnership Agreement to the "Agreement" or "this Agreement" shall be
deemed to refer to the Partnership Agreement as amended by this Amendment.
In the event of any conflict between the terms and provisions of the
Partnership Agreement and this Amendment, this Amendment shall prevail.
This Amendment may be executed in counterparts, each of which when taken
together shall constitute one and the same agreement.

[signatures begin next page]

<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Amendment as
of the day first above written.

EXISTING GENERAL PARTNERS

CARLYLE REAL ESTATE LIMITED
PARTNERSHIP - XIV, a limited
partnership

By: CARLYLE - XIV MANAGERS,
INC., an Illinois corporation,
General Partner

By:
Name:
Title:

THE JOHN AKRIDGE COMPANY, a
Virginia corporation

By: _______________________________
John E. Akridge, III, President

<PAGE>

EXISTING LIMITED PARTNERS

CARLYLE REAL ESTATE LIMITED
PARTNERSHIP - XIV, a limited
partnership

By: CARLYLE - XIV MANAGERS,
INC., an Illinois corporation,
General Partner

By:
Name:
Title:

VERMONT AND L LTD., a District of
Columbia limited partnership

By: _______________________________
John E. Akridge III, General
Partner

By: _______________________________
Henry E. Bowden, General
Partner

__________________________________
JOHN E. AKRIDGE, III

__________________________________
ALAN W. WASSERBACH

__________________________________
HENRY E. BOWDEN

<PAGE>

NEWLY ADMITTED GENERAL AND
LIMITED PARTNER

TMF 1090 LLC, a Delaware limited liability
company

By: The Monument Fund, LLC, sole member

By: Monument Akridge, L.L.C.,
managing member

By: JACo Manager, L.L.C.,
managing member

By: JACo Manager, Inc. of
Delaware, managing member

By:
Name:
Title:

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998

<CASH> 27,265,218
<SECURITIES> 0
<RECEIVABLES> 568,391
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,833,609
<PP&E> 34,025,945
<DEPRECIATION> 0
<TOTAL-ASSETS> 67,560,589
<CURRENT-LIABILITIES> 3,516,665
<BONDS> 53,447,914
<COMMON> 0
0
0
<OTHER-SE> (3,338,388)
<TOTAL-LIABILITY-AND-EQUITY>67,560,589
<SALES> 4,493,410
<TOTAL-REVENUES> 5,250,254
<CGS> 0
<TOTAL-COSTS> 2,210,903
<OTHER-EXPENSES> 659,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,936,588
<INCOME-PRETAX> (556,337)
<INCOME-TAX> 0
<INCOME-CONTINUING> (238,574)
<DISCONTINUED> 2,633,169
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,394,595
<EPS-PRIMARY> 5.93
<EPS-DILUTED> 5.93

</TABLE>