CARLYLE REAL ESTATE LTD PARTNERSHIP XV, 10-K, 1994-03-31

CARLYLE REAL ESTATE LTD PARTNERSHIP XV
10-K, 1994-03-31
REAL ESTATE

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Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549

Re: Carlyle Real Estate Limited Partnership - XV
Commission File No. 0-16111
Form 10-K

Gentlemen:

Transmitted, for the above-captioned registrant, is the electronically filed
executed copy of registrant's current report on Form 10-K for the year ended
December 31, 1993. The financial statements included in such Form 10-K do not
reflect a change from the preceding year in any accounting principles or
practices, or in the method of applying any such principles or practices.

Also, as required, the filing fee in the amount of $250.00 has been posted to
our account at the Melon Bank.

Thank you.

Very truly yours,

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

By: JMB Realty Corporation
Corporate General Partner

By: C. SCOTT NELSON
________________________________
C. Scott Nelson, Vice President
Accounting Officer

CSN:kg
Enclosures

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the fiscal year
ended December 31, 1993 Commission file no. 0-16111

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

Illinois 36-3314827
(State of organization) (IRS Employer Identification No.)

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

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

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each Class which registered
- - ------------------- -----------------------------

None None

Securities registered pursuant to Section 12(g) of the Act:

LIMITED PARTNERSHIP INTERESTS
AND ASSIGNEE INTERESTS THEREIN
(Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K - X

State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Not applicable.

Certain pages of the Prospectus of the registrant dated July 5, 1985 and filed
with the commission pursuant to Rules 424(b) and 424(c) under the Securities
Exchange Act of 1933 are incorporated by reference in Part III of this Annual
Report on Form 10-K.

TABLE OF CONTENTS

PAGE
----

PART I

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

Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . 6

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 10

Item 4. Submission of Matters to a Vote of Security Holders . . . 10

PART II

Item 5. Market for the Partnership's Limited Partnership
Interests and Related Security Holder Matters . . . . . . 10

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . 11

Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . 17

Item 8. Financial Statements and Supplementary Data . . . . . . . 30

Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure. . . . . . . . . . 95

PART III

Item 10. Directors and Executive Officers of the Partnership . . . 95

Item 11. Executive Compensation. . . . . . . . . . . . . . . . . . 98

Item 12. Security Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . . . . . . 100

Item 13. Certain Relationships and Related Transactions. . . . . . 101

PART IV

Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . . . . . . 101

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

ITEM 1. BUSINESS

Unless otherwise indicated, all references to "Notes" are to Notes to
Consolidated Financial Statements contained in this report.

The registrant, Carlyle Real Estate Limited Partnership-XV (the
"Partnership"), is a limited partnership formed in August of 1984 and
currently governed by the Revised Uniform Limited Partnership Act of the State
of Illinois to invest in income-producing commercial and residential real
property. On July 5, 1985, the Partnership commenced an offering to the
public of $250,000,000 (subject to increase by up to $250,000,000) in Limited
Partnership Interests and assigned interests therein ("Interests") pursuant to
a Registration Statement on Form S-11 under the Securities Act of 1933 (No.
2-95382). A total of 443,711.76 Interests were sold to the public at $1,000
per Interest. The holders of 224,569.10 Interests were admitted to the
Partnership in 1985; the holders of 219,142.66 Interests were admitted to the
Partnership in 1986. The offering closed on July 31, 1986. Subsequent to
admittance to the Partnership, no holder of Interests (hereinafter, a "Limited
Partner") has made any additional capital contribution. The Limited Partners
of the Partnership share in their portion of the benefits of ownership of the
Partnership's real property investments according to the number of Interests
held.

The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title, leasehold estates and/or through
joint venture partnership interests. The Partnership's real property
investments are located throughout the nation and it has no real estate
investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an understanding of
the Partnership's business taken as a whole. Pursuant to the Partnership
Agreement, the Partnership is required to terminate on or before December 31,
2035. Accordingly, the Partnership intends to hold the real properties it
acquires for investment purposes until such time as sale or other disposition
appears to be advantageous. Unless otherwise described, the Partnership
expects to hold its properties for long-term investment. Due to current
market conditions, the Partnership is not able to determine the holding period
for its remaining properties. At sale of a particular property, the proceeds,
if any, are generally distributed or reinvested in existing properties rather
than invested in acquiring additional properties.

The Partnership has made the real property investments set forth in the
following table:
<TABLE>
<CAPTION>

SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1993,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (g) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP (b)
- - ---------------------- ---------- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. 900 Third Avenue Building
New York, New York. . . . . . 517,000 sq.ft. 8/20/84 9% fee ownership of land and
n.r.a improvements
(through joint venture
partnerships) (c)

2. Piper Jaffray Tower
Minneapolis, Minnesota. . . . 723,755 sq.ft. 12/27/84 6% fee ownership of land and
n.r.a. improvements (through joint
venture partnerships) (c)
3. RiverEdge Place Building
Fulton County
(Atlanta), Georgia. . . . . . 235,762 sq.ft. 6/10/85 3% fee ownership of land and
n.r.a. improvements
4. Wells Fargo Center -
IBM Tower
Los Angeles, California . . . 1,100,000 sq.ft. 6/28/85 18% fee ownership of land and
n.r.a. improvements (through a joint
venture partnership)
(c)(h)
5. Villa Solana Apartments
Laguna Hills, California. . . 272 units 8/30/85 2% fee ownership of land and
improvements (through a
joint venture partnership)
(c)
6. Eastridge Mall
Casper, Wyoming . . . . . . . 477,019 sq.ft. 9/10/85 3% fee ownership of land and
g.l.a. improvements (through a joint
venture partnership) (c)
7. Woodland Hills Apartments
DeKalb County (Atlanta),
Georgia . . . . . . . . . . . 228 units 9/30/85 1% fee ownership of land and
improvements
8. Park at Countryside Apartments
Port Orange (Daytona Beach),
Florida. . . . . . . . . . . 120 units 11/27/85 1% fee ownership of land and
improvements (through a joint
venture partnership) (c)
9. 160 Spear Street Building
San Francisco, California. . 267,000 sq.ft. 11/27/85 4% fee ownership of improvements
r.a. and ground leasehold interest
in land (through a joint vent
partnership) (c)(d)
10. 21900 Burbank Boulevard
Building
Los Angeles (Woodland
Hills), California . . . . . 87,000 sq.ft. 11/29/85 2% fee ownership of land and
n.r.a. improvements
11. 300 East Lombard Building
Baltimore, Maryland. . . . . 232,000 sq.ft. 11/29/85 9/30/91 fee ownership of improvements
n.r.a. and ground leasehold interest
in land (through joint ventur
partnerships) (c)(e)
12. Boatmen's Center
Kansas City, Missouri. . . . 285,000 sq.ft. 12/16/85 8/31/89 fee ownership of land and
n.r.a. improvements (through a joint
venture partnership) (c)(f)
13. 125 Broad Street Building
New York, New York . . . . . 1,336,000 sq.ft. 12/31/85 11% fee ownership of improvements
n.r.a. and ground leasehold interest
in land (through joint ventur
partnerships) (c)(d)(h)
14. Owings Mills Shopping Center
Owings Mills (Baltimore
County), Maryland. . . . . . 325,000 sq.ft. 12/31/85 6/30/93 fee ownership of land and
g.l.a. improvements (through joint
venture partnerships) (c)(j)
15. 260 Franklin Street Building
Boston, Massachusetts. . . . 348,901 sq.ft. 5/21/86 8% fee ownership of land and
n.r.a. improvements (through a joint
venture partnership) (c)
16. 9701 Wilshire Building
Beverly Hills, California. . 98,721 sq.ft. 6/17/86 5% fee ownership of land and
n.r.a. improvements
17. California Plaza
Walnut Creek, California . . 368,290 sq.ft. 6/30/86 7% fee ownership of land and
n.r.a. improvements (through joint
venture partnerships) (c)
18. Dunwoody Crossing Apartments
(Phase I, II, and III)
DeKalb County (Atlanta),
Georgia. . . . . . . . . . . 810 units 9/18/86 4% fee ownership of land and
improvements (through joint
venture partnerships) (c)(k)
19. NewPark Mall
Newark (Alameda County),
California . . . . . . . . . 423,748 sq.ft. 12/2/86 5% fee ownership of land and
g.l.a. improvements (through joint
venture partnerships) (c)
20. Springbrook Shopping Center
Bloomingdale (Chicago),
Illinois . . . . . . . . . . 189,651 sq.ft. 7/5/89 3% fee ownership of land and
g.l.a. improvements
21. Erie-McClurg Parking Facility
Chicago, Illinois. . . . . . 1,073 spaces 7/21/89 9/25/92 fee ownership of land and
improvements (i)

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

(a) The computation of this percentage for properties held at
December 31, 1993 does not include amounts invested from sources other than
the original net proceeds of the public offering as described above and in
Item 7.

(b) Reference is made to Note 4 and to Note 3 of Notes to Combined
Financial Statements and to the Schedule XI's to such Consolidated and
Combined Financial Statements filed with this annual report for the current
outstanding principal balances and a description of the long-term mortgage
indebtedness secured by the Partnership's real property investments.

(c) Reference is made to Note 3 for a description of the joint
venture partnership or partnerships through which the Partnership made this
real property investment.

(d) Reference is made to Note 9(b) and Note 4(b) of Notes to
Combined Financial Statements filed with this annual report for a description
of the leasehold interest, under a ground lease, in the land on which this
real property investment is situated.

(e) Formerly known as Baltimore Federal Financial Building.
Reference is made to Note 7 for a description of the sale of the Partnership's
interest in this property.

(f) Reference is made to Note 3(b)(i) for a description of the
disposition of this investment property.

(g) Reference is made to Item 8 - Schedules X and XI filed with this
annual report for further information concerning the real estate taxes and
depreciation.

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

(i) This property was sold September 25, 1992. Reference is made to
Note 7 for a description of the sale of the interest in this investment
property.

(j) The Partnership's interest in this property was sold June 30,
1993. Reference is made to Note 7 for a description of the sale of the
Partnership's interest in this investment property.

(k) Formerly known as Post Crest, Post Terrace and Post Crossing
Apartments.

</TABLE>
The Partnership's real property investments are subject to competition
from similar types of properties (including in certain areas properties owned
or advised by affiliates of the General Partners or properties owned by
venture partners or their affiliates) in the respective vicinities in which
they are located. Such competition is generally for the retention of existing
tenants. Additionally, the Partnership is in competition for new tenants in
markets where significant vacancies are present. Reference is made to Item 7
below for a discussion of competitive conditions and future renovation and
capital improvement plans of the Partnership and certain of its significant
investment properties. Approximate occupancy levels for the properties are
in the table in Item 2 below to which reference is hereby made. The
Partnership maintains the suitability and competitiveness of its properties in
its markets primarily on the basis of effective rents, tenant allowances and
service provided to tenants. In the opinion of the Corporate General Partner
of the Partnership, all of the investment properties held at December 31, 1993
are adequately insured. Although there is earthquake insurance coverage for a
portion of the value of the Partnership's investment properties, the Corporate
General Partner does not believe that such coverage for the entire replacement
cost of the investment properties is available on economic terms.

In January 1993, the Partnership sold its remaining partnership interest
in Harbor Overlook Limited Partnership (which owns an interest in the joint
venture which owns the 300 East Lombard investment property) to an affiliate
of the Harbor unaffiliated venture partners as described in the Partnership's
Report on Form 8-K (File No. 0-16111) for January 19, 1993, which description
is hereby incorporated herein by reference. Reference is also made to Note 7
for a further description of such transaction.

On June 30, 1993, the Partnership, through JMB/Owings, sold its interest
in Owings Mills Shopping Center to an affiliate of the Partnership's joint
venture partner in the Partnership, as described in the Partnership's Report
on Form 8-K (File No. 0-16111) for August 3, 1993, which description is hereby
incorporated herein by reference. Reference is also made to Note 7 for a
further description of such transaction.

Reference is made to Note 9(a) and to Note 4(a) of Notes to Combined
Financial Statements filed with this annual report for a schedule of minimum
lease payments to be received in each of the next five years, and in the
aggregate thereafter, under leases in effect at the Partnership's consolidated
and combined properties as of December 31, 1993.

The Partnership has approximately six full-time personnel performing on-
site duties at certain of the Partnership's properties, none of whom are
officers or directors of the Corporate General Partner of the Partnership.

The terms of transactions between the Partnership, the General Partners
and their affiliates are set forth in Item 11 below to which reference is
hereby made for a description of such terms and transactions.

ITEM 2. PROPERTIES

The Partnership owned or owns directly or through joint venture
partnerships the properties or interests in the properties referred to under
Item 1 above to which reference is hereby made for a description of said
properties.

The following is a listing of principal businesses or occupations carried
on in and approximate occupancy levels by quarter during fiscal years 1993 and
1992 for the Partnership's investment properties owned during 1993:
<TABLE>
<CAPTION>
1992 1993
------------------------------- ------------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 900 Third Avenue Building
New York, New York. . . . .. Legal Services/
Detective Agency/
Insurance 95% 92% 92% 92% 91% 94% 94% 95%
2. Piper Jaffray Tower
Minneapolis, Minnesota.. . . Legal/Advertising/
Financial Services 93% 92% 93% 93% 97% 98% 98% 98%
3. RiverEdge Place (a)
Fulton County (Atlanta),
Georgia. . . . . . . . . . . Banking 97% 97% 85% 85% 85% 83% 84% 89%
4. Wells Fargo Center-IBM Tower
Los Angeles, California .. . Business Information
Systems/Legal Services 96% 96% 98% 98% 98% 98% 98% 98%
5. Villa Solana Apartments
Laguna Hills, California.. . Apartments 92% 93% 95% 95% 94% 91% 91% 91%
6. Eastridge Mall
Casper, Wyoming . . . . .. . Retail 89% 89% 87% 89% 90% 90% 90% 91%
7. Woodland Hills Apartments
DeKalb County (Atlanta),
Georgia. . . . . . . . . . . Apartments 95% 90% 98% 96% 96% 87% 98% 92%
8. Park at Countryside
Apartments
Port Orange (Daytona Beach),
Florida. . . . . . . . . . . Apartments 96% 95% 97% 98% 97% 95% 97% 99%
9. 160 Spear Street Building
San Francisco, California . Public Utility/Govern-
ment/Insurance 90% 91% 96% 98% 93% 95% 94% 91%
10. 21900 Burbank Boulevard
Building
Los Angeles (Woodland Hills),
California. . . . . . . . . Insurance/Financial
Services 75% 82% 98% 98% 98% 98% 100% 99%
11. 125 Broad Street Building
New York, New York. . . . . Insurance/Legal Services 71% 71% 72% 72% 72% 72% 72% 54%
12. Owings Mills Shopping Center
Owings Mills
(Baltimore County),
Maryland. . . . . . . . . . Retail 93% 92% 92% 93% 93% N/A N/A N/A
13. 260 Franklin Street Building
Boston, Massachusetts . . . Financial Services 88% 93% 93% 96% 97% 98% 97% 99%
14. 9701 Wilshire Building
Beverly Hills, California . Banking/Financial
Services 90% 90% 90% 92% 92% 96% 93% 93%
15. California Plaza
Walnut Creek, California. . Manufacturing/
Public Utility 91% 93% 93% 92% 94% 96% 97% 95%
16. Dunwoody Crossing
(Phase I, II and III)
Apartments
DeKalb County (Atlanta),
Georgia (b). . . . . . . . Apartments 96% 95% 96% 90% 94% 96% 93% 90%
17. NewPark Mall
Newark (Alameda County),
California . . . . . . . . Retail 80% 77% 78% 75% 71% 73% 80% 81%
18. Springbrook Shopping
Center
Bloomingdale (Chicago),
Illinois. . . . . . . Retail 98% 97% 98% 97% 95% 95% 95% 74%
<FN>
- - --------------------

Reference is made to Item 6, Item 7 and to Note 9, and to Note 4 of Notes
to Combined Financial Statements for further information regarding property
occupancy, competitive conditions and tenant leases at the Partnership's
investment properties.

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

(a) This investment property, formerly the First American Bank Building,
had been 100% leased pursuant to an over-lease since the date the Partnership
acquired the property. However, reference is made to Note 2(b) regarding the
over-lease buy-out in June, 1992.

(b) Formerly known as Post Crest, Post Terrace and Post Crossings
Apartments.

</TABLE>
ITEM 3. LEGAL PROCEEDINGS

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

Reference is made to Note 3(c)(ii) for a discussion of certain litigation
involving the Partnership.

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

There were no matters submitted to a vote of security holders during 1993
and 1992.

PART II

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

As of December 31, 1993, there were 40,382 record holders of Interests in
the Partnership. There is no public market for Interests, and it is not
anticipated that a public market for Interests will develop. Upon request,
the Corporate General Partner may provide information relating to a
prospective transfer of Interests to an investor desiring to transfer his
Interests. The price to be paid for the Interests, as well as any other
economic aspect of the transaction, will be subject to negotiation by the
investor. Reference is made to Article XVI of the Partnership Agreement and
Sections 3 and 4 of the Assignment Agreement, (included as Exhibits 3 and 4-A,
respectively, filed with the Partnership's report on Form 10-K for December
31, 1992 (File No. 0-16111) dated March 19, 1993) for provisions governing the
transferability of Interests, which provisions are hereby incorporated herein
by reference.

Reference is made to Note 5 for a discussion of the provisions of the
Partnership Agreement relating to cash distributions. Reference is made to
Item 6 below for a discussion of cash distributions made to the Limited
Partners.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

DECEMBER 31, 1993, 1992, 1991, 1990 AND 1989

(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)

<CAPTION>
1993 1992 1991 1990 1989
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Total income . . . .. . . . . . . $ 55,288,244 64,499,133 60,718,299 61,615,559 61,772,197
============ ============ =========== =========== ===========

Operating loss . . .. . . . . . . $ 27,390,383 37,863,307 20,060,387 35,842,026 18,730,057
Partnership's share of loss from
operations of unconsolidated
ventures . . . . . . . . . . . . 31,617,778 24,576,481 15,887,646 9,615,653 11,482,767
Venture partners' share of
ventures' operations. .. . . . . (2,866,514) (3,678,862) (3,432,757) (8,522,318) (3,761,640)
------------ ------------ ----------- ----------- -----------
Net operating loss . . .. . . . . 56,141,647 58,760,926 32,515,276 36,935,361 26,451,184
Gain on sale of investment
property. . . . . . . . . . . . -- (506,446) -- -- --
Gain on sale of interests in
unconsolidated
ventures. . . . . . . . . . . . (2,856,567) -- (9,041,533) -- (548,847)
------------ ------------ ----------- ----------- -----------
Net loss before extraordinary item 53,285,080 58,254,480 23,473,743 36,935,361 25,902,337
Extraordinary item . . . . . . . -- -- (1,014,538) -- --
------------ ------------ ----------- ----------- -----------
Net loss . . . . . . . . . . . . $ 53,285,080 58,254,480 22,459,205 36,935,361 25,902,337
============ ============ =========== =========== ===========
Net operating loss per Interest (b) $ 121.46 127.13 70.35 79.91 57.22
Net gain on sale of investment
property. . . . . . -- (1.13) -- -- --
Net gain on sale of interests in
unconsolidated ventures. . . . (6.37) -- (20.17) -- (1.22)
Extraordinary item . . . . . . . -- -- (2.20) -- --
------------ ------------ ----------- ----------- -----------
Net loss . . . . . . . . . . . . $ 115.09 126.00 47.98 79.91 56.00
============ ============ =========== =========== ===========

Total assets . . . . . . . . . . $371,886,177 414,132,574 473,874,338 503,848,026 545,522,307
Long-term debt . . . . . . . . . $237,811,558 305,589,971 306,150,647 351,723,659 341,506,608
Cash distributions per Interest (c) $ .55 .50 4.25 8.75 10.00
============ ============ =========== =========== ===========
<FN>
- - -------------

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

(b) The net loss per Interest is based upon the number of Interests
outstanding at the end of the period (443,717).

(c) Cash distributions to the Limited Partners since the inception of the
Partnership have not resulted in taxable income to such Limited Partners and
have therefore represented a return of capital. Each Partner's taxable income
(loss) from the Partnership in each year is equal to his allocable share of
the taxable income (loss) of the Partnership, without regard to the cash
generated or distributed by the Partnership.<PAGE>
</TABLE>
<TABLE>

SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1993

Property
- - --------

Wells Fargo Center a) The historical occupancy rate and average base rent per square foot for the last five years were as f

Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>

1989. . . . . . . 99% $30.70
1990. . . . . . . 100% 31.22
1991. . . . . . . 96% 31.84
1992. . . . . . . 98% 29.11
1993. . . . . . . 98% 30.66
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>

International Business 579,493 $22,784,791 12/1998 N/A
Machines Corporation
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at Wells Fargo Center:

Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>

1994 8 19,437 611,682 1.9%
1995 2 5,426 101,249 0.3%
1996 6 81,648 2,237,972 6.8%
1997 4 23,769 665,532 2.0%
1998 32 686,366 25,793,634 78.0%
1999 1 6,065 126,395 0.4%
2000 -- -- -- --
2001 2 28,810 749,060 2.3%
2002 4 46,087 1,046,175 3.2%
2003 -- -- -- --
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1994.
</TABLE>
<TABLE>
<CAPTION>

Property
- - --------

125 Broad Street a) The historical occupancy rate and average base rent per square foot for the last five years were
as follows:

Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
<S> <C> <C> <C> <C>

1989. . . . . . . 99% $34.54
1990. . . . . . . 99% 34.93
1991. . . . . . . 71% 42.99
1992. . . . . . . 72% 36.64
1993. . . . . . . 54% 49.52
<FN>
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>

Johnson & Higgins 424,482 $16,637,142 January, 2011 N/A
(Insurance Broker)

Sullivan & Cromwell 300,912 7,946,888 35,041 sq. ft. N/A
(Law Firm) September, 1996
265,871 sq. ft.
September, 1997

</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at 125 Broad Street:

1994 1 1,359 $ 40,000 0.1%
1995 - -- -- --
1996 2 35,541 1,511,329 4.2%
1997 9 267,059 6,654,563 18.6%
1998 - -- -- --
1999 - -- -- --
2000 - -- -- --
2001 - -- -- --
2002 - -- -- --
2003 - -- -- --
<FN>
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1994.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

On July 5, 1985, the Partnership commenced an offering of $250,000,000
(subject to increase by up to $250,000,000) of Limited partnership interests
and assignee interests therein pursuant to a Registration Statement on Form
S-11 (File No. 2-95382) under the Securities Act of 1933. A total of
443,711.76 Interests were sold to the public at $1,000 per Interest
(fractional interests are due to a Distribution Reinvestment Program). The
holders of such Interests were admitted to the Partnership in 1985 and 1986.

After deducting selling expenses and other offering costs, the Partner-
ship had approximately $385,000,000 with which to make investments in
income-producing commercial and residential real property, to pay legal fees
and other costs (including acquisition fees) related to such investments and
to satisfy working capital requirements. A portion of the proceeds has been
utilized to acquire the properties described in Item 1 above.

At December 31, 1993, the Partnership and its consolidated ventures had
cash and cash equivalents of approximately $5,020,000. Such funds and short-
term investments of approximately $10,167,000 are available for the
Partnership's share of leasing costs and capital improvements at 9701 Wilshire
Building, 160 Spear Street Building, Springbrook Shopping Center, Eastridge
Mall and 260 Franklin Street Building, and the Partnership's share of
operating deficits currently being incurred at 260 Franklin Street Building
(to the extent not funded from escrowed reserves for 260 Franklin as discussed
below) and 9701 Wilshire Building as well as distributions to partners as
discussed below and working capital requirements, including the Partnership's
share of potential future deficits and financing costs at these and certain
other of the Partnership's investment properties. The Partnership currently
has adequate cash and cash equivalents to maintain the operations of the
Partnership. However, the Partnership has taken steps to preserve its working
capital by deciding to suspend distributions (except for certain withholding
requirements) to the Limited and General Partners effective as of the first
quarter of 1992. In addition, the General Partners and their affiliates have
deferred cash distributions, management and leasing fees and reimbursements
payable to them in an aggregate amount of approximately $6,811,566
(approximately $15 per interest) through December 31, 1993. These amounts,
which do not bear interest, are expected to be paid in future periods.
Effective October 1, 1993, the Partnership began paying property management
and leasing fees on a current basis. Reference is made to Note 11 relating to
this deferral of distributions, fees and reimbursements.

The Partnership and its consolidated ventures have currently budgeted in
1994 approximately $4,328,000 for leasing costs and other capital
expenditures. The Partnership's share of such items and its share of such
similar items for its unconsolidated ventures in 1994 is currently budgeted to
be $6,419,000. Actual amounts expended in 1994 may vary depending on a number
of factors including actual leasing activity, results of property operations,
liquidity considerations and other market conditions over the course of the
year. The source of capital for such items and for both short-term and long-
term future liquidity requirements and distributions is expected to be
primarily through net cash generated by the Partnership's investment
properties, through an existing obligation of a seller (or its affiliate) to
fund deficits at one property and through the sale or refinancing of such
investments.

A number of mortgage loans secured by the Partnership's investment
properties will mature in 1994 and will need to be extended or refinanced,
including the mortgage loans related to the Wells Fargo Center, 900 Third
Avenue, 9701 Wilshire Building and the Dunwoody Apartments (Phase I and III).
In addition, certain other mortgage loans secured by the Partnership's
investment properties are the subject of discussions with lenders for debt
modifications or restructurings, including the mortgage loans related to 125
Broad and RiverEdge Plaza. The current status of the a
refinance, modify or restructure these loans, as well as other possible
mortgage loan modifications, are discussed below.

The mortgage note secured by the Villa Solana Apartments matured on
November 1, 1993. The venture had obtained extensions of this note from the
existing lender until August 1, 1994. The venture paid the lender $125,000 in
extension fees in connection with these extensions. The monthly principal and
interest payment, and the interest rate remain the same on the loan as prior
to the original maturity date. The unpaid principal and accrued interest were
to mature on August 1, 1994, however, the venture sold the investment property
on March 23, 1994 as described in Note 13. The loan has been classified at
December 31, 1993 and December 31, 1992 as a current liability in the
accompanying consolidated financial statements. As a matter of prudent
accounting practice, the Partnership made a provision for value impairment of
$916,309 at September 30, 1993 for Villa Solana Apartments. Such provision
reduced the net carrying value of the investment property to an amount not in
excess of the proposed selling price of the investment property. Reference is
made to Note 1.

The mortgage notes secured by the Woodland Hills Apartments are scheduled
to mature on June 1, 1994. The Partnership plans to refinance these notes
when they mature, although there is no assurance the Partnership will be able
to obtain such financing. The loans have been classified at December 31, 1993
as current liabilities in the accompanying consolidated financial statements.
Reference is made to Notes 2(f) and 4(c).

In October 1993, the joint venture ceased making the required debt
service payments on the mortgage note secured by Park at Countryside
Apartments, and commenced discussions with the lender regarding an additional
modification of the loan. However, the venture was unable to secure an
additional modification of the loan. Therefore, as of the date of this
report, the loan is in default and the lender has initiated procedures to
obtain title to the property. The loan has been classified at December 31,
1993 as a current liability in the accompanying consolidated financial
statements. Based on current and anticipated market conditions, the
Partnership and the joint venture partners are unwilling to commit any
additional amounts to the property since the likelihood of recovering any such
amounts is remote. This will result in the Partnership no longer having an
ownership interest in the property and would result in a gain to the
Partnership for financial reporting and Federal income tax purposes with no
corresponding distributable proceeds.

