CARLYLE REAL ESTATE LTD PARTNERSHIP XIV /IL/, 10-Q, 1999-05-17

CARLYLE REAL ESTATE LTD PARTNERSHIP XIV /IL/
10-Q, 1999-05-17
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended
March 31, 1999 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. . . . . . . . . . . . . . . . 16

PART II OTHER INFORMATION

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

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

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

CONSOLIDATED BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998

(UNAUDITED)

ASSETS
------

MARCH 31, DECEMBER 31,
1999 1998
------------ ------------

Current assets:
Cash and cash equivalents. . . . . . . . . $ 2,888,375 6,875,849
Interest, rents and other receivables
(net of allowance for doubtful
accounts of $73,560 and $72,746 at
March 31, 1999 and December 31, 1998,
respectively). . . . . . . . . . . . . . 809,987 685,990
Prepaid expenses . . . . . . . . . . . . . 25,640 25,860
Escrow deposits. . . . . . . . . . . . . . 495,992 352,268
------------ ------------
Total current assets . . . . . . . . 4,219,994 7,939,967
------------ ------------
Investment property held for sale
or disposition . . . . . . . . . . . . . . 34,369,810 34,434,318
------------ ------------

Investment in unconsolidated ventures,
at equity. . . . . . . . . . . . . . . . . 9,968,675 5,068,160
Deferred expenses. . . . . . . . . . . . . . 826,265 856,169
Accrued rents receivable . . . . . . . . . . 569,690 570,862
------------ ------------
$ 49,954,434 48,869,476
============ ============

<PAGE>

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

CONSOLIDATED BALANCE SHEETS - CONTINUED

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

MARCH 31, DECEMBER 31,
1999 1998
------------ ------------
Current liabilities:
Current portion of long-term debt. . . . . $ 394,919 387,096
Accounts payable and other current
liabilities. . . . . . . . . . . . . . . 1,201,751 774,360
Due to affiliates. . . . . . . . . . . . . 1,471,150 1,415,702
Accrued interest . . . . . . . . . . . . . 169,473 170,101
Accrued real estate taxes. . . . . . . . . 682,500 545,000
------------ ------------
Total current liabilities. . . . . . 3,919,793 3,292,259

Tenant security deposits . . . . . . . . . . 21,619 19,919
Investment in unconsolidated ventures,
at equity. . . . . . . . . . . . . . . . . 6,182,211 5,958,542
Partnership's share of the maximum
unfunded obligation under the
indemnification agreement. . . . . . . . . 7,927,136 7,994,262
Long-term debt, less current portion . . . . 55,952,230 55,119,460
------------ ------------
Commitments and contingencies

Total liabilities. . . . . . . . . . 74,002,989 72,384,442

Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses) . . . . (15,090,789) (15,069,445)
Cumulative cash distributions. . . . . . (1,817,374) (1,817,374)
------------ ------------
(16,907,163) (16,885,819)
------------ ------------
Limited partners:
Capital contributions, net of
offering costs . . . . . . . . . . . . 351,746,836 351,746,836
Cumulative net earnings (losses) . . . . (296,674,832) (296,162,587)
Cumulative cash distributions. . . . . . (62,213,396) (62,213,396)
------------ ------------
(7,141,392) (6,629,147)
------------ ------------
Total partners' capital
accounts (deficits). . . . . . . . (24,048,555) (23,514,966)
------------ ------------
$ 49,954,434 48,869,476
============ ============

See accompanying notes to consolidated financial statements.

<PAGE>

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

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)

1999 1998
---------- ----------
Income:
Rental income. . . . . . . . . . . . . . $2,424,336 2,458,273
Interest income. . . . . . . . . . . . . 83,344 284,781
Other income . . . . . . . . . . . . . . -- 186,042
---------- ----------
2,507,680 2,929,096
---------- ----------
Expenses:
Mortgage and other interest. . . . . . . 1,461,826 1,471,191
Property operating expenses. . . . . . . 984,827 1,019,088
Professional services. . . . . . . . . . 484,230 285,476
Amortization of deferred expenses. . . . 45,092 44,974
General and administrative . . . . . . . 198,166 210,192
---------- ----------
3,174,141 3,030,921
---------- ----------
(666,461) (101,825)
Partnership's share of the reduction of
the maximum unfunded obligation under
the indemnification agreement. . . . . . 67,126 67,126
Partnership's share of operations
of unconsolidated ventures . . . . . . . 65,746 (201,850)
---------- ----------

Net earnings (loss). . . . . . . . $ (533,589) (236,549)
========== ==========

Net earnings (loss) per limited
partnership interest. . . . . . . $ (1.28) (.57)
========== ==========

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

See accompanying notes to consolidated financial statements.

<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)

1999 1998
---------- ----------
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . $ (533,589) (236,549)
Items not requiring (providing) cash or
cash equivalents:
Amortization of deferred expenses. . . 45,092 44,974
Long-term debt - deferred accrued
interest . . . . . . . . . . . . . . 934,483 934,483
Partnership's share of the reduction
of the maximum unfunded obligation
under the indemnification agreement. (67,126) (67,126)
Partnership's share of operations of
unconsolidated ventures. . . . . . . (65,746) 201,850
Changes in:
Interest, rents and other receivables. (123,997) (238,402)
Prepaid expenses . . . . . . . . . . . 220 14,146
Escrow deposits. . . . . . . . . . . . (143,724) (147,673)
Accrued rents receivable . . . . . . . 1,172 (2,137)
Accounts payable and other current
liabilities. . . . . . . . . . . . . 427,391 150,208
Due to affiliates. . . . . . . . . . . 55,448 44,768
Accrued interest . . . . . . . . . . . (628) (580)
Accrued real estate taxes. . . . . . . 137,500 150,000
Tenant security deposits . . . . . . . 1,700 9,740
------------ -----------
Net cash provided by (used in)
operating activities . . . . . 668,196 857,702
------------ -----------
Cash flows from investing activities:
Refund of payment for capital
improvements . . . . . . . . . . . . . 64,508 --
Partnership's distributions from
unconsolidated ventures. . . . . . . . -- 100,000
Partnership's contributions to
unconsolidated ventures. . . . . . . . (4,611,100) (14,242)
Refund (payment) of deferred expenses,
net. . . . . . . . . . . . . . . . . . (15,188) 105,889
------------ -----------
Net cash provided by (used in)
investing activities . . . . . (4,561,780) 191,647
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt . . (93,890) (86,667)
------------ -----------
Net cash provided by (used in)
financing activities . . . . . . (93,890) (86,667)
------------ -----------
Net increase (decrease) in cash
and cash equivalents . . . . . . (3,987,474) 962,682
Cash and cash equivalents,
beginning of year. . . . . . . . 6,875,849 21,051,953
------------ -----------
Cash and cash equivalents,
end of period. . . . . . . . . . $ 2,888,375 22,014,635
============ ===========

<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1999 1998
---------- ----------

Supplemental disclosure of cash flow
information:
Cash paid for mortgage and
other interest . . . . . . . . . . . . $ 527,971 537,288
============ ===========

Non-cash investing and financing
activities. . . . . . . . . . . . . . . $ -- --
============ ===========

See accompanying notes to consolidated financial statements.

<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 1999 AND 1998

(UNAUDITED)

GENERAL

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1998 which are
included in the Partnership's 1998 Annual Report on Form 10-K filed on
March 22, 1999 (File No. 0-15962) 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 1998 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 three months ended March 31, 1999 and 1998
for the consolidated property classified as held for sale or disposition
for the past two years were income of $929,314 and $929,908, respectively.
The accompanying consolidated financial statements include earnings
(losses) of $65,746 and ($201,850), as the Partnership's share of total
property losses of ($3,322,279) and ($3,394,084) for unconsolidated
properties for the three months ended March 31, 1999 and 1998,
respectively, which are held for sale or disposition or have been sold or
disposed of during the past two years.

Certain amounts in the 1998 financial statements have been
reclassified to conform with the 1999 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 March 31, 1999 and for the three months
ended March 31, 1999 and 1998 were as follows:

Unpaid at
March 31,
1999 1998 1999
-------- ------- -------------
Property management
and leasing fees. . . . . . . . $ 89,098 75,575 --
Insurance commissions. . . . . . 1,845 -- --
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 . . . 42,941 29,914 41,155
-------- ------- -------
$133,884 105,489 41,155
======== ======= =======

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 March 31, 1999,
these obligations bore interest at 4.62% per annum and interest accrued on
these obligations was $629,995 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 pursuant to a loan modification.
Such fees deferred by the affiliate were approximately $1,839,000 (of which
approximately $919,500 is the Partnership's share) at March 31, 1999. The
unconsolidated venture's obligation to the affiliate is not reflected in
the Consolidated Balance Sheets as of March 31, 1999 and December 31, 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"), owned primarily by holders of the first mortgage
debt that 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. In addition, the non-
recourse purchase money notes made by JMB/NYC for its interests in the
properties and had outstanding principal and accrued and deferred interest

<PAGE>

of approximately $121,500,000 at March 31, 1999, mature on 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.

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 any 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.

During 1996, as a result of the adoption of the Plan, JMB/NYC
discontinued the application of the equity method of accounting for its
investments in unconsolidated ventures and reversed those previously
recognized losses from the unconsolidated ventures except for an amount
equal to the maximum obligation under the indemnification agreement of
$25,000,000. Also, 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 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
significant preference levels to other partners within the reorganized
joint ventures owning the Properties and the purchase money notes payable
by JMB/NYC, it is unlikely that JMB/NYC will receive any significant
distributions from the joint venture.

JMB/PIPER

Occupancy of the building at the end of the first quarter of 1999 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 1997, 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 exceeded Popham's modified rate which
became effective in August 1997. Popham had paid its modified rent through

<PAGE>

the end of 1997. Commencing in January 1998, Hinshaw began paying rent in
accordance with the letter of intent. In addition, once a lease was
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 March 31, 1999. The lender is essentially entitled to all operating
cash flow. During 1998, no excess cash flow was generated.

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.

Piper had discussed an early renewal with PJI which occupies 335,684
square feet or approximately 46% of the building's rentable square feet,
with a lease expiration date at March 31, 2000. Piper and PJI were unable
to come to terms and PJI announced that it would be moving to a new
building (to be built in Minneapolis) upon expiration of its existing lease
in 2000.

As a result of a flood in 1997, the property incurred significant
repair costs in 1998. Piper completed such repairs and the balance
(approximately $1,100,000) is expected to be reimbursed by the insurance
carrier in 1999. JMB/Piper made certain advances to Piper for such costs,
and expects to have the advances repaid upon reimbursement from the
insurance carrier.

JMB/Piper, on behalf of Piper, had 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 first quarter of 1999 was
100%.

Progress Partners had been negotiating with the building's major
tenant, Schulte, Roth & Zabel (139,948 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.

<PAGE>

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 1999, approximately $935,000 has been
deposited into escrow from net cash flow from property operations. The
escrow balance at March 31, 1999 was approximately $11,231,000.

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 effected a settlement with
MDIFC by purchasing its claims. JMB/900 pursued certain claims against the
Venture Partners in the bankruptcy forum and 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 asserted claims against the venture and JMB/900 including
claims for unpaid Guaranteed Payments in the purported amount of $36
million. JMB/900 denied that such claims were due and owing and contended
that, in any event, such claims were 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 would have been required
to make contributions to pay for any part of the purported claim for
Guaranteed Payments, a portion of the Guaranteed Payments actually paid may
have been allocated to other unsecured creditors of PPI and JRA and,
therefore, JMB/900 might not have received the full amount of the interest
due on the $20 million loan. However, JMB/900's contributions would have
created a preferred return level payable out of future net cash flow or net
sale or refinancing proceeds. Furthermore, JMB/900 took the position that
to the extent that it did not receive annual distributions equal to the
interest payable on the $20,000,000 loan, JMB/900's preferred return
deficiency would be increased by the amounts not received, but the Venture
Partners disputed this characterization.