The first mortgage loan secured by the Dunwoody Crossing Phase I and III
Apartments is scheduled to mature in October 1994. The Partnership plans to
refinance this note when it matures, although there can be no assurance the
Partnership will be able to obtain such financing.

In June 1993, JMB/Owings sold its interest in the Owings Mills Shopping
Center for $9,416,000 represented by a purchase price note. Reference is made
to Note 7.

The borrowings of the Partnership and its ventures consist of separate
non-recourse mortgage loans secured by the investment properties and
individually are not obligations of the entire investment portfolio. However,
for any particular investment property incurring deficits, the Partnership or
its ventures, if deemed appropriate, may seek a modification or refinancing of
existing indebtedness and, in the absence of a satisfactory debt modification
or refinancing, may decide, in light of then existing and expected future
market conditions for such investment property, not to commit additional funds
to such investment property. This would result in the Partnership no longer
having an ownership interest in such property and would result in a gain to
the Partnership for financial reporting and Federal income tax purposes with
no corresponding distributable proceeds.

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

In response to the weakness of the economy and the limited amount of
available real estate financing in particular, the Partnership is taking steps
to preserve its working capital during the current economic slowdown.
Therefore, the Partnership is carefully scrutinizing the appropriateness of
any possibly discretionary expenditures, particularly in relation to the
amount of working capital it has available to it and its ventures. By
conserving working capital, the Partnership will be in a better position to
meet future needs of its properties without having to rely on external
financing sources.

Piper Jaffray Tower

The Minneapolis office market remains competitive due to the significant
amount of new office building developments, which has caused effective rental
rates achieved at Piper Jaffray Tower to be below expectations. During the
fourth quarter 1991, Larkins, Hoffman, Daly & Lindgren, Ltd. (23,344 square
feet) approached the joint venture indicating that it was experiencing
financial difficulties and desired to give back a portion or all of its leased
space. Larkin's lease was scheduled to expire in January 2005 and provided
for annual rental payments which were significantly higher than current market
rental rates. Larkin was also an owner with partial interests in the building
and the land under the building. After substantive review of Larkin's
financial condition, on January 15, 1992, the joint venture signed an
agreement with Larkin to terminate its lease in return for its partial
interest (4%) in the land under the building and a $1,011,798 note payable to
the joint venture. The note payable provides for monthly payments of
principal and interest at 8% per annum with full repayment over ten years.
Larkin may prepay all or a portion of the note payable at any time.

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

In August 1992, the venture signed an agreement with the lender,
effective April 1, 1991, to modify the terms of the mortgage notes which are
secured by the investment property. The principal balance of the mortgage
notes has been consolidated into one note in the amount of $100,000,000.
Under the terms of the modification, commencing on April 1, 1991 and
continuing through and including January 30, 2020, fixed interest will accrue
and is payable on a monthly basis at a $10,250,000 per annum level.
Contingent interest is payable in annual installments on April 1 and is
computed at 50% of gross receipts, as defined, for each fiscal year in excess
of $15,200,000; none was due for 1992 or 1993. In addition, to the extent the
investment property generates cash flow after leasing and capital costs, and
29% of the ground rent (25% after January 15, 1992 as a result of the Larkin,
Hoffman, Daly & Lindgren, Ltd. settlement discussed above), such amount will
be paid to the lender as a reduction of the principal balance of the mortgage
loan. The excess cash flow generated by the property in 1992 totalled
$923,362 and was remitted to the lender during the third quarter of 1993.
During 1993, the excess cash flow generated under this agreement was
$1,390,910 and will be remitted to the lender during the second quarter in
1994. The mortgage note provides for the lender to earn a minimum internal
rate of return which increases over the term of the note. Accordingly, for
financial reporting purposes, interest expense has been accrued at a rate of
13.59% per annum which is the estimated minimum interna
annum assuming the note is held to maturity. On a monthly basis, the venture
deposits the property management fee into an escrow account to be used for
future leasing costs to the extent cash flow is not sufficient to cover such
items. The manager of the property (which is an affiliate of the Corporate
General Partner) has agreed to defer receipt of its management fee until a
later date. As of December 31, 1993, the manager has deferred approximately
$1,792,000 of management fees. If upon sale of the property or refinancing as
discussed below, there are funds remaining in this escrow after repayments of
amounts owed the lender, such funds will be paid to the manager to the extent
of its deferred and unpaid management fees. Any remaining unpaid management
fees would be payable out of the venture's share of sale or refinancing
proceeds. Additionally, pursuant to the terms of the loan modification,
effective January 1992, an affiliate of the joint venture, as majority owner
of the underlying land, began deferring receipt of its share of land rent.
These deferrals will be repaid from potential net sale or refinancing
proceeds. In order for the Partnership to share in future net sale or
refinancing proceeds, there must be a significant improvement in current
market and property operating conditions resulting in a significant increase
in value of the property. Reference is made to Note 3(c)(i).

160 Spear Street Building

Due to the rental concessions granted to facilitate leasing, the property
operated at an approximate break-even level in 1993. As more fully discussed
in Note 4(b)(iii), effective February 1992, the Partnership reached an
agreement with the lender to reduce the current debt service payments and to
extend the loan, which was scheduled to mature on December 10, 1992, to
February 10, 1999. Additionally, tenant leases comprising approximately 69%
of the building are scheduled to expire in 1995. It is anticipated that there
will be significant costs related to releasing this space. The venture
expects to approach the lender regarding an additional modification to the
loan due to the increased deficits anticipated in connection with the re-
leasing costs. Should the venture not be successful in obtaining an
additional loan modification or alternative financing, or, should the
Partnership decide not to commit any significant additional funds for the
anticipated re-leasing costs, this may result in the Partnership no longer
having an ownership interest in the property. This would likely result in the
Partnership recognizing a gain for financial reporting and Federal income tax
purposes with no corresponding distributable proceeds.

125 Broad Street Building

Vacancy rates in the downtown Manhattan office market have increased
significantly over the last few years. As vacancy rates rise, competition for
tenants increases, which results in lower effective rental rates. The
increased vacancy rate in the downtown Manhattan office market has resulted
primarily from layoffs, cutbacks and consolidations by many of the financial
service companies which, along with related businesses, dominate this
submarket. The Partnership believes that these adverse market conditions and
the negative impact on effective rental rates will continue over the next few
years. The depressed market in downtown Manhattan has significantly affected
the 125 Broad Street Building as the occupancy has decreased to 54% at
December 31, 1993 partially as a result of a major tenant vacating 395,000
square feet (30% of the building) at the expiration of its lease during 1991.
Additionally, in October 1993, the joint venture owning the building, 125
Broad Street Company ("125 Broad") entered into an agreement with Salomon
Brothers, Inc. to terminate its lease covering approximately 231,000 square
feet (17% of the building) at the property on December 31, 1993 rather than
its scheduled termination in January 1997. In consideration for the early
termination of the lease, Salomon Brothers, Inc. paid 125 Broad approximately
$26,500,000 plus interest thereon of approximately $200,000, which 125 Broad
in turn paid its lender to reduce amounts outstanding under the mortgage loan.

In addition, Salomon Brothers, Inc. paid JMB/125 $1,000,000 in consideration
of JMB/125's consent to the lease termination. The property will be adversely
affected by lower than originally expected effective rental rates to be
achieved upon releasing of the space. The low effective rental rates coupled
with the lower occupancy during the releasing period are expected to result in
the property operating at a significant deficit in 1994 and for
several years. The unaffiliated venture partners (the "O&Y partners"), who
are affiliates of Olympia & York Developments, Ltd. ("O&Y"), are obligated to
fund (in the form of interest-bearing loans) operating deficits and costs of
lease-up and capital improvements through the end of 1995. However, as
discussed below, the O&Y partners are in default in respect to certain of
their funding obligations, and it appears unlikely that the O&Y partners will
fulfill their obligation to 125 Broad and JMB/125. Releasing of the vacant
space will depend upon, among other things, the O&Y partners advancing the
costs associated with such releasing since JMB/125 does not intend to
contribute funds to the joint venture to pay such costs. The O&Y partners
have made outstanding loans to the joint venture of approximately $14,650,000
as of December 31, 1993. Such loans, which are non-recourse to JMB/125, are
payable out of cash flow from property operations or sale or refinancing
proceeds. Based on the facts discussed above and as described more fully in
Note 3(c)(iv), the joint venture recorded a provision for value impairment as
of December 31, 1991 to reduce the net book value of the 125 Broad Street
Building to the then outstanding balance of the related non-recourse financing
and O&Y partner loans due to the uncertainty of the joint venture's ability to
recover the net carrying value of the investment property through future
operations or sale.

O & Y and certain of its affiliates have been involved in bankruptcy
proceedings in the United States and Canada and similar proceedings in
England. Subsequent to December 31, 1992, O & Y emerged from bankruptcy
protection in Canada. In addition, a reorganization of the management of the
company's United States operations has been completed, and certain O&Y
affiliates are in the process of renegotiating or restructuring various loans
affecting properties in the United States in which they have an interest. In
view of the present financial condition of O&Y and its affiliates and the
anticipated deficits for the property as well as the existing defaults of the
O&Y partners, it appears unlikely that the O&Y partners will meet their
financial and other obligations to JMB/125 and 125 Broad.

The O&Y partners have failed to advance necessary funds to 125 Broad as
required under the joint venture agreement, and as a result, the joint venture
defaulted on its mortgage loan which has an outstanding principal balance of
approximately $277,000,000 in June 1992 by failing to pay approximately
$4,722,000 of the semi-annual interest payment due on the loan. In addition,
during 1992 affiliates of O&Y defaulted on a "takeover space" agreement with
Johnson & Higgins, Inc. ("J&H"), one of the major tenants at the 125 Broad
Street Building, whereby such affiliates of O&Y agreed to assume certain lease
obligations of J&H at another office building in consideration of J&H's
leasing space in the 125 Broad Street Building. As a result of this default,
J&H has offset rent payable to 125 Broad for its lease at the 125 Broad Street
Building in the amount of approximately $28,600,000 through December 31, 1993,
and it is expected that J&H will continue to offset amounts due under its
lease corresponding to amounts by which the affiliates of O&Y are in default
under the "takeover space" agreement. As a result of the O&Y affiliates'
default under the "takeover space" agreement and the continuing defaults of
the O&Y partners to advance funds to cover operating deficits, as of the end
of 1993, the arrearage under the mortgage loan had increased to approximately
$48,180,000. However, as discussed above, approximately $26,700,000 was
remitted to the lender in October 1993 in connection with the early
termination of the Salomon Brothers lease, and was applied towards the
mortgage principal for financial reporting purposes. Due to their obligations
relating to the "takeover space" agreement, the affiliates of O&Y are
obligated for the payment of the rent receivable associated with the J&H lease
at the 125 Broad Street Building. Based on the continuing defaults of the O&Y
partners, the joint venture has reserved the entire rent offset by J&H,
$19,300,000 and $9,300,000 in 1993 and 1992, respectively, and has also
reserved approximately $32,600,000 of accrued rents receivable relating to
such J&H lease, since the ultimate collectability of such amounts depends upon
the O&Y partners' and the O&Y affiliates' performance of their obligations.
The Partnership's share of such losses was approximately $5,587,000 and
$12,159,000 for 1993 and 1992, respectively, and is included in the
Partnership's share of loss from operations of unconsolidated ventures. The
O&Y partners have attempted to negotiate a restructuring of the mortgage loan
with the lender in order to reduce operating deficits
view of, among other things, the significant operating deficits which the
property is expected to incur during 1994 and for the next several years, it
is unlikely that a restructuring of the mortgage loan will be obtained. The
loan restructuring is part of a larger restructuring with the lender involving
a number of loans secured by various properties in which O&Y affiliates have
an interest. JMB/125 has notified the O&Y partners that their failure to
advance funds to cover the operating deficits constitutes a default under the
joint venture agreement.

Accordingly, it appears unlikely the O&Y partners will fulfill their
obligations to 125 Broad and JMB/125. Therefore, it appears unlikely that 125
Broad will be able to restructure the mortgage loan, and JMB/125 is not likely
to commit any significant additional amounts to the property. This would
result in the Partnership no longer having an ownership interest in the
property. If this event were to occur, the Partnership would recognize a net
gain for financial reporting and Federal income tax purposes without any
corresponding distributable proceeds. In addition, under certain
circumstances JMB/125 may be required to make an additional capital
contribution to 125 Broad in order to make up a deficit balance in its capital
account. Reference is made to Note 3(c)(iv).

260 Franklin Street Building

The office market in the Financial District of Boston remains competitive
due to new office building developments and layoffs, cutbacks and
consolidations by financial service companies. The effective rental rates
achieved upon releasing have been substantially below the rates which were
received under the previous leases for the same space. In December 1991, 260
Franklin, the affiliated joint venture, reached an agreement with the lender
to modify the long-term mortgage note secured by the 260 Franklin Street
Building. The property is currently expected to operate at a deficit for 1994
and for several years thereafter. The loan modification required that the
affiliated joint venture establish an escrow account for excess cash flow from
the property's operations (computed without a deduction for property
management fees and leasing commissions to an affiliate) to be used to cover
the cost of capital and tenant improvements and lease inducements, which are
the primary components of the anticipated operating deficits noted above, as
defined, with the balance, if any, of such escrowed funds available at the
scheduled or accelerated maturity to be used for the payment of principal and
interest due to the lender. Beginning January 1, 1992, 260 Franklin began
escrowing the payment of property management fees and lease commissions owed
to an affiliate of the Corporate General Partner pursuant to the terms of the
debt modification, which is more fully described in Note 4(b), and
accordingly, such fees and commissions remained unpaid. The Partnership's
share of such fees and lease commissions is approximately $523,615 at December
31, 1993. In 1995, the leases of tenants occupying approximately 107,000
square feet (approximately 31% of the property) at the 260 Franklin Street
Building expire. It is anticipated that there will be significant cost
related to releasing this space. In addition, the long-term mortgage loan
matures January 1, 1996. If the Partnership is unable to refinance or extend
the mortgage loan, the Partnership may decide not to commit any significant
additional funds. This may result in the Partnership no longer having an
ownership interest in the property. This would result in the Partnership
recognizing a gain for financial reporting purposes.

900 Third Avenue Building

During the year, occupancy of this building increased to 95%, up from 92%
in the previous year primarily due to Investment Technology Group, Inc.
occupying 15,636 square feet (approximately 3% of the building's leasable
space) in the second quarter of 1993. The midtown Manhattan market remains
very competitive. Although, the joint venture is in discussions with the
existing lender for a possible refinancing and extension of its mortgage loan
which matures in December 1994, there can be no assurance that the Partnership
will be successful in such discussions.

The Partnership and affiliated partner have filed a lawsuit against the
former manager and one of the unaffiliated venture partners to recover the
amounts advanced and certain other joint venture obligations on which the
unaffiliated partner has defaulted. This lawsuit has been dismissed on
jurisdictional grounds. Subsequently, however, the Federal Deposit Insurance
Corp. ("FDIC") filed a complaint, since amended, in a lawsuit against the
joint venture partner, the Partnership and affiliated partner and the joint
venture, which has enabled the Partnership and affiliated partner to refile
its previously asserted claims against the joint venture partner as part of
that lawsuit in Federal court. There is no assurance that the Partnership and
affiliated partner will recover the amounts of its claims as a result of the
litigation. Due to the uncertainty, no amounts in addition to the amounts
advanced to date, noted above, have been recorded in the accompanying
consolidated financial statements. Settlement discussions with one of the
venture partners and the FDIC continue. The FDIC has, in the past, been
unwilling to consider a settlement until certain other issues it has with one
of the unaffiliated venture partners are resolved. It appears that a
resolution of those other issues may be near. There are no assurances that a
settlement will be finalized and that the Partnership and affiliated partner
will be able to recover any amounts from the unaffiliated venture partners.

300 East Lombard Building

Effective September 30, 1991, the Partnership sold, to an affiliate of
the joint venture partners, 62% of its interest in a joint venture that owns a
55% interest in the 300 East Lombard investment property. In conjunction with
the sale, the Partnership and buyer established a put-call option on the
Partnership's remaining interest in the joint venture. In January 1993, the
Partnership sold its remaining interest in accordance with the terms of the
option. Reference is made to Note 7.

Wells Fargo Center

The Wells Fargo Center operates in the Downtown Los Angeles office
market, which has become extremely competitive over the last several years
with the addition of several new buildings that has resulted in a high vacancy
rate of approximately 25% in the marketplace. In 1992, two major law firm
tenants occupying approximately 11% of the building's space approached the
joint venture indicating that they were experiencing financial difficulties
and desired to give back a portion of their leased space in lieu of ceasing
business altogether. The joint venture reached agreements which resulted in a
reduction of the space leased by each of these tenants. The Partnership is
also aware that a major tenant, IBM, leasing approximately 58% of the tenant
space in the Wells Fargo Building is sub-leasing or attempting to sub-lease
approximately one-fourth of its space, which is scheduled to expire in
December 1998. The Partnership expects that the competitive market conditions
will have an adverse affect on the building through lower effective rental
rates achieved on releasing of existing tenant space which expires or is given
back over the next several years. The property operated at deficits in 1992
and 1993 due to rental concessions granted to facilitate leasing of space
taken back from the two tenants noted above and the expansion of one of the
other major tenants in the building. The property is expected to produce cash
flow in 1994. The mortgage note secured by the property, as well as the
promissory note secured by the Partnership's interest in the joint venture are
scheduled to mature in December 1994. The promissory note secured by the
Partnership's interest in the joint venture is classified at December 31, 1993
as a current liability in the accompanying consolidated financial statements.
In view of, among other things, current and anticipated market and leasing
conditions affecting the property, including uncertainty regarding the amount
of space, if any, which IBM will renew when its lease expires in December
1998, the South Tower Venture, as a matter of prudent accounting practice,
recorded a provision for value impairment of $67,479,871 (of which $20,035,181
has been allocated to the Partnership and is reflected in the Partnership's
share of operations of unconsolidated ventures in the accompanying
consolidated financial statements). Such provision, made as of August 31,
1993, is recorded to reduce the net carrying value of the Wells Fargo Center
to the then outstanding balance of the related non-recourse debt. Further,
there is no assurance that the joint venture or the Partnership will be able
to refinance these notes when they mature in December o
Partnership may then decide not to commit any significant additional amounts
to the property. This may result in the Partnership no longer having an
ownership interest in the property, and would result in a gain for financial
reporting and for Federal income tax purposes with no corresponding
distributable proceeds. The property did not sustain any significant damage
as a result of the January 1994 earthquake in southern California. Reference
is made to Notes 1 and 3(c)(iii).

RiverEdge Place Building

The RiverEdge Place Building was 100% leased to an affiliate of the major
tenant, First American Bank, under a long-term over-lease executed in
connection with the purchase of the property. The Bank and its affiliate
approached the Partnership indicating that they were experiencing significant
financial difficulties. On June 23, 1992, the Partnership reached an
agreement with the Bank and received cash and U.S. Government Securities
valued at $9,325,000 for the buy-out of the Bank's over-lease obligations.
The termination of the Bank's over-lease obligation yielded an approximately
$1,591,000 reduction in accrued rents receivable. The Partnership took these
courses of action due to the First American Bank's deteriorating financial
condition and the Federal Deposit Insurance Corporation's ability to assume
control of the Bank and to terminate the over-lease obligation. The
$9,325,000 buy-out was concurrently remitted to the lender to reduce the
mortgage secured by the RiverEdge Place Building and the Partnership continues
to negotiate with the lender to restructure the mortgage note in order to
reduce operating deficits anticipated as a result of the over-lease buy-out.
In connection with the Partnership's negotiations with the lender, the
Partnership ceased making debt service payments effective July 1, 1992. If
the Partnership's negotiations for mortgage note restructuring are not
successful, the Partnership would likely decide, based upon current market
conditions and other considerations relating to the property and the
Partnership's portfolio, not to commit significant additional amounts to the
property. This would result in the Partnership no longer having an ownership
interest in the property and would result in a gain for financial reporting
and Federal income tax purposes without any corresponding distributable
proceeds. Accordingly, the mortgage note has been classified as a current
liability in the accompanying consolidated financial statements.
Additionally, the tenant lease with First American Bank for approximately
120,000 square feet has been assigned to and assumed by SouthTrust Bank of
Georgia in connection with that bank's acquisition of most of the remaining
assets of First American Bank. Effective August 1, 1992, the Partnership
restructured the lease with SouthTrust Bank of Georgia reducing the tenant's
space to approximately 92,000 square feet, as well as reducing the effective
rent on the retained space in exchange for an extension of the lease term from
April, 1994 to July, 2002. The restructuring of SouthTrust Bank's lease
reduced the occupied space of the RiverEdge Place Building from 96% to 85% at
that time. The Partnership is actively pursuing replacement tenants for the
building's vacant space including the space taken back from the SouthTrust
lease restructuring. Due to the uncertainty as to the Partnership's ability
to recover the net carrying value of the investment property through future
operations and sale, as a matter of prudent accounting practice, the
Partnership made a provision for value impairment of $6,149,632 recorded as of
September 30, 1992. Such provision was recorded to reduce the net carrying
value of the investment property to the September 30, 1992 outstanding balance
of the related non-recourse financing. Reference is made to Notes 1, 2(b) and

4(b)(iv).

21900 Burbank Building

The 21900 Burbank Building sustained some damage as a result of the
earthquakes that occurred in January 1994 in southern California. Preliminary
estimates of the damage range from $200,000 to $500,000. Much of this damage
occurred within tenant premises in the building. The Partnership does not
believe it has any significant obligations to reimburse tenants for such
repairs. While the Partnership carried earthquake insurance on this property,
it is anticipated that the total damages will not exceed the
deductible amount. Although the property produced cash flow to the
Partnership in 1993, there is uncertainty as to the Partnership's ability to
recover the net carrying value of the investment property through future
operations and sale as a result of the substantial amount of tenant space
(approximately 83% of the building) under leases that are scheduled to expire
during 1995 and 1996. As a matter of prudent accounting practice, the
Partnership made a provision for value impairment of such investment property
of $1,740,533 recorded as of June 30, 1992. Such provision was recorded to
reduce the net carrying value of the investment property to the June 30, 1992
outstanding balance of the related non-recourse financing. Reference is made
to Notes 1 and 2(c).

NewPark Associates

In December 1992, NewPark Associates refinanced the existing indebtedness
related to its shopping center with a new mortgage loan as described in Note
3(c)(v). In addition to retiring the prior mortgage loan and the notes
payable to the unaffiliated joint venture partner, the new mortgage loan,
which is in the principal amount of approximately $51,000,000 and bears
interest at 8.75% per annum, has provided approximately $14,000,000 of
additional proceeds, a major portion of which were used to pay the costs of
the renovation work described below and to provide a reserve for future tenant
improvement costs at the property. The new mortgage loan matures in November
1995, subject to the right of the joint venture to extend the maturity date to
November 2000 upon payment of a $250,000 fee and satisfaction of certain
conditions.

NewPark Associates commenced a renovation of NewPark Mall in early 1993
and such renovation was substantially complete as of September 30, 1993.
NewPark Mall may be subject to increased competition from a new mall that is
expected to open in the vicinity in late 1994.

California Plaza

The property operated at a deficit in 1993 due to the costs incurred in
connection with the leasing of space which was vacant or under leases that
expired in 1993. Effective March 1, 1993, the joint venture ceased making the
scheduled debt service payments on the mortgage loan secured by the property
which was scheduled to mature on January 1, 1997. Subsequently, the
Partnership made partial debt service payments based on net cash flow of the
property through December, 1993 when an agreement was reached with the lender
to modify the loan on December 22, 1993. As more fully discussed in Note
4(b)(vi), the loan modification reduced the pay rate of monthly interest only
payments to 8% per annum, effective February 1993, extended the loan maturity
date to January 1, 2000, and requires the net cash flow of the property to be
escrowed (as defined). The venture also funded $500,000 into a reserve
account as required by the modification agreement. This reserve account is to
be used to fund future costs, including tenant improvements, leasing
commissions and capital improvements, approved by the lender. Additionally,
due to the uncertainty of the Partnership's ability to recover the net
carrying value of the California investment property, the Partnership made, as
a matter of prudent accounting practice, a provision for value impairment of
California Plaza at June 30, 1993 of $2,166,799 (which included $1,558,492
relating to the venture partner's deficit investment balance at that date).
Such provision reduced the net carrying value of the investment property to
the June 30, 1993 outstanding balance of the related non-recourse mortgage
note. Reference is made to Notes 1 and 4(b)(vi).

Erie-McClurg Parking Facility

On September 25, 1992, the Partnership, through Erie-McClurg Associates,
sold the Erie-McClurg Parking Facility located in Chicago, Illinois. A
portion of the cash proceeds was used to retire the first mortgage note
secured by the property. Additionally, a portion of the proceeds was used to
retire the Partnership's unsecured, non-revolving line of credit. Reference
is made to Notes 2(e) and 7.
<PAGE>
Concurrently, with the sale of the Erie-McClurg Parking Facility, the
Partnership entered into an agreement with the unaffiliated manager of the
parking facility to induce the manager to re-write the existing long-term
management agreement at less favorable terms to the manager. This agreement
guarantees the manager 100% of the compensation which would have been earned
under the agreement prior to the sale in years one through five and 50% of any
potential difference between the management fee under the agreement prior to
the sale and the renegotiated agreement with the purchaser (as defined) in
years six through eighteen. Reference is made to Note 7.

In connection with this agreement, at closing the Partnership paid the
unaffiliated manager a partial settlement of $400,000 and has estimated the
present value of the remaining contingent liability to be $360,000. This
contingent liability is recorded as a long-term liability in the accompanying
consolidated financial statements. Reference is made to Note 7.

Springbrook Shopping Center

In October 1993, a tenant occupying 20% of the space at the Springbrook
Shopping Center vacated upon expiration of its lease. The Partnership is
actively pursuing replacement tenants for the vacant space, but there is no
assurance that any leases will be consummated. Due to the uncertainty of re-
leasing this space, and due to the property being expected to operate at a
deficit in 1994, there is uncertainty as to the Partnership's ability to
recover the net carrying value of the investment property through future
operations or sale. Thus, as a matter of prudent accounting practice, the
Partnership made a provision for value impairment of such investment property
of $7,534,763 at December 31, 1993. Such provision is recorded to reduce the
net carrying value of the investment property to the December 31, 1993
outstanding balance of the related non-recourse financing. Reference is made
to Note 1.

Other

The mortgage note secured by Eastridge Mall is scheduled to mature on
October 1, 1995. There is no assurance that the venture will be able to
refinance or obtain alternative financing when the note matures. Due to the
uncertainty of the Partnership's ability to recover the net carrying value of
the Eastridge Mall investment property, the Partnership has made, as a matter
of prudent accounting practice, a provision at June 30, 1992 for value
impairment of Eastridge Mall of $5,752,710. Such provision reduced the net
carrying value of the investment property to the then outstanding balance of
the related non-recourse mortgage note.