In July 1998, JMB/900 entered into an agreement with the Venture
Partners and a judgment creditor of JRA and PPI (such judgment creditor,
JRA and PPI, are hereinafter collectively referred to as the "Progress
Parties") to resolve outstanding claims. The agreement was subject to
occurrence of various terms and conditions, which failed to occur. In a
further effort to resolve outstanding claims and to place JMB/900 in a
position to control and market the 900 Third Avenue property, JMB/900
entered into a settlement agreement with the Progress Parties effective as
of March 17, 1999 ("Settlement Agreement"). The Settlement Agreement
generally provides for the settlement and release of all claims and causes
of action by and against JMB/900 and the Progress Parties related to or
arising from the joint venture relationship or the property including,
without limitation, any claims by the Venture Partners to Guaranteed
Payments and any claims by Progress Partners for capital contributions from
JMB/900. Under the Settlement Agreement and related transactions, JMB/900
and an affiliate acquired all of the right, title and interest of the
Progress Parties in the property, Progress Partners and PC-900 and resolved
all outstanding litigation in exchange for a total payment of $16.0
million, $13.5 million of which was paid at closing of the Settlement
Agreement with the remaining $2.5 million to be paid upon the earlier of
(i) closing of a sale of the property by Progress Partners or (ii) January
3, 2000. In a related agreement and for the payment of $300,000 and the
release of various claims, the litigation and claims by and between the
FDIC and JMB/900 were resolved and dismissed. As part of the settlement,
the limited partnership interests in PC-900 were assigned to 14-15 Office
Associates, L.P. ("Office Associates"), in which JMB/900 owns a 99% limited
partnership interest. P-C 900's interest in Progress Partners was then
transferred to JMB/900 and Office Associates, which are now the sole
remaining partners in Progress Partners. Amendments to the joint venture
agreement of Progress Partners were made to effectuate the terms of the
settlement and the substitution of partners.

<PAGE>

As the venture 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 first quarter of 1999 was
82%.

The Partnership has negotiated a lease with a replacement operator for
General Cinema, Inc. (approximately 5% of the mall space). In connection
with the lease, the Partnership has agreed to contribute $700,000 to
reconfigure the current four screen cinema to a six screen cinema. An
amendment to the lease is currently being negotiated pursuant to which the
Partnership would agree to contribute an additional $220,000 to pay for a
portion of the cost overruns incurred in connection with the
reconfiguration. Although the replacement operator's credit rating was
recently downgraded, the Partnership expects to receive a security interest
in the new fixtures and equipment being installed in the space as
collateral for lease obligations of the replacement operator. Two other
tenants occupying approximately 8,900 square feet of space recently filed
for protection from creditors under chapter 11 of the Bankruptcy Code. It
is currently expected that at least one of these tenants will reject its
lease and vacate its space. There is no assurance that the other tenant
will ultimately honor its entire lease obligations.

The Partnership had been marketing the property for sale. In March
1999, the Partnership entered into a contract for the sale of the Louis
Joliet Mall to BRE/Louis Joliet LLC, an unaffiliated third party. In light
of issues concerning one or more of the tenants discussed above, the
prospective purchaser terminated the sale contract. However, the
Partnership is currently negotiating a new contract with this purchaser.
However, there can be no assurance that this, or any other sale will be
consummated.

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 for financial reporting purposes.

WELLS FARGO CENTER

The mortgage note secured by the property (with a balance of
approximately $167,593,000 as of March 31, 1999), 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 $9,033,000 at March 31,
1999 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.

<PAGE>

Due to the restructuring of the Partnership's interest in Wells Fargo
Center - South Tower in 1996, the Partnership has ceased loss recognition
relative to its real estate investment and has reversed those previously
recognized losses that the Partnership is no longer obligated to fund. The
Partnership has no future funding obligation for its investment in Wells
Fargo Center - South Tower. Accordingly, the Partnership has discontinued
the application of the equity method of accounting and additional losses
from the investment in Wells Fargo Center - South Tower will not be
recognized.

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 joint venture agreement, the venture partner had the right
of first refusal to purchase the Partnership's interest in the joint
venture. 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. The venture partner exercised its right to first refusal, and
on May 29, 1998, the venture partner purchased the Partnership's interest
in the joint venture.

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 a gain for Federal
income tax purposes in 1998 of $4,650,000. The Partnership has no future
liability for any representations, warranties and covenants as a result of
the sale.

YERBA BUENA OFFICE BUILDING

Due to the default of the joint venture that owned the Yerba Buena
Office Building (a partnership comprised of the Partnership, two other
partnerships sponsored by the Partnership's Corporate General Partner, and
four unaffiliated limited partners) in the payment of required debt
service, the former lender to such joint venture realized on its security
by taking title to the property in June 1992. In return for a smooth
transition of title and management of the property (relative to which the
existing property manager that was affiliated with the Partnership's
Corporate General Partner agreed to continue to manage the property), the
joint venture was able to negotiate, among other things, a right of first
opportunity to purchase the property during the time frame from June 1995
through May 1998 should the lender wish to market the property for sale.
The lender sold the property in 1996. However, the joint venture was not
given an opportunity to purchase the property as required by the previous
settlement with the lender. As previously reported, such joint venture
filed a lawsuit against the lender for breach of its obligations. In June
1998, the court granted the lender's motion for summary judgement and
dismissed the lawsuit. In dismissing the action, the court apparently
relied upon a release given by the management company relative to the
settlement of its claims against the lender and the termination of its
management contract for the property. Such settlement was the result of
claims made by the management company in a separate lawsuit, due to the
non-payment of management fees. Though the intent of the management
company in providing the release was confined to matters relative to
management only, the court apparently ruled that it covered the earlier
transaction with the joint venture as well. In addition, the former lender
filed a claim and subsequently received an order against the joint venture
for legal fees expended in the litigation (the Partnership's potential
share of such amount is approximately $300,000). The joint venture has
appealed the dismissal of the lawsuit. The joint venture and the lender

<PAGE>

agreed to cap the fee award and the venture then posted a bond on that
amount. If the joint venture's appeal of the dismissal is successful, the
joint venture will have no obligation for the fees. In December 1998, one
of the affiliated venture partners, to resolve its claims and liabilities,
paid an agreed upon amount to the joint venture in respect of its estimated
liabilities related to the litigation and withdrew from the venture. There
can be no assurance that the litigation will ultimately be successful, or
that the Partnership will ultimately realize any amounts (or avoid any
payments) with respect thereto.

UNCONSOLIDATED VENTURES - SUMMARY INFORMATION

Summary income statement information for JMB/Piper, JMB/Piper II and
JMB/900 for the three months ended March 31, 1999 and 1998 are as follows:

1999 1998
----------- ----------
Total income from properties
(unconsolidated) . . . . . . . . . . . . $ 9,959,195 9,990,341
=========== ==========
Operating loss of ventures . . . . . . . . $ 3,332,279 3,675,961
=========== ==========
Partnership's share of
operating profit (loss). . . . . . . . . $ 65,746 (294,573)
=========== ==========

ADJUSTMENTS

In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of March 31,
1999 and for the three months ended March 31, 1999 and 1998.

<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.

The board of directors of JMB Realty Corporation ("JMB") the Managing
General Partner of the Partnership, has established a special committee
(the "Special Committee") consisting of certain directors of JMB to deal
with all matters relating to tender offers for Interests in the
Partnership, including any and all responses to such tender offer.

During 1998, some of the Holders of Interests received unsolicited
offers from unaffiliated third parties to purchase less than 5% of the
Interests in the Partnership at prices ranging from $10 to $21 per
Interest. The Special Committee recommended against acceptance of these
offers on the basis that, among other things, the offer prices were
inadequate. These offers have expired. As of the date of this report, the
Partnership is aware that approximately 1.57% of the Interests in the
Partnership have been purchased by such unaffiliated third parties either
pursuant to such offers or through negotiated purchases. The Partnership
was recently notified that an unaffiliated third party intends to make an
offer for up to 4.7% of the outstanding Interests at a price of $25 per
Interest. If such offer is made, the Special Committee will advise Holders
of Interests of the Special Committee's recommendation, if any, in regard
to such offer. There is no assurance such offer will in fact be made or,
if made, will be on the same terms described herein. It is possible that
other offers for Interests may be made by unaffiliated third parties in the
future, although there is no assurance that any other third party will
commence an offer for Interests, the terms of any such offer or whether any
such offer, if made, will be consummated, amended or withdrawn.

At March 31, 1999, the Partnership had cash and cash equivalents of
approximately $2,888,000. Such funds are available for working capital
requirements.

As discussed below, in March 1999, JMB/900 settled various claims and
acquired the interest of the FDIC and the unaffiliated venture partners in
Progress Partners, which owns the 900 Third Avenue office building, for
$16,300,000, of which $13,800,000 was paid upon closing of the various
transactions. In connection with these transactions, the Partnership
contributed its proportionate share (approximately $4,600,000) of the
$13,800,000 to JMB/900.

The Partnership has currently budgeted in 1999 approximately
$1,919,000 for tenant improvements and other capital expenditures including
the outstanding amounts 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 1999 is currently budgeted to be
approximately $2,887,000. However, this amount does not include any
portion of additional funds contained in the lease amendment currently
being negotiated with the replacement operator at the Louis Joliet Mall
discussed below. Actual amounts expended in 1999 may vary depending upon a
number of factors including actual leasing activity, results of property
operations, liquidity considerations and market conditions over the course
of the year and whether and when properties are sold.

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 certain escrowed funds and the sale of such
investments. The 900 Third Avenue, Piper Jaffray and Wells Fargo Center -
South Tower investment properties are restricted as to their use of excess

<PAGE>

cash flows by escrow agreements negotiated pursuant to loan modifications.
Amounts held in escrow for a particular property may be used for payment of
tenant improvement and possibly other expenses related to the particular
property. Due to property specific concerns discussed in the Notes to the
accompanying 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 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. All 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 the 900 Third Avenue
and Louis Joliet Mall investment properties will be sold during 1999,
barring unforeseen economic developments. The Piper Jaffray Tower
investment property may also be disposed of in 1999. In addition, the
Partnership currently expects to retain 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 beyond
1999.

Although the Partnership expects that it will be able to distribute
proceeds from the sale 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 will be
allocated 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 of these investment properties, the Partnership,
and therefore the Holders of Interest will recognize a substantial 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.

<PAGE>

all outstanding litigation in exchange for a total payment of $16.0
million, $13.5 million of which was paid at closing of the Settlement
Agreement with the remaining $2.5 million to be paid upon the earlier of
(i) closing of a sale of the property by Progress Partners or (ii)
January 3, 2000. In a related agreement and for the payment of $300,000
and the release of various claims, the litigation and claims by and between
the FDIC and JMB/900 were resolved and dismissed. As part of the
settlement, the limited partnership interests in PC-900 were assigned to
14-15 Office Associates, L.P. ("Office Associates"), in which JMB/900 owns
a 99% limited partnership interest. P-C 900's interest in Progress
Partners was then transferred to JMB/900 and Office Associates, which are
now the sole remaining partners in Progress Partners. Amendments to the
joint venture agreement of Progress Partners were made to effectuate the
terms of the settlement and the substitution of partners.

RESULTS OF OPERATIONS

The increase in interest, rents and other receivables at March 31,
1999 as compared to December 31, 1998 is primarily due to the timing of
payments of rents from tenants at the Louis Joliet Mall.

The increase in escrow deposits and related increase in accrued real
estate tax at March 31, 1999 as compared to December 31, 1998 is primarily
due to the timing of payments for real estate taxes at the Louis Joliet
Mall.

The increase in the investment in unconsolidated ventures, at equity
at March 31, 1999 as compared to December 31, 1998 is primarily due to
contributions made to JMB/900 to purchase the interests of the FDIC and the
unaffiliated venture partners in Progress Partners.

The increase in accounts payable and other current liabilities at
March 31, 1999 as compared to December 31, 1998 is primarily due to the
timing of payment for certain expenses incurred by the Partnership
including legal fees related to the Yerba Buena litigation.

The decrease in interest income for the three months ended March 31,
1999 as compared to the same period in 1998 is primarily due to a lower
cash balance available for investment due to distributions to the General
Partners and Holders of Interests in 1998.

<PAGE>

The decrease in other income for the three months ended March 31, 1999
as compared to the same period in 1998 is primarily due to the receipt of
proceeds from the sale of stock in 1998 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 professional fees for the three months ended March 31,
1999 as compared to the same period in 1998 is primarily due to the
Partnership incurring legal fees for the Yerba Buena litigation.

The increase in Partnership's share of operations of unconsolidated
ventures for the three months ended March 31, 1999 as compared to the same
period in 1998 is primarily due to the decrease in the assessed value of
the Piper Jaffray Tower which resulted in lower real estate tax expense
being incurred by the property and additional income allocated to the
Partnership as a result of JMB/900 purchasing the interests of the FDIC and
unaffiliated venture partners in Progress Partners.

YEAR 2000

The year 2000 problem is the result of computer programs being written
with two digits rather than four to define a year. Consequently, any
computer programs that have time-sensitive software may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations
including, among other things, an inability to process transactions or
engage in other normal business activities. In addition, other date-
sensitive electronic devices could experience various operational
difficulties as a result of not being year 2000 compliant.

The Partnership uses the telephone, accounting, transfer agent and
other administrative systems, which include both hardware and software,
provided by affiliates of the Corporate General Partner and certain third
party vendors. Except as noted in the following sentence, the Partnership
or its affiliates have received representations to the effect that the
telephone, accounting, transfer agent and other administrative systems are
year 2000 compliant in all material respects. Both the hardware and
software for individual personal computers used in the Partnership's
administrative systems are expected to be tested for their year 2000
compliance during the summer of 1999.

The property managers for 900 Third Avenue, Piper Jaffray Tower and
Louis Joliet Mall have conducted assessments of various aspects of these
properties' respective operating systems in regard to their year 2000
compliance. In general, such assessments were performed through written
inquiries to third party vendors and service personnel for these properties
and, to some extent, testing of some of the components at certain of these
properties. Based upon the information received from the property
managers., the Partnership believes that the major operating systems for
these properties, including HVAC controls, elevators and alarm and safety
systems, are or will be year 2000 compliant in all material respects.
Certain of the operating systems at these properties require minor
upgrading, which has been undertaken and completed, or will be undertaken
and completed in the near future, without the incurrence of material
expense. The Partnership does not have information concerning the extent
to which the Wells Fargo Center-South Tower is year 2000 compliant, but
will seek to obtain such information in the near future. However, the
Partnership does not believe that it is obligated for year 2000 compliance
for the Wells Fargo Center-South Tower.

The Partnership does not believe that the year 2000 problem presents
any material additional risks to its business, results of operations or
financial condition and has not developed, and does not intend to develop,
any contingency plans to address the year 2000 problem. Given its limited
operations, the Partnership believes that its accounting, transfer agent
and most of its other administrative systems functions could, if necessary,

<PAGE>

be performed manually (i.e., without significant information technology)
for an extended period of time without a material increase in costs to the
Partnership. The Partnership has not incurred and does not expect to
incur, any material direct costs for year 2000 compliance.

The Partnership is relying on the information obtained and
representations made by the property managers, as well as the
representations made by third party vendors and service personnel, for 900
Third Avenue, Piper Jaffray Tower and Louis Joliet Mall regarding the
ability of those properties to be year 2000 compliant in all material
respects. The Partnership is also relying on the assessments made by the
property managers of the third party vendors and service personnel to be
contacted in regard to those properties' year 2000 compliance. In the
event that the Partnership's investment properties are not year 2000
compliant in all material respects, the relevant investment property or
properties could experience various operational difficulties, such as
possible systems failures. Such operational difficulties could result in
remediation and, under certain circumstances, possibly other costs and
expenses. If such were to occur, there is no assurance that such costs and
expenses would not, under certain circumstances, have a material adverse
effect on the Partnership or its investment in 900 Third Avenue, Piper
Jaffray Tower and/or Louis Joliet Mall in the event such properties are not
sold during 1999.

<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 1999.

<CAPTION>
1998 1999
------------------------------------- ------------------------------
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. Piper Jaffray Tower
Minneapolis, Minnesota. . . . . 91% 89% 89% 89% 89%
4. 900 Third Avenue Building
New York, New York. . . . . . . 97% 100% 99% 97% 100%
5. Wells Fargo Center
South Tower
Los Angeles, California . . . . 90% 90% 90% 85% 86%
6. Louis Joliet Mall
Joliet, Illinois. . . . . . . . 83% 83% 84% 84% 82%

<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.

10-A. Assignment of Partnership Interest between Federal
Deposit Insurance Corporation and 14-15 Office Associates, L.P., dated
March 10, 1999 is hereby filed herewith.

10-B. Assignment of Partnership Interest between P-C 900
Third Associates and 14-15 Office Associates, L.P. and 900 3rd Avenue
Associates, dated March 22, 1999 is hereby filed herewith.

10-C. Assignment of Partnership Interest between 900
Realty, LLC and 900 3rd Avenue Associates dated March 22, 1999 is hereby
filed herewith.

10-D. Amendment No. 2 to Amended and Restated Agreement of
General Partnership for Progress Partners dated March 17, 1999 is hereby
filed herewith.

10-E. Amendment No. 3 to Amended and Restated Agreement of
General Partnership for Progress Partners dated March 22, 1999 is hereby
filed herewith.

10-F. Settlement Agreement and Release between Progress
Properties, Inc., J.R.A. Realty Corporation, P-C 900 Third Associates, 900
Realty LLC and 900 3rd Avenue Associates dated March 17, 1999 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: May 12, 1999

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

GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: May 12, 1999

EXHIBIT 10-A
- ------------
(Carlyle-XIV)

EXHIBIT B
---------

ASSIGNMENT OF PARTNERSHIP INTEREST
----------------------------------

THIS ASSIGNMENT OF PARTNERSHIP INTEREST (the "Assignment"), is made
as of this 10th day of March, 1999 by and between the Federal Deposit
Insurance Corporation in its capacity as Receiver of Central National Bank
(the "Assignor") and 14-15 Office Associates, L.P., a limited partnership
(the "Assignee").

WHEREAS, the Assignor is the holder of a 99% limited partnership
interest (the "Partnership Interest") in P-C 900 Third Associates, a New
York limited partnership (the "Partnership");

WHEREAS, the Partnership is governed by the provisions of an
Agreement of Limited Partnership dated February 26, 1986 (the "Partnership
Agreement");

WHEREAS, Assignor and 900 3rd Avenue Associates ("Associates")
exchanged certain correspondence, dated April 22, 1996, as modified and
amended thereafter, relating to, among other things, the transfer of
Assignor's rights in the Partnership and certain releases to be made by the
parties thereto (the "Letter"); and

WHEREAS, the parties hereto agree that the Letter is of no further
and effect and is merged into this Assignment and the Mutual Release being
executed contemporaneously herewith, by and between Assignor and Assignee.

NOW, THEREFORE, FOR AND IN CONSIDERATION of the payment to the
Assignor of Three Hundred Thousand Dollars ($300,000) and other good and
valuable consideration, the receipt and adequacy of which are acknowledged
by each party, the parties agree as follows:

Section 1. ASSIGNMENT; RELEASE.

The Assignor hereby assigns to the Assignee and the Assignee hereby
accepts from the Assignor, (a) all of the Assignor's right, title and
interest in the Partnership, including without limitation, the Partnership
Interest, and all of Assignor's interest in the Partnership's capital,
profits and distributions and (b) any and all right, title, and interest
which the Assignor has under the provisions of New York limited partnership
law or any other applicable law, the Partnership Agreement, or in and to
any of the Partnership's assets, with respect to the Partnership Interest
or other interests so assigned ('(a)' and '(b)' collectively, the "Assigned
Interests"); and Assignor and Assignee are exchanging releases.

Section 2. REPRESENTATIONS.

2.1 BY ASSIGNOR. To induce the Assignee to accept such delivery of
this Assignment, the Assignor hereby represents and warrants to the
Assignee that, on the date hereof and at the time of such delivery:

(a) Assignor is the legal and equitable owner of the Assigned
Interests, free and clear of all liens, charges, claims, defenses,
encumbrances and security interests of every kind and natures;

(b) the Partnership Agreement heretofore delivered to the
Assignee is a true, correct and complete copy of the Partnership Agreement
in effect on the date hereof;

<PAGE>

(c) the execution, delivery and performance of this Agreement
has been duly authorized by Assignor and the person signing on behalf of
Assignor has been authorized to do so; [proof of authority to be delivered
at time of execution] and

(d) No consent or approval of any third party is necessary
for the validity of the background made hereunder; and

(e) Assignor has not heretofore assigned or transferred or
purported to assign or transfer to any person, firm or corporation or other
entity whomsoever the Assigned Interests or any interest therein.

2.2 BY ASSIGNEE. The Assignee hereby represents and warrants to
the Assignor (a) that the Partnership Interest is being acquired for
investment for the Assignee's own account and not with a view to offering
it for sale or otherwise to distributing it, after or in connection with
such assignment to it, and (b) that the Assignee has read and agrees to be
bound by the Partnership Agreement.

2.3 BY ASSIGNOR AND ASSIGNEE. Neither Assignor nor Assignee is
relying on any representations made by the other or by anyone purporting to
act on behalf of the other as to any matters which might influence or
affect the decision to execute this Assignment, except those
representations and warranties which are specifically set forth herein.

Section 3. INDEMNIFICATION.

3.1 BY ASSIGNOR. The Assignor shall defend, indemnify and hold
harmless the Assignee against and from any and all liability, claim of
liability or expense arising out of any failure of the Assignor's
representation contained in the provisions of Section 2 to be true,
accurate and complete in all material respects.

3.2 BY ASSIGNEE. The Assignee hereby agrees to indemnify the
Assignor against any expense incurred by it in connection with the
Assignee's admission and substitution as a Partner (including, by way of
example rather than of limitation, any such expense incurred in preparing
and filing for record any amendment of the Partnership Agreement or the
Partnership's Certificate of Limited Partnership), and any other
instrument, if necessitated by such admission and substitution. The
Assignee shall defend, indemnify and hold harmless the Assignor against and
from any and all liability, claim of liability or expense arising out of
any failure of the Assignee's representation contained in the provisions of
Section 2 to be true, accurate and complete in all material respects.

Section 4. FURTHER ASSURANCES. The parties hereto agree that they
will cooperate with each other and will execute and deliver, or cause to be
delivered, all such other instruments, and will take all such other
actions, as either party hereto may reasonably request from time to time in
order to effectuate the provisions hereof.

Section 5. MISCELLANEOUS.

5.1 BINDING EFFECT. This Assignment shall be binding upon and
inure to the benefit of Assignor and Assignee and their respective
successors and assigns.

<PAGE>

5.2 EXECUTION IN COUNTERPARTS. This Assignment may be executed in
any number of counterparts and any party hereto or thereto may execute any
counterpart, each of which when executed and delivered will be deemed to be
an original and all of which counterparts of this Assignment, taken
together will be deemed to be but one and the same instrument.

5.3 AMENDMENT. Neither this Assignment nor any provision hereof
may be waived, modified, amended, discharged or terminated except by an
instrument signed by the party against whom the enforcement of such waiver,
modification, amendment, discharge or termination is sought, and then only
to the extent set forth in such instrument.

5.4 GOVERNING LAW. This Assignment shall be governed by, and
construed and enforced in accordance with, the internal laws of the State
of New York.

5.5 INTEGRATION. This Assignment and the Mutual Release being
executed by the parties contemporaneously herewith comprise the complete
and integrated agreement of the parties on the subject matter hereof and
supersede all prior agreements, written or oral, including without
limitation, the Letter Agreement, on the subject matter hereof.

5.6 NO AGENCY, PARTNERSHIP OR JOINT VENTURE. Assignee is not the
agent or representative of Assignor, and Assignor is not the agent or
representative of Assignee. Assignor and Assignee intend and agree that
the relationship created by this Assignment is and shall be solely that of
assignor and assignee.

5.7 JURISDICTION; VENUE. Assignor and Assignee irrevocably and
unconditionally (a) agree that any suit, action or other legal proceeding
arising out of this Assignment may be brought in the courts of record of
the State of New York or the courts of the United States located in the
State of New York; (b) consent to the jurisdiction of each such court in
any such suit, action or proceeding; and (c) waive any objection which it
may have to the laying of venue of any such suit, action or proceeding in
any of such courts. In any action hereunder, Assignor and Assignee each
waive the right to demand a trial by jury.

5.8 SURVIVAL. The representations and warranties of Assignor
contained herein shall survive.

<PAGE>

IN WITNESS WHEREOF, each party hereto has executed and sealed this
Assignment the day and year first above written.