Due to the uncertainty of the Partnership's ability to recover the net
carrying value of the 9701 Wilshire Building investment property, the
Partnership has made, as a matter of prudent accounting practice, a provision
at September 30, 1992 for value impairment of 9701 Wilshire Building of
$12,504,079. Such provision reduced the net carrying value of the investment
property to the then outstanding balance of the related non-recourse mortgage
note. The property operated at a slight deficit in 1993 due to the costs
incurred in connection with the re-leasing of the vacant space in the
building. The mortgage note secured by the property matured on January 1,
1994. The Partnership obtained extensions of this note from the existing
lender until August 1, 1994. The Partnership paid the lender $110,000 in
extension fees in connection with these extensions. The monthly principal and
interest payment, and the interest rate remain the same on the loan as prior
to the original maturity date. The unpaid principal and interest matures on
August 1, 1994, and thus, the loan has been classified at December 31, 1993 as
a current liability in the accompanying consolidated financial statements.
The Partnership is pursuing a sale or alternative financing of the property,
however, there is no assurance that the Partnership will be successful in
either refinancing or selling the property. The property did not sustain any
significant damage as a result of the January 1994 earthquake in southern
California.

Due to the factors discussed above and the general lack of buyers of real
estate today, it is likely that the Partnership may hold some of its
investment properties longer than originally anticipated in order to maximize
Partnership's recovery of its investments and any potential return thereon.
In light of the current severely depressed real estate markets, it currently
appears that the Partnership's goal of capital appreciation will not be
achieved. Although some portion of the Limited Partners' original capital is
expected to be distributed from sales proceeds, without a dramatic improvement
in market conditions the Limited Partners will not receive a full return of
their original investment. In addition, in connection with sales or other
dispositions (including transfers to lenders) of properties (or interests
therein) owned by the Partnership or its joint ventures, the Limited Partners
may be allocated substantial gain for Federal income tax purposes.

RESULTS OF OPERATIONS

The decrease in current portion of notes receivable at December 31, 1993
as compared to December 31, 1992 is primarily due to the receipt by the
Partnership in June 1993 of $165,625 of the Boatman's settlement. Reference
is made to Note 3(b)(i).

The increase in escrow deposits and restricted securities at December 31,
1993 as compared to December 31, 1992 is primarily due to an increase in the
escrow balance at the 260 Franklin Street Building and an increase in the
escrow balance at Cal Plaza due to the loan modification in December 1993,
offset by the return of reserves to the venture partner related to Cal Plaza
as required by the 1991 settlement. Reference is made to Notes 3(b)(iii) and
4(b).

The decrease in land and buildings and improvements at December 31, 1993
as compared to December 31, 1992 is primarily due to the Partnership's
decision to establish provisions for value impairment in connection with the
Cal Plaza, Villa Solana Apartments and Springbrook Shopping Center investment
properties. The decrease in buildings and improvements is partially offset by
additions of buildings and improvements at certain of the Partnership's
investment properties. Reference is made to Note 1.

The decrease in investment in unconsolidated ventures, at equity at
December 31, 1993 as compared to December 31, 1992 is primarily due to the
provision for value impairment recorded at Wells Fargo Center at August 31,
1993, of which the Partnership's share was $20,035,181, as more fully
discussed in Note 1, and in the Liquidity and Capital Resources section above.

The increase in the balance of the current portion of long-term debt and
corresponding decrease in the balance of long-term debt at December 31, 1993
as compared to December 31, 1992 is primarily due to 9701 Wilshire's debt,
which matured January 1, 1994 and for which the Partnership obtained
extensions until August 1, 1994, Woodland Hills debt, which is scheduled to
mature June 1, 1994, Dunwoody Crossings (Phase I and III) Apartment's debt,
which is scheduled to mature on October 1, 1994, Park at Countryside
Apartment's debt which has been in default since October 1993, and for which
the lender has initiated foreclosure proceedings, and the Wells Fargo
promissory note which is secured by the Partnership's interest in the South
Tower joint venture, which is scheduled to mature on December 31, 1994, being
classified as current liabilities at December 31, 1993. Reference is made to
Note 4.

The increase in amounts due affiliates at December 31, 1993 as compared
to December 31, 1992 is primarily due to the additional deferrals by the
Partnership's General Partners and their affiliates of certain property
management and leasing fees and reimbursements. Reference is made to Note 11.

The increase in the balance of accrued interest payable at December 31,
1993 as compared to December 31, 1992 is primarily due to the accrual of
approximately $2,611,000 in 1993 of unpaid interest on the mortgage loan
secured by the RiverEdge Place investment property. Reference is made to Note
4(b)(iv).
<PAGE>
The decrease in deposits and advances at December 31, 1993 as compared to
December 31, 1992 is due to the return of reserves to the venture partner
related to the California Plaza investment property as required by the 1991
settlement agreement. Reference is made to Note 3(b)(iii).

Decreases in rental income for the year ended December 31, 1993 as
compared to the same period in 1992 is primarily due to the June 30, 1992 buy-
out of the First American Bank's over-lease obligations at RiverEdge Place,
and the sale of the Erie-McClurg Parking Facility in September 1992.
Reference is made to Notes 2(b) and 7. Increases in rental income for the
year ended December 31, 1992 as compared to the same period in 1991 are
primarily due to the June 1992 buy-out of the First American Bank's over-lease
obligations (as discussed above) offset, in part, by lower effective rental
rates on tenant space that expired in 1991 and was re-leased in 1992 at the
260 Franklin Street investment property and the September 1992 sale of the
Erie-McClurg Parking Facility.

The decrease in interest income for the year ended December 31, 1993 as
compared to the same period in 1992 is primarily due to lower interest rates
earned on the Partnership's short-term investments. The increase in interest
income for the year ended December 31, 1992 as compared to same period in 1991
is primarily due to an increase in the average balance of short-term
investments in 1992 as compared to 1991.

The decrease in mortgage and other interest for the year ended December
31, 1993 as compared to the same period in 1992 is primarily due to the sale
of the Erie-McClurg Parking Facility in September, 1992, a reduction of the
debt balance of RiverEdge Place investment property by $9,325,000 in June 1992
and the modification of the loan at Cal Plaza which decreased the effective
interest rate. Reference is made to Notes 2(b), 4(b)(vi) and 7. The decrease
in mortgage and other interest for the year ended December 31, 1992 as
compared to the same period in 1991 is primarily due to the February 1992
modification (effecting a lower average interest rate) of the debt secured by
the 160 Spear Street investment property, the June 1992 $9,325,000 principal
reduction of the debt secured by the RiverEdge Place investment property and
the September 1992 sale and simultaneous retirement of debt of the Erie-
McClurg Parking Facility.

The decrease in depreciation expense for the year ended December 31, 1993
as compared to the same period in 1992, and the decrease for the year and
December 31, 1992 as compared to the same period in 1991 is primarily due to
the provisions for value impairment recorded at several of the Partnership's
investment properties in 1993 and 1992, which resulted in a lower basis of
assets to be depreciated in 1993 and 1992, and due to the sale in September
1992 of the Erie-McClurg Parking Facility. Reference is made to Notes 1 and
7.

The decrease in professional services for the years ended December 31,
1993 as compared to the same period in 1992 and the decrease for the year
ended December 31, 1992 as compared to the same period in 1991 is primarily
due to Partnership's 1991 and 1992 legal fees relating to the lawsuit against
the joint venture partner of the C-C California Plaza venture. Reference is
made to Note 3(b)(iii).

The decrease in management fees to corporate general partner for the year
ended December 31, 1993 as compared to the same period in 1992 and, the
decrease for the year ended December 31, 1992 as compared to the same period
in 1991 is due to the decreases in the Partnership's distributions in 1992,
and suspension of distributions in 1992, a portion of which is earned by the
Corporate General Partner as a partnership management fee. Reference is made
to Note 11 relating to the deferral of these fees.

The provisions for value impairment for the year ended December 31, 1993
relate to provisions recorded for Cal Plaza, Villa Solana Apartments, and
Springbrook Shopping Center of $2,166,799, $916,309 and $7,534,763,
respectively. The provisions for value impairment for the year ended December
31, 1992 relate to provisions recorded for Eastridge Mall, 21900 Burbank
Boulevard Building, 9701 Wilshire Building and RiverEdge Plaza
properties of $5,752,710, $1,740,533, $12,504,079 and $6,149,632,
respectively. Reference is made to Note 1.

The increase in Partnership's share of loss from operations of
unconsolidated ventures for the year ended December 31, 1993 as compared to
the same period in 1992 is primarily due to the provision for value impairment
recorded at August 31, 1993 at Wells Fargo Center (of which the Partnership's
share is $20,035,181), offset by a decrease in the Partnership's share of
losses of JMB/125 due to the receipt of the Salomon Brothers lease termination
fee payment in 1993. The increase in the Partnership's share of losses from
operations of unconsolidated ventures for the year ended December 31, 1992 as
compared to the same period in 1991 is primarily due to activity at the 125
Broad Street office building, including (i) the recognition of losses relating
to Johnson and Higgins receivables in 1992 and (ii) a decrease in rental
income as a result of a major tenant vacating a large portion of its space
during 1991. The Partnership's share of loss from operations of
unconsolidated ventures for 1991 includes a provision for value impairment
recorded on the books of the 125 Broad Street Building as of December 31, 1991
to reduce the net book value of the 125 Broad Street Building to the then
outstanding balance of related non-recourse financing. Reference is made to
Notes 3(c)(iii) and 3(c)(iv).

The gain on sale of investment property in 1992 relates to the sale of
the Erie-McClurg Parking Facility in September 1992. Reference is made to
Note 7.

The gain on sale of interests in unconsolidated ventures for the year
ended December 31, 1993 relates to JMB/Owning's sale of its interest in Owings
Mills Limited Partnership ("OMLP") in June 1993, and the Partnership's sale of
the remaining interest in Harbor Overlook Limited Partnership in January 1993.

The gain on sale of interest in unconsolidated ventures for the year ended
December 31, 1991 relates to the Partnership's sale of 62% of its general
partnership interest in Harbor Overlook Limited Partnership in 1991.
Reference is made to Note 7.

The $1,014,538 extraordinary item for the year ended December 31, 1991
relates to the cancellation in February 1991, of the wrap-around mortgage note
secured by the Woodland Hills apartment complex. Reference is made to Note
4(c).

INFLATION

Due to the decrease in the level of inflation in recent years, inflation
generally has not had a material effect on rental income or property operating
expenses.

To the extent that inflation in future periods does have an adverse
impact on property operating expenses, the effect will generally be offset by
amounts recovered from tenants as many of the long-term leases at the
Partnership's commercial and retail properties have escalation clauses
covering increases in the cost of operating and maintaining the properties as
well as real estate taxes. Therefore, there should be little effect on net
operating earnings if the properties remain substantially occupied. In
addition, substantially all of the leases at the Partnership's shopping center
investments contain provisions which entitle the property owner to participate
in gross receipts of tenants above fixed minimum amounts.

Future inflation may also cause capital appreciation of the Partnership's
investment properties over a period of time to the extent that rental rates
and replacement costs of properties increase.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

INDEX

Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1993 and 1992
Consolidated Statements of Operations, years ended December 31, 1993,
1992 and 1991
Consolidated Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows, years ended December 31, 1993,
1992 and 1991
Notes to Consolidated Financial Statements

SCHEDULE
--------

Supplementary Income Statement Information X
Consolidated Real Estate and Accumulated Depreciation XI

Schedules not filed:

All schedules other than those indicated in the indices have been omitted
as the required information is inapplicable or the information is presented in
the consolidated or combined financial statements or related notes.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

CERTAIN UNCONSOLIDATED VENTURES

INDEX

Independent Auditors' Report
Combined Balance Sheets, December 31, 1993 and 1992
Combined Statements of Operations, years ended December 31, 1993,
1992 and 1991
Combined Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1993, 1992 and 1991
Combined Statements of Cash Flows, years ended December 31, 1993,
1992 and 1991

Notes to Combined Financial Statements

SCHEDULE
--------

Supplementary Income Statement Information X
Combined Real Estate and Accumulated Depreciation XI

Schedules not filed:

INDEPENDENT AUDITORS' REPORT

The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV:

We have audited the consolidated financial statements of Carlyle Real
Estate Limited Partnership - XV (a limited partnership) and Consolidated
Ventures as listed in the accompanying index. In connection with our audits
of the consolidated financial statements, we also have audited the financial
statement schedules as listed in the accompanying index. These consolidated
financial statements and financial statement schedules are the responsibility
of the General Partners of the Partnership. Our responsibility is to express
an opinion on these consolidated financial statements and financial statement
schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Carlyle
Real Estate Limited Partnership - XV and Consolidated Ventures at December 31,
1993 and 1992, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 1993, in
conformity with generally accepted accounting principles. Also in our
opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.

As described in Note 3 (c)(iv) of notes to consolidated financial
statements, the property owned by 125 Broad Street Company (125 Broad), in
which the Partnership has an interest through 125 Broad Building Associates
(JMB/125), has suffered losses and cash flow deficits from operations and
expects to incur significant cash flow deficits in the future that are
required to be funded by the unaffiliated venture partners through 1995
pursuant to the 125 Broad joint venture agreement. In 1992, the unaffiliated
venture partners failed to advance necessary funds to 125 Broad and, as a
result, 125 Broad defaulted on its mortgage loan. JMB/125 has notified the
unaffiliated joint venture partners that their failure to advance funds to
cover operating deficits constitutes a default under the 125 Broad joint
venture agreement. The 125 Broad joint venture partners have been negotiating
with the property's lender to restructure the mortgage loan; however, there
can be no assurances that negotiations to restructure the loan will be
successful. The Partnership believes it is unlikely that the unaffiliated
joint venture partners will fulfill their funding obligations to 125 Broad and
JMB/125. As a result, it appears unlikely that 125 Broad will be able to
restructure the mortgage loan. In the event that 125 Broad is unable to
restructure the mortgage loan, JMB/125 would likely decide not to commit
additional funds to 125 Broad. These circumstances could result in the
Partnership no longer having an ownership interest in the investment property.

The ultimate outcome of these circumstances cannot presently be determined.
The consolidated financial statements do not include any adjustments that
might result from the outcome of these uncertainties.

Additionally, as discussed in Notes 3 and 4 of notes to consolidated
financial statements, a number of mortgage loans secured by the Partnership's
investment properties or investment properties owned by ventures in which the
Partnership has an interest, mature in 1994. The Partnership has commenced or
intends to commence discussions with the mortgage lenders in order to extend
and/or modify such mortgage loans. In the event that discussions with lenders
are unsuccessful, the Partnership and its venture partners may be unable or
unwilling to commit additional amounts to the investment properties. These
circumstances could result in the Partnership no longer having an ownership
interest in certain investment properties. The ultimate outcome of these
circumstances cannot presently be determined. The Partnership and ventures
have recorded provisions for value impairment, where applicable, to reduce the
net book value of such properties to the outstanding balance of the related
non-recourse financing (Notes 1 and 3 of notes to consolidated financial
statements).

KPMG PEAT MARWICK

Chicago, Illinois
March 28, 1994
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992

ASSETS
------

<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,020,087 3,188,488
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,167,294 9,725,210
Interest, rents and other receivables (net of reserve for uncollectibility of $17,200 in 1993
and $124,935 in 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,092,658 1,288,627
Current portion of notes receivable (net of reserve for uncollectibility of
$1,466,051 in 1993 and 1992) (note 8). . . . . . . . . . . . . . . .. . . . . . . . . . . . . 34,073 219,557
Escrow deposits and restricted securities (notes 1 and 4(b)) . . . . .. . . . . . . . . . . . . 6,151,429 4,199,918
------------ ------------

Total current assets . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 22,465,541 18,621,800
------------ ------------
Investment properties, at cost (notes 1, 2 and 3) - Schedule XI:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 37,109,099 38,697,995
Buildings and improvements. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 376,030,478 382,575,795
------------ ------------
413,139,577 421,273,790
Less accumulated depreciation . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . (107,997,321) (95,627,226)
------------ ------------

Total investment properties, net of accumulated depreciation . . . . . . . . . . . . . 305,142,256 325,646,564
------------ ------------

Investment in unconsolidated ventures, at equity (notes 3 and 12). . . . . . . . . . . . . . . . 28,554,815 53,315,151
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,305,261 5,084,619
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,719,239 7,775,550
Venture partners' deficit in ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,699,065 3,688,890
------------ ------------

$371,886,177 414,132,574
============ ============ <PAGE>

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1993 1992
------------ ------------
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . $103,244,992 32,940,514
Current portion of notes payable (note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . 70,701 70,701
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,256,478 2,907,807
Amounts due to affiliates (note 11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,410,710 5,578,932
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,130,382 3,404,490
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 728,334 792,844
Deposits and advances (note 3(b)(iii)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 430,000
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,841,597 46,125,288
Notes payable (note 10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361,135 431,836
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863,192 812,480
Investment in unconsolidated ventures, at equity (notes 3 and 12). . . . . . . . . . . . . . . . 28,318,569 21,499,082
Other liabilities (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,000 360,000
Long-term debt, less current portion (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . 237,811,558 305,589,971
------------ ------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386,556,051 374,818,657
Venture partners' subordinated equity in ventures. . . . . . . . . . . . . . . . . . . . . . . . 9,901,367 10,354,954
Partners' capital accounts (deficits) (note 5):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,779,416) (13,562,316)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (600,866) (600,866)
------------ ------------
(16,360,282) (14,143,182)
------------ ------------
Limited partners (443,717 Interests):
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . .. . . . . . 384,978,681 384,978,681
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . (368,991,190) (317,923,210)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . (24,198,450) (23,953,326)
------------ ------------
(8,210,959) 43,102,145
------------ ------------
Total partners' capital accounts (deficits). . . . . . . . . . . . . . .. . . . . . . . (24,571,241) 28,958,963
------------ ------------
Commitments and contingencies (notes 1, 2, 3, 4,7 and 9)
$371,886,177 414,132,574
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>

1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . $54,795,252 63,899,911 60,216,942
Interest income. . . . . . . . . . . . . . . . . . . . . . .. . . . . 492,992 599,222 501,357
----------- ----------- -----------
55,288,244 64,499,133 60,718,299
----------- ----------- -----------
Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . .. . 34,767,530 36,863,527 38,734,494
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,370,095 13,296,137 14,143,499
Property operating expenses. . . . . . . . . . . . . . . . . . . . . 22,465,768 23,159,488 24,638,273
Professional services. . . . . . . . . . . . . . . . . . . . . . . . 605,331 957,340 1,071,470
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . 1,223,341 1,322,442 1,298,384
Management fees to corporate general partner (note 11) . . . . . . . -- 15,407 130,958
General and administrative . . . . . . . . . . . . . . . . . . . . . 628,691 601,145 761,608
Provisions for value impairment (note 1) . . . . . . . . . . . . . . 10,617,871 26,146,954 --
----------- ----------- -----------
82,678,627 102,362,440 80,778,686
----------- ----------- -----------

Operating loss . . . . . . . . . . . . . . . . . . . . . . . 27,390,383 37,863,307 20,060,387

Partnership's share of loss from operations of unconsolidated ventures
(note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,617,778 24,576,481 15,887,646
Venture partners' share of ventures' operations (note 3) . . . . . . . (2,866,514) (3,678,862) (3,432,757)
----------- ----------- -----------

Net operating loss . . . . . . . . . . . . . . . . . . . . . 56,141,647 58,760,926 32,515,276

Gain on sale of investment property (note 7) . . . . . . . . . . . . . -- (506,446) --
Gain on sale of interests in unconsolidated ventures (note 7). . . . . (2,856,567) -- (9,041,533)
----------- ----------- -----------

Net loss before extraordinary item . . . . . . . . . . . . . 53,285,080 58,254,480 23,473,743

Extraordinary item (note 4(c)) . . . . . . . . . . . . . . . . . . . . -- -- (1,014,538)
----------- ----------- -----------

Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . $53,285,080 58,254,480 22,459,205
=========== =========== ===========

(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED

1993 1992 1991
------------ ----------- -----------

Net loss per limited partnership interest (note 1):
Net operating loss . . . . . . . . . . . . . . . . . . . $ 121.46 127.13 70.35
Net gain on sale of investment property . . . . . . . . . -- (1.13) --
Net gain on sale of interests in unconsolidated ventures. (6.37) -- (20.17)
Extraordinary item . . . . . . . . . . . . . . . . . . .. -- -- (2.20)
----------- ----------- -----------

$ 115.09 126.00 47.98
=========== =========== ===========

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

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (443,717 INTERES
------------------------------------------------------- --------------------------------------------------
CONTRI-
BUTIONS
NET OF
CONTRI- NET CASH OFFERING NET CASH
BUTIONS LOSS DISTRIBUTIONS TOTAL COSTS LOSS DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficit)
December
31, 1990 . $20,000 (10,047,328) (600,866) (10,628,194) 384,978,681 (240,724,513) (21,845,664) 122,408,504

Net loss . . -- (1,169,615) -- (1,169,615) -- (21,289,590) -- (21,289,590)
Cash dis-
tributions
($4.25 per
limited
partnership
interest) . -- -- -- -- -- -- (1,885,803) (1,885,803)
------- ----------- --------- ----------- ----------- ------------ ------------ -----------

Balance
(deficit)
December
31, 1991 . 20,000 (11,216,943) (600,866) (11,797,809) 384,978,681 (262,014,103) (23,731,467) 99,233,111

Net loss . . -- (2,345,373) -- (2,345,373) -- (55,909,107) -- (55,909,107)
Cash distri-
butions
($.50 per
limited part-
nership
interest) . -- -- -- -- -- -- (221,859) (221,859
------- ----------- --------- ----------- ----------- ------------ ------------ -----------

Balance
(deficit)
December
31, 1992 . 20,000 (13,562,316) (600,866) (14,143,182) 384,978,681 (317,923,210) (23,953,326) 43,102,145

Net loss . -- (2,217,100) -- (2,217,100) -- (51,067,980) -- (51,067,980
Cash distri-
butions
($.55 per
limited
partnership
interest) . -- -- -- -- -- -- (245,124) (245,124)
------- ----------- --------- ----------- ----------- ------------ ------------ -----------

Balance
(deficit)
December
31, 1993 . $20,000 (15,779,416) (600,866) (16,360,282) 384,978,681 (368,991,190) (24,198,450) (8,210,959
======= =========== ========= =========== =========== ============ ============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<CAPTION>
1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(53,285,080) (58,254,480) (22,459,205)

Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . .. . . . . . . . . . . . . . . . . . . . . . . 12,370,095 13,296,137 14,143,499
Amortization of deferred expenses. . . . . . . . . . . . . . . . . 1,223,341 1,322,442 1,298,384
Long-term debt - deferred accrued interest . . . . . . . . . . . . 3,543,421 2,072,994 3,587,106
Partnership's share of loss from operations of unconsolidated ventures 31,617,778 24,576,481 15,887,646
Venture partners' share of ventures' operations. . . . . . . . . . (2,866,514) (3,678,862) (3,432,757)
Provisions for value impairment. . . . . . . . . . . . . . . . . . 10,617,871 26,146,954 --
Gain on sale of investment property (note 7) . . . . . . . . . . . -- (506,446) --
Gain on sale of interests in unconsolidated ventures (note 7) . . . (2,856,567) -- (9,041,533)
Extraordinary item-early extinguishment of debt (note 4(c)). . . . -- -- (1,014,538)

Changes in:
Interest, rents and other receivables. . . . . . . . . . . .. . . . 195,969 163,945 1,394,379
Current portion of notes receivable. . . . . . . . . . . . .. . . . 185,484 767,844 564,280
Notes receivable . . . . . . . . . . . . . . . . . . . . . .. . . . -- 165,625 167,281
Escrow deposits and restricted securities (note 4(b)). . . .. . . . (1,951,511) (529,901) (2,931,114)
Accrued rents receivable . . . . . . . . . . . . . . . . . .. . . . 1,056,311 2,612,964 1,077,056
Accounts payable . . . . . . . . . . . . . . . . . . . . . .. . . . (651,329) 410,584 (382,758)
Amounts due to affiliates. . . . . . . . . . . . . . . . . .. . . . 831,778 999,184 1,313,961
Accrued interest payable . . . . . . . . . . . . . . . . . .. . . . 2,725,892 892,521 (436,663)
Accrued real estate taxes. . . . . . . . . . . . . . . . . .. . . . (64,510) (850,110) 77,499
Deposits and advances. . . . . . . . . . . . . . . . . . . .. . . . (430,000) -- (348,569)
Tenant security deposits . . . . . . . . . . . . . . . . . .. . . . 50,712 70,393 (96,635)
------------ ----------- -----------

Net cash provided by (used in) operating activities. .. . . . 2,313,141 9,678,269 (632,681)
------------ ----------- ----------- <PAGE>

(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1993 1992 1991
------------ ----------- -----------

Cash flows from investing activities:
Net purchases of short-term investments. . . . . . . . . . . . . . . (442,084) (3,908,797) --
Additions to investment properties . . . . . . . . . . . . . . . . . (838,618) (1,728,484) (1,493,457)
Purchase price adjustment. . . . . . . . . . . . . . . . . . . . . . -- -- 65,504
Partnership's distributions from unconsolidated ventures . . . . . . 3,329,583 5,243,928 7,506,022
Partnership's contributions to unconsolidated ventures . . . . . . . (740,111) (1,301,243) (2,079,667)
Cash proceeds from sale of investment property (note 7). . . . . . . -- 10,680,440 --
Cash proceeds from sale of interests in unconsolidated ventures (note 7) 229,140 -- 383,244
Changes in escrow deposits and restricted securities (note 3(b)(iii)). -- -- 1,033,113
Payment of deferred expenses . . . . . . . . . . . . . .. . . . . . . (530,531) (1,192,057) (599,866)
------------ ----------- -----------

Net cash provided by investing activities. . . .. . . . . . . 1,007,379 7,793,787 4,814,893
------------ ----------- -----------

Cash flows from financing activities:
Payoff of bank notes payable . . . . . . . . . . . . . .. . . . . . . -- (6,335,000) --
Proceeds from bank notes payable . . . . . . . . . . . .. . . . . . . -- -- 700,000
Principal payments on long-term debt . . . . . . . . . .. . . . . . . (1,017,356) (1,118,875) (1,134,710)
Principal paydown or retirement on long-term debt (notes 2(b) and 4(b)) -- (18,791,830) --
Proceeds from long-term debt (note 4(b)) . . . . . . . . . . . . . . -- 9,800,000 --
Principal payments on notes payable. . . . . . . . . . . . . . . . . (70,701) (70,701) (70,701)
Venture partners' contributions to venture . . . . . . . . . . . . . 30,000 182,116 2,622,490
Distributions to venture partners. . . . . . . . . . . . . . . . . . (185,740) (359,270) (2,390,002)
Distributions to limited partners. . . . . . . . . . . . . . . . . . (245,124) (221,859) (1,885,803)
------------ ----------- -----------
Net cash used in financing activities . . . . . . . . . . . (1,488,921) (16,915,419) (2,158,726)
------------ ----------- -----------

Net increase in cash and cash equivalents . . . . . . . . . . $ 1,831,599 556,637 2,023,486
============ =========== =========== <PAGE>

(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1993 1992 1991
----------- ----------- -----------

Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . $28,498,214 33,898,012 35,584,051
=========== =========== ===========
Non-cash investing and financing activities:
Extraordinary item - early extinguishment of debt (note 4(c)). . . $ -- -- 1,014,538
Non-cash gain recognized on sale of interest in unconsolidated venture
(note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,627,427 -- 8,658,289
Purchase price reduction applied towards payment of principal
on long-term debt (note 3(b)(i)) . . . . . . . . . . . . . . . . -- -- 240,285
Deferred expenses funded by increases in notes payable . . . . . . -- -- 51,026
=========== =========== ===========
Sale of investment property (note 7):
Total sale proceeds, net of selling expenses . . . . . . . . . . . $ -- 17,932,665 --
Contingent liability assumed upon sale . . . . . . . . . . . . . . -- 360,000 --
Principal balance due on mortgage payable. . . . . . . . . . . . . -- (7,612,225) --
----------- ----------- -----------

Cash proceeds from sale of investment property,
net of selling expenses . . . . . . . . . . . . . . . . . . $ -- 10,680,440 --
=========== =========== ===========

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1993, 1992 AND 1991

(1) BASIS OF ACCOUNTING

The accompanying consolidated financial statements include the accounts
of the Partnership and its consolidated ventures, Eastridge Development
Company ("Eastridge"); Daytona Park Associates ("Park"); JMB/160 Spear Street
Associates ("160 Spear"); Villa Solana Associates ("Villa Solana"); 260
Franklin Street Associates ("260 Franklin"); C-C California Plaza Partnership
("Cal Plaza"); Villages Northeast Associates ("Villages Northeast") and VNE
Partners, Ltd. ("VNE Partners"). The effect of all transactions between the
Partnership and the consolidated ventures has been eliminated.