FEDERAL DEPOSIT INSURANCE CORPORATION,
in its capacity as Receiver of Central
National Bank

By:___________________________________(SEAL)

Its:___________________________________

14-15 OFFICE ASSOCIATES, L.P.,
an Illinois limited partnership

By: 900 3rd Avenue Corporation,
its general partner

By:__________________________________
Name:_______________________________
Title:________________________________

EXHIBIT 10-B
- ------------
(Carlyle-XIV)

ASSIGNMENT OF PARTNERSHIP INTEREST
-----------------------------------

THIS ASSIGNMENT OF PARTNERSHIP INTEREST (the "Assignment"), is made
as of this 22nd day of March, 1999 by and between P-C 900 Third Associates,
a New York limited partnership (the "Assignor") and 14-15 Office
Associates, L.P., a limited partnership and 900 3rd Avenue Associates, an
Illinois general partnership (collectively, the "Assignee").

WHEREAS, the Assignor is the holder of a partnership interest (the
"Partnership Interest") in Progress Partners, a New York general
partnership (the "Partnership");

WHEREAS, the Partnership is governed by the provisions of an Amended
and Restated Agreement of General Partnership for Progress Partners dated
August 24, 1984, as amended (the "Partnership Agreement");

WHEREAS, the Assignee constitute all of the partners of the Assignor
and the Assignor desires to dissolve and distribute its assets to the
Assignee;

NOW, THEREFORE, FOR AND IN CONSIDERATION of the payment to the
Assignor of Ten Dollars ($10.00) and other good and valuable consideration,
the receipt and adequacy of which are acknowledged by each party, the
parties agree as follows:

Section 1. ASSIGNMENT; RELEASE.

The Assignor hereby assigns to the Assignee (in such shares as herein
set forth) and the Assignee hereby accepts from the Assignor, (a) all of
the Assignor's right, title and interest in the Partnership, including
without limitation, the Partnership Interest, and all of Assignor's
interest in the Partnership's capital, profits and distributions and (b)
any and all right, title, and interest which the Assignor has under the
provisions of New York limited partnership law or any other applicable law,
the Partnership Agreement, or in and to any of the Partnership's assets,
with respect to the Partnership Interest or other interests so assigned
('(a)' and '(b)' collectively, the "Assigned Interests"); and Assignor and
Assignee are exchanging releases. 1% of the Assigned Interests are hereby
assigned and distributed to 900 3rd Avenue Associates and 99% of the
Assigned Interests are hereby assigned and distributed to 14-15 Office
Associates, L.P.

Section 2. FURTHER ASSURANCES. The parties hereto agree that they
will cooperate with each other and will execute and deliver, or cause to be
delivered, all such other instruments, and will take all such other
actions, as either party hereto may reasonably request from time to time in
order to effectuate the provisions hereof.

Section 3. MISCELLANEOUS.

3.1 BINDING EFFECT. This Assignment shall be binding upon and
inure to the benefit of Assignor and Assignee and their respective
successors and assigns.

<PAGE>

3.2 EXECUTION IN COUNTERPARTS. This Assignment may be executed in
any number of counterparts and any party hereto or thereto may execute any
counterpart, each of which when executed and delivered will be deemed to be
an original and all of which counterparts of this Assignment, taken
together will be deemed to be but one and the same instrument.

3.3 AMENDMENT. Neither this Assignment nor any provision hereof
may be waived, modified, amended, discharged or terminated except by an
instrument signed by the party against whom the enforcement of such waiver,
modification, amendment, discharge or termination is sought, and then only
to the extent set forth in such instrument.

3.4 GOVERNING LAW. This Assignment shall be governed by, and
construed and enforced in accordance with, the internal laws of the State
of New York.

<PAGE>

IN WITNESS WHEREOF, each party hereto has executed and sealed this
Assignment the day and year first above written.

P-C 900 THIRD ASSOCIATES

By: 900 3rd Avenue Associates,
General Partner

By: Carlyle Real Estate Limited
Partnership-XIV, a General Partner

By: JMB Realty Corporation, a
General Partner

By:
-------------------------
Its:
-------------------------

14-15 OFFICE ASSOCIATES, L.P.,
an Illinois limited partnership

By: 900 3rd Avenue Corporation,
its general partner

By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------

900 3RD AVENUE ASSOCIATES

By: Carlyle Real Estate Limited
Partnership-XIV, a General Partner

By: JMB Realty Corporation, a
General Partner

By:
-------------------------------
Its:
-------------------------------

EXHIBIT 10-C
- ------------
(Carlyle-XIV)

EXHIBIT E
---------

ASSIGNMENT OF PARTNERSHIP INTEREST
----------------------------------

THIS ASSIGNMENT OF PARTNERSHIP INTEREST (the "Assignment"), is made
as of this 22nd day of March, 1999 by and between the 900 Realty, LLC, a
Delaware limited liability company (the "Assignor") and 900 3rd Avenue
Associates, a Illinois general partnership (the "Assignee").

WHEREAS, the Assignor is the holder of all of the partnership
interests in Progress Partners, a New York general partnership (the
"Partnership"), formerly held by Progress Properties, Inc. and J.R.A.
Realty Corporation, together with any other right, title, interest or other
claims of them relating to the Partnership (the "900 Realty Interests");

WHEREAS, the Assignor is the holder of a 1% general partnership
interest (the "P-C Interest") in P-C 900 Third Associates, a New York
limited partnership (the "P-C 900");

WHEREAS, the P-C 900 is governed by the provisions of an Agreement of
Limited Partnership dated February 26, 1986, as amended (the "P-C
Agreement");

WHEREAS, the Assignor has agreed to assign, among other things, the
900 Realty Interests and the P-C Interest on the terms and conditions set
forth in that certain Settlement and Release dated as of March 17, 1999 by
and between, among others, Assignor and Assignee (the "Settlement
Agreement");

NOW, THEREFORE, FOR AND IN CONSIDERATION of the foregoing and the
payment to the Assignor of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and adequacy of which are acknowledged by each
party, the parties agree as follows:

Section 1. ASSIGNMENT.

The Assignor hereby assigns to the Assignee and the Assignee hereby
accepts from the Assignor (a) all of the Assignor's right, title and
interest in and all claims against, the Partnership and P-C 900, including
without limitation, the 900 Realty Interests and the P-C Interest, and all
of Assignor's interest in the Partnership's and P-C 900's capital, profits
and distributions and (b) any and all right, title, and interest which the
Assignor has under the provisions of New York general or limited
partnership law or any other applicable law, the Partnership Agreement, the
P-C Agreement or in and to any of the Partnership's or P-C 900's assets,
with respect to the 900 Realty Interests, the P-C Interest or other
interests so assigned ('(a)' and '(b)' collectively, the "Assigned
Interests").

<PAGE>

Section 3. MISCELLANEOUS.

3.1 BINDING EFFECT. This Assignment shall be binding upon and
inure to the benefit of Assignor and Assignee and their respective
successors and assigns.

3.4 GOVERNING LAW. This Assignment shall be governed by, and
construed and enforced in accordance with, the internal laws of the State
of New York.

3.5 NO AGENCY, PARTNERSHIP OR JOINT VENTURE. Assignee is not the
agent or representative of Assignor, and Assignor is not the agent or
representative of Assignee. Assignor and Assignee intend and agree that
the relationship created by this Assignment is and shall be solely that of
assignor and assignee.

3.6 SURVIVAL. The covenants, agreements, representations and
warranties of Assignor contained in the Settlement Agreement are
incorporated herein by this reference and shall survive the assignment
provided for herein.

IN WITNESS WHEREOF, each party hereto has executed and sealed this
Assignment the day and year first above written.

900 REALTY, LLC

By:
------------------------------
Its:
------------------------------

900 3RD AVENUE ASSOCIATES

By: Carlyle Real Estate Limited
Partnership-XIV, a General Partner

By: JMB Realty Corporation, a
General Partner

By:
------------------------------
Its:
------------------------------

EXHIBIT 10-D
- ------------
(Carlyle-XIV)

AMENDMENT NO. 2 TO
AMENDED AND RESTATED
AGREEMENT OF GENERAL PARTNERSHIP
FOR PROGRESS PARTNERS
--------------------------------

AMENDMENT NO. 2 ("Amendment"), dated as of this 17th day of March,
1999, to the Amended and Restated Agreement of General Partnership dated as
of August 20, 1984, as amended pursuant to Amendment No. 1, dated as of
February 26, 1986 ("Partnership Agreement") is made by and among PROGRESS
PROPERTIES, INC. ("PPI"), J.R.A. REALTY CORPORATION ("JRA"), P-C 900 THIRD
ASSOCIATES ("P-C 900," and collectively with PPI and JRA, the "Progress
Group"), 900 REALTY, LLC ("900 Realty" and collectively with PPI, JRA and
P-C 900, the "Progress Parties"), 900 3RD AVENUE ASSOCIATES ("Associates"),
and PROGRESS PARTNERS (the "Partnership").

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

WHEREAS, each of the entities constituting the Progress Group and
Associates are (or were) partners in the Partnership pursuant to, among
other things, that certain Amended and Restated Agreement of General
Partnership for Progress Partners dated as of August 20, 1984, as amended
pursuant to Amendment No. 1, dated as of February 26, 1986 ("Partnership
Agreement");

WHEREAS, the Federal Deposit Insurance Corporation has filed
various claims against, among others, Associates, the Progress Group and
Albert Schwartz, individually, arising from Schwartz's acquisition of
certain interests in the Progress Group, entitled FDIC V. PROGRESS
PROPERTIES, et al., Case No. 91 Civ. 3761 (S.D.N.Y.) and FDIC V. FIRST
MARYLAND, et al., Case No. 96 Civ. 3792 (S.D.N.Y.) both of which are
presently pending in the United States District Court for the Southern
District of New York, and FDIC V. FIRST MARYLAND, et al., presently pending
in Circuit Court of Maryland for Baltimore City, Case No.
96141932/CL212356;

WHEREAS, Associates filed a cross-complaint against, among others,
the Progress Group, arising from its prior management of the Property, in
the action entitled FDIC V. PROGRESS PROPERTIES, et al., Case No. 91 Civ.
3761 (S.D.N.Y.) presently pending in the United States District Court for
the Southern District of New York;

WHEREAS, in or about January, 1996, the Maryland Deposit Insurance
Fund Corporation obtained a judgment against PPI and JRA to foreclose its
lien on the partnership interests in the Partnership and P-C 900 held by
PPI and JRA (collectively, "PPI/JRA Partnership Interests");

WHEREAS, 900 Realty has represented that in or about January, 1998,
MDIF assigned to 900 Realty, for good and valuable consideration, all of
MDIF's right, title and interest in its judgment and the PPI/JRA
Partnership Interests;

WHEREAS, 900 Realty conducted a foreclosure sale of the PPI/JRA
Partnership Interests at which sale 900 Realty was the successful purchaser
and now maintains that is the holder of the PPI/JRA Partnership Interests,
as evidenced by a certificate of sale, dated as of September 14, 1998, a
copy of which has been delivered to Associates;

<PAGE>

WHEREAS, Associates maintains that it holds a lien on (and the
Progress Parties contest that Associates holds a lien on) the PPI/JRA
Partnership Interests as well as the partnership interest of P-C 900 in the
Partnership to secure that certain promissory note, dated as of August 20,
1984 in the original principal amount of $20 million, together with
interest accrued thereon ("Associates' Note") made by PPI and delivered to
Associates, which lien Associates claims (and the Progress Parties contest)
is superior to MDIF's lien;

WHEREAS, PPI, JRA and 900 Realty have asserted various claims against
the Partnership and Associates (and Associates and the Partnership have
contested such claims), including, without limitation, (i) the
mismanagement of the Property by JMB and/or Heitman (ii) claims arising
from Associates' negotiations and agreement with MDIF after MDIF obtained
its judgment, (iii) claims under the Partnership Agreement by the Progress
Group against the Partnership for certain Guaranteed Payments (as defined
therein) and other claims asserted by or on behalf of the Partnership
against Associates for certain capital contributions allegedly due from
Associates to the Partnership and (iv) claims arising from distributions
taken by Associates for the repayment of certain funds loaned to the
Partnership in connection with the refinancing of the Partnership's debt
and other distributions;

WHEREAS, Associates, the Progress Parties and the Partnership have
agreed to settle and compromise some of the various claims between them by
means of this Amendment; and

NOW, THEREFORE, in consideration of the premises aforesaid, the
mutual covenants herein contained, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:

1. 900 Realty shall be admitted and substituted as general partner
in lieu of PPI and JRA. 900 Realty agrees to be bound by all of the terms
and provisions of the Partnership Agreement, as amended by this Amendment,
as fully as if 900 Realty were a signatory thereto.