The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's interests
in JMB/Piper Jaffray Tower Associates ("JMB/Piper") and JMB/Piper Jaffray
Tower Associates II ("JMB/Piper II"); 900 Third Avenue Associates ("JMB/900");
Maguire/Thomas Partners-South Tower ("South Tower"); Harbor Overlook Limited
Partnership ("Harbor"); JMB/Owings Mills Associates ("JMB/Owings"); Carlyle-XV
Associates, L.P., which owns an interest in JMB/125 Broad Building Associates,
L.P. ("JMB/125") and JMB/NewPark Associates, L.P. ("JMB/NewPark").

The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles ("GAAP")
and to consolidate the accounts of certain ventures as described above. Such
adjustments are not recorded on the records of the Partnership. The effect of
these items is summarized as follows for the years ended December 31, 1993 and
1992:
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

1993 1992
-------------------------------- ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>

Total assets . . . . . . . . . . . . . . . . $371,886,177 173,128,303 414,132,574 177,783,423

Partners' capital accounts (deficit):
General partners . . . . . . . . . . . . . (16,360,282) (23,818,870) (14,143,182) (25,081,131)
Limited partners . . . . . . . . . . . . . (8,210,959) 27,985,249 43,102,145 41,432,383

Net gain (loss):
General partners . . . . . . . . . . . . . (2,217,100) 1,262,261 (2,345,373) (823,532)
Limited partners . . . . . . . . . . . . . (51,067,980) (13,202,010) (55,909,107) (18,792,533)

Net loss per limited partnership interest. . 115.09 29.75 126.00 42.35
============ ============ =========== ===========
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The net loss per limited partnership interest is based upon the limited
partnership interests outstanding at the end of the period (443,717). Deficit
capital accounts will result, through the duration of the Partnership, in the
recognition of net gain for financial reporting and income tax purposes.

Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement. Partnership
distributions from unconsolidated ventures are considered cash flow from
operating activities only to the extent of the Partnership's cumulative share
of net earnings. In addition, the Partnership records amounts held in U.S.
Government obligations and other securities at cost which approximates market.

For the purposes of these statements, the Partnership's policy is to consider
all such amounts held with original maturities of three months or less (none
at December 31, 1993 and 1992) as cash equivalents with any remaining amounts
reflected as short-term investments.

Escrow deposits and restricted securities primarily represent cash and
investments restricted as to their use by the Partnership.

Due to the uncertainty of the Partnership's ability to recover the net
carrying value of the 125 Broad Street Building (note 3(c)(iv), 260 Franklin
Street Building, Eastridge Mall, 21900 Burbank Boulevard Building, 9701
Wilshire Building, RiverEdge Place, California Plaza, Wells Fargo Center - IBM
Tower, Villa Solana Apartments and Springbrook Shopping Center investment
properties, the Partnership, or ventures, as the case may be, made, as a
matter of prudent accounting practice, provisions for value impairment. A
provision for value impairment was recorded at June 30, 1992 of $5,752,710 and
$1,740,533 for Eastridge Mall and 21900 Burbank Boulevard Building,
respectively, at September 30, 1992 of $12,504,079 and $6,149,632 for 9701
Wilshire Building and RiverEdge Place, respectively, at June 30, 1993, of
$2,166,799 for California Plaza, which included $1,558,492 relating to the
venture partner's deficit investment balance at that date, at August 31, 1993,
of $67,479,871 (of which, the Partnership's share is $20,035,181) at Wells
Fargo Center - IBM Tower, at September 30, 1993, of $916,309 at Villa Solana
Apartments, and at December 31, 1993 of $7,534,763 at Springbrook Shopping
Center. Such provisions generally reduce the net carrying values of the
investment properties to the then outstanding balance of the related non-
recourse mortgage notes.

Deferred expenses are comprised principally of deferred financing fees
which are amortized over the related debt term and deferred leasing fees which
are amortized over the related lease term.

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

liability at December 31, 1993 as a result of defaults (see notes 4(b)(i) and
4(b)(iv)), and because the resolution of such defaults is uncertain, the
Partnership considers the disclosure of the SFAS 107 value of such long-term
debt to be impracticable. The remaining debt, with a carrying balance of
$319,790,235, has been calculated to have a SFAS 107 value of $311,472,146 by
discounting the scheduled loan payments to maturity. Due to restrictions on
transferability and prepayment, and the inability to obtain comparable
financing due to previously modified debt terms or other property specific
competitive conditions, the Partnership would be unable to refinance these
properties to obtain such calculated debt amounts reported (see note 4). The
Partnership has no other significant financial instruments.

Certain reclassifications have been made to the 1992 and 1991
consolidated financial statements to conform with the 1993 presentation.

No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the partners rather than the Partnership.
However, in certain instances, the Partnership has been required under
applicable law to remit directly to the tax authorities amounts representing
withholding from distributions paid to partners.

(2) INVESTMENT PROPERTIES

(a) General

The Partnership has acquired, either directly or through joint ventures,
interests in four apartment complexes, twelve office buildings, four shopping
centers and one parking facility. The Partnership's aggregate cash
investment, excluding certain related acquisition costs, was $299,637,926.
During 1989, the Partnership disposed of its interest in the investment
property owned by CBC Investment Company ("Boatmen's") (note 3(b)(i)). During
1991, the Partnership sold 62% of its interest in Harbor and in 1993 sold its
remaining 38% interest in Harbor (note 7). In September 1992, the Partnership
sold the Erie-McClurg Parking Facility (note 7). In June 1993, the
Partnership sold its interest in Owings Mills Shopping Center (note 7). All
of the properties owned at December 31, 1993 were completed and operating.

The cost of the investment properties represents the total cost to the
Partnership or its ventures plus miscellaneous acquisition costs. Deprecia-
tion on the operating properties has been provided over the estimated useful
lives of 5-30 years using the straight-line method.

All investment properties are pledged as security for the long-term debt,
for which generally there is no recourse to the Partnership.

Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives.

(b) RiverEdge Place Building

The RiverEdge Place Building (formerly the First American Bank Building)
was 100% leased to an affiliate of the major tenant, First American Bank,
under a long-term over-lease executed in connection with the purchase of the
property. The Bank and its affiliate approached the Partnership and indicated
that they were experiencing significant financial difficulties. On June 23,
1992, the Partnership reached an agreement with the Bank and received cash and
U.S. Government securities valued at $9,325,000 for the buy-out of the Bank's
over-lease obligations. The termination of the Bank's over-lease obligations
yielded an approximately $1,591,000 reduction in accrued rents receivable.
The Partnership took these courses of action due to the First American Bank's

CARLYLE REAL ESTATE LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

deteriorating financial condition and the Federal Deposit Insurance
Corporation's ability to assume control of the Bank and to terminate the over-
lease obligation. The $9,325,000 buy-out was concurrently remitted to the
lender to reduce the mortgage note secured by the RiverEdge Place Building and
the Partnership continues to negotiate with the lender to restructure the
mortgage note in order to reduce operating deficits anticipated as a result of
the over-lease buy-out (see note 4(b)(iv)). Additionally, the tenant lease
with First American Bank for approximately 120,000 square feet of space was
assigned to and assumed by SouthTrust Bank of Georgia in connection with that
bank's acquisition of most of the remaining assets of First American Bank.
Effective August 1, 1992, the Partnership restructured the lease with
SouthTrust Bank of Georgia reducing the tenant's space to approximately 92,000
square feet, as well as, reducing the effective rent on the retained space in
exchange for an extension of the lease term from April 1994 to July 2002. The
restructuring of SouthTrust Bank's lease reduced the occupied space of the
RiverEdge Place Building from 96% to 85% at that time. The Partnership is
actively pursuing replacement tenants for the building's vacant space
including the space taken back from the SouthTrust lease restructuring.

(d) Springbrook Shopping Center

(e) Erie-McClurg Parking Facility

The mortgage note secured by the Erie-McClurg Parking Facility was
scheduled to mature May 1, 1992. The Partnership negotiated with the
underlying lender and received an extension of the note's maturity to
September 30, 1992. On September 25, 1992, the Partnership sold the Erie-
McClurg Parking Facility to an unaffiliated third party for a price of
$18,700,000 (before selling costs and prorations) (note 7).

(f) Woodland Hills Apartments

Effective February 1, 1991, the seller/manager has agreed to guarantee a
level of cash flow from the property equal to the underlying debt service in
return for a subordinated level of cash flow (payable as an incentive
management fee) from operations and sale or refinancing of the property. The
underlying debt which consists of first and second mortgage notes secured by
the property is scheduled to mature in June 1994. The Partnership plans to
refinance the notes when they mature, although there is no assurance the
Partnership will be able to obtain such financing (see note 4(c)).

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(3) VENTURE AGREEMENTS

(a) Introduction

The Partnership (or Carlyle-XV Associates, L.P., in which the Partnership
holds a limited partnership interest) has entered into eight joint venture
agreements (JMB/Piper, JMB/Piper II, JMB/900, JMB/Owings, JMB/125, 260
Franklin, Villages Northeast and JMB/NewPark) with Carlyle Real Estate Limited
Partnership-XIV ("Carlyle-XIV") or Carlyle Real Estate Limited Partnership-XVI
(or Carlyle-XVI Associates, L.P., in which Carlyle Real Estate Limited
Partnership-XVI holds a limited partnership interest) ("Carlyle-XVI"),
partnerships sponsored by the Corporate General Partner, and eight joint
venture agreements with unaffiliated venture partners. Pursuant to such
agreements, the Partnership made initial capital contributions of
approximately $247,300,000 (before legal and other acquisition costs and its
share of operating deficits as discussed below). The terms of these
affiliated partnerships provide, in general, that the benefits of ownership,
including tax effects, net cash receipts and sale and refinancing proceeds,
are allocated between or distributed to, as the case may be, the Partnership
and the affiliated partner in proportion to their respective capital
contributions to the affiliated venture.

There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the Partnership's
joint venture partner(s) in an investment might become unable or unwilling to
fulfill its (their) financial or other obligations, or that such joint venture
partner(s) may have economic or business interests or goals that are
inconsistent with those of the Partnership. Under certain circumstances,
either pursuant to the venture agreements or due to the Partnership's
obligations as a general partner, the Partnership may be required to
contribute additional amounts to the venture.

During 1989, the Partnership disposed of its interest in the Boatmen's
venture (note 3(b)(i)). During 1991, the Partnership sold a portion of its
interest in the Harbor venture (note 7). In January 1993, the Partnership
sold the remaining portion of its interest in the Harbor venture and in June
1993, the Partnership sold its interest in the JMB/Owings Mills joint venture
(note 7).

(b) Consolidated Ventures

The terms of the 260 Franklin venture have been described, in general,
above (note 3(a)). The terms of the Eastridge, Park, 160 Spear, Villa Solana,
Cal Plaza and VNE Partners ventures can be described in general, as follows:

In most instances, these properties were acquired (as completed) for a
fixed purchase price; however, certain properties were developed by the
ventures and in those instances, the contributions of the Partnership are
generally fixed. The joint venture partner was required to contribute any
excess of cost over the aggregate amount available from Partnership
contributions and financing. To the extent such funds exceed the aggregate
costs, the venture partner was entitled to retain such excesses. The venture
properties have been financed under various long-term debt arrangements as
described in note 4.

The Partnership generally has a cumulative preferred interest in net cash
receipts (as defined) from the properties. Such preferential interest relates
to a negotiated rate of return on contributions made by the Partnership.
After the Partnership receives its preferential return, the venture partner is
generally entitled to a non-cumulative return on its interest in the venture;
additional net cash receipts are generally shared in a ratio relating to the

CARLYLE REAL ESTATE LIMITED PARTNERSHI

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

various ownership interests of the Partnership and its venture partners.
During 1993, 1992 and 1991, three, four and four, respectively, of the
ventures' properties produced net cash receipts. The Partnership also has
preferred positions (related to the Partnership's cash investment in the
ventures) with respect to distribution of net sale or refinancing proceeds
from the ventures.

In general, operating profits and losses are shared in the same ratio as
net cash receipts; however, if there are no net cash receipts, substantially
all profits or losses are allocated to the Partnership. In addition,
generally amounts equal to certain expenses paid from capital contributions by
the Partnership or venture partners are allocated to the contributing partner
or partners.

(i) Boatmen's

During 1989 the joint venture defaulted on the mortgage loan secured by
the property, and the lender obtained title to the property. As a result, the
Partnership has no further ownership interest in the property.

On May 31, 1990, the Partnership entered into an agreement with the
joint venture partners to settle certain claims against the joint venture
partners. The settlement provided that the Partnership would receive payments
totalling $2,325,000. As of December 31, 1993 the Partnership has received
cash payments totalling $1,910,937. Two of the venture partners were
delinquent under the scheduled payments in the amount of $414,063 as of
December 31, 1993. These joint venture partners had requested extensions of
the promissory notes and the Partnership is currently considering their
requests. To preserve its legal rights, the Partnership served the delinquent
partners with notices of default. The Partnership has recognized revenue on
the settlement to the extent of the cash collected. There is no assurance
that the remaining delinquent payments will be collected.

(ii) Park

In November 1991, Park modified the mortgage note secured by Park at
Countryside Apartments effective January 1, 1990 (note 4(b)). In October
1993, the joint venture ceased making the required debt service payments, and
commenced discussions with the lender regarding an additional modification of
the loan. However, the venture was unable to secure an additional
modification of the loan. Therefore, as of the date of this report, the loan
is in default and the lender has initiated procedures to obtain title to the
property. As a result of an amendment to the joint venture agreement, an
affiliate of the joint venture partners agreed to manage the property without
compensation from January 1, 1990 through December 31, 1995.

(iii) Cal Plaza

In August 1990, the joint venture partner filed a lawsuit against the
Partnership, the General Partners of the Partnership and certain of their
affiliates, alleging, among other things, breaches of the joint venture
agreement and fraud. The Partnership filed a counter claim against the joint
venture partner for breaches of the joint venture agreement and property
management agreement. In November 1991, the Partnership and the joint venture
partner reached a settlement resolving certain claims between the two parties.

Under the terms of the settlement agreement, the obligation of the venture
partner to indemnify Cal Plaza for payment on promissory notes issued to a
tenant was revised (see note 10) and previously escrowed amounts were made
available for 1991 cash flow requirements.

In December 1993, the venture reached an agreement with the lender to
modify the mortgage note, effective February 1993. The accrual rate of the
note remains at 10.375%, but the interest only monthly payments are based on

CARLYLE REAL ESTATE LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

an interest rate of 8% per annum. The maturity date of the note has been
extended from January 1, 1997 to January 1, 2000, and property cash flows are
required to be escrowed as more fully described in note 4(b)(vi).

(i) JMB/Piper

In 1984, the Partnership acquired, through a joint venture partnership
("JMB/Piper") with Carlyle-XIV, an interest in three existing joint ventures
(OB Joint Venture, OB Joint Venture II and 222 South Ninth Street Limited
Partnership, together "Piper") with the developer and certain limited partners
which own a 42-story office building known as the Piper Jaffray Tower in
Minneapolis, Minnesota. As of December 31, 1993, two of the limited partners
are primary tenants in the office building and hold a 25% interest in the land
and building ventures. The third limited partner holds a 4% interest in the
building venture; however, on January 15, 1992, it returned its 4% interest in
the land venture to 222 South Ninth Street Limited Partnership (as discussed
below). In April 1986, JMB/Piper II, a joint venture partnership between the
Partnership and Carlyle-XIV, acquired the developer's interest in the OB Joint
Venture as discussed below.

The terms of the JMB/Piper and JMB/Piper II venture agreements generally
provide that JMB/Piper's and JMB Piper II's respective shares of Piper's
annual cash flow, sale or refinancing proceeds and profits and losses will be
distributed or allocated to the Partnership in proportion to its 50% share of
capital contributions.

JMB/Piper invested approximately $19,915,000 for its 71% interest in
Piper. JMB/Piper is obligated to loan amounts to Piper to fund operating
deficits (as defined). The loans bear interest at a rate of not more than
14.36% per annum, provide for payments of interest only from net cash flow, if
any, and are repayable from net sale or refinancing proceeds. Such loans and
accrued interest was approximately $63,214,000 and $53,729,000 at December 31,
1993 and 1992, respectively. The Partnership and the affiliated partner,
Carlyle-XIV, have contributed to JMB/Piper the funds required for such loans.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

remaining unpaid management fees would be payable out of the venture's share
of sale of refinancing proceeds. Additionally, pursuant to the terms of the
loan modification, effective January 1992, OB Joint Venture, as majority owner
of the underlying land, began deferring receipt of it share of land rent.
These deferrals will be payable from potential net sale or refinancing
proceeds, if any.

Furthermore, pursuant to the loan modification, the venture can prepay
the mortgage note beginning February 1, 1996. The prepayment fee is equal to
the sum of (i) 6% of the amount prepaid declining 1/2 of 1% per annum to a
minimum of 1%; (ii) from the greatest of: (1) net sale proceeds or (2) net
refinance proceeds or (3) the net appraised value (all as defined), an amount
until the lender has received an internal rate of return of 12% per annum if
prepayment occurs between February 1, 1996 and February 1, 1997; 12 3/4% if
prepayment occurs between February 1, 1997 and February 1, 1998; and 13.59%
per annum thereafter; and (iii) after the lender has received the internal
rate of return as noted above, the next $10,000,000 of net proceeds (as
determined in (ii) above) will be distributed 50% to the lender and 50% to the
venture, the next $10,000,000 - 40% to the lender and 60% to the venture, the
next $10,000,000 - 30% to the lender and 70% to the venture, the next
$10,000,000 - 20% to the lender and 80% to the venture, and the remaining
proceeds - 10% to the lender and 90% to the venture. For financial reporting
purposes, interest expense has been accrued at a rate of 13.59% per annum
which is the estimated minimum internal rate of return assuming the note is
held to maturity. In order for the venture to share in future net sale or
refinancing proceeds, there must be a significant improvement in current
market and property operating conditions resulting in a significant increase
in value of the property.

The Piper venture agreements provide that any net cash flow, as defined,
will be used to pay interest on any operating deficit loans (as described
above) with any excess generally distributable 71% to JMB/Piper and 29% to the
venture partners, subject to certain adjustments (as defined). In general,
operating profits or losses are allocated in relation to the economic
interests of the venture partners. Accordingly, operating profits and losses
(excluding depreciation and amortization) were allocated 71% to the General
Partner and 29% to limited partners during 1993 and 100% to the General
Partner during 1992.

The Piper venture agreements further provide that, in general, upon any
sale or refinancing of the property, the principal and any accrued interest
outstanding on any operating deficit loans will be repaid. Any remaining
proceeds will be distributable 71% to JMB/Piper and 29% to the joint venture
partners, subject to certain adjustments, as defined.

During the fourth quarter 1991, Larkin, Hoffman, Daly & Lindgren, Ltd.
(23,344 square feet) approached the joint venture indicating that it was
experiencing financial difficulties and desired to give back a portion or all
of its leased space. Larkin's lease was scheduled to expire in January 2005
and provided for annual rental payments which were significantly higher than
current market rental rates. Larkin was also an owner with partial interests
in the building and the land under the building. After substantive review of
Larkin's financial condition, on January 15, 1992, the joint venture signed an
agreement with Larkin to terminate its lease in return for its partial
interest (4%) in the land under the building and a $1,011,798 note payable to
the joint venture. The note payable provides for monthly payments of
principal and interest at 8% per annum with full repayment over ten years.
Larkin may prepay all or a portion of the note payable at any time.

During the third quarter of 1992, the joint venture executed a lease
amendment with a major tenant and joint venture partner, Piper Jaffray Inc.,
which provides for (i) deletion of the tenant's option to terminate in March
1994 its leases on 21,508 square feet of space and 18,288 square feet of space
which leases were to expire on March 2000 and March 1995, respectively, (ii)

CARLYLE REAL ESTATE LIMITED PARTNERSH

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

extension of the lease term on its 18,288 square foot space to March 2000,
(iii) rent reductions on the aggregate 39,796 square feet of space, (iv) lease
expansions through March 2000 of 23,344 square feet (the former Larkin,
Hoffman space) and 19,350 square feet on November 1992 and February 1993,
respectively, at rental rates significantly below market, and (v) additional
expansion options to lease up to an additional 94,210 square feet of space
throughout the term of the lease.

During the fourth quarter of 1993, the joint venture finalized a lease
amendment with Popham, Haik, Schnobrich & Kaufman, Ltd. (104,843 square feet).

The amendment provides for the extension of the lease term from February 1,
1997 to January 31, 2003 in exchange for a rent reduction effective February
1, 1994. In addition, the tenant will lease an additional 10,670 square feet
effective August 1, 1995. The rental rate on the expansion space approximates
market which is significantly lower than the reduced rental rate on the
tenant's current occupied space.

(ii) JMB/900

In 1984, the Partnership acquired, through JMB/900, an interest in an
existing joint venture ("Progress Partners") which owns a 36-story office
building known as the 900 Third Avenue Building in New York, New York. The
partners of Progress Partners are the developer of the property and an
affiliate of the developer (the "Venture Partners") and JMB/900.

The terms of the JMB/900 venture agreement generally provide that
JMB/900's share of Progress Partners' cash flow, sale or refinancing proceeds
and profits and losses will be distributed or allocated to the Partnership in
proportion to its 66-2/3% share of capital contributions.

JMB/900 has made capital contributions to Progress Partners and certain
payments to an affiliate of the developer, in the aggregate amount of
$17,200,000, subject to the obligation to make additional capital
contributions as described below.

JMB/900 has also made a loan to the developer in the amount of
$20,000,000 which is secured by the Venture Partners' interest in Progress
Partners. The loan bears interest at the rate of 16.4% per annum and is
payable in monthly installments of interest only until maturity on the earlier
of the sale or refinancing of the property or August 2004. For financial
reporting purposes, the loan is classified as an additional investment in
Progress Partners and any related interest received would be accounted for as
distributions (none in 1991, 1992 and 1993). To the extent that JMB/900 has
not received annual distributions equal to the interest payable on such loan,
the deficiency becomes a cumulative preferred return payable out of future net
cash flow or net sale or refinancing proceeds.

The Progress Partners venture agreement provides that the venture is
required to pay the Venture Partners a stated return of $3,285,000 per annum.
Generally, JMB/900 is required to contribute funds to the venture, to the
extent net cash flow is not sufficient, to enable the venture to make this
payment. Such amounts have not been paid as interest has not been received on
the $20,000,000 loan discussed above. Under the terms of the Progress
Partners' venture agreement, the Venture Partners are generally entitled to
receive a non-cumulative preferred return of net cash flow of approximately
$3,414,000 per annum, with any remaining net cash flow distributable 49% to
JMB/900 and 51% to the Venture Partners.

The Progress Partners venture agreement further provides that net sale or
refinancing proceeds are distributable to JMB/900 and the Venture Partners, on
a pro rata basis, in an amount equal to the sum of any deficiencies in the
receipt of their respective cumulative preferred returns of net cash flow plus
certain contributions to the venture made by JMB/900. Next, proceeds will be
distributable to the Venture Partners in an amount equal to $20,000,000.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

JMB/900 is entitled to receive the next $21,000,000 and the Venture Partners
will receive the next $42,700,000. Any remaining net proceeds are to be
distributed 49% to JMB/900 and 51% to the Venture Partners.

Operating profits, in general, are allocated 49% to JMB/900 and 51% to
the Venture Partners. Operating losses, in general, are allocated 90% to
JMB/900 and 10% to the venture partners.

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

Through December 31, 1991, it was necessary for JMB/900 to contribute
approximately $4,364,000 ($2,909,000 of which was contributed by the
Partnership) to pay past due property real estate taxes and to pay certain
costs, including litigation settlement costs, which were the responsibility of
one of the unaffiliated joint venture partners under the terms of the joint
venture agreement to the extent such funds were not available from the
investment property.

In July 1989, JMB/900 filed a lawsuit in federal court against the former
manager and one of the unaffiliated venture partners to recover the amounts
contributed and to recover for certain other joint venture obligations on
which the unaffiliated partner has defaulted. This lawsuit was dismissed on
jurisdictional grounds. Subsequently, however, the Federal Deposit Insurance
Corporation ("FDIC") filed a complaint, since amended, in a lawsuit against
the joint venture partner, the Partnership and affiliated partner and the
joint venture, which has enabled the Partnership and affiliated partner to
refile its previously asserted claims against the joint venture partner as
part of that lawsuit in Federal Court. There is no assurance that JMB/900
will recover the amounts of its claims as a result of the litigation. Due to
the uncertainty, no amounts in addition to the amounts advanced to date, noted
above, have been recorded in the financial statements. Settlement discussions
with one of the venture partners and the FDIC continue. The FDIC has, in the
past, been unwilling to consider a settlement until certain other issues it
has with one of the unaffiliated venture partners are resolved. It appears
that a resolution of those other issues may be near. There are no assurances
that a settlement will be finalized and that the Partnership and affiliated
partner will be able to recover any amounts from the unaffiliated venture
partners.

The joint venture negotiated an early lease termination agreement with a
major tenant that vacated its space in June 1992. The joint venture
terminated the lease (which was to expire in November 2000) for a fee of
approximately $1.2 million (including arrearages). The Partnership is
currently seeking a replacement tenant for the vacated space (14,700 square
feet). The Midtown Manhattan office rental market remains very competitive.

(iii) South Tower

In June 1985, the Partnership acquired an interest in a joint venture
partnership ("South Tower") which owns a 44-story office building in Los
Angeles, California. The joint venture partners of the Partnership include
Carlyle Real Estate Limited Partnership-XIV ("Affiliated Partner"), one of the
sellers of the interests in South Tower, and another unaffiliated venture
partner.

The Partnership and the Affiliated Partner purchased their interests for
$61,592,000. In addition, the Partnership and the Affiliated Partner made
capital contributions to South Tower totaling $48,400,000 for general working
capital requirements and certain other obligations of South Tower. The
Partnership's share of the purchase price, capital contributions (net of
additional financing) and interest thereon totaled $53,179,000.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The terms of the South Tower agreement generally provide that the
Partnership and Affiliated Partner's aggregate share of the South Tower's
annual cash flow, net sale or refinancing proceeds, and profits and losses are
to be distributed or allocated to the Partnership and the Affiliated Partner
in proportion to their aggregate capital contributions.

Annual cash flow will be distributed 80% to the Partnership and
Affiliated Partner and 20% to another partner until the Partnership and the
Affiliated Partner have received, in the aggregate, a cumulative preferred
return of $8,050,000 per annum. The remaining cash flow is to be
distributable 49.99% to the Partnership and the Affiliated Partner, and the
balance to the other joint venture partners. Additional contributions to
South Tower were contributed 49.99% by the Partnership and the Affiliated
Partner until all partners had contributed $10,000,000 in aggregate.

Operating profits and losses, in general, are to be allocated 49.99% to
the Partnership and the Affiliated Partner and the balance to the other joint
venture partners. Substantially all depreciation and certain expenses paid
from the Partnership's and Affiliated Partner's capital contributions are to
be allocated to the Partnership and Affiliated Partner. In addition,
operating profits, up to the amount of any annual cash flow distribution, are
allocated to all partners in proportion to such distributions of annual cash
flow.

In general, upon sale or refinancing of the property, net sale or
refinancing proceeds will be distributed 80% to the Partnership and the
Affiliated Partner and 20% to another partner until the Partnership and the
Affiliated Partner have received the amount of any deficiency in their
preferred cash flow distributions described above plus an amount equal to
their "Disposition Preference" (which, in general, begins at $120,000,000 and
increases annually by $8,000,000 to a maximum of $200,000,000). Any remaining
net sale or refinancing proceeds will be distributed 49.99% to the Partnership
and the Affiliated Partner and the remainder to the other partners.

The office building is being managed by an affiliate of one of the
venture partners under a long-term agreement pursuant to which the affiliate
is entitled to receive a monthly management fee of 2-1/2% of gross project
income, a tenant improvement fee of 10% of the cost of tenant improvements,
and commissions on new leases.

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

(iv) JMB/125

In December 1985, the Partnership, through the JMB/125 joint venture
partnership, acquired an interest in an existing joint venture partnership
("125 Broad") which owns a 40-story office building, together with a leasehold
interest in the underlying land, located at 125 Broad Street in New York, New
York. In addition to JMB/125, the other partners (the "O&Y partners") of 125
Broad include O&Y 25 Realty Company L.P., Olympia & York Broad Street Holding
Company L.P. (USA) and certain other affiliates of Olympia & York Development,
Ltd. ("O&Y").
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

JMB/125 is a joint venture between Carlyle-XV Associates, L.P. (in which
the Partnership holds a 99% limited partnership interest), Carlyle-XVI
Associates, L.P. and Carlyle Advisors, Inc. The terms of the JMB/125 venture
agreement generally provide that JMB/125's share of 125 Broad's annual cash
flow and sale or refinancing proceeds will be distributed or allocated to the
Partnership in proportion to its (indirect) approximate 60% share of capital
contributions to JMB/125. In April 1993 JMB/125, originally a general
partnership, was converted to a limited partnership, and the Partnership's
interest in JMB/125, which previously has been held directly, was converted to
a limited partnership interest and was contributed to Carlyle-XV Associates,
L.P. in exchange for a limited partnership interest in Carlyle-XV Associates,
L.P. As a result of these transactions, the Partnership currently holds,
indirectly through Carlyle-XV Associates, L.P., an approximate 60% limited
partnership interest in JMB/125. The general partner in each of JMB/125 and
Carlyle-XV Associates, L.P. is an affiliate of the Partnership. For financial
reporting purposes, profits and losses of JMB/125 are generally allocated 60%
to the Partnership.

JMB/125 acquired an approximately 48.25% interest in 125 Broad for a
purchase price of $16,000,000, subject to a first mortgage loan of
$260,000,000 and a note payable to an affiliate of the joint venture partners
in the amount of $17,410,516 originally due September 30, 1989. In June 1987,
the note payable was consolidated with the first mortgage loan forming a
single consolidated note in the principal amount of $277,410,516. The
consolidated note bears interest at a rate of 10-1/8% per annum payable in
semi-annual interest only payments and matures on December 27, 1995. JMB/125
has also contributed $14,055,500 to 125 Broad to be used for working capital
purposes and to pay an affiliate of O&Y for its assumption of JMB/125's share
of the obligations incurred by 125 Broad under the "takeover space" agreement
described below. In addition, JMB/125 contributed $24,222,042, plus interest
thereon of approximately $1,089,992 on June 30, 1986 for working capital
purposes. Thus, JMB/125's original cash investment, exclusive of acquisition
costs, was $55,367,534, of which the Partnership's share was approximately
$33,220,000.

The land underlying the office building is subject to a ground lease
which has a term through June 2067 and provides for annual rental payments of
$1,075,000. The terms of the ground lease grant 125 Broad a right of first
refusal to acquire the fee interest in the land in the event of any proposed
sale of the land during the term of the lease and an option to purchase the
fee interest in the land for $15,000,000 at 10-year intervals (the next option
date occurring in 1994).

The partnership agreement of 125 Broad, as amended, provides that the O&Y
partners are obligated to make advances to pay operating deficits incurred by
125 Broad from the earlier of 1991 or the achievement of a 95% occupancy rate
of the office building through 1995. In addition, from closing through 1995,
the O&Y partners are required to make capital contributions to 125 Broad for
the cost of tenant improvements and leasing expenses up to certain specified
amounts and to make advances to 125 Broad to the extent such costs exceed such
specified amounts and such costs are not paid for by the working capital
provided by JMB/125 or the cash flow of 125 Broad. The amount of all costs
for such tenant improvements and leasing expenses over the specified amounts
and the advances for operating deficits from the earlier of the achievement of
a 95% occupancy rate of the office building or 1991 will be treated by 125
Broad as non-recourse loans bearing interest, payable monthly, at the floating
prime rate of an institutional lender. The interest rate in effect at
December 31, 1993 was 6%. The amount of such outstanding O&Y partner non-
recourse loans was approximately $14,650,000 at December 31, 1993. Due to a
major tenant vacating in 1991 and the O&Y affiliates' default under the
"takeover space" agreement, the property operated at a deficit in 1993 and is
expected to operate at a deficit for the next several years. Such deficits
are required to be funded by additional loans from the O&Y partners, although
as discussed below the O&Y partners have been in default of such funding
obligation since June 1992. The outstanding principal balance and any accrued

CARLYLE REAL ESTATE LIMITED PARTNERS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

and unpaid interest of such loans will be payable from 125 Broad's annual cash
flow or net sale or refinancing proceeds, as described below. Any unpaid
principal of such loans and any accrued and unpaid interest thereon will be
due and payable on December 31, 2000. JMB/125 and the O&Y partners are
obligated to make capital contributions, in proportion to their respective
interests in 125 Broad, in amounts sufficient to enable 125 Broad to pay any
excess expenditures not covered by the capital contributions or advances of
the O&Y partners described above.

The 125 Broad partnership agreement also provides that beginning in 1991
annual cash flow, if any, is distributable first to JMB/125 and to the O&Y
partners in certain proportions up to certain specified amounts. Next, the
O&Y partners are entitled to repayment of principal and any accrued but unpaid
interest on the loans for certain tenant improvements, leasing expenses and
operating deficits described above, and remaining annual cash flow, if any, is
distributable approximately 48.25% to JMB/125 and approximately 51.75% to the
O&Y partners. In general, operating profits or losses are allocable
approximately 48.25% to JMB/125 and approximately 51.75% to the O&Y partners,
except for certain specified items of profits or losses which are allocable to
JMB/125 or the O&Y partners.

The 125 Broad partnership agreement further provides that, in general,
upon sale or refinancing of the property, net sale or refinancing proceeds
(after repayment of the outstanding principal balance and any accrued and
unpaid interest on any loans from the O&Y partners described above) are
distributable approximately 48.25% to JMB/125 and approximately 51.75% to the
O&Y partners.

In the event of a dissolution and liquidation of the joint venture, the
terms of the joint venture agreement between the O&Y partners and JMB/125
provide that if there is a deficit balance in the tax basis capital account of
JMB/125, after the allocation of profits or losses and the distribution of all
liquidation proceeds, then JMB/125 generally would be required to contribute
cash to the joint venture in the amount of its deficit capital account
balance. Taxable gain arising from the sale or other disposition of the joint
venture's property would be allocated to the joint venture partner or partners
then having a deficit balance in its or their respective capital accounts in
accordance with the terms of the joint venture agreement. However, if such
taxable gain is insufficient to eliminate the deficit balance in its account
in connection with a liquidation of the joint venture, JMB/125 would be
required to contribute funds to the joint venture (regardless of whether any
proceeds were received by JMB/125 from the disposition of the joint venture's
property) to eliminate any remaining deficit account balance.

The Partnership's liability for such contribution, if any, would be its
share, if any, of the liability of JMB/125 and would depend upon, among other
things, the amounts of JMB/125's and the O&Y partners' respective capital
accounts at the time of a sale or other disposition of 125 Broad's property,
the amount of JMB/125's share of the taxable gain attributable to such sale or
other disposition of 125 Broad's property and the timing of the dissolution
and liquidation of 125 Broad. In such event, the Partnership could be
required to sell or dispose of other assets in order to satisfy any obligation
attributable to it as a partner of JMB/125 to make such contribution.
Although the amount of such liability may be material, the Limited Partners of
the Partnership would not be required to make additional contributions of
capital to satisfy the obligation, if any, of the Partnership.

As described above, the terms of the joint venture agreement provide that
the O&Y partners are obligated to advance to the joint venture, in the form of
interest-bearing loans, amounts required to pay operating deficits and capital
improvement costs incurred during 1991 through 1995. O&Y and certain of its
affiliates have been involved in bankruptcy proceedings in the United States
and Canada and similar proceedings in England. During 1993, O & Y emerged
from bankruptcy protection in Canada. In addition, a reorganization of the
CARLYLE REAL ESTATE LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

management of the company's United States operations has been completed, and
certain O&Y affiliates are in the process of renegotiating or restructuring
various loans affecting properties in the United States in which they have
an interest. In view of the present financial conditions of O&Y and its
affiliates and the anticipated deficits for the property, as well as the
existing defaults of the O&Y partners, it appears unlikely that the O&Y
partners will meet their financial and other obligations to JMB/125 and
125 Broad.

In October 1993, 125 Broad entered into an agreement with Salomon
Brothers, Inc. to terminate its lease covering approximately 231,000 square
feet (17% of the building) at the property on December 31, 1993 rather than
its scheduled termination in January 1997. In consideration for the early
termination of the lease, Salomon Brothers, Inc. paid 125 Broad approximately
$26,500,000, plus interest thereon of approximately $200,000, which 125 Broad
in turn paid its lender to reduce amounts outstanding under the mortgage loan.
In addition, Salomon Brothers, Inc. paid JMB/125 $1,000,000 in consideration
of JMB/125's consent to the lease termination.

Due to the O&Y partners' failure to advance necessary funds to 125 Broad
as required under the joint venture agreement, 125 Broad defaulted on its
mortgage loan in June 1992 by failing to pay approximately $4,722,000 of
the semi-annual interest payment due on the loan. As a result of this
default, the loan agreement provides for a default interest rate of 13-1/8%
per annum on the unpaid principal amount. In addition, during 1992
affiliates of O&Y defaulted on a "takeover space" agreement with Johnson &
Higgins, Inc. ("J&H"), one of the major tenants at the 125 Broad Street
Building, whereby such affiliates of O&Y agreed to assume certain lease
obligations of J&H at another office building in consideration of J&H's
leasing space in the 125 Broad Street Building. As a result of
this default, J&H has offset rent payable to 125 Broad for its lease at the
125 Broad Street Building in the amount of approximately $28,600,000 through
December 31, 1993, and it is expected that J&H will continue to offset
amounts due under its lease corresponding to amounts by which the affiliates
of O&Y are in default under the "takeover space" agreement. As a result of
the O&Y affiliates' default under the "takeover space" agreement and
the continuing defaults of the O&Y partners to advance funds to cover
operating deficits, as of the end of 1993, the arrearage under the mortgage
loan had increased to approximately $48,180,000. As discussed above,
approximately $26,700,000 was remitted to the lender in October 1993 in
connection with the early termination of the Salomon Brothers lease, and
was applied towards mortgage principal for financial reporting purposes.
Due to their obligations relating to the "takeover space" agreement, the
affiliates of O&Y are obligated for the payment of the rent receivable
associated with the J&H lease at the 125 Broad Street Building. Based on
the continuing defaults of the O&Y partners, 125 Broad has provided loss
reserves for the entire rent offset by J&H, $19,300,000 and $9,300,000 in
1993 and 1992, respectively, and has also reserved approximately $32,600,000
of accrued rents receivable relating to such J&H lease, since the ultimate
collectability of such amounts depends upon the O&Y partners' and the O&Y
affiliates' performance of their obligations. The Partnership's share of
such losses was approximately $5,587,000 and $12,159,000 for the years ended
December 31, 1993 and 1992, respectively, and is included in the Partnership's
share of loss from operations of unconsolidated venture. The O&Y partners
have attempted to negotiate a restructuring of the mortgage loan with the
lender in order to reduce operating deficits of the property. In view of,
among other things, the significant operating deficits which the property is
expected to incur during 1994 and for the next several years, it is unlikely
that a restructuring of the mortgage will be obtained. The loan restructuring
is part of a larger restructuring with the lender involving a number of loans
secured by various properties in which O&Y affiliates have an interest.
JMB/125 has notified the O&Y partners that their failure to advance funds to
cover the operating deficits constitutes a default under the joint venture
agreement.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Accordingly, it appears unlikely the O&Y partners will fulfill their
obligations to 125 Broad and JMB/125. As a result, as discussed above, it
appears unlikely that 125 Broad will be able to restructure the mortgage loan
and JMB/125 is not likely to commit any significant additional amounts to the
property. This would result in the Partnership no longer having an ownership
interest in the property. If this event were to occur, the Partnership would
recognize a net gain for financial reporting and Federal income tax purposes
without any corresponding distributable proceeds. In addition, under certain
circumstances, as discussed above, JMB/125 may be required to make an
additional capital contribution to 125 Broad in order to make up a deficit
balance in its capital account.

The O&Y partners and certain other O&Y affiliates reached an agreement
with the City of New York to defer the payment of real estate taxes owed in
July 1992 on properties in which O&Y affiliates have an ownership interest,
including the 125 Broad Street Building. Payment of the real estate taxes
was made in six equal monthly installments from July through December, 1992.
Interest on the deferred amounts was paid in July 1992. A similar
agreement to defer payment of real estate taxes owed in January, 1993 was
entered into for the first six months of 1993. Interest on the deferred
amounts was paid in January, 1993.

Vacancy rates in the downtown Manhattan office market have increased
substantially over the last several years. As a result, competition for tenants
has increased, which has resulted in lower effective rents. The increased
vacancy in the downtown Manhattan office market has resulted primarily from
layoffs, cutbacks and consolidations by many financial service companies
which, along with related businesses, dominate the submarket. This has
resulted in uncertainty as to the joint venture partnership's ability to
recover the net carrying value of the investment property through future
operations and sales. As a matter of prudent accounting practice, a
provision for value impairment of such investment property of $14,844,420 was
recorded as of December 31, 1991. The Partnership's share of such provision
was $4,841,800 and was included in the Partnership's share of operations of
unconsolidated ventures. Such provision was recorded to reduce the net book
value of the investment property to the then outstanding balance of the
related non-recourse financing and O&Y partner loans.

The office building is being managed pursuant to a long-term agreement
with an affiliate of the O&Y partners. Under the terms of the management
agreement, the manager is obligated to manage the office building, collect
all receipts from operations and to the extent available from such receipts
pay all expenses of the office building. The manager is entitled to receive
a management fee equal to 1% of gross receipts of the property.

(v) JMB/NewPark

In December 1986, the Partnership, through a joint venture partnership
("JMB/NewPark"), acquired an interest in an existing joint venture partnership
("NewPark Associates") with the developer which owns an interest in an
existing enclosed regional shopping center in Newark, California known as
NewPark Mall.

JMB/NewPark acquired its 50% interest in NewPark Associates for a
purchase price of $32,500,000 paid in cash at closing, subject to an existing
first mortgage loan of approximately $23,556,000 and certain loans from the
joint venture partner of approximately $6,300,000.

In 1990, NewPark Associates reached an agreement with J.C. Penney to
open an anchor store at NewPark Mall which opened in November 1991. Under
the terms of the agreement, J.C. Penney built its own store and NewPark
Associates constructed a parking deck to accommodate the addition of J.C.
Penney to the center. NewPark Associates incurred costs of approximately
$10,400,000 related to this addition, of which $2,000,000 was reimbursed
by J.C. Penney.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The unaffiliated joint venture partner loaned NewPark Associates all of the
funds to cover the costs incurred related to the addition. In December 1992,
proceeds from the refinancing described below were used to repay all amounts
due to the unaffiliated joint venture partner.

On December 31, 1992, NewPark Associates refinanced the shopping center
with an institutional lender. The new mortgage note payable in the principal
amount of $50,620,219 is due on November 1, 1995. Monthly payments
of interest only of $369,106 are due through November 30, 1993. Commencing
on December 1, 1993 through October 30, 1995, principal and interest are due
in monthly payments of $416,351 with a final balloon payment due November 1,
1995. Interest on the note payable accrues at 8.75% per annum. The joint
venture has an option to extend the term of the mortgage note payable to
November 1, 2000 upon payment of a $250,000 option fee and
satisfaction of certain conditions as specified in the mortgage note. A
portion of the proceeds from the note payable were used to pay the outstanding
balance including accrued interest, under the previous mortgage note payable
and the notes payable to the unaffiliated joint venture partner. NewPark
Associates commenced a renovation that was substantially complete as of
September 30, 1993.

The NewPark Associates partnership agreement provides that JMB/NewPark
and the joint venture partner are each entitled to receive 50% of profits and
losses, net cash flow and net sale or refinancing proceeds of NewPark
Associates and are each obligated to advance 50% of any additional funds
equired under the terms of the NewPark Associates partnership agreement.

The portion of the shopping center owned by NewPark Associates is managed
by the unaffiliated joint venture partner under a long-term agreement pursuant
to which it is obligated to manage the property and collect all receipts
from operations of the property. The joint venture partner is paid a
management
fee equal to 4% of the fixed and percentage rent.
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(4) LONG-TERM DEBT

(a) Long-term debt consists of the following at December 31, 1993 and 1992:

<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
13.875% mortgage note; secured by the RiverEdge Place Building; monthly payments of $302,821
are due through December 1, 1995; the outstanding balance of principal and accrued interest
is due January 1, 1996 (see note 4(b)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,166,294 18,166,294

12.0% promissory note; secured by the Partnership's interest in the South Tower venture;
payable interest only through November 30, 1994; principal balance of $22,750,000 is
due December 1, 1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,750,000 22,750,000

8.5% mortgage note; secured by the Villa Solana Apartments; principal and interest
payments of $107,648 were due monthly through October 1, 1993; the unpaid balance of
principal and interest of approximately $13,612,872 was originally due on November 1, 1993;
the maturity date has been extended to August 1, 1994; principal and interest
payments of $107,648 are due monthly through August 1, 1994 when the unpaid principal
and interest balance is due (see note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,481,503 13,631,639

11.155% mortgage note; secured by the Eastridge Mall; principal and interest payments
of $241,010 are due monthly; unpaid balance of principal and interest of approximately
$23,352,312 is due on October 1, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,608,492 23,852,115

12.8% first mortgage note; secured by the Woodland Hills Apartments; monthly payments
of interest only are required until scheduled maturity on June 1, 1994 (see note 4(c)). . . . . . 6,800,000 6,800,000

11.7% second mortgage note; secured by the Woodland Hills Apartments; monthly payments
of interest only are required until scheduled maturity on June 1, 1994 (see note 4(c)). . . . . . 1,256,667 1,256,667

11.25% mortgage note; secured by Park at Countryside Apartments; monthly payments of
interest only were required until scheduled maturity on January 1, 1996 when the unpaid
balance of principal and interest was payable (the note was modified, and is in default;
see note 4(b)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,100,000 3,100,000

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

1993 1992
------------ ------------

9.3% first mortgage note; secured by the 160 Spear Street Building; monthly payments of
interest only are required through March 10, 1995; principal and interest payments
of $278,877 are due monthly from April 10, 1995 through January 10, 1999;
the unpaid balance of principal and interest of approximately $32,772,760 is due
on February 10, 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,750,000 33,750,000

12.55% second mortgage note; secured by the 160 Spear Street Building; monthly payments
of interest only are required through March 10, 1995; principal and interest of $58,216
are due monthly from April 10, 1995 through January 10, 1999; the unpaid balance of
principal and interest of approximately $5,351,910 is due on February 10, 1999. . . . . . . . . . 5,434,894 5,434,894

9.5% mortgage note; secured by the 21900 Burbank Boulevard Building; requiring monthly
principal and interest payments of $106,789 through November 1, 1996 with the balance of
the unpaid principal and interest of approximately $11,563,066 due on December 1, 1996. . . . . . 11,958,681 12,096,860

11.0% mortgage note; secured by the 260 Franklin Street Building; monthly payments
of interest only of $374,455 are due from June 1991 through January 1, 1992, monthly
payments of interest only of $499,273 are due from February 1, 1992 through December 1,
1995, the unpaid balance of principal and interest of approximately $74,891,013 is due
on January 1, 1996. Additional interest payable upon maturity to provide an 11% return to
lender and 60% of the greater of net sales or refinancing proceeds or appraised value,
as defined (the note has been modified; see note 4(b)). . . . . . . . . . . . . . . . . . . . . . 83,629,438 80,883,434

9.0% mortgage note; secured by the 9701 Wilshire Building; principal and interest payments of
$136,850 were due monthly through December 1, 1993; the unpaid balance of principal and interest
of approximately $16,431,634 was originally due on January 1, 1994; the maturity date has been
extended to August 1, 1994; monthly principal and interest payments of $136,850 are due monthly
through August 1, 1994 when the unpaid principal and interest balance is due. . . . . . . . . . . 16,475,465 16,627,367

10.375% Mortgage note; secured by the California Plaza Building; interest only payments of $501,458
were due monthly through January 1, 1992; principal and interest payments of $525,136 were due
monthly from February 1, 1992 through December 1, 1996; the unpaid balance of principal and
interest of approximately $56,673,315 was due on January 1, 1997; modified in December 1993
to require interest only payments of $384,505 (8.00%) due monthly effective February 1993
through January 1, 2000; interest accrues at 10.375% through January 1, 2000 when the
unpaid principal and interest is due; see note 4(b)(vi) . . . . . . . . . . . . . . . . . . . . . . 59,349,163 58,604,030
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

1993 1992
------------ ------------

7.64% mortgage note; secured by Dunwoody Crossing (Phase II), formerly Post Crest Apartments;
principal and interest payments of $73,316 are due monthly from November 1, 1992 through
October 31, 1997; the unpaid balance of principal and interest of approximately $9,004,930
is due on November 1, 1997 (see note 4(b)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,652,454 9,789,077

9.75% mortgage note; secured by Dunwoody Crossing (Phase I and III), formerly Post Crossing
and Post Terrace Apartments; principal and interest payments of $180,425 are due monthly from
May 1991 through September 1994; the unpaid balance of principal and interest of
approximately $20,692,324 is due on October 1, 1994 . . . . . . . . . . . . . . . . . . . . . . . . 20,643,499 20,788,108

9.53% mortgage note; secured by the Springbrook Shopping Center; monthly payments of interest
only are required through May 1, 1995; principal and interest payments of $92,735 are due
monthly from June 1, 1995 through April 1, 1997; the unpaid balance of principal and interest
of approximately $10,951,198 is due on May 1, 1997. . . . . . . . . . . . . . . . . . . . . . . . . 11,000,000 11,000,000
------------ ------------

Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341,056,550 338,530,485
Less current portion of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,244,992 32,940,514
------------ ------------

Total long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $237,811,558 305,589,971
============ ============

</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Included in the above total long-term debt is $10,411,883 and $6,868,462
for 1993 and 1992, respectively, which represents mortgage interest accrued
but not currently payable pursuant to the terms of the notes.

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

1994. . . . . . . . $103,244,992
1995. . . . . . . . 23,874,541
1996. . . . . . . . 87,025,453
1997. . . . . . . . 11,352,285
1998. . . . . . . . 504,393
============

(b) Debt Modifications

(i) Park

In March 1988, the mortgage note secured by Park at Countryside Apartments
located in Daytona Beach, Florida was modified to reduce the monthly
installments payable and in November 1991, the mortgage note was further
modified effective January 1, 1990 through December 31, 1995. The new
agreement
provides for minimum monthly interest payments of $18,033 (7.0% per annum)
through 1991, $19,375 (7.5% per annum) for 1992, $20,667 (8.0% per annum) for
1993, $21,958 (8.5% per annum) for 1994 and $23,250 (9.0% per annum) for 1995.
The contract rate on the loan will remain at 11.25% per annum. The deferrals,
along with interest thereon, and the outstanding principal balance were to
become due and payable at maturity on January 1, 1996.

In October 1993, the joint venture ceased making the required debt service
payments, and commenced discussions with the lender regarding an additional
modification of the loan. However, the venture was unable to secure an
additional modification of the loan. Therefore, as of the date of this
report, the loan is in default and the lender has initiated procedures to
obtain title to the property.

(ii) 260 Franklin

In December 1991, the affiliated joint venture reached an agreement with
the lender to modify the terms of the long-term mortgage note secured by the
260 Franklin Street Building. During 1991, the affiliated joint venture made
monthly payments of principal and interest, in the amount of $714,375, which
reduced the outstanding balance to $74,891,013 as of April 30, 1991. The
modified terms of the mortgage note provide for payments made relating
to 1991, which were paid through April 1991, to be amortized based upon an
accrued interest rate of 6%. Beginning May 1991, the modified mortgage note
provides for monthly payments of interest only based upon the then outstanding
balance at a rate of 6% per annum through January 1992 and 8% per annum
thereafter. Upon the scheduled or accelerated maturity, or prepayment of the
mortgage loan, the affiliated joint venture shall be obligated to pay an
amount sufficient to provide the lender with an 11% per annum yield on the
mortgage note from January 1, 1991 through the date of maturity or prepayment.
In addition, upon maturity or prepayment, the affiliated joint venture is
obligated to pay to the lender a residual interest amount equal to 60% of the

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

highest amount, if any, of (i) net sales proceeds, (ii) net refinancing
proceeds, or (iii) net appraisal value, as defined. The affiliated joint
venture is required to (i) escrow excess cash flow from operations, beginning
in 1991, to cover future cash flow deficits (ii) make an initial contribution
to the escrow account of $250,000, of which the Partnership's share was
$175,000, and (iii) make annual escrow contributions through January 1995, of
$150,000, of which the Partnership's share is $105,000. The escrow account
is to be used to cover the costs of capital and tenant improvement and lease
inducements which are the primary components of the anticipated operating
deficits noted above ($726,983 as of December 31, 1993), as defined, with the
balance, if any, of such escrowed funds available at the scheduled or
accelerated maturity to be used for the payment of principal and interest due
to the lender as described above.

(iii) 160 Spear Street Building

The Partnership reached an agreement, effective February 10, 1992, with
the first mortgage lender to modify the mortgage note secured by the 160 Spear
Street investment property, which was scheduled to mature on December 10, 1992.
Under the terms of the agreement, the modified first mortgage note of
approximately $33,750,000 and the second mortgage note of $5,435,000 require
monthly debt service (reduced to interest only payments) of approximately
$279,000 (9.3% per annum) and $58,000 (12.55% per annum), respectively,
through February 10, 1995. Beginning March 10, 1995, monthly payments of
principal and interest of approximately $337,000 are required through maturity
of the loan, which is extended to February 10, 1999. Additionally, the
Partnership is required to escrow net cash flow (as defined) thirty days
following each quarter end which can be withdrawn for expenditures approved by
the lender, by the lender upon default of the note or by the Partnership on
February 10, 1997 when the escrow agreement terminates. As of December 31,
1993, $62,000 has been placed in, and withdrawn for expenditures approved by
the lender, from the escrow account.

(iv) RiverEdge Place Building

On June 23, 1992, in connection with the buy-out of the over-lease (see
note 2(b)), the Partnership remitted cash and U.S. Government securities valued
at $9,325,000 to the lender reducing the balance of the mortgage note secured
by the RiverEdge Place Building (formerly the First American Bank Building) to
approximately $18,166,000. The Partnership ceased making its monthly debt
service payments effective July 1, 1992. The Partnership is currently
negotiating with the lender to restructure the mortgage note in order to
reduce operating deficits anticipated as a result of the over-lease buy-out.
If the Partnership's negotiations for mortgage note restructuring are not
successful, the Partnership would likely decide, based upon current market
conditions and other considerations relating to the property and the
Partnership's portfolio, not to commit significant additional amounts to the
property. This would result in the Partnership no longer having an ownership
interest in the property and would result in the recognition of a gain for
financial statement and Federal income tax purposes without any corresponding
distributable proceeds. As of December 31, 1993, the amount of such principal
and interest payments in arrears is approximately $5,451,000.

Therefore, the loan has been classified at December 31, 1993 as a current
liability in the accompanying consolidated financial statements.

(v) Villages Northeast

Effective October 6, 1992, the Villages Northeast joint venture, through
a joint venture ("Post Associates") refinanced the first mortgage loan secured
by the Dunwoody (Phase II) Apartments which had a principal balance at the date
of refinancing of approximately $9,467,000.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The new first mortgage loan of $9,800,000 (from an institutional lender)
bears interest of 7.64% per annum, is collateralized by the property and
requires monthly payments of principal and interest of $73,316 beginning
November 1, 1992 and continuing through November 1, 1997, when the remaining
balance is payable.

(vi) Cal Plaza

Effective March 1, 1993, the joint venture ceased making the scheduled
debt service payments on the mortgage loan secured by the property which was
scheduled to mature on January 1, 1997. Subsequently, the Partnership made
partial debt service payments based on net cash flow of the property through
December 1993 when an agreement was reached with the lender to modify the loan.
The accrual rate of the modified loan remains at 10.375% per annum while the
pay rate is reduced to 8% per annum. The loan modification reduced the monthly
payments to $384,505, effective with the March 1, 1993 payment. The maturity
date is extended, as a result of this modification, to January 1, 2000 when
the unpaid balance of principal and interest is due. Additionally, the joint
venture entered into a cash management agreement which requires monthly net
cash flow to be escrowed (as defined). The excess of the monthly cash flow
paid from March 1993 to December 1993 above the 8% interest pay rate was put
into escrow for the future payment of insurance premiums, real estate taxes,
and to fund a reserve account to be used to cover future costs, including
tenant improvements, lease commissions, and capital improvements, approved by
the lender. The joint venture also was required to fund $500,000 into the
reserve account.

In February 1991, the Partnership entered into an agreement with the
seller of Woodland Hills Apartments. Under the terms of this agreement, the
seller canceled its wrap-around mortgage note receivable from the Partnership
and assumed management of the property (see notes 2(f) and 6). The obligations
to make payments on the two underlying mortgage loans have been assumed by the
Partnership. The mortgage note receivable wrapped around and was subordinate
to a first and a second mortgage loan in the principal amounts of $6,800,000
and $1,256,667, respectively. The first mortgage loan bears interest at the
rate of 12.8% per annum and requires monthly payments of interest only in
arrears through June 1, 1994 when the entire principal balance and any accrued
interest will be due and payable. The second mortgage loan bears interest at
11.7% per annum and requires monthly payments of interest only in arrears until
June 1, 1994 when the entire principal balance and any accrued interest will be
due and payable. The Partnership plans to refinance these notes when they
mature, although there is no assurance the Partnership will be able to
obtain such financing. The loans have been classified as current liabilities
at December 31, 1993 in the accompanying consolidated financial statements.
As a result of the seller's cancellation of the wrap-around mortgage note, an
extraordinary gain totalling $1,014,538 was recognized in the 1991 consolidated
financial statements.

(5) PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement, net profits and losses
of the Partnership from operations are allocated 96% to the Limited Partners
and 4% to the General Partners. Profits from the sale or other dispositions
of investment properties will be allocated first to the General Partners in
an amount equal to the greater of the General Partners' share of cash
distributions from the proceeds of any such sale or other dispositions (as
described below) or 1% of the total profits from any such sales or other
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

dispositions, plus an amount which will reduce deficits (if any) in the
General Partners' capital accounts to a level consistent with the gain
anticipated to be realized from the sale of investment properties. Losses
from the sale or other disposition of investment properties will be allocated
1% to the General Partners. The remaining sale or other disposition profit
and losses will be allocated to the Limited Partners.

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

The Partnership Agreement provides that subject to certain conditions,
the General Partners shall receive as a distribution from the sale of a real
property by the Partnership up to 3% of the selling price, and that the
remaining proceeds (net after expenses and retained working capital) be
distributed 85% to the Limited Partners and 15% to the General Partners.
However, prior to such distribution being made, the Limited Partners are
entitled to receive 99% and the General Partners l% of net sale or refinancing
proceeds until the Limited Partners (i) have received cash
distributions of "sale proceeds" or "refinancing proceeds" in an amount equal
to the Limited Partners' aggregate initial capital investment in the
Partnership and (ii) have received cumulative cash distributions from the
Partnership's operations which, when combined with "sale proceeds" or
"refinancing proceeds" previously distributed, equal a 6% annual return on
the Limited Partners' average capital investment for each year (their initial
capital investment as reduced by "sale proceeds" or "refinancing proceeds"
previously distributed) commencing with the first fiscal quarter of 1990.
Accordingly, up to $561,000 of sale proceeds from Erie-McClurg Parking
Facility for the General Partners has been deferred (see note 7).

(6) MANAGEMENT AGREEMENTS

The Partnership has entered into agreements for the operation and
management of the properties. Such agreements are summarized as follows:

At acquisition, management of the 9701 Wilshire Building and the
Springbrook Shopping Center was assumed by affiliates of the Corporate General
Partner.

For a fee computed as a percentage of rental income, an affiliate of the
Corporate General Partner assumed management of the 21900 Burbank Boulevard
Building, the 260 Franklin Street Building, the Woodland Hills Apartments,
the Villa Solana Apartments, the RiverEdge Place Building and Village
Northeast Apartments in January 1988, May 1988, September 1989, December 1989,
September 1992 and August 1993, respectively.

The Partnership has also entered into agreements with certain joint
venture partners or affiliates of the joint venture partners for the operation
and management of properties owned by Eastridge, 160 Spear, Park, Boatmen's,
Cal Plaza and VNE Partners. Certain of these agreements have been terminated.
Reference is made to note 3(b). Such agreements generally provided for initial
terms during which the managers or their affiliates pay all expenses of the
properties and retain the excess, if any, of the cash revenues from operations
over costs and expenses, as defined (including debt service requirements), as
a management fee. Upon termination of the agreements, the properties are
expected to be managed by an affiliate of the Corporate General Partner.

In February 1991, management of the Woodland Hills Apartments was
reassumed by the seller of this property (see notes 2(f) and 4(c)).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(7) SALE OF INVESTMENT PROPERTIES

(a) Erie-McClurg Parking Facility

On September 25, 1992, the Partnership, through Erie-McClurg Associates,
sold the Erie-McClurg Parking Facility located in Chicago, Illinois. The
sale price was $18,700,000 (before selling costs and prorations), all of
which was paid in cash at closing. A portion of the cash proceeds
(approximately $7,612,000) was used to retire the first mortgage note secured
by the property. An additional $6,335,000 of the proceeds was used to retire
the Partnership's unsecured, non-revolving line of credit.

Concurrently, with the sale of the Erie-McClurg Parking Facility, the
Partnership entered into an agreement with the unaffiliated manager of the
parking facility to induce the manager to re-write the existing long-term
management agreement at less favorable terms to the manager (see note 2(e)).
This agreement guarantees the manager 100% of
the compensation which would have been earned under the agreement prior to
the sale in years one through five and 50% of any potential difference
between the management fee under the agreement prior to the sale and the re-
negotiated agreement with the purchaser (as defined) in years six through
eighteen.

In connection with this agreement, at closing the Partnership paid the
unaffiliated manager a partial settlement of $400,000 and has estimated the
remaining contingent liability to be $360,000. This contingent liability is
recorded as a long-term liability in the accompanying consolidated financial
statements.

The sale of the property has resulted in the Partnership's recognition of
a gain of $506,446 for financial reporting purposes and $1,296,367 for Federal
income tax purposes in 1992.

(b) Owings Mills

On June 30, 1993, JMB/Owings sold its partnership interest in Owings Mills
Limited Partnership ("OMLP"), which owns an allocated portion of the land,
building and related improvements of the Owings Mills Mall located in Owings
Mills, Maryland. The purchaser, O.M. Investment II Limited Partnership, is
an affiliate of the Partnership's joint venture partner in OMLP.

The sale price of the interest in OMLP was $9,416,000, all of which was
received in the form of a promissory note. In addition, the Partnership and
Carlyle-XVI were relieved of their allocated portion of the debt secured by
the property. The promissory note (which is secured by a guaranty from an
affiliate of the purchaser and of the Partnership's joint venture partner in
OMLP) bears interest at a rate of 7% per annum unless a certain specified
event occurs, in which event the rate would increase to 8% per annum for the
remainder of the term of the note. The promissory note requires principal
and interest payments of approximately $109,000 per month with the remaining
principal balance of approximately $5,500,000 due and payable on June 30, 1998.
The monthly installment of principal and interest would be adjusted for the
increase in the interest rate if applicable. Early prepayment of the
promissory note may be required under certain circumstances, including the
sale or further encumbrance of Owings Mills Mall.

The net cash proceeds and gain from sale of the interest in OMLP was
allocated 50% to the Partnership and 50% to Carlyle-XVI in accordance to the
JMB/Owings Mills Associates partnership agreement.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For financial reporting purposes, JMB/Owings recognized, on the date of
sale, gain of $5,254,855, of which the Partnership's share is $2,627,427,
attributable to JMB/Owings being relieved of its obligations under the OMLP
partnership agreement pursuant to the terms of the sale agreement. The
Partnership has adopted the cost recovery method until such time as the
purchaser's initial investment is sufficient in order to recognize gain under
Statement of Financial Accounting Standards No. #66. At December 31, 1993,
the total deferred gain of JMB/Owings including principal and interest payments
of $546,639 received through December 31, 1993 is $9,687,441 of which the
Partnership's share is $4,843,720.

During 1991, the Partnership sold, 62% of its general partnership
interest in Harbor, to an affiliate of the Harbor unaffiliated joint venture
partners. The Partnership owned an 80% interest in Harbor prior to sale.
Harbor owned a 55% general partnership interest in a joint venture which owned
the leasehold interest on the land and owned the building and related
improvements of the 300 East Lombard office building located in
Baltimore, Maryland. The sale price for 62% of the Partnership's general
partnership interest was $383,244, all of which was received in cash
at closing. As of the date of the initial sale, the Partnership had a
deficit capital account balance in the Harbor venture resulting from losses
and distributions from the joint venture in an amount in excess of its
original cash investment in the joint venture. As a result of the
Partnership's initial sale of 62% of its interest and its simultaneous
conversion to a limited partner, the Partnership eliminated its remaining
deficit capital balance and recognized a total gain of $9,041,533 in 1991
for financial reporting purposes. In conjunction with the sale, the
Partnership established a put-call option with the buyer on the Partnership's
remaining interest in Harbor. On January 19, 1993, the Partnership sold the
remaining 38% of its limited partnership interest in Harbor based on the
buyer's exercise of the put-call option. The sale price for the Partnership's
remaining interest was $229,140, plus $24,294 of interest accrued at 10% per
annum from September 30, 1991 through the closing date, all of which was
received in cash at closing. For financial reporting purposes in 1993, the
Partnership recognized a gain on sale of the remaining interest of $229,140,
which is included in gain on sale of interests in unconsolidated ventures in
the accompanying financial statements.

(8) NOTES RECEIVABLE

In 1987 and 1988, the Partnership advanced funds to pay for certain
deficits at the 21900 Burbank Boulevard Building which were the obligation of
an affiliate of the seller. Such advances, including unpaid interest, were
approximately $2,004,000 as of the date of this report. The Partnership
received demand notes from the seller which are personally guaranteed by
certain of its principals. The seller had been paying interest on the note
at a rate equal to 3% over the prime rate. In February 1991, the seller
ceased paying monthly interest required under terms of the note. The
Partnership has put the seller in default and effective October 31, 1991, the
note began accruing interest at the default rate. The Partnership is
pursuing its legal remedies against the seller and certain of its principals.
The collectibility of the amounts discussed above is uncertain. For financial
reporting purposes, the Partnership ceased accruing interest on the note
receivable as of February 1991. As a matter of prudent accounting policy, a
reserve for uncollectibility for the entire amount recorded for financial
reporting purposes ($1,466,051) has been reflected in the accompanying
consolidated financial statements.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(9) LEASES

(a) As Property Lessor

At December 31, 1993, the Partnership and its consolidated ventures'
principal assets are six office buildings, four apartment complexes and two
shopping centers. The Partnership has determined that all leases relating to
these properties are properly classified as operating leases; therefore,
rental income is reported when earned and the cost of each of the properties,
excluding cost of land, is depreciated over the estimated useful lives. Leases
with commercial tenants range in term from one to 30 years and provide for
fixed minimum rent and partial to full reimbursement of operating costs. In
addition, substantially all leases with shopping center tenants provide for
additional rent based upon percentages of tenant sales volume. With respect
to the Partnership's shopping center investments, a substantial portion of
the ability of retail tenants to honor their leases is dependent upon the
retail economic sector.

Apartment complex leases in effect at December 31, 1993 are generally for
a term of one year or less and provide for annual rents of approximately
$11,925,695.

Cost and accumulated depreciation of the leased assets are summarized as
follows at December 31, 1993:

Office buildings:
Cost. . . . . . . . . . . . . . . . . $278,922,521
Accumulated depreciation. . . . . . . 72,739,876
------------
206,182,645
------------
Shopping centers:
Cost. . . . . . . . . . . . . . . . . 46,856,107
Accumulated depreciation. . . . . . . 13,230,510
------------
33,625,597
------------
Apartment complexes:
Cost. . . . . . . . . . . . . . . . . 87,360,949
Accumulated depreciation. . . . . . . 22,026,935
------------
65,334,014
------------
Total . . . . . . . . . . . . $305,142,256
============

1994. . . . . . . . . . . $ 35,330,429
1995. . . . . . . . . . . 28,530,858
1996. . . . . . . . . . . 18,689,562
1997. . . . . . . . . . . 13,786,253
1998. . . . . . . . . . . 11,363,918
Thereafter. . . . . . . . 31,075,046
------------
Total . . . . . . . . $138,776,066
============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(b) As Property Lessee

The following lease agreement has been determined to be an operating
lease:

The Partnership owns through 160 Spear, a leasehold interest which
expires in 2033 in the land underlying the 160 Spear Street Building. The
ground lease provides that through the end of the lease term and each of the
two ten-year renewal option periods, the rental payments will increase
annually to equal the lesser of (i) 105-1/2% of $252,000, compounded annually,
or (ii) $252,000 increased by the increase in a price index from August 1,
1987 through the commencement date of each subsequent lease year.

Future minimum rental commitments under the lease are as follows:

1994. . . . . . . . . . . $ 374,724
1995. . . . . . . . . . . 374,724
1996. . . . . . . . . . . 374,724
1997. . . . . . . . . . . 374,724
1998. . . . . . . . . . . 374,724
Thereafter. . . . . . . . 13,115,340
-----------

Total. . . . . . . . $14,988,960
===========

(10) NOTES PAYABLE

Pursuant to the terms of a tenant lease at Cal Plaza, promissory notes
(for certain sub-leasing costs) aggregating $707,009 have been issued by the
Cal Plaza joint venture to a tenant of the investment property. Commencing
on July 1, 1990 and on each July 1st thereafter until the notes are paid in
full, one tenth of the original principal balance together with 12% annual
interest on the outstanding balance of the notes shall be payable. As the
result of a settlement agreement between the Partnership and its joint
venture partner, the joint venture partner is obligated to pay 40% of the
amounts owed under the promissory notes and the Partnership is obligated to
pay 60% of such amounts (see note 3(b)(iii)). During July 1991, principal of
$70,701 and interest of $71,724 was paid to the tenant from cash flow
generated from operations of the property. During July 1992, principal of
$70,701 and interest of $68,788 was paid to the tenant from cash flow
generated from operations of the property. During July 1993, principal of
$70,701 and interest of $60,304 was paid to the tenant from cash flow
generated from operations of the property. As of December 31, 1993, the
outstanding balance of the notes was $431,836.

(11) TRANSACTIONS WITH AFFILIATES

The Corporate General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees of
the Corporate General Partner and its affiliates relating to the
administration of the Partnership and the operation of the Partnership's
properties.

Fees, commissions and other expenses required to be paid by the
Partnership (or in the case of property management and leasing fees, by the
Partnership's consolidated ventures) to the General Partners and their
affiliates as of December 31, 1993 and for the years ended December 31, 1993,
1992 and 1991 are as follows:
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

<CAPTION>
UNPAID AT
DECEMBER 31,
1993 1992 1991 1993
---------- --------- --------- --------------
<S> <C> <C> <C> <C>

Disbursement agent fees. . . . . . . . . . . . . . . . . . $ -- -- 22,078 --
Property management and leasing fees . . . . . . . . . . . 900,177 852,116 917,975 1,748,717
Insurance commissions. . . . . . . . . . . . . . . . . . . 63,740 62,616 182,924 --
Management fees to corporate general partner . . . . . . . -- 15,407 130,958 724,121
Reimbursement (at cost) for accounting services. . . . . . 154,763 157,732 139,724 715,933
Reimbursement (at cost) for legal services . . . . . . . . 11,702 31,220 57,109 129,922
Reimbursement (at cost) for other out-of-pocket expenses . 71,511 45,407 30,079 877
Reimbursement (at cost) for out-of-pocket salary and salary
related expenses relating to on-site and other costs
for the Partnership and its investment properties. . . . 94,637 166,426 141,030 --
---------- --------- --------- ---------

$1,296,530 1,330,924 1,621,877 3,319,570
========== ========= ========= ==========

</TABLE>
<TABLE>
<CAPTION>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

<S> <C> <
The General Partners and its affiliates have deferred payment of certain partnership management fees and
property management and leasing fees as set forth in the above table. Effective October 1, 1993, the Partnership
began paying management and leasing fees on a current basis. In addition, an affiliate of the General Partner has
deferred (through reimbursements made directly to the Partnership) $2,866,734 for the Partnership's proportionate
share of property management and leasing fees paid by affiliated joint venture partnerships or their underlying
ventures, as the case may be (these reimbursements are not reflected in the above table). These reimbursements
include the proportionate share of property management fees of two unconsolidated entities, which are not included
in the consolidated financial statements. Distributions to the General Partners of net cash flow of the Partnership
aggregating $249,571 also have been deferred. The cumulative deferred amounts (including reimbursement for
salaries and direct expenses and the proportionate reimbursements described above) aggregated $6,811,566 at
December 31, 1993. These amounts (approximately $15 per Interest) do not bear interest and are expected to be
paid in future periods. In addition, up to approximately $561,000 of sale proceeds from the sale of the Erie-McClurg
Parking Facility for the General Partners is subordinated to the satisfaction of certain conditions (see note 5).
</TABLE>
<TABLE>
(12) INVESTMENT IN UNCONSOLIDATED VENTURES

Summary financial information for South Tower, JMB/125, JMB/Piper, JMB/Piper II, JMB/900 and
JMB/Owings, for the years ended 1993 and 1992 follows:
<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Current assets . . . . . . . . . . . . . . . . $ 26,856,872 18,302,533
Current liabilities (including
$296,919,801 of debt in default
at December 31, 1993, see note 3(c)). . . . . (605,831,086) (323,152,586)
------------ ------------
Working capital (deficit). . . . . . . . . (578,974,214) (304,850,053)
------------ ------------
Other assets . . . . . . . . . . . . . . . . . 35,572,682 39,613,747
Deferred expenses. . . . . . . . . . . . . . . 36,260,962 40,624,396
Investment property, net . . . . . . . . . . . 578,380,706 749,340,483
Other liabilities. . . . . . . . . . . . . . . (26,255,281) (12,609,787)
Long-term debt . . . . . . . . . . . . . . . . (104,965,875) (478,888,688)
Ventures partners' equity. . . . . . . . . . . 39,401,388 (23,885,837)
------------ ------------
Partnership's capital (deficit). . . . . . $(20,579,632) 9,344,261
============ ============
Represented by:
Invested capital . . . . . . . . . . . . . . $183,054,556 182,287,566
Cumulative distributions . . . . . . . . . . (50,471,893) (48,179,264)
Cumulative losses. . . . . . . . . . . . . . (153,162,295) (124,764,041)
------------ ------------
$(20,579,632) 9,344,261
============ ============
Total income . . . . . . . . . . . . . . . . . $166,451,322 152,565,623
------------ ------------
Expenses applicable to operating loss. . . . . 265,781,606 230,900,798
------------ ------------
Operating loss . . . . . . . . . . . . . . . . 99,330,284 78,335,175
------------ ------------
Gain on sale of investment property,
see note 7 . . . . . . . . . . . . . . . . . 5,254,855 --
------------ ------------
Net loss, see note 3(c). . . . . . . . . . . . $ 94,075,429 78,335,175
============ ============
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

<S> <C> <
The total income, expenses applicable to operating loss and net loss for the above ventures (including Harbor)
for the year ended December 31, 1991 were $160,047,704, $116,869,714 and $43,177,900, respectively.

(13) SUBSEQUENT EVENT

The mortgage note secured by the Villa Solana Apartments matured on November 1, 1993. Villa Solana
obtained extensions of this note to August 1, 1994, however, subsequently, on March 23, 1994, Villa Solana sold
the investment property. The sales price was $16,600,000 before closing costs, which resulted in net sales proceeds
of approximately $2,585,000 to the venture after the payment of the outstanding debt. The Partnership's share of
gain upon sale is approximately $790,000 for financial reporting purposes, and approximately $4,360,000 for income
tax purposes in 1994.
</TABLE>
<TABLE>
SCHEDULE X

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

SUPPLEMENTARY INCOME STATEMENT INFORMATION

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Depreciation . . . . . . . . $12,370,095 13,296,137 14,143,499

Repairs and maintenance. . . 4,590,123 4,113,668 3,797,750

Real estate taxes. . . . . . 5,397,832 5,648,123 6,534,407

Amortization of
deferred expenses . . . . . 1,223,341 1,322,442 1,298,384
=========== ============ ===========
</TABLE>

<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
COSTS
CAPITALIZED
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) TO ACQUISITION AT CLOSE OF PERIOD (B)
---------------------- -------------- ----------------------------------------------
LAND AND BUILDINGS LAND AND LAND AND BUILDINGS
LEASEHOLD AND BUILDINGS AND LEASEHOLD AND
DESCRIPTION ENCUMBRANCE INTERESTS IMPROVEMENTS IMPROVEMENTS INTEREST IMPROVEMENTS TOTAL
- - ----------- ------------ ----------- ------------ ------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
APARTMENT COMPLEXES:
Villa Solana
Laguna Hills,
California
(D). . . . . . $13,481,503 4,574,838 16,960,895 (814,043)(G) 4,327,032 16,394,658 20,721,690
Woodland Hills
DeKalb County
(Atlanta),
Georgia.. . . . 8,056,667 1,617,433 10,425,264 92,549 1,617,433 10,517,813 12,135,246
Park at Country-
side
Port Orange
(Daytona Beach),
Florida (D).. . 3,100,000 393,900 2,389,914 39,318 393,900 2,429,232 2,823,132
Dunwoody Crossing
(Phase I,
I and III)
DeKalb County
(Atlanta),
Georgia (D) (H) 30,295,953 4,827,220 46,139,432 714,229 4,827,220 46,853,661 51,680,881
OFFICE BUILDINGS:
First American
Bank Building
Fulton County
(Atlanta),
Georgia. . . . 18,166,294 3,185,826 28,389,541 (5,964,054)(F) 2,397,888 23,213,425 25,611,313
160 Spear Street
San Francisco,
California(C)(D) 39,184,895 -- 47,552,813 2,940,663 -- 50,493,476 50,493,476
21900 Burbank
Boulevard
Los Angeles
(Woodland
Hills),
California . . 11,958,680 4,072,552 11,797,054 (886,650)(F) 3,562,658 11,420,298 14,982,956
260 Franklin
Street
Boston,
Massachusetts
(D). . . . . . 83,629,438 8,169,209 97,607,593 (14,001,246)(E) 6,662,200 85,113,356 91,775,556

</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
INCOME
ACCUMULATED DATE OF DATE STATEMENT REAL ESTATE
DEPRECIATION(J) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
APARTMENT COMPLEXES:
Villa Solana
Laguna Hills,
California
(D). . . . . . . . . $ 4,852,785 1984 08/30/85 5-30 years 205,144
Woodland Hills
DeKalb County
(Atlanta),
Georgia. . . . . . . 3,075,758 1984 09/30/85 5-30 years 167,377
Park at Countryside
Port Orange
(Daytona Beach),
Florida (D). . . . . 772,156 1983 11/27/85 5-30 years 66,321
Dunwoody Crossings
(Phase I, II
and III)
DeKalb County
(Atlanta),
Georgia (D) (H). . . 13,326,236 1981-1983 09/18/86 5-30 years 667,750
OFFICE BUILDINGS:
First American Bank
Building
Fulton County
(Atlanta),
Georgia (F). . . . . 7,816,494 1984 06/10/85 5-30 years 334,550
160 Spear Street
San Francisco,
California (C)(D). . 14,313,124 1985 11/27/85 5-30 years 286,694
21900 Burbank
Boulevard
Los Angeles
(Woodland
Hills), California . 3,184,770 1985 11/29/85 5-30 years 187,139
260 Franklin Street
Boston,
Massachusetts (D). . 23,539,352 1985 05/21/86 5-30 years 1,768,728

</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
<CAPTION>
COSTS
CAPITALIZED
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) TO ACQUISITION AT CLOSE OF PERIOD (B)
-------------------------- -------------- ------------------------------------------
LAND AND BUILDINGS LAND AND LAND AND BUILDINGS
LEASEHOLD AND BUILDINGS AND LEASEHOLD AND
ENCUMBRANCE INTERESTS IMPROVEMENTS IMPROVEMENTS INTEREST IMPROVEMENTS TOTAL
------------ ----------- ------------ ------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>

9701 Wilshire Building
Beverly Hills,
California . . . . . . 16,475,465 2,794,977 28,447,966 (7,944,295)(F) 1,601,879 21,696,769 23,298,648
California Plaza
Walnut Creek,
California (D) . . . . 59,349,163 6,010,604 62,029,222 4,720,746 (G) 5,949,997 66,810,575 72,760,572
SHOPPING CENTERS:
Eastridge Mall
Casper, Wyoming
(D). . . . . . . . . . 23,608,492 4,817,201 33,876,882 (5,527,293)(F) 3,884,668 29,282,122 33,166,790
Springbrook Shopping
Center
Bloomingdale,
Illinois . . . . . . . 11,000,000 3,164,708 17,913,485 (7,388,876)(G) 1,884,224 11,805,093 13,689,317
------------ ---------- ----------- ------------ ---------- ----------- -----------
Total. . . . . . . .$318,306,550 43,628,468 403,530,061 (34,018,952) 37,109,099 376,030,478 413,139,577
============ ========== =========== =========== ========== =========== ===========
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV SCHEDULE XI - CONTINUED
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993

<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
INCOME 1993
ACCUMULATED DATE OF DATE STATEMENT REAL ESTATE
DEPRECIATION(J) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
9701 Wilshire Building
Beverly Hills,
California . . . . . . . 7,058,980 1973 06/17/86 5-30 years 370,158
California Plaza
Walnut Creek,
California (D) . . . . . 16,827,156 1985 06/30/86 5-30 years 649,830
SHOPPING CENTERS:
Eastridge Mall
Casper, Wyoming
(D)(F) . . . . . . . . . 10,536,029 1983 09/10/85 5-30 years 249,634
Springbrook Shopping Center
Bloomingdale,
Illinois . . . . . . . . 2,694,481 1980 07/05/89 5-30 years 444,507
----------- ---------

Total. . . . . . . . . 107,997,321 5,397,832
=========== =========
<FN>

Notes:
(A) The initial cost to the Partnership represents the original purchase price of
the properties, including amounts incurred subsequent to acquisition which were contemplated
at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income
tax purposes was $424,628,143.
(C) Property operated under ground lease; see Note 9(b).
(D) Properties owned and operated by joint venture; see Note 3(b).
(E) In 1990, the Partnership recorded a provision for value impairment. The portion allocated to real estate
totalled $17,120,734; see Note 1.
(F) In 1992, the Partnership recorded provisions for value impairment. The portion allocated to real estate
totalled totalling $25,994,317; see Note 1.
(G) In 1993, the Partnership recorded provisions for value impairment. The portion allocated to real estate
totalled $8,972,831; see Note 1.
(H) Formerly known as Post Crest, Post Terrace and Post Crossing Apartments.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV SCHEDULE XI - CONTINU
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993

(I) Reconciliation of real estate owned as of December 31, 1993, 1992 and 1991:

<CAPTION>
1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Balance at beginning of period. . . . . . . . . . . . $421,273,790 464,553,348 463,365,680
Additions during period . . . . . . . . . . . . . . . 838,618 1,728,484 1,493,457
Purchase price adjustments. . . . . . . . . . . . . . -- -- (305,789)
Provisions for value impairment (H) . . . . . . . . . (8,972,831) (25,994,317) --
Sale during period. . . . . . . . . . . . . . . . . . -- (19,013,725) --
------------ ----------- -----------

Balance at end of period. . . . . . . . . . . . . . . $413,139,577 421,273,790 464,553,348
============ =========== ===========

(J) Reconciliation of accumulated depreciation:

Balance at beginning of period. . . . . . . . . . . . $ 95,627,226 83,918,595 69,775,096
Depreciation expense. . . . . . . . . . . . . . . . . 12,370,095 13,296,137 14,143,499
Sale during period. . . . . . . . . . . . . . . . . . -- (1,587,506) --
------------ ----------- -----------

Balance at end of period. . . . . . . . . . . . . . . $107,997,321 95,627,226 83,918,595
============ =========== ===========

</TABLE>

<TABLE>

INDEPENDENT AUDITORS' REPORT

<CAPTION>
The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV:
<S> <C> <C>
We have audited the combined financial statements of Certain Unconsolidated Joint Ventures of Carlyle Real
Estate Limited Partnership - XV (Note 1) as listed in the accompanying index. In connection with our audits of the
combined financial statements, we also have audited the financial statement schedules as listed in the accompanying
index. These combined financial statements and financial statement schedules are the responsibility of the General
Partners of the Partnership. Our responsibility is to express an opinion on these combined financial statements and
financial statement schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by the General Partners of the Partnership, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the
combined financial position of Certain Unconsolidated Joint Ventures of Carlyle Real Estate Limited Partnership -
XV at December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the years
in the three-year period ended December 31, 1993, in conformity with generally accepted accounting principles. Also
in our opinion, the related financial statement schedules, when considered in relation to the basic combined financial
statements taken as a whole, present fairly, in all material respects, the information set forth therein.

The accompanying combined financial statements and financial statement schedules have been prepared assuming
that the ventures comprising Certain Unconsolidated Joint Ventures of Carlyle Real Estate Limited Partnership - XV
will continue as going concerns. 125 Broad Building Associates (JMB/125) and its venture, 125 Broad Street
Company (125 Broad) comprise approximately 56.9%, 60.3% and 18.7% of combined assets, revenues and net loss,
respectively, in the accompanying combined financial statements as of and for the year ended December 31, 1993.
As discussed in Note 3(c)(iv) of the Partnership's notes to consolidated financial statements, incorporated by
reference in Note 2 of the combined financial statements, the property owned by 125 Broad has suffered losses and
cash flow deficits from operations and expects to incur significant cash flow deficits in the future that are required
to be funded by the unaffiliated venture partners through 1995 pursuant to the 125 Broad joint venture agreement.
In 1992, the unaffiliated joint venture partners failed to advance necessary fund to 125 Broad and, as a result, 125
Broad defaulted on its mortgage loan. JMB/125 has notified the unaffiliated joint venture partners that their failure
to advance funds to cover operating deficits constitutes a default under the 125 Broad joint venture agreement. The
125 Broad joint venture partners have been negotiating with the property's lender to restructure the mortgage loan;
however, there can be no assurances that negotiations to restructure the loan will be successful. The Partnership
believes it is unlikely that the unaffiliated joint venture partners will fulfill their funding obligations to 125 Broad
and JMB/125. As a result, it appears unlikely that 125 Broad will be able to restructure the mortgage loan. In the
event that 125 Broad is unable to restructure the mortgage loan, JMB/125 would likely decide not to commit
additional funds to 125 Broad. These circumstances raise substantial doubt about JMB/125's and 125 Broad's ability
to retain their ownership interest in the investment property and continue as going concerns. The General Partners
plans with regard to these matters are also described in Note 3(c)(iv) of the Partnership's notes to consolidated
financial statements. The accompanying combined financial statements and financial statement schedules do not
include any adjustments that might result from the outcome of this uncertainty.

Additionally, as discussed in notes 2 and 3 of notes to the combined financial statements, the mortgage loan
secured by the South Tower matures in December 1994. There can be no assurance that the South Tower venture
will be able to extend or refinance the loan. In the event the joint venture is not successful in extending or
refinancing the loan, the Partnership and its joint venture partners may be unable or unwilling to commit additional
amounts to the property. These circumstances could result in the Partnership no longer having an ownership interest
in the property. The ultimate outcome of this uncertainty cannot presently be determined. During 1993 the venture
recorded a provision for value impairment to reduce the net book value of the property to the outstanding balance
of the related non-recourse financing.
</TABLE>

KPMG PEAT MARWICK

Chicago, Illinois
March 28, 1994
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED BALANCE SHEETS

DECEMBER 31, 1993 AND 1992

ASSETS
------
<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . $ 903,777 489
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . 2,862,784 2,197,176
Interest, rents and other receivables, net of
allowance for doubtful accounts
of approximately $28,600,000 and $9,300,000
at December 31, 1993 and 1992, respectively. . . . . . . . . . . . . . . 2,967,817 4,925,667
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 874,359 704,313
------------ ------------

Total current assets . . . . . . . . . . . . . . . . . . . . . . . 7,608,737 7,827,645
------------ ------------

Investment properties, at cost (notes 1, 2 and 4)
- Schedule XI:
Land and leasehold interests . . . . . . . . . . . . . . . . . . . . 27,528,045 36,879,872
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . 600,791,977 655,708,160
------------ ------------

628,320,022 692,588,032
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . (199,333,463) (178,748,354)
------------ ------------

Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . . . . . . . . 428,986,559 513,839,678

Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,142,441 33,842,663
Accrued rents receivable, net of provision for
losses of approximately $32,600,000 at
December 31, 1993 and 1992. . . . . . . . . . . . . . . . . . . . . . . . 13,931,452 16,802,360
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 948,807 1,064,004
------------ ------------

$481,617,996 573,376,350
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
<CAPTION>
1993 1992
------------ ------------
Current liabilities:
Current portion of long-term debt (notes 2 and 3). . . . . . . . . . . . . . $447,216,935 277,860,783
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,096,281 5,670,764
Unearned rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,043,073 3,609,516
Accrued interest payable (notes 2 and 3) . . . . . . . . . . . . . . . . . . 48,180,063 19,702,140
------------ ------------

Total current liabilities. . . . . . . . . . . . . . . . . . . . . . 502,536,352 306,843,203
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,791 33,481
Advances from venture partners . . . . . . . . . . . . . . . . . . . . . . . . 14,650,326 12,054,105
Lease buyout obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,440,327 --
Long-term debt (note 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 198,477,197
------------ ------------

Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 518,669,796 517,407,986

Partners' capital accounts (note 2):
Carlyle-XV:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . 114,851,682 114,850,692
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,093,462) (30,205,402)
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . (106,352,914) (79,337,066)
------------ ------------

(23,594,694) 5,308,224
------------ ------------
Venture partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . 271,751,539 271,751,429
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79,253,018) (77,641,078)
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . (205,955,627) (143,450,211)
----------- ------------
(13,457,106) 50,660,140
------------ ------------
Total partners' capital accounts . . . . . . . . . . . . . . . . . . (37,051,800) 55,968,364
------------ ------------
Commitments and contingencies (notes 2, 3 and 4)
$481,617,996 573,376,350
============ ============
<FN>
See accompanying notes to combined financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<CAPTION>
1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 86,432,476 90,067,395 96,653,837
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443,047 464,734 1,107,752
Other income (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . 26,670,778 -- --
------------ ----------- -----------

113,546,301 90,532,129 97,761,589
------------ ----------- -----------

Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . 55,840,305 55,369,279 55,184,288
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,023,113 22,625,958 22,233,706
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . 34,521,719 36,180,789 37,152,168
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . 4,007,632 3,367,762 3,829,014
Provision for value impairment (note 1). . . . . . . . . . . . . . . . . . 67,479,871 -- 14,844,420
Loss on disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . 905,466 -- --
Provision for uncollectible rents and accrued rents receivable (note 1). . 19,289,459 41,945,558 --
------------ ----------- -----------

203,067,565 159,489,346 133,243,596
------------ ----------- -----------

Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 89,521,264 68,957,217 35,482,007
============ =========== ===========

<FN>
See accompanying notes to combined financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

<CAPTION>
VENTURE
CARLYLE-XV PARTNERS
----------- -------------
<S> <C> <C>
Balance at December 31, 1990 . . . . . . $43,348,711 126,613,957

Capital contributions. . . . . . . . . . 4,000 1,425,692
Cash distributions . . . . . . . . . . . (4,022,403) (4,763,369)
Net loss . . . . . . . . . . . . . . . . (11,762,534) (23,719,473)
----------- ------------

Balance at December 31, 1991 . . . . . . 27,567,774 99,556,807

Capital contributions. . . . . . . . . . 600 400
Cash distributions . . . . . . . . . . . (1,144,000) (1,056,000)
Net loss . . . . . . . . . . . . . . . . . (21,116,150) (47,841,067)
------------ ------------

Balance at December 31, 1992 . . . . . . . 5,308,224 50,660,140

Capital contributions. . . . . . . . . . . 990 110
Cash distributions . . . . . . . . . . . . (1,888,060) (1,611,940)
Net loss . . . . . . . . . . . . . . . . . (27,015,848) (62,505,416)
------------ ------------

Balance at December 31, 1993 .. . . . . . . $(23,594,694) (13,457,106)
============ ============
</TABLE>

See accompanying notes to combined financial statements.
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
1993 1992 1991
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(89,521,264) (68,957,217) (35,482,007)
Item not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,023,113 22,625,958 22,233,706
Amortization of deferred expenses. . . . . . . . . . . . . . . . . 4,007,632 3,367,762 3,829,014
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . 2,870,908 1,371,466 (479,400)
Loss on disposal of fixed assets . . . . . . . . . . . . . . . . . 905,466 -- --
Provision for value impairment . . . . . . . . . . . . . . . . . . 67,479,871 -- 14,844,420
Provision for uncollectible rents and accrued rents receivable . . 19,289,459 41,945,558 --
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . . . (17,331,609) (12,229,860) 288,149
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . (170,046) (101,654) 33,458
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . (574,483) 512,108 553,860
Unearned rent. . . . . . . . . . . . . . . . . . . . . . . . . . . (1,566,443) 1,560,622 1,375,080
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . 28,477,923 18,999,945 78,022
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . 9,310 -- --
Lease buyout obligations . . . . . . . . . . . . . . . . . . . . . 1,440,327 -- --
------------ ------------ -----------
Net cash provided by operating activities. . . . . . . . . . 36,340,164 9,094,688 7,274,302
------------ ------------ -----------
Cash flows from investing activities:
Net (purchases) sales of short-term investments. . . . . . . . . . (665,608) 1,327,824 --
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . 115,197 100,543 69,875
Additions to investment properties . . . . . . . . . . . . . . . . (2,913,093) (4,809,749) (2,027,620)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . (1,949,648) (2,581,514) (15,960)
----------- ------------ -----------
Net cash used in investing activities. . . . . . . . . . . . (5,413,152) (5,962,896) (1,973,705)
------------ ------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . . (29,121,045) (395,654) (347,666)
Advances from (repayments to) venture partners, net. . . . . . . . 2,596,221 (539,702) 4,056,748
Contributions to ventures. . . . . . . . . . . . . . . . . . . . . 1,100 1,000 1,429,692
Distributions to partners. . . . . . . . . . . . . . . . . . . . . (3,500,000) (2,200,000) (8,785,772)
------------ ------------ -----------
Net cash used in financing activities. . . . . . . . . . . . (30,023,724) (3,134,356) (3,646,998)
------------ ------------ -----------
Net increase (decrease) in cash and cash equivalents . . . . $ 903,288 (2,564) 1,653,599
============ ============ ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED STATEMENTS OF CASH FLOWS - CONTINUED

1993 1992 1991
------------ ------------ -----------

Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . $27,362,382 36,369,334 55,106,266
=========== ============ ===========
Non-cash investing and financing activities:
Disposals of fixed assets. . . . . . . . . . . . . . . . . . . . . $ 1,343,470 1,469,162 178,453
Write-off of related accumulated depreciation. . . . . . . . . . . (438,004) -- --
----------- ------------ -----------

Loss on disposal of fixed assets . . . . . . . . . . . . . . . . . $ 905,466 1,469,162 178,453
=========== ============ ===========

<FN>
See accompanying notes to combined financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1993, 1992 AND 1991

(1) ORGANIZATION AND BASIS OF ACCOUNTING

The accompanying combined financial statements have been prepared for the
purpose of complying with Rule 3.09 of Regulation S-X of the Securities and
Exchange Commission. They include the accounts of certain of the
unconsolidated joint ventures in which Carlyle Real Estate Limited
Partnership-XV ("Carlyle-XV") owns a direct interest. Also included are the
accounts of one of the joint venture partnerships (underlying ventures) in
which Carlyle-XV owns an indirect interest through one of the unconsolidated
joint ventures. The entities included in the combined financial statements
are as follows:
DATE
VENTURE ACQUIRED
------- --------

1. Maguire/Thomas Partners - South Tower
("South Tower") (a) 06/28/85

2. Carlyle - XV Associates, L.P. (a)
- JMB/125 Broad Building Associates, L.P. 12/31/85
("JMB/125") (a)
- 125 Broad Street Company (b)

<TABLE>
<CAPTION>
<S> <C> <C>
(a) Represents an unconsolidated venture in which Carlyle-XV owns a direct ownership interest.

(b) Represents a joint venture in which Carlyle-XV owns an indirect ownership interest through an
unconsolidated venture.

For purposes of preparing the combined financial statements, the effect of all transactions between an unconsolidated
joint venture and an underlying venture has been eliminated.

The records of the ventures are maintained on the accrual basis of accounting as adjusted for Federal income
tax reporting purposes. The accompanying combined financial statements have been prepared from such records after
making appropriate adjustments to present the ventures' accounts in accordance with generally accepted accounting
principles. Such adjustments are not recorded on the records of the ventures.

Statement of Financial Accounting Standards No. 95 requires the ventures to present a statement which classifies
receipts and payments according to whether they stem from operating, investing or financing activities. The required
information has been segregated and accumulated according to the classifications specified in the pronouncement.
In addition, the ventures record amounts held in U.S. Government obligations and other securities at cost which
approximates market. For the purposes of these statements, the ventures' policy is to consider all such amounts held
with original maturities of three months or less (none at December 31, 1993 and 1992) as cash equivalents with any
remaining amounts reflected as short-term investments.

Vacancy rates in the downtown Manhattan office market have increased over the last few years. As a result,
competition for tenants has increased which has resulted in lower effective rents. The increased vacancy in the
downtown Manhattan office market has resulted primarily from layoffs, cutbacks and consolidations by many
financial service companies which, along with related businesses, dominate the submarket. This has resulted in
uncertainty as to the ability of the joint venture partnership that owns the 125 Broad Street<PAGE>
CARLYLE REAL ESTATE L
CERTAIN UNCONSOLIDATED VENTURES

NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED

Building to recover the net carrying value of the investment property through future operations and sale. As a matter
of prudent accounting practice, a provision for value impairment of such investment property of $14,844,420 was
recorded as of December 31, 1991. Such provision was recorded to reduce the net book value of the investment
property to the then outstanding balance of the related non-recourse financing and unaffiliated venture partner loans.

Additionally, as more fully described in Note 3 (c)(iv) of Notes to the Consolidated Financial Statements of
Carlyle Real Estate Limited Partnership-XV, JMB/125 has reserved for certain receivables relating to one of the
major tenants at 125 Broad Street. In 1992, 125 Broad reserved for approximately $32,600,000 of accrued rents
receivable relating to such tenant's lease. Additionally, 125 Broad has provided for additional losses of
approximately $19,300,000 and $9,300,000 in 1993 and 1992, respectively, relating to amounts currently due from
the O&Y partners relating to such tenant's lease.

In October 1993, 125 Broad entered into an agreement with Salomon Brothers, Inc. to terminate its lease
covering approximately 236,000 square feet at the property on December 31, 1993 rather than its scheduled
termination in January 1997. In consideration for the early termination of the lease, Salomon Brothers, Inc. paid 125
Broad approximately $26,700,000, which 125 Broad in turn paid to its lender to reduce mortgage principal
outstanding under the mortgage loan. In addition, Salomon Brothers, Inc. paid JMB/125 $1,000,000 in consideration
of JMB/125's consent of the lease termination.

The mortgage note secured by Wells Fargo Center is scheduled to mature in December 1994. In view of, among
other things, current and anticipated market and leasing conditions affecting the property, including uncertainty
regarding the amount of space, if any, which IBM will renew when its lease expires in 1998, there is no assurance
that the venture will be able to refinance the note when it matures. The venture may then decide not to commit any
significant additional amounts to the property. This may result in the venture no longer having an ownership interest
in the property, and would result in a gain for financial reporting and for Federal income tax purposes with no
corresponding distributable proceeds. As a result of the uncertainty described above, the South Tower Venture, as
a matter of prudent accounting practice, recorded a provision for value impairment of $67,479,871. Such provision
made as of August 31, 1993, is recorded to reduce the net carrying value of the Wells Fargo Center to the then
outstanding balance of the related non-recourse debt.

Deferred expenses are comprised of deferred leasing costs, which are amortized using the straight-line method
over the terms of the related leases, financing costs, which are amortized over the term of the related debt, and
organization costs, which are amortized over a five-year period.

Depreciation on the investment properties has been provided over the estimated useful lives of 5 to 30 years
using the straight-line method.

All investment properties are pledged as security for the long-term debt, for which generally there is no recourse
to the ventures.

Maintenance and repair expenses are charged to operations as incurred. Significant betterments and
improvements are capitalized and depreciated over their estimated useful lives.

Although certain leases of the ventures provide for tenant occupancy during periods for which no rent is due,
the ventures accrue prorated rental income for the full period of occupancy. In addition, although certain leases
provide for step increases in rent during the lease term, the ventures recognize the total rent due on a straight-line
basis over the entire lease.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED

Statement of Financial Accounting Standards No. 107 ("SFAS 107"), "Disclosures about Fair Value of Financial
Instruments", requires entities with total assets exceeding $150 million at December 31, 1993 to disclose the SFAS
107 value of all financial assets and liabilities for which it is practicable to estimate. Value is defined in the
Statement as the amount at which the instrument could be exchanged in a current transaction between willing parties,
other than in a forced or liquidation sale. The venture believes the carrying amount of its current assets and
liabilities (excluding current portion of long-term debt) approximates SFAS 107 value due to the relatively short
maturity of these instruments. There is no quoted market value available for any of the venture's other instruments.
As the debt secured by the 125 Broad Street Building investment property has been classified as a current liability
at December 31, 1993 as a result of defaults (see note 3), and because the resolution of such defaults is uncertain,
JMB/125 considers the disclosure of the SFAS 107 value of such long-term debt to be impracticable. The remaining
debt, with a carrying balance of $198,477,197, has been calculated to have a SFAS 107 value of $201,181,435 by
discounting the scheduled loan payments to maturity. Due to restrictions on transferability and prepayment and the
inability to obtain comparable financing due to previously modified debt terms or other property specific competitive
conditions, the ventures would be unable to refinance any of these properties to obtain such calculated debt amounts
reported. The ventures have no other significant financial instruments.

Certain reclassifications have been made to the 1992 and 1991 combined financial statements to conform with
the 1993 presentation.

No provision for State or Federal income taxes has been made as the liability for such taxes is that of the venture
partners rather than the ventures.

(2) VENTURE AGREEMENTS

A description of the significant venture agreements is contained in Note 3 of Carlyle Real Estate Limited
Partnership-XV. Such note is incorporated herein by reference.

</TABLE>
<TABLE>
<CAPTION>
(3) LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1993 and 1992:

1993 1992
------------ ------------
<S> <C> <C>
13% mortgage note; secured by the
South Tower; payable in monthly
installments of principal and
interest of $2,190,000 until
December 1994 when the remaining
principal balance of $198,055,000
is due. . . . . . . . . . . . . . . . . . . . $198,477,197 198,927,464

10.125% mortgage note; secured by the
125 Broad Street Building; semi-annual
payments of interest only are required
through December 23, 1995; any outstanding
principal and unpaid interest is due on
December 27, 1995 . . . . . . . . . . . . . . 248,739,738 277,410,516
------------ ------------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED

1993 1992
------------ ------------

Total debt . . . . . . . . . . . . . 447,216,935 476,337,980
Less current portion of
long-term debt . . . . . . . . . . 447,216,935 277,860,783
------------ ------------

Total long-term debt . . . . . . . . $ -- 198,477,197
============ ============
<FN>
In June 1992, the 125 Broad Street Company defaulted on its mortgage loan secured by the 125 Broad Street
Building. Therefore, the loan has been classified at December 31, 1993 and December 31, 1992 as a current liability
in the accompanying combined financial statements. As of December 31, 1993, accrued interest relating to the 125
Broad Street note in default was $48,180,063. Reference is made to Note 3(c)(iv) of Notes to the Consolidated
Financial Statements of Carlyle Real Estate Limited Partnership-XV.
</TABLE>
Five year maturities of long-term debt are as follows:

1994 . . . . . . . . . $447,216,935
1995 . . . . . . . . . --
1996 . . . . . . . . . --
1997 . . . . . . . . . --
1998 . . . . . . . . . --
============

<TABLE>
(4) LEASES
<CAPTION>
(a) As Property Lessor
<S> <C> <C>
At December 31, 1993, the properties in the combined group consisted of two office buildings. The ventures
have determined that all leases relating to the properties are properly classified as operating leases; therefore, rental
income is reported when earned and the cost of each of the properties, excluding cost of land, is depreciated over
the estimated useful lives. Leases with commercial tenants range in term from one to 20 years and provide for fixed
minimum rent and partial to full reimbursement of operating costs.

Minimum lease payments including amounts representing executory costs (e.g., taxes, maintenance, insurance),
and any related profit in excess of specific reimbursements, to be received in the future under the above operating
commercial lease agreements, are as follows:
</TABLE>
1994 . . . . . . . . . . . $ 56,853,468
1995 . . . . . . . . . . . 57,634,891
1996 . . . . . . . . . . . 60,566,341
1997 . . . . . . . . . . . 57,362,986
1998 . . . . . . . . . . . 51,203,800
Thereafter . . . . . . . . 354,036,341
------------
Total. . . . . . $637,657,827
============

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

NOTES TO COMBINED FINANCIAL STATEMENTS - CONCLUDED

(b) As Property Lessee

The 125 Broad Street Building is currently subject to a ground lease which
has a term through June 2067. The future minimum rental commitments under
these leases are as follows:

1994 . . . . . . . . . $ 1,075,000
1995 . . . . . . . . . 1,075,000
1996 . . . . . . . . . 1,075,000
1997 . . . . . . . . . 1,075,000
1998 . . . . . . . . . 1,075,000
Thereafter . . . . . . 74,175,000
-----------
Total. . . . $79,550,000
===========

The terms of the ground lease grant 125 Broad Street Company a right of
first refusal to acquire the fee interest in the land in the event of any
proposed sale of the land during the term of the lease and an option to
purchase the fee interest in the land for $15,000,000 at ten-year intervals
(the next option date occurring in 1994).
SCHEDULE X

CARLYLE REAL ESTATE LIMITED PARTNERSHIP
CERTAIN UNCONSOLIDATED VENTURES

SUPPLEMENTARY INCOME STATEMENT INFORMATION

YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
----------- ---------- ----------
Depreciation . . . . . . . . $21,023,113 22,625,958 22,233,706

Repairs and maintenance. . . 5,968,953 6,291,955 6,490,736

Real estate taxes. . . . . . 14,578,166 15,863,796 14,635,888

Amortization of
deferred expenses. . . . . 4,007,632 3,367,762 3,829,014
=========== ========== ==========

<TABLE>
SCHEDULE XI
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1993

COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
UNCONSOLIDATED VENTURES(A) TO ACQUISITION AT CLOSE OF PERIOD (B)(D)
-------------------------- -------------- ------------------------------------------
LAND AND BUILDINGS LAND, LAND AND BUILDINGS
LEASEHOLD AND BUILDINGS AND LEASEHOLD AND
ENCUMBRANCE INTERESTS IMPROVEMENTS IMPROVEMENTS INTEREST IMPROVEMENTS TOTAL (E)
----------- ----------- ------------ ------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE BUILDINGS:
Wells Fargo Center
South Tower
Los Angeles,
California . . . . $198,477,197 36,009,872 291,684,146 (45,083,279)(D) 27,528,045 255,082,694 282,610,739
125 Broad Street
Building
New York, New
York . . . . . . . 248,739,738 -- 347,338,617 (1,629,334)(C) -- 345,709,283 345,709,283
------------ ---------- ----------- ---------- ---------- ----------- -----------

Total. . . . . . $447,216,935 36,009,872 639,022,763 (46,712,613) 27,528,045 600,791,977 628,320,022
============ ========== =========== ========== ========== =========== ===========

</TABLE>
<TABLE>
SCHEDULE XI - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1993

<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
INCOME 1993
ACCUMULATED DATE OF DATE STATEMENT REAL ESTA
DEPRECIATION(F) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- ---------
<S> <C> <C> <C> <C> <C>
OFFICE BUILDINGS:
Wells Fargo Center
South Tower
Los Angeles,
California . . . . . . . . . . $ 92,186,065 1983 06/28/85 5-30 years 2,713,959
125 Broad Street
Building
New York, New
York . . . . . . . . . . . . . 107,147,398 1970 12/31/85 5-30 years 11,864,207
------------ ----------

Total. . . . . . . . . . . . $199,333,463 14,578,166
=========== ==========

SCHEDULE XI - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
CERTAIN UNCONSOLIDATED VENTURES

COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1993

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

Notes:
(A) The initial cost to the Unconsolidated Ventures or Underlying Ventures represents the original purchase price of the
properties, including amounts incurred subsequent to acquisition which were contemplated at the time the property was acquired.

(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was $601,294,155.

(C) In 1991, the affiliated joint venture recorded a provision for value impairment. The portion allocated to real estate totalled
$14,844,420; see Note 1 of Notes to Combined Financial Statements.

(D) In 1993, the affiliated joint venture recorded a provision for value impairment. The portion allocated to real estate totalled
$65,837,633; see Note 1 of Notes to Combined Financial Statements.
</TABLE>
<TABLE>
<CAPTION>

(E) Reconciliation of real estate owned as of December 31, 1993, 1992 and 1991:

1993 1992 1991
------------ ----------- -----------
<S> <C> <C> <C>
Balance at beginning of period. . . . . . . . . . . . $692,588,032 689,247,445 702,242,698
Additions during period . . . . . . . . . . . . . . . 2,913,093 4,809,749 2,027,620
Provision for value impairment. . . . . . . . . . . . (65,837,633) -- (14,844,420)
Disposals during period . . . . . . . . . . . . . . . (1,343,470) (1,469,162) (178,453)
------------ ----------- -----------

Balance at end of period. . . . . . . . . . . . . . . $628,320,022 692,588,032 689,247,445
============ =========== ===========

(F) Reconciliation of accumulated depreciation:

Balance at beginning of period. . . . . . . . . . . . $178,748,354 157,591,558 135,536,305
Depreciation expense. . . . . . . . . . . . . . . . . 21,023,113 22,625,958 22,233,706
Disposals during period . . . . . . . . . . . . . . . (438,004) (1,469,162) (178,453)
------------ ----------- -----------

Balance at end of period. . . . . . . . . . . . . . . $199,333,463 178,748,354 157,591,558
============ =========== ===========

</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

There were no changes of or disagreements with accountants during fiscal
year 1993 and 1992.

PART III
<TABLE>
<CAPTION>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
<S> <C> <C>
The Corporate General Partner of the Partnership is JMB Realty Corporation ("JMB"), a Delaware corporation.
JMB has responsibility for all aspects of the Partnership's operations, subject to the requirement that purchases and
sales of real property must be approved by the Associate General Partner of the Partnership, Realty Associates-XV,
L.P., an Illinois limited partnership with JMB as the sole general partner. The Associate General Partner shall be
directed by a majority in interest of its limited partners (who are generally officers, directors and affiliates of JMB
or its affiliates) as to whether to provide its approval of any sale of real property (or any interest therein) of the
Partnership. Various relationships of the Partnership to the Corporate General Partner and its affiliates are described
under the caption "Conflicts of Interest" at pages 12-18 of the Prospectus, which description is hereby incorporated
herein by reference to Exhibit 28-A to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-
16111) dated March 19, 1993.

The names, positions held and length of service therein of each director and executive officer and certain officers
of the Corporate General Partner are as follows:

</TABLE>
<TABLE>
<CAPTION> SERVED IN
NAME OFFICE OFFICE SINCE
- - ---- ------ ------------
<S> <C> <C>
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Jerome J. Claeys III Director 5/09/88
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer and 8/01/93
Executive Vice President 1/02/87
Jeffrey R. Rosenthal Chief Financial Officer 8/01/93
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Ira J. Schulman Executive Vice President 6/01/88
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
There is no family relationship among any of the foregoing directors or officers. The foregoing directors have
been elected to serve one-year terms until the annual meeting of the Corporate General Partner to be held on June
7, 1994 . All of the foregoing officers have been elected to serve one-year terms until the first meeting of the Board
of Directors held after the annual meeting of the Corporate General Partner to be held on June 7, 1994. There are
no arrangements or understandings between or among any of said directors or officers and any other person pursuant
to which any director or officer was elected as such.

JMB is the corporate general partner of Carlyle Real Estate Limited Partn
Estate Limited Partnership-IX ("Carlyle-IX"), Carlyle Real Estate Limited Partnership-X ("Carlyle-X"), Carlyle Real
Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real Estate Limited Partnership-XII ("Carlyle-XII"), Carlyle
Real Estate Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV ("Carlyle-XIV"),
Carlyle Real Estate Limited Partnership-XVI ("Carlyle-XVI"), Carlyle Real Estate Limited Partnership-XVII
("Carlyle-XVII"), JMB Mortgage Partners, Ltd. ("Mortgage Partners"), JMB Mortgage Partners, Ltd.-II ("Mortgage
Partners-II"), JMB Mortgage Partners, Ltd.-III ("Mortgage Partners-III"), JMB Mortgage Partners, Ltd.-IV ("Mortgage
Partners-IV"), Carlyle Income Plus, Ltd. ("Carlyle Income Plus") and Carlyle Income Plus, Ltd.-II ("Carlyle Income
Plus-II") and the managing general partner of JMB Income Properties, Ltd.-IV ("JMB Income-IV"), JMB Income
Properties, Ltd.-V ("JMB Income-V"), JMB Income Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties,
Ltd.-VII ("JMB Income-VII"), JMB Income Properties, Ltd.-VIII ("JMB Income-VIII"), JMB Income Properties,
Ltd.-IX ("JMB Income-IX"), JMB Income Properties, Ltd.-X ("JMB Income-X"), JMB Income Properties, Ltd.-XI
("JMB Income-XI"), JMB Income Properties, Ltd.-XII ("JMB Income-XII"), JMB Income Properties, Ltd.-XIII
("JMB Income-XIII"). Most of the foregoing officers and directors are also officers and/or directors of various
affiliated companies of JMB including Arvida/JMB Managers, Inc. (the general partner of Arvida/JMB Partners, L.P.
("Arvida")), Arvida/JMB Managers-II, Inc. (the general partner of Arvida/JMB Partners, L.P.-II ("Arvida-II)) and
Income Growth Managers, Inc. (the corporate general partner of IDS/JMB Balanced Income Growth, Ltd.
("IDS/BIG")). Most of such directors and officers are also partners, directly or indirectly, of certain partnerships
which are associate general partners in the following real estate limited partnerships: The Partnership, Carlyle-VII,
Carlyle-IX, Carlyle-X, Carlyle-XI, Carlyle-XII, Carlyle-XIII, Carlyle-XIV, Carlyle-XVI, Carlyle-XVII, JMB
Income-VI, JMB Income-VII, JMB Income-VIII, JMB Income-IX, JMB Income-X, JMB Income-XI, JMB
Income-XII, JMB Income-XIII, Mortgage Partners, Mortgage Partners-II, Mortgage Partners-III, Mortgage
Partners-IV, Carlyle Income Plus, Carlyle Income Plus-II and IDS/BIG.

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

Judd D. Malkin (age 56) is an individual general partner of JMB Income-IV and JMB Income-V. Mr. Malkin
has been associated with JMB since October, 1969. He is a Certified Public Accountant.

Neil G. Bluhm (age 56) is an individual general partner of JMB Income-IV and JMB Income-V. Mr. Bluhm
has been associated with JMB since August, 1970. He is a member of the Bar of the State of Illinois and a Certified
Public Accountant.

Jerome J. Claeys III (age 51) (Chairman and Director of JMB Institutional Realty Corporation) has been
associated with JMB since September, 1977. He holds a Masters degree in Business Administration from the
University of Notre Dame.

Burton E. Glazov (age 55) has been associated with JMB since June, 1971 and served as an Executive Vice
President of JMB until December 1990. He is a member of the Bar of the State of Illinois and a Certified Public
Accountant.

Stuart C. Nathan (age 52) has been associated with JMB since July, 1972. He is a member of the Bar of the
State of Illinois.

A. Lee Sacks (age 60) (President and Director of JMB Insurance Agency, Inc.) has been associated with JMB
since December, 1972.

John G. Schreiber (age 47) has been associated with JMB since December, 1970 and served as an Executive Vice
President of JMB until December 1990. He holds a Masters degree in Business Administration from Harvard
University Graduate School of Business.<PAGE>
H. Rigel Barber (age 45) has been associated with JMB since March, 1982. He holds a J.D
Northwestern Law School and is a member of the Bar of the State of Illinois.

Jeffrey R. Rosenthal (age 43) has been associated with JMB since December, 1987. He is a Certified Public
Accountant.

Gary Nickele (age 41) has been associated with JMB since February, 1984. He holds a J.D. degree from the
University of Michigan Law School and is a member of the Bar of the State of Illinois.

Ira J. Schulman (age 42) has been associated with JMB since February, 1983. He holds a Masters degree in
Business Administration from the University of Pittsburgh.

Gailen J. Hull (age 45) has been associated with JMB since March, 1982. He holds a Masters degree in
Business Administration from Northern Illinois University and is a Certified Public Accountant.

Howard Kogen (age 58) has been associated with JMB since March, 1973. He is a Certified Public Accountant.

ITEM 11. EXECUTIVE COMPENSATION

The Partnership has no officers or directors. The Partnership is required to pay a management fee to the
Corporate General Partner and the General Partners are entitled to receive a share of cash distributions, when and
as cash distributions are made to the Limited Partners, and a share of profits or losses as described under the captions
"Compensation and Fees" at pages 8-12, "Cash Distributions" at pages 79-80, "Allocation of Profits or Losses for
Tax Purposes" at pages 78-79 of the Prospectus and at pages A-9 to A-17 of the Partnership Agreement, included
as an exhibit to the Prospectus, is hereby incorporated herein by reference to Exhibit 28-A to the Partnership's Report
for December 31, 1992 on Form 10-K (File No. 0-16111) dated March 19, 1993. Reference is also made to Notes
5 and 11 for a description of such transactions, distributions and allocations. In 1993, 1992 and 1991, the General
Partners were entitled to distributions of $0, $9,244 and $78,555, respectively, and earned management fees of $0,
$15,407 and $130,958, respectively, all of which was unpaid at December 31, 1993. Through December 31, 1993,
$4,992,019 of property management fees and leasing fees have been deferred (including direct reimbursements made
to the Partnership) by an affiliate of the General Partner, or approximately $11 per Interest in the aggregate. If the
General Partners, and their affiliates had not deferred these fees and distributions, the distributions per Interest would
have been reduced by up to such amount. The Partnership expects to pay such amounts from net cash generated
from future operations and sales. The General Partners received a share of the Partnership's long-term capital gain
for tax purposes aggregating $2,030,185 in 1993. In addition, the General Partners received a share of the
Partnership's operating losses for tax purposes aggregating $767,924 in 1993. Such operating losses may benefit
the General Partners or the partners thereof to the extent that such losses may be offset against taxable income from
the Partnership or other sources.

The Partnership is permitted to engage in various transactions involving the General Partners and their affiliates
of the Partnership, as described under the captions "Compensation and Fees" at pages 8-12, "Conflicts of Interest"
at pages 12-18 of the Prospectus and "Powers, Rights and Duties of the General Partners" at pages A-19 to A-26
of the Partnership Agreement, included as an exhibit to the Prospectus, which are hereby incorporated herein by
reference to Exhibit 28-A to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-16111) dated
March 19, 1993. The relationship of the Corporate General Partner (and its directors and officers) to its affiliates
is set forth above in Item 10 and Exhibit 21 hereto.

Affiliates of the Corporate General Partner provided property management services in 1993 for six investment
properties. Such affiliates earned property management and leasing fees amounting to $900,177 in 1993 for such
services, of which $703,737 was unpaid as of December 31, 1993. Through December 31, 1993, $1,748,717 in
property management and leasing fees have been unpaid. In addition, an affiliate of the Corporate General Partner
deferred (through direct reimbursement to the Partnership) $140,049 in 1993 for the Partnership's proportionate share
of property management and leasing fees paid by affiliated joint venture partnerships or their underlying ventures.
As set forth in the Prospectus of the Partnership, the Corporate General Partner must negotiate such agreements on
terms no less favorable to the Partnership than those customarily charged for similar services in the relevant
geographical area (but in no event at rates greater than 6% of the gross income from a property), and such
agreements must be terminable by either party thereto, without penalty, upon 60 days notice.

JMB Insurance Agency, Inc., affiliate of the Corporate General Partner, earned and received insurance brokerage
commissions in 1993 aggregating $63,740 in connection with providing insurance coverage for certain of the real
property investments of the Partnership. Such commissions are at rates set by insurance companies for the classes
of coverage provided.

The General Partners of the Partnership or their affiliates may be reimbursed for their direct expenses o
out-of-pocket expenses and salaries relating to the administration of the Partnership and the operation of the
Partnership's real property investments. In 1993, the Corporate General Partner of the Partnership was due
reimbursement for such out-of-pocket expenses in the amount of $166,148, of which $877 was unpaid as of
December 31, 1993.

Additionally, the General Partners are also entitled to reimbursements for legal, accounting and data processing
services. Such costs for 1993 were $166,465, of which all were unpaid as of December 31, 1993. Reference is
made to Note 11.
</TABLE>
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding Interests
of the Partnership.

(b) The Corporate General Partner and its officers and directors own the following Interests of the Partnership:

NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- - -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership Corporate General Partner 9.8 Interests(1)(2) Less than 1%
Interests and its officers and
directors as a group
<FN>
- - ----------

(1) Includes 5 Interests owned by the Initial Limited Partner of the Partnership for which JMB, as its indirect majority
shareholder, is deemed to have sole voting and investment power.
(2) Includes 4.8 Interests owned by officers or their relatives for which each officer has sole investment and voting power
as to such Interests so owned.

No officer or director of the Corporate General Partner of the Partnership possesses a right to acquire beneficial ownership
of Interests of the Partnership.

(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date result in
a change in control of the Partnership.

</TABLE>
<TABLE>
<CAPTION>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
<S> <C> <C>
There were no significant transactions or business relationships with the Corporate General Partner, affiliates or
their management other than those described in Items 10 and 11 above.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

(1) Financial Statements (See Index to Financial Statements filed with this annual report).

(2) Exhibits.

3. Amended and Restated Agreement of Limited Partnership, is hereby
incorporated by reference to Exhibit 3 to the Partnership's Form 10-K (File No.
0-16111) for December 31, 1992 dated March 19, 1993.

4-A. Assignment Agreement set forth as Exhibit B to the Prospectus is hereby
incorporated herein by reference to Exhibit 4-A to the Partnership's Report on
Form 10-K (File No. 0-16111) for December 31, 1992 dated March 19, 1993.

4-B. Documents relating to the modification of the mortgage loan secured by 260
Franklin Street Building are hereby incorporated herein by reference to the
Partnership's Report on Form 10-K (File No. 0-16111) for December 31, 1992 dated March 19, 1993.

4-C. Documents relating to the modification of the mortgage loans secured by the
160 Spear Street Building are hereby incorporated herein by reference to Exhibit
4-C to the Partnership's Report on Form 10-K (File No. 0-16111) for December 31, 1992 dated March 19, 1993.

4-D. Documents relating to the refinancing of the mortgage note secured by the Post
Crest Apartments are hereby incorporated herein by reference to Exhibit 4-D to the Partnership's Report on Form
10-K (File No. 0-16111) for December 31, 1992 dated March 19, 1993.

10-A. Escrow Deposit Agreement is hereby incorporated herein by reference to the
Partnership Registration Statement on Form S-11 (File No. 2-95382) dated
January 18, 1985.

10-B. Acquisition documents relating to the purchase by the Partnership of an interest
in the 900 Third Avenue Building in New York, New York, are hereby incorporated herein by reference to the
Partnership's Registration Statement on Form S-11 (File No. 2-95382) dated January 18, 1985.

10-C. Acquisition documents relating to the purchase by the Partnership of an interest
in the Piper Jaffray Tower in Minneapolis, Minnesota, are hereby incorporated herein by reference to the Partner-
ship's Registration Statement on Form S-11 (File No. 2-95382) dated January 18, 1985.<PAGE>
10-D. Acquisition documen
Building in Fulton County, Georgia, are hereby incorporated herein by reference to the Partnership's Registration
Statement on Amendment No. 2 to Form S-11 (File No. 2-95382) dated July 5, 1985.

10-E. Acquisition documents relating to the purchase by the Partnership of an interest
in the Crocker Center South Tower in Los Angeles, California, are hereby incorporated herein by reference to the
Partnership's Registration Statement on Amendment No. 2 to Form S-11 (File No. 2-95382) dated July 5, 1985.

10-F. Acquisition documents relating to the purchase by the Partnership of an interest
in the Villa Solana Apartments in Laguna Hills, California, are hereby incorporated herein by reference to the
Partnership's Registration Statement on Post-Effective Amendment No. 1 to Form S-11 (File No. 2-95382) dated
September 13, 1985.

10-G. Acquisition documents relating to the purchase by the Partnership of an interest
in the Eastridge Mall in Casper, Wyoming, are hereby incorporated herein by reference to the Partnership's
Registration Statement on Post Effective Amendment No. 1 to Form S-11 (File No. 2-95382) dated September 13,
1985.

10-H. Acquisition documents relating to the purchase by the Partnership of the Summit
Hills Apartments in DeKalb County, Georgia, are hereby incorporated herein by reference to the Partnership's
Registration Statement on Post Effective Amendment No. 2 to Form S-11 (File No. 2-95382) dated December 13,
1985.

10-I. Acquisition documents relating to the purchase by the Partnership of an interest
in the 160 Spear Street Building in San Francisco, California, are hereby incorporated herein by reference to the
Partnership's Registration Statement on Post-Effective Amendment No. 3 to Form S-11 (File No. 2-95382) dated
March 13, 1986.

10-J. Acquisition documents relating to the purchase by the Partnership of an interest
in the Baltimore Federal Financial Building in Baltimore, Maryland, are hereby incorporated herein by reference to
the Partnership's Registration Statement on Post-Effective Amendment No. 3 to Form S-11 (File No. 2-95382) dated
March 13, 1986.

10-K. Acquisition documents relating to the purchase by the Partnership of the Arthur
D. Little Building in Woodland Hills, California, are hereby incorporated herein by reference to the Partnership's
Registration Statement on Post-Effective Amendment No. 3 to Form S-11 (File No. 2-95382) dated March 13, 1986.

10-L. Acquisition documents relating to the purchase by the Partnership of an interest
in the Park at Countryside Apartments in Port Orange, Florida, are hereby incorporated herein by reference to the
Partnership's Registration Statement on Post-Effective Amendment No. 3 to Form S-11 (File No. 2-95382) dated
March 13, 1986.<PAGE>
10-M. Acquisition documents relating to the purchase by the Partnership of an interest
in the Owings Mills Shopping Center in Owings Mills, Maryland, are hereby incorporated herein by reference to the
Partnership's Registration Statement on Post-Effective Amendment No. 3 to Form S-11 (File No. 2-95382) dated
March 13, 1986.

10-N. Acquisition documents relating to the purchase by the Partnership of an interest
in the 125 Broad Street Building, New York, New York, are hereby incorporated herein by reference to the Partner-
ship's Registration Statement on Post-Effective Amendment No. 3 to Form S-11 (File No. 2-95382) dated March
13, 1986.

10-O. Acquisition documents relating to the purchase by the Partnership of an interest
in the Boatmen's Center in Kansas City, Missouri, are hereby incorporated herein by reference to the Partnership's
Registration Statement on Post-Effective Amendment No. 3 to Form S-11 (File No. 2-95382) dated March 13, 1986.

10-P. Acquisition documents relating to the purchase by the Partnership of an interest
in the 260 Franklin Street Building in Boston, Massachusetts, are hereby incorporated herein by reference to the
Partnership's Registration Statement on Post-Effective Amendment No. 4 to Form S-11 dated April 30, 1986.

10-Q. Acquisition documents relating to the purchase by the Partnership of an interest
in the Mitsui Manufacturers Bank Building in Beverly Hills, California, are hereby incorporated herein by reference
to the Partnership's Registration Statement on Post-Effective Amendment No. 5 to Form S-11 dated July 31, 1986.

10-R. Acquisition documents relating to the purchase by the Partnership of an interest
in the California Plaza office building in Walnut Creek, California are hereby incorporated herein by reference to
the Partnership's Registration Statement on Post-Effective Amendment No. 5 to Form S-11 dated July 31, 1986.

10-S. Acquisition documents relating to the purchase by the Partnership of the
Springbrook Shopping Center in Bloomingdale, Illinois, are hereby incorporated
herein by reference.

10-T. Acquisition documents relating to the purchase by the Partnership of the Erie-
McClurg Parking Facility in Chicago, Illinois are hereby incorporated herein by
reference.

10-U.* Real Estate Purchase Agreement dated June 30, 1992, between Erie-McClurg
Associates ("Beneficiary") and The Streeterville Corporation ("Purchaser") for the sale of Erie-McClurg Parking
Facility, is hereby incorporated herein by reference.

10-V.* First Amendment to Real Estate Purchase Agreement dated August 26, 1992,
between Erie-McClurg Associates ("Beneficiary") and The Streeterville Corporation ("Purchaser") for the sale of
Erie-McClurg Parking Facility, is hereby incorporated herein by reference.<PAGE>
10-W.* Second Amendment to Real Estat
1992, between Erie-McClurg Associates ("Beneficiary") and The Streeterville
Corporation ("Purchaser") for the sale of Erie-McClurg Parking Facility, is hereby incorporated herein by reference.

10-X. Agreement of Limited Partnership of Carlyle-XV Associates, L.P., dated April
19, 1993 between the Partnership and Carlyle Partners, Inc. relating to the 125 Broad Street Building, is filed
herewith.

10-Y. Documents relating to the modification of the mortgage loan secured by
California Plaza are
filed herewith.

21. List of Subsidiaries.

24. Powers of Attorney.

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

* Previously filed as Exhibits 10-U, 10-V and 10-W, respectively, to the Partnership's
Report for December 31, 1992 on Form 10-K of the Securities Exchange Act of 1934 (File No. 0-16111) dated
March 19, 1993 and hereby incorporated herein by reference.

(b) The following reports on Form 8-K were required or filed since the beginning of the last quarter
of the period covered by this report.

(i) None

No annual report for the fiscal year 1993 or proxy material has been sent to the Partners of the
Partnership. An annual report will be sent to the Partners subsequent to this filing.
</TABLE>
SIGNATURES

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

By: JMB Realty Corporation
Corporate General Partner

GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 28, 1994

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

By: JMB Realty Corporation
Corporate General Partner

JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and Director
Date: March 28, 1994

NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 28, 1994

H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 28, 1994

JEFFREY R. ROSENTHAL*
By: Jeffrey R. Rosenthal, Chief Financial Officer
Principal Financial Officer
Date: March 28, 1994

GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 28, 1994

A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 28, 1994

STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 28, 1994

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

GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 28, 1994

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
EXHIBIT INDEX

Document
Incorporated
By Reference Page
------------ ----

3. Amended and Restated Agreement Yes
of Limited Partnership of the
Partnership, included as Exhibit A
to the Partnership's Prospectus
dated July 5, 1985.

4-A. Assignment Agreement, included as Yes
Exhibit B to the Partnership's
Prospectus dated July 5, 1985.

4-B. Documents relating to the modification
of the mortgage loan secured by
the 260 Franklin Street Building Yes

4-C. Documents relating to the modification
of the mortgage loans secured by
the 160 Spear Street Building Yes

4-D. Documents relating to the refinancing
of the mortgage loan secured by
the Post Crest Apartments Yes

10-A. through
10-R. * Exhibits 10.A through 10.R Yes
are hereby incorporated herein by
reference.

10-S. through
10-W. Exhibits 10-S. through 10-W.
are hereby incorporated herein by
reference. Yes

10-X. Agreement of Limited Partnership
of Carlyle-XV Associates, L.P.,
dated April 19, 1993 between the
Partnership and Carlyle Partners,
Inc. relating to the 125 Broad Street
Building is filed herewith. No

10-Y. Documents relating to the modification
of the mortgage loan secured by
California Plaza are filed herewith. No

21. List of Subsidiaries No

24. Powers of Attorney No

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

* Previously filed as Exhibits to the Partnership's Registration Statement
(as amended) on Form S-11 (Filed No. 2-95382) of the Securities Act of 1933.

AMENDED AND RESTATED ARTICLES OF PARTNERSHIP OF
JMB/125 BROAD BUILDING ASSOCIATES

These Amended and Restated Articles of Partnership made and entered into
as of April 21, 1993, by and between Carlyle Advisors, Inc., a Delaware
corporation (hereinafter referred to as "General Partner"), and Carlyle-XV
Associates, L.P., an Delaware limited partnership, and Carlyle-XVI Associates,
L.P., a Delaware limited partnership, as the limited partners (hereinafter
collectively referred to as the "Limited Partners").

W I T N E S S E T H

THAT WHEREAS, this partnership (hereinafter referred to as the
"Partnership") was heretofore formed pursuant to the Uniform Partnership Act
of the State of Illinois by Carlyle Real Estate Limited Partnership-XV, an
Illinois limited partnership, and Carlyle Real Estate Limited Partnership-XVI,
an Illinois limited partnership (hereinafter collectively referred to as the
"Original Partners"); and

THAT WHEREAS, the Original Partners have each individually assigned
their respective partnership interests to the Limited Partners pursuant to
that certain Amendment No. 1 to the Articles of Partnership of the Partnership
(the "Agreement"); and

THAT WHEREAS, the parties hereto desire to continue the partnership as a
limited partnership pursuant to the Revised Uniform Limited Partnership Act as
in effect in the State of Illinois, as amended (the "Act"), for the purposes
and on the terms and conditions hereinafter set forth; and

THAT WHEREAS, the General Partner desires to: (i) be admitted into the
Partnership as a general partner, (ii) perform all of the duties and
responsibilities of a general partner under the Act, and (iii) acquire a
general partnership interest in the Partnership, and the Limited Partners, by
their execution hereof, desire to evidence their consent to said admission and
to the continuance of the Partnership as a limited partnership; and

THAT WHEREAS, the parties hereto desire to amend and restate the
partnership so that it appears in its entirety as follows.

NOW THEREFORE, the undersigned hereby continue the partnership as a
limited partnership