2. Paragraph D of Section 1.7 of the Partnership Agreement is hereby
amended to read in its entirety as follows:

"D. "PROGRESS GROUP" means, individually and
collectively, 900 Realty LLC, a Delaware limited liability company and P-C
900 Third Associates, a New York limited partnership, and their respective
successors and assigns."

3. The Progress Group Relative Shares shall be seventy-five percent
(75%) to 900 Realty and twenty-five percent (25%) to P-C 900.
Notwithstanding anything in Section 1.7N or any other provision of the
Partnership Agreement to the contrary, the Progress Group Relative Shares
cannot be modified without the written consent of Associates.

4. Notwithstanding any contrary term contained in the Partnership
Agreement, that certain Consent Agreement dated as of October 27, 1990 by
and among the PPI and JRA, Associates and First Maryland Savings and Loan
("MDIF Agreement"), or any other written or oral agreement or understanding
between any of the parties hereto, the provisions of this Agreement shall
govern and, with respect to the distribution of or payment of any monies to
any of the partners of the Partnership, this Agreement supersedes all
provisions in the Partnership Agreement or MDIF Agreement relating to such
payments or distributions. Without limitation of the foregoing, Associates
shall have no obligation whatsoever hereafter to make contributions
pursuant to Sections 2.1.B and 2.2 of the Partnership Agreement and the
Progress Group shall have no right whatsoever hereafter to any Guaranteed
Payments pursuant to Article III of the Partnership Agreement or otherwise.

<PAGE>

5. Section 3.2 of the Partnership is hereby amended to read in its
entirety as follows:

"Net Cash Receipts (if any) for such calendar year or portion
of such calendar year shall be distributed seventy percent (70%) to
Associates and thirty percent (30%) to the Progress Group."

6. Paragraph A of Section 3.3 of the Partnership is hereby amended
to read in its entirety as follows:

"A. FIRST LEVEL. There shall be distributed to Associates
such Net Sale Proceeds or Net Financing Proceedings until Associates shall
have received under this subsection A an aggregate of $36,000,000."

7. Paragraph D of Section 3.3 is hereby deleted in its entirety.

8. Paragraph E of Section 3.3 of the Partnership is renumbered as
Paragraph D and is hereby amended to substitute the words "subsections A
through C" in lieu of "subsections A through D".

9. Notwithstanding the provisions of Article IV of the Partnership
Agreement, taxable profits and taxable losses, profits and losses, and gain
or loss, shall be allocated among the partners by applying the rules of
Treas. Reg. Section 1.704-1(b).

10. For any taxable year in which a partner disposes of his entire
interest, in order to avoid an interim closing of the partnership books,
such partner's distributive share of items described in Section 702(a)
shall be estimated and allocated to such partner by estimating the pro rata
part of the items which would have been included if such partner remained a
partner until the end of the partnership year. The proration shall be
determined in a reasonable manner, as provided in Section 1.706-
1(C)(2)(ii), which will allocate income to a partner on a pro rata basis
only for the period in which such partner was a partner (which in the case
of 900 Realty shall be deemed to end on March 22, 1999). A transferee of
such partner's interest shall be allocated his pro rata share of the items
described in Section 702(a) determined by the method used by the transferor
partner.

11. This Agreement shall constitute a written amendment to the
Partnership Agreement, as required by Section 10.2 thereof.

12. The Partnership Agreement shall remain in full force and effect
except as amended hereby.

13. This Amendment may be signed in any number of counterparts with
the same effect as if the signatures thereto were upon the same instrument.

<PAGE>

IN WITNESS HEREOF, the parties have executed this Agreement the day
and year first above written.

PROGRESS PROPERTIES, INC.

By:
------------------------------
Its:
------------------------------

J.R.A. REALTY CORPORATION

By:
------------------------------
Its:
------------------------------

P-C 900 THIRD ASSOCIATES

By: 900 Realty LLC, General Partner

By:
------------------------------
Its:
------------------------------

PROGRESS PARTNERS

By: Progress Properties, Inc., General
Partner

By:
------------------------------
Its:
------------------------------

By: J.R.A. Realty Corporation, General
Partner

By:
------------------------------
Its:
------------------------------

<PAGE>

By: 900 3rd Avenue Associates,
General Partner

By: Carlyle Real Estate Limited
Partnership-XIV, a General
Partner

By: JMB Realty Corporation, a
General Partner

By:
-------------------------
Its:
-------------------------

900 REALTY, LLC

By:
------------------------------
Its:
------------------------------

900 3RD AVENUE ASSOCIATES

By: Carlyle Real Estate Limited
Partnership-XIV, a General Partner

By: JMB Realty Corporation, a
General Partner

By:
------------------------
Its:
------------------------

EXHIBIT 10-E
- ------------
(Carlyle-XIV)

AMENDMENT NO. 3 TO
AMENDED AND RESTATED
AGREEMENT OF GENERAL PARTNERSHIP
FOR PROGRESS PARTNERS
--------------------------------

AMENDMENT NO. 3 ("Amendment"), dated as of this 22nd day of March,
1999, to the Amended and Restated Agreement of General Partnership dated as
of August 20, 1984, as amended pursuant to Amendment No. 1, dated as of
February 26, 1986, and as amended by Amendment No. 2, dated as of March 17,
1999 ("Partnership Agreement") is made by and among P-C 900 THIRD
ASSOCIATES, a New York limited partnership ("P-C 900"), 900 REALTY, LLC, a
Delaware limited liability company ("900 Realty"), 900 3RD AVENUE
ASSOCIATES, an Illinois general partnership ("Associates"), 14-15 Office
Associates, L.P., an Illinois limited partnership ("14-15 Office
Associates") and PROGRESS PARTNERS (the "Partnership").

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

WHEREAS, Associates, 900 Realty and P-C 900 were partners in
the Partnership pursuant to, among other things, that certain Amended and
Restated Agreement of General Partnership for Progress Partners dated as of
August 20, 1984, as amended pursuant to Amendment No. 1, dated as of
February 26, 1986, and as amended pursuant to Amendment No. 2, dated as of
March 17, 1998 (collectively "Partnership Agreement");

WHEREAS, 900 Realty has assigned all of its right, title and
interest in Progress Partners to Associates;

WHEREAS, P-C 900 has assigned all of its right, title and
interest in Progress Partners to Associates and 14-15 Office Associates;
and

1. 900 Realty shall no longer be a general partner in Progress
Partners and Associates shall hold and be entitled to exercise all of
right, title and interest formerly belonging to 900 Realty under the
Partnership Agreement, effective as of the date of this Amendment.

2. 14-15 Office Associates shall be admitted as a general partner of
the Partnership in substitution for P-C 900, and 14-15 Office Associates
shall hold and be entitled to exercise all of right, title and interest
formerly belonging to P-C 900 under the Partnership Agreement, effective as
of the date of this Amendment. 14-15 Office Associates agrees to be bound
by all of the terms and provisions of the Partnership Agreement, as amended
by this Amendment, as fully as if 14-15 Office Associates were a signatory
thereto.

3. Section 3.2 of the Partnership is hereby amended to read in its
entirety as follows:

"Net Cash Receipts (if any) for such calendar year or portion
of such calendar year shall be distributed 92.575% to Associates and 7.425%
to 14-15 Office Associates."

<PAGE>

4. Paragraph D of Section 3.3 of the Partnership is hereby amended
to read in its entirety as follows:

"D. FOURTH LEVEL. The balance of the Net Sales Proceeds and
Net Financing Proceeds remaining after the distributions pursuant to
subsections A through C above shall be distributed 92.575% to Associates
and 7.425% to 14-15 Office Associates."

5. This Agreement shall constitute a written amendment to the
Partnership Agreement, as required by Section 10.2 thereof.

6. The Partnership Agreement shall remain in full force and effect
except as amended hereby.

7. This Amendment may be signed in any number of counterparts with
the same effect as if the signatures thereto were upon the same instrument.

IN WITNESS HEREOF, the parties have executed this Agreement the day
and year first above written.

P-C 900 THIRD ASSOCIATES

By: 900 Third Avenue Associates,
its general partner

By: Carlyle Real Estate Limited
Partnership-XIV, a General
Partner

By: JMB Realty Corporation, a
General Partner

By:
--------------------
Its:
--------------------

PROGRESS PARTNERS

By: 900 Realty, LLC,
General Partner

By:
------------------------------
Its:
------------------------------

By: 900 3rd Avenue Associates, General
Partner

By: Carlyle Real Estate Limited
Partnership-XIV, a General
Partner

By: JMB Realty Corporation, a
General Partner

By:
--------------------
Its:
--------------------

<PAGE>

900 REALTY, LLC

By:
------------------------------
Its:
------------------------------

900 3RD AVENUE ASSOCIATES

By: Carlyle Real Estate Limited
Partnership-XIV, a General Partner

By: JMB Realty Corporation, a
General Partner

By:
--------------------
Its:
--------------------

14-15 OFFICE ASSOCIATES, L.P.,
an Illinois limited partnership

By: 900 3rd Avenue Corporation,
its general partner

By:
------------------------------
Name:
------------------------------
Title:
------------------------------

EXHIBIT 10-F
- ------------
(Carlyle-XIV)

SETTLEMENT AGREEMENT AND RELEASE
--------------------------------

THIS SETTLEMENT AGREEMENT AND RELEASE ("Agreement"), dated as of this
17th day of March, 1999, is made by and among PROGRESS PROPERTIES, INC.
("PPI"), J.R.A. REALTY CORPORATION ("JRA"), P-C 900 THIRD ASSOCIATES ("P-C
900," and collectively with PPI and JRA, the "Progress Group"), 900 REALTY,
LLC ("900 Realty" and collectively with PPI, JRA and P-C 900, the "Progress
Parties"), 900 3RD AVENUE ASSOCIATES ("Associates"), and PROGRESS PARTNERS
(the "Partnership").

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

WHEREAS, the Partnership owns certain land and improvements commonly
known as 900 3rd Avenue, New York, New York (the "Property");

WHEREAS, in 1987, JMB Property Management Company ("JMB") became the
manager of the Property pursuant to that certain Agreement for Operation
and Management of Office Building (the "Management Agreement") dated as of
December 1, 1987;

WHEREAS, in December, 1994, JMB delegated certain of its duties under
the Management Agreement to Heitman Properties of New York, Ltd.
("Heitman") pursuant to that certain Submanagement Agreement;

WHEREAS, the Federal Deposit Insurance Corporation ("FDIC") has filed
various claims against, among others, Associates, the Progress Group and
Albert Schwartz, individually ("Schwartz"), arising from Schwartz's
acquisition of certain interests in the Progress Group, entitled FDIC V.
PROGRESS PROPERTIES, et al., Case No. 91 Civ. 3761 (S.D.N.Y.) and FDIC V.
FIRST MARYLAND, et al., Case No. 96 Civ. 3792 (S.D.N.Y.) both of which are
presently pending in the United States District Court for the Southern
District of New York, and FDIC V. FIRST MARYLAND, et al., presently pending
in Circuit Court of Maryland for Baltimore City, Case No. 96141932/CL212356
(collectively, the "FDIC Cases");

WHEREAS, in or about January, 1996, the Maryland Deposit Insurance
Fund Corporation ("MDIF") obtained a judgment against PPI and JRA to
foreclose its lien on the partnership interests in the Partnership and PC-
900 held by PPI and JRA (collectively "PPI/JRA Partnership Interests");

<PAGE>

WHEREAS, Associates maintains that it holds a lien on (and the
Progress Parties contest that Associates holds a lien on) the PPI/JRA
Partnership Interests as well as the partnership interest of PC-900 in the
Partnership to secure that certain promissory note, dated as of August 20,
1984 in the original principal amount of $20 million ("Associates' Note")
made by PPI and delivered to Associates, together with interest thereon,
which lien Associates claims (and the Progress Parties contest) is superior
to MDIF's lien;

WHEREAS, PPI, JRA and 900 Realty have asserted various claims against
the Partnership and Associates (and Associates and the Partnership have
contested such claims), including, without limitation, (i) the
mismanagement of the Property by JMB and/or Heitman (ii) claims arising
from Associates' negotiations and agreement with MDIF after MDIF obtained
its judgment ("MDIF-related Claims"), (iii) claims under the Partnership
Agreement by the Progress Group against the Partnership for certain
Guaranteed Payments (as defined therein) and other claims asserted by or on
behalf of the Partnership against Associates for certain capital
contributions allegedly due from Associates to the Partnership (the
"Partnership Agreement Claims") and (iv) claims arising from distributions
taken by Associates for the repayment of certain funds loaned to the
Partnership in connection with the refinancing of the Partnership's debt
and other distributions ("Distribution Claims");

WHEREAS, Associates, the Progress Parties and the Partnership desire
to avoid the uncertainties and expense of litigation and to settle and
compromise on the terms set forth below all claims asserted or that could
be asserted by any party that they may have against each other, except as
provided herein; and

1. AUTHORITY. Simultaneously with the execution and delivery of
this Agreement by all of the parties hereto, each party shall provide to
the other evidence of its due authorization to enter into and perform the
transactions contemplated by this Agreement, all in form reasonably
satisfactory to the other parties. Such evidence shall include the
following: (a) certificate of good standing in the state of its formation
or incorporation (except that no such certificate shall be required from
Associates or the Progress Group) and the organizational documents of such
party (e.g. operating agreement, by-laws, etc.); (b) an incumbency
certificate; (c) an organizational certificate or resolution, duly
certified, authorizing such party to enter into this Agreement, consummate
the sale and perform the obligations required of such party hereunder; and
(d) such other evidence reasonably required by any of them.

2. ACQUISITION BY 900 REALTY. Associates and the Progress Group
hereby (a) consent to and agree to waive all defects and objections, if
any, to MDIF's assignment of the MDIF Interests to 900 Realty, (b) consent
to and agree to waive all defects and objections, if any, to 900 Realty's
judicial or foreclosure sale of the PPI/JRA Partnership Interests, (c)
acknowledge, agree and will not contest (i) that 900 Realty is the sole
holder and owner of the PPI/JRA Partnership Interests, formerly held by PPI
and JRA in the Partnership and PC-900, together with all claims held by JRA
or PPI against the Partnership and/or Associates, (ii) that 900 Realty, in
substitution for PPI and JRA, now owns and controls all of the right, title

<PAGE>

and interest formerly held by PPI and JRA in the Partnership and in PC-900
as well as all claims held by them against the Partnership and/or
Associates, and (iii) that 900 Realty has the authority to convey the
Partnership Interests as provided in paragraph 4 hereinafter; provided,
however, that nothing herein shall be construed as a waiver or otherwise
estop or limit in any way Associates' right to enforce or rely on the
representations and warranties made by the Progress Parties in this
Agreement (including the representations and warranties set forth in
Article 10 herein) or any Closing Document, it being understood that the
foregoing acknowledgments and agreements made by Associates in this
Paragraph 2 are based on such representations and warranties. In order to
further support the agreements herein, PPI and JRA do hereby quitclaim,
assign and convey to 900 Realty, without representation or warranty, all of
their right, title and interest in and claims against the Property,
Partnership and/or PC-900, including, without limitation, whatever claims
they may have against the Partnership and/or Associates for Guaranteed
Payments (collectively the "Support Interests"). Subject to the proviso in
Paragraph 28 of this Agreement, the Progress Parties and Associates and the
Partnership acknowledge and agree (x) that in order to secure Associates'
Note, Associates holds a lien on (i) the PPI/JRA Partnership Interests,
(ii) the partnership interest of PC-900 in the Partnership, and (iii) all
of the claims of the Progress Group against the Partnership, including all
claims, if any, for Guaranteed Payments (the "Associates' Lien"), and (y)
that such lien is superior to MDIF's lien and (z) that 900 Realty's
acquisition of all of its right, title and interest in and claims against
the Partnership is subject to such lien.

3. FDIC ACQUISITION. Simultaneously with or prior to the execution
and delivery of this Agreement by all of the parties hereto, 900 Realty
shall deliver (a) original copies of the Agreement and Mutual Release
attached hereto as Exhibit A duly executed by each of the Progress Parties,
Albert Schwartz, Joel Wiener and by PPI on behalf of the Partnership, (b)
an original Partner Consent attached hereto as Exhibit B duly executed by
the Progress Parties and Albert Schwartz, (c) the letter to the FDIC in the
form attached hereto as Exhibit C duly executed by each of the Progress
Parties and Albert Schwartz, and (d) stipulations to dismiss in the form
attached hereto as Exhibit D duly executed by counsel for each of the
Progress Parties and Albert Schwartz.

4. SALE OF PARTNERSHIP INTERESTS. Simultaneously with the
execution and delivery of this Agreement by all of the parties hereto
("Closing Date"), Associates shall acquire from 900 Realty the Partnership
Interests (defined hereafter) in exchange for a total payment by Associates
of Sixteen Million Dollars ($16,000,000) (the "Purchase Price"), which
Purchase Price shall be paid by Associates according to the terms and upon
the conditions hereinafter set forth. As used herein, "Partnership
Interests" shall mean all of the right, title and interest (i) in the
Partnership not owned by Associates as of the Closing Date and (ii) in PC-
900 not owned by the FDIC (or its successor in interest) as of the Closing
Date, including all of the right, title and interest of JRA and PPI in the
Property (if any), Partnership and PC-900 held by them since the inception
of the Partnership (other than Associates' interest in the Partnership), as
well as any claims held by any of them against the Partnership or
Associates, together with the Support Interests transferred to 900 Realty
pursuant to paragraph 2 above.

(a) On the Closing Date, 900 Realty shall, at its expense,
provide Associates with (i) an original of the assignment attached hereto
as Exhibit E duly executed by each of the parties thereto, (ii) results of
a search of the Progress Parties from a reputable search service for the
State of New York (and any other state in which such of the Progress
Parties is incorporated or formed and doing business), dated no earlier
than March 3, 1999, and showing no UCC, tax or judgment liens with respect
to any interest in the Partnership or in PC-900 (other than the Associates'

<PAGE>

Lien), (iii) a policy issued by Commonwealth Title Company (the "Title
Company") in the amount of the Purchase Price, in form reasonably
satisfactory to Associates, insuring Associates' title to the Partnership
Interests free and clear of any liens (other than the Associates' Lien),
encumbrances or defects, as well as the interest of 14-15 Office
Associates, L.P. ("14-15 Office Associates") in the Partnership free and
clear of any liens (other than the Associates' Lien), encumbrances or
defects, and (iv) a certificate and report of title on the Property free
and clear of all liens, claims and encumbrances, other than those approved
by Associates, and a letter from the Title Company agreeing not to raise
certain matters in form reasonably satisfactory Associates. On the Closing
Date, Associates shall pay to 900 Realty, by federal funds wire transfer of
immediately available funds to an account designated by 900 Realty to
Associates in writing, of which 900 Realty hereby represents that it shall
be the beneficial owner, the sum of Thirteen Million Five Hundred Thousand
and no/Dollars ($13,500,000); and

(b) The remaining balance of the Purchase Price, in the
amount of Two Million Five Hundred Thousand and no/Dollars ($2,500,000)
(the "Closing Balance"), shall be paid by Associates in the same manner as
above upon the earlier of (i) a closing of a sale of the Property by the
Partnership, or (ii) January 3, 2000. The Partnership hereby guarantees
Associates' obligation to pay the Closing Balance (together with interest
due thereon, if any) according to the terms and conditions set forth
herein. Associates and the Partnership hereby acknowledge and agree that
Associates: (a) has an irrevocable obligation to pay the Closing Balance
when the same shall become due and payable as provided herein, and (b) if
Associates fails to pay the Closing Balance as provided herein, then, for
each day that such payment is not paid when due, Associates shall pay
interest on the Closing Balance at an annual rate equal to 150 basis points
over the prime rate of Citibank, N.A. in effect from time to time (computed
on an actual/365 day basis), provided that in no event shall such amounts
exceed the maximum rate permitted by law, plus any and all out of pocket
cost incurred by 900 Realty, including, without limitation, reasonable
attorneys' fees, in an effort to collect such amounts from Associates.

5. AMENDMENTS OF PARTNERSHIP AGREEMENTS. Prior to the execution
of this Agreement, Progress Parties, the Partnership and Associates have
executed and delivered an amendment to the Partnership Agreement in the
form attached hereto as Exhibit F. Associates, 14-15 Office Associates,
PPI and 900 Realty have executed and delivered the amendment to the
partnership agreement of PC-900 in the form attached hereto as Exhibit G.
Associates, 900 Realty, P-C 900, and 14-15 Office Associates have executed
and delivered the amendment to the Partnership Agreement in the form
attached hereto as Exhibit H.

6. TRANSFER TAXES. If any property transfer taxes or real estate
transfer taxes are due and payable in connection with (a) the acquisitions
by Associates (and/or by any nominee, affiliate or related party of
Associates, including 14-15 Office Associates) of all of the right, title
and interest in the Partnership and in PC-900, including the Partnership
Interests and the limited partnership interest of the FDIC in P-C 900,
and/or (b) any prior transaction(s) with which such acquisitions may be
aggregated for tax purposes relating to any acquisitions by 900 Realty of
any interest in the Partnership or of the general partnership interest in
P-C 900, 900 Realty unconditionally and irrevocably agrees to pay the same
when due, and to defend, indemnify and hold the Associates Group (as
defined herein) harmless from any liabilities, claims or expenses on
account of such unpaid taxes, including without limitation of any other
rights it may have, interest, penalties, and reasonable attorneys' fees and
other costs related thereto; provided, however, that if the taxes payable
in connection with such acquisitions or transactions include taxes
attributable to the acquisition by Associates (and/or by any nominee,
affiliate or related party of Associates) of the limited partnership
interest in P-C 900 held by the FDIC, then upon demand of 900 Realty,
Associates shall contribute to the payment of the total amount of taxes
due hereunder an amount equal to the tax on the fair market value as of
the date of this Agreement of such limited partnership in P-C 900, such
amount not to exceed twenty-four percent (24%) of the total amount of such
taxes attributable to the acquisitions contemplated under clause (a) of
this paragraph 6 ("Associates Contribution"), together with interest or
penalties, if any, attributable thereto. The foregoing payment by
Associates is subject to 900 Realty's simultaneous payment of the balance
of the total amount of said taxes due hereunder, including interest and
penalties, if any. All rights, if any, to seek payment or reimbursement
from the FDIC (including any right of contribution, indemnity or
subrogation) on account of the taxes paid hereunder by 900 Realty or in
connection with the payment made by Associates of the Associates
Contribution hereunder shall belong solely to Associates. 900 Realty shall
have the right to contest the payment of taxes assessed in connection with
all (but not less than all unless Associates otherwise agrees in writing)
of the acquisitions and transactions referred to in this Section 6 and to
defer payment of such taxes; provided, however, that such right of contest
shall terminate and 900 Realty shall pay such amounts due hereunder upon
the first to occur of (i) a ruling by a State or City or other governmental
agency of New York from which no further appeal may be taken, or (ii) if
such contest in any way hinders or interferes, as reasonably determined by
Associates, with Associates' ability to sell (or close any such sale of)
the Property and provided further that before initiating such contest, and
thereafter within twenty-one (21) days of Associates' request (not to
exceed once in every six months), 900 Realty provides Associates with
Minimum Statements of Net Worth (as provided for and defined in the
Agreement, Guaranty and Mutual Release attached as Exhibit I ("Release"))
from each of the 900 Realty Members (as defined in the Release). If 900
Realty shall fail to provide any of the foregoing Minimum Statements of Net
Worth when due, it shall have no further right of contest and shall
immediately pay the taxes due together with all interest and penalties
thereon and any other costs relating thereto. Subject to the foregoing,
Associates shall reasonably cooperate in such contest and, if 900 Realty
notifies Associates of its intent to contest such taxes prior to initiating
such contest and Associates does not object in writing to such contest
within seven (7) days of delivery of the foregoing notice, Associates shall
pay for twenty-four percent (24%) of the legal expenses and costs incurred
and payable by 900 Realty in contesting the taxes attributable to the
acquisitions contemplated under clause (a) of this paragraph 6, provided
900 Realty simultaneously pays the balance of such expenses and costs due
and payable, and Associates shall have no other liability for interest or
penalties or any other claims, expenses or costs relating to such unpaid
taxes. Wherever used in this Agreement, "Associates Group" means
Associates, the Partnership, 14-15 Office Associates, and PC-900 (after
giving effect to the acquisitions of Associates and/or its affiliates of
the interest therein), together with its partners (other than the Progress
Parties), partners of their partners (including, without limitation, in the
case of Associates, Carlyle Real Estate Limited Partnership-XIV, Carlyle
Real Estate Limited Partnership-XV, JMB Realty Corporation), members, and
each of the foregoing's officers, directors, affiliates of every kind or
nature (including in the case of Associates, JMB Property Management
Company and Heitman Properties of New York, Ltd.), agents, employees, and
attorneys. 900 Realty shall also promptly provide Associates with copies
of all tax notices and all correspondence, petitions, briefs and other
filings made by itself or New York City or State in connection with the
contest of any tax deficiency.

7. INDIVIDUAL RELEASES. Concurrently with the execution and
delivery of this Agreement, the Progress Parties shall deliver to
Associates an original of the Release attached hereto as Exhibit I duly
executed by Albert Schwartz, Joel Wiener, Emil Rausman and Martin Rausman.

8. CONDITION TO EFFECTIVENESS. This Agreement shall be effective
upon the execution and delivery of all parties hereto.

<PAGE>

9. TAX RETURNS AND REPORTING.

(a) Associates shall cause the Partnership to and the Partnership
shall: (i) provide the Progress Parties with a copy of the final United
States federal income tax return of the Partnership (including Schedules K-
1 for the Progress Parties) for the year ended December 31, 1998 (the "1998
Partnership Tax Return") which return shall provide that income
attributable to the Progress Parties does not exceed thirty percent (30%)
of income attributable to the Partnership;

(ii) file with the Internal Revenue Service (the "Service")
and provide to PPI and JRA Schedules K-1 to the 1998 Partnership Tax Return
showing the distributive shares of PPI and JRA of the income or loss of the
Partnership for the period January 1, 1998 to December 31, 1998; and

(iii) file with the Service and provide to 900 Realty a
Schedule K-1 to the Partnership tax return for the year ended December 31,
1999 showing the distributive share of 900 Realty of the income or loss of
the Partnership for the period January 1, 1999 through the date preceding
the date hereof; which return shall provide that income attributable to 900
Realty does not exceed thirty percent (30%) of income of the Partnership
for the year ended December 31, 1999; such income to be calculated based on
900 Realty's share of the Partnership's income for the entire year prorated
for the period January 1, 1999 through March 22, 1999;

(b) If the federal, state or local income tax return of the
Partnership for 1999 or any preceding year is audited by the Service or by
any state or local taxing authority, the Partnership shall provide
reasonable notice of such audit to 900 Realty. The Partnership shall have
the right to settle any such audit without the consent of PPI or any other
Progress Party in the case of any audit for 1998 and preceding years and
900 Realty or any other Progress Party in the case of audits for 1998 and
1999.

(c) State and local income tax returns of the Partnership for the
years ended on December 31, 1998 and December 31, 1999 shall be consistent
with the federal income tax returns of the Partnership in prior years.

(d) The federal, state and local income tax returns filed by the
Progress Parties shall be consistent with, and such parties shall not
contest, the treatment and reporting by the Partnership provided herein.

10. GENERAL REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.

a. BY PROGRESS PARTIES. Each of the Progress Parties (other
than P-C 900) jointly and severally represents and warrants to Associates,
14-15 Office Associates and the Partnership that the following is true and
correct as of the date of this Agreement and shall be true and correct as
of the date of the delivery of the assignment pursuant to Paragraph 4
hereof:

(i) Albert Schwartz is the sole shareholder of
PPI, and PPI is the sole shareholder of JRA. PPI and JRA have full power
and authority to execute and deliver this Agreement, and any other document
required to be delivered by such parties hereunder (including without
limitation the documents delivered pursuant to paragraphs 3, 5 and 7
hereof), and to quitclaim and assign any and all rights, title and
interests they have or may have in, and claims against, the Partnership,
Associates and PC-900 as provided in paragraph 2.

<PAGE>

(ii) The copy delivered by 900 Realty to
Associates of the agreement dated January 13, 1998 between 900 Realty and
MDIF is a true and complete copy of the original, constitutes the entire
agreement between the parties and has not been amended, either orally or in
writing, and 900 Realty owns all of the claims against PPI, JRA the
Partnership or its partners previously held by MDIF (except to the extent
such claims have been partially satisfied or discharged in connection with
the foreclosure sale of the PPI/JRA Partnership Interests).

(iii) Joel Wiener, Schwartz, Emil Rausman and
Martin Rausman are the sole members of 900 Realty, and 900 Realty has not
transferred, assigned, pledged, granted a lien on, or otherwise disposed of
any interest in, or claims against, PPI, JRA, the Partnership or its
partners, including the claims it acquired from MDIF (except to the extent
such claims have been partially satisfied or discharged in connection with
the foreclosure sale in which it acquired the PPI/JRA Partnership
Interests).

(iv) No Progress Party has assigned, transferred,
disposed of, pledged or granted a lien to or in favor of any person with
respect to its interest in the Partnership or its interest in any other
Progress Party (except for the Associates' Lien, the collateral assignment
of their interests under Partnership Agreement to Associates and the
Partnership and the liens granted to MDIF that were assigned to 900 Realty)
or with respect to any claim against or relating to the Partnership or
Associates previously held by it or the Released Claims disposed of by this
Agreement.

(v) There is no lawsuit in which any of the
Progress Parties is a party that is not referred to in the recitals to this
Agreement and there are no claims against or liabilities of the Partnership
caused or incurred by any Progress Party, except the existing first
mortgage loan to Teachers Insurance and Annuity Association of America.

(vi) Each of the Progress Parties is duly
authorized and empowered to enter into this Agreement, and the signatory
designated below for each such party has full authority and power to bind
such party to the representations, warranties, terms and conditions of this
Agreement, and this Agreement is valid and enforceable in accordance with
its terms.

(vii) To the best knowledge of each of the Progress
Parties (a) none of them or Joel Wiener, Albert Schwartz, Emil Rausman or
Martin Rausman or any entity which any of them or the foregoing individuals
control or in which any of them or the foregoing individuals own any
interest holds any interest, direct or indirect, in Associates, its
partners, its partners of partners or their Affiliates (which for purposes
of this Agreement shall have the meaning as defined in Section 6.3 of the
Partnership Agreement), (b) none of them has authorized or consented to or
made any amendments to the Partnership Agreement, except for the amendment
referenced in paragraph 5 herein, and (c) none of them has authorized any
amendments to the Agreement of Limited Partnership of P-C 900 Third
Associates, dated February 26, 1986, by and between PPI and Central
National Bank of New York, except for the amendment referenced in paragraph
5 herein.

(viii) None of the Progress Parties, Joel Wiener,
Albert Schwartz, Emil Rausman or Martin Rausman has engaged, or caused the
Partnership to engage, any broker with respect to the Property or the
transfer of the Partnership Interests hereunder.

(ix) 900 Realty is the sole holder and owner of all the
right, title and interest in the Partnership, PC-900 and the Property (and
in all claims against the Partnership and/or Associates) formerly held by
PPI and JRA.

<PAGE>

(xi) 900 Realty has good and marketable title to the
Partnership Interests transferred to Associates pursuant to the assignment
(the "Assignment") attached hereto as Exhibit D (and full power and
authority to transfer same) free and clear of any defects, liens or
encumbrances, other than any Associates' lien and such interests shall be
transferred to Associates, in each case free and clear of any defects,
liens or encumbrances, other than the Associates' lien, upon delivery of
the Assignment.

(xii) Each of the Closing Documents (defined hereafter)
was duly executed by the person who purported to sign it and said person
was duly authorized and competent to execute such document and each of the
Closing Documents is valid and enforceable in accordance with its terms.

(xiii) P-C 900 has no obligations or liabilities (other
than its obligations and liabilities with respect to claims by Associates
and other than any liabilities which it may have under general partnership
law or by reason of its status as a general partner of the Partnership) and
there are no pending or, to the best knowledge of the Progress Parties,
threatened claims of any kind or nature against P-C 900 (except for claims
asserted in the FDIC Cases), and all of PC-900's right, title and interest
in the Partnership is owned and held by P-C 900 free and clear of any
liens, encumbrances or defects (other than the Associates' Lien or any
claims by Associates).

(xiv) The Partnership Interests conveyed by 900 Realty to
Associates hereunder were acquired by it for fair consideration and for
reasonably equivalent value.

(xv) There are no agreements of any kind or nature between or
among, on the one hand, PC-900 and, on the other hand, any other Progress
Party, Albert Schwartz, Joel Wiener, Emil Rausman or Martin Rausman other
than the Partnership Agreement, this Agreement or any Closing Document.

(xvi) Without limitation of any other provisions hereof, after
the consummation of the transactions contemplated by this Agreement, there
are no interests in the Partnership that are not owned by Associates and P-
C 900 or 14-15 Office Associates, provided the foregoing representation and
warranty does not include any transfers of interest by Associates.

b. BY ASSOCIATES. Associates represents and warrants to the
Progress Parties that the following is true and correct as of the date
hereof:

(i) Except for the collateral assignment under
the Partnership Agreement, Associates has not previously assigned, pledged
or granted a lien on its interest in the Partnership or any claim against
any Progress Party to any other party.

(ii) Associates is duly authorized and empowered
to enter into this Agreement, and the signatory designated below has full
authority and power to bind such party to the representations, warranties,
terms and conditions of this Agreement.

(iii) Except for the interests Associates (or its
nominee, affiliate or related party) intends to acquire in P-C 900, neither
Associates or any Affiliate of Associates holds any interest, direct or
indirect, in any Progress Party, its partners, or affiliates.

(iv) Associates has not authorized or made any
amendments to the Partnership Agreement, except for Exhibit F and H.

<PAGE>

c. INDEMNIFICATION. Each of the Progress Parties
(other than P-C 900) jointly and severally agree to indemnify, defend and
hold harmless the Associates Group from and against any demands or claims
of every kind or nature (including claims of third parties or any person
claiming through or under any of the Progress Parties), damages, costs,
expenses, liability or losses suffered as a result of any inaccuracy or
breach of the representations and warranties or of any covenant or
agreement made by any of the Progress Parties in this Agreement or in any
Closing Document (as defined herein), provided that the Progress Parties
shall only be required to pay the fees and expenses of one law firm (and
local or special counsel, if engaged and any law firms engaged in
substitution for such firm or counsel) to defend the Associates Group,
whether one or more members of the Associates Group have been sued.
Associates agrees to indemnify, defend and hold harmless each of the
Progress Parties from and against any demands or claims of every kind or
nature (including claims of third parties or any person claiming through or
under Associates), damages, costs, expenses, liability or losses suffered
by them as a result of any inaccuracy or breach of the representations and
warranties or of any covenant or undertaking made by Associates in this
Agreement or in any Closing Document, provided that the Associates Group
shall only be required to pay the fees and expenses of one law firm (and
local or special counsel, if engaged, and any law firms engaged in
substitution for such firm or counsel) to defend the Progress Parties,
whether one or more of the Progress Parties have been sued. Wherever used
in this Agreement, "Closing Document" shall mean any document executed and
delivered in connection with this Agreement or any other agreement entered
into in connection with this Agreement, including all Exhibits . The
Partnership agrees to indemnify, defend and hold each of the Progress
Parties harmless from any wrongful act or omission of the Partnership first
occurring after the Closing Date, provided that the Partnership shall only
be required to pay the fees and expenses of one law firm (and local or
special counsel, if engaged, and any law firms engaged in substitution for
such firm counsel) to defend the Progress Parties, whether one or more of
the Progress Parties have been sued.

11. MUTUAL RELEASE. Except for each party's obligations hereunder
and the obligations of the parties under any Closing Document, each of the
parties hereto hereby releases, forgives and discharges each of the other
parties hereto and their respective partners, partners of their partners
(including, in the case of Associates, Carlyle Real Estate Limited
Partnership-XIV, Carlyle Real Estate Limited Partnership-XV, and JMB Realty
Corporation), members, and each of the foregoing's officers, directors,
affiliates of every kind or nature (including in the case of Associates,
JMB and Heitman), agents, employees, and attorneys, and each of them, of
and from all matters, claims, liabilities, demands, causes of action,
debts, obligations, promises, acts, agreements, interests, damages or
interests of whatever kind or nature, and any attorneys fees and expenses
that may be related thereto, whether known or unknown, which such party has
or may hereafter incur or acquire against any of the others by reason of or
relating to any reason, cause or event concerning or arising from the
relationship between or among any of the Progress Parties, the Partnership,
and Associates related to the Partnership or the Property that has
happened, accrued, developed or occurred on or prior to or as of the date
hereof, including without limitation all claims or interests asserted or
that could have been asserted by (i) any of the Progress Parties or
Associates in the Partnership Litigation, (ii) any party pursuant to the
Partnership Agreement, including without limitation claims by the Progress
Group for Guaranteed Payments and by the Partnership for capital
contributions from Associates under Sections 1.7, 2.2 and 3.1 of the
Partnership Agreement and any claim by any party with respect to any
financial obligation under the Partnership Agreement, including, without
limitation, with respect to any distributions by the Partnership, any
refinancing, any capital contribution or otherwise, (iii) any party,
including, without limitation, the MDIF, on account of any MDIF-related
Claim or on account of the MDIF's assignment of the MDIF Interests to 900
Realty, (iv) any party in any of the FDIC Cases, (v) any party arising out

<PAGE>

of or related to the management and leasing of the Property by JMB or
Heitman, and (vi) the Partnership against any party hereto or by any party
against the Partnership, relating to or arising from the Distribution
Claims, and (vii) by any Progress Party who has acquired or may acquire any
interest in any partner of Associates (collectively "Released Claims").

12. DEFENSE AND INJUNCTION. The provisions of this Agreement may
be pleaded as a full and complete defense to, and may be used as the basis
for an injunction against, any action, suit or other proceeding that may be
instituted, prosecuted or attempted in breach of this Agreement.

13. WAIVER AND RELEASE. The parties hereto expressly waive any and
all rights under any applicable statute, doctrine or principle of law
restricting the right of any person to release claims which such person
does not know or suspect to exist at the time of executing the release,
which claims, if known, may have materially affected such person's decision
to give such releases. In connection with such waiver and relinquishment,
the parties hereto acknowledge that they are aware that they may hereafter
discover claims presently unknown or unsuspected, or facts in addition to
or different from those which they now know or believe to be true, with
respect to the matters released herein. Nevertheless, it is the intention
of the parties hereto through this Agreement to fully, finally and forever
settle and release all such matters, and all claims relative thereto, which
now exist, may exist or theretofore have existed between or among any of
the parties hereto as described above. Notwithstanding the foregoing or
any other provision in this Agreement to the contrary, nothing in this
Agreement shall be construed as a waiver or release of any representation,
warranty, covenant, agreement, obligation or liability provided for in this
Agreement or in any Closing Document.

14. FUTURE ACQUISITION. Each Progress Party agrees that it shall
not acquire any interest hereafter, direct or indirect, in Associates,
their partners (or any of their partners or affiliates), and no Progress
Party shall assist any other person in acquiring such interest or in
transferring any interest in the Property or the Partnership, or knowingly
communicate, directly or indirectly, with any person holding such interest
with respect to such interest.

15. AMENDMENT OF AGREEMENT; NO ASSIGNMENTS. This Agreement shall
not be amended except by a writing signed by Associates and 900 Realty. No
party hereto shall be permitted to assign any right or delegate any duty
hereunder without the prior written consent of Associates and 900 Realty.

16. ENTIRE AGREEMENT. This Agreement, including all exhibits and
Closing Documents, constitutes the entire agreement of the parties hereto
as to the subject matter hereof. The undersigned acknowledge that all
prior agreements or understandings within the scope of the subject matter
of the Agreement are, upon the execution and delivery of this Agreement,
superseded, null and void.

17. GOVERNING LAW. This Agreement shall be construed and governed
by the internal laws of the State of New York without regard to its
conflict of law provisions.

18. NO WAIVER. No delay or omission of any party hereto to
exercise any right hereunder shall impair such right or be construed to be
a waiver of any default or an acquiescence therein.

19. HEADINGS, EXHIBITS. Section headings herein are for
convenience of reference only and shall not govern the interpretation of
any of the provisions hereof. Each of the exhibits attached hereto is
hereby by this reference incorporated herein. Any place in this Agreement
or any Closing Document where the word "including" is used shall be deemed
to include "without limitation."

<PAGE>

20. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto were upon
the same instrument. Delivery of this Agreement by fax transmission shall
be effective and binding on all parties hereto and shall be deemed to have
the same effect as delivery of the original counterpart.

21. DRAFTING. Each party hereto has participated in the drafting
of this Agreement and no adverse inference shall be drawn against any party
on account of their responsibility for drafting this Agreement.

22. CONFIDENTIALITY. The terms, conditions and other provisions of
this Agreement shall be kept strictly confidential except to the extent
disclosure is required by law (including such disclosure as is deemed
necessary in connection with any documents or reports filed with the
Securities & Exchange Commission by Associates or its partners) or to the
extent such disclosure is necessary for a valid purpose to any party's
attorneys, accountants or business advisors.

23. SUCCESSOR AND ASSIGNS. Subject to paragraph 15 hereof, this
Agreement shall be binding on the successors and assigns of each party
hereto.

24. NO ADMISSION. Nothing herein shall be construed as an
admission of liability by any party of the Released Claims which are
settled and disposed of herein.

25. FURTHER ASSURANCES. The parties hereto agree to do such
further acts and things, and to execute and deliver such additional
agreements, conveyances, assignments and instruments, as any other party
may at any time reasonably request in connection with the implementation,
administration and enforcement of this Agreement or in connection with the
sale of the Property at any time hereafter. In addition, the parties
hereto agree not to (and to cause their agents, officers, directors,
shareholders, members and affiliates not to) take any action inconsistent
with the terms hereof, including without limitation by acquiring (other
than as referenced herein) any direct or indirect interest in any other
party hereto for any purpose whatsoever without the consent of all other
parties hereto.

26. NO OTHER CONSENTS. Each of the parties to this Agreement
represents and affirms that no other consents by or from any other person,
entity or government authority are necessary to render binding and
enforceable such party's signature hereto and obligations and agreements
hereunder.

27. EXCULPATION. No present or future partner of Associates or of
any partner of any such partner (or any other partners of any tier) shall
have any personal liability of any kind or nature for or by reason of any
matter or thing whatsoever, under or in connection with this Agreement or
any other agreement entered into under or in connection herewith, and the
other parties hereto waive all such personal liability. However, the
foregoing shall not limit the right of any party hereto to enforce its
remedies for breach or default by Associates hereunder against the assets
of Associates (as opposed to the assets of any such partners), which assets
for purposes hereof shall not be deemed to include any negative capital
accounts or commitments to provide additional capital. Until the Closing
Balance is paid in full, before making any distributions to either Carlyle
Real Estate Limited Partnership-XIV or Carlyle Real Estate Limited
Partnership-XV from the proceeds of a refinancing or sale of the Property,
Associates shall segregate and reserve for the exclusive use of paying the
Closing Balance from such proceeds an amount equal to the Closing Balance.

<PAGE>

28. Notwithstanding Sections 11 and 13 or anything else in this
Agreement to the contrary, nothing herein shall limit, waive or release any
right of Associates to collect or foreclose on the Associates' Note (except
for interest accrued thereon through the date of this Agreement, which is
hereby waived) provided that with respect to any action or judgment which
may be obtained or secured or taken by Associates, Associates shall look
solely to the Partnership Interests (including the proceeds therefrom) to
satisfy the Associates' Note, and Associates will not collect or attempt to
collect any such judgment out of any other assets of the Progress Parties.

29. 900 Realty, PPI and JRA hereby waive and release any right of
contribution or indemnity any of them has or may have against PC-900 in
connection with any liabilities hereunder, under Partnership Agreement or
in connection with any Closing Document.

30. SUBMISSION TO JURISDICTION. All disputes arising out of or
relating to this Agreement and all actions to enforce this Agreement may be
adjudicated in the state or federal courts of either the City of New York
or City of Chicago and each of the parties to this Agreement hereby
irrevocably submits to the jurisdiction of such courts in any suit, action,
or proceeding arising out of or relating to this Agreement or in any action
to enforce this Agreement.

31. No person is intended to be a third-party beneficiary of this
Agreement, except for a member of 900 Realty or the Associates Group.

32. NOTICE. All notices and other communications provided for
hereunder shall be in writing and mailed or delivered to the address set
forth below. All such notices and other communications shall, when mailed
or hand delivered be effective upon receipt; provided, however, in the
event that a notice or communication so sent shall be refused,
undeliverable or the intended recipient shall otherwise prevent such
receipt, such notice or other communication shall be deemed to be received
on the date of such rejection, attempted delivery or prevention. All such
notices and other communications shall, when sent by overnight courier, be
effective one business day after the same are deposited with such overnight
courier. All notices and other communications provided for hereunder shall
be addressed as set forth below.

If to:

900 3rd Avenue Associates JMB Realty Corporation
14-15 Office Associates, L.P. 900 N. Michigan, 19th Flr.
P-C 900 Third Associates Chicago, IL 60611
Attn: Lorenzo Bracy

with a copy to: Neal, Gerber & Eisenberg
Two North LaSalle Street
Suite 2100
Chicago, Illinois 60602
Attn: David R. Schenk

If to any of
the Progress Parties: Wiener Realtors
One Penn Plaza
Suite 4000
New York, NY 10119
Attn: Joel Wiener

With a copy to: Gibson, Dunn & Crutcher
200 Park Avenue
New York, NY 10166
Attn: Andrew Levy

or to such other address as each party may designate for itself by notice
given in accordance with this paragraph 32.

<PAGE>

IN WITNESS HEREOF, the parties have executed this Agreement the day
and year first above written.

PROGRESS PROPERTIES, INC.

By:
------------------------------
Its:
------------------------------

J.R.A. REALTY CORPORATION

By:
------------------------------
Its:
------------------------------

P-C 900 THIRD ASSOCIATES

By: 900 Realty LLC, General Partner

By:
------------------------------
Its:
------------------------------

PROGRESS PARTNERS

By: Progress Properties, Inc., General
Partner

By:
------------------------------
Its:
------------------------------

By: J.R.A. Realty Corporation, General
Partner

By:
------------------------------
Its:
------------------------------

By: 900 3rd Avenue Associates, General Partner

By: Carlyle Real Estate Limited
Partnership-XIV, a General Partner

By: JMB Realty Corporation, a
General Partner

By:
--------------------------
Its:
--------------------------

<PAGE>

900 REALTY, LLC

By:
----------------------------------------
Its:
----------------------------------------

900 3RD AVENUE ASSOCIATES

By: Carlyle Real Estate Limited Partnership-XIV,
a General Partner

By: JMB Realty Corporation, a
General Partner

By:
------------------------------
Its:
------------------------------

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-30-1999

<CASH> 2,888,375
<SECURITIES> 0
<RECEIVABLES> 1,331,619
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,219,994
<PP&E> 34,369,810
<DEPRECIATION> 0
<TOTAL-ASSETS> 49,954,434
<CURRENT-LIABILITIES> 3,919,793
<BONDS> 55,952,230
<COMMON> 0
0
0
<OTHER-SE> (24,048,555)
<TOTAL-LIABILITY-AND-EQUITY> 49,954,434
<SALES> 2,424,336
<TOTAL-REVENUES> 2,507,680
<CGS> 0
<TOTAL-COSTS> 1,029,919
<OTHER-EXPENSES> 682,396
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,461,826
<INCOME-PRETAX> (666,461)
<INCOME-TAX> 0
<INCOME-CONTINUING> (533,589)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (533,589)
<EPS-PRIMARY> (1.28)
<EPS-DILUTED> (1.28)

</TABLE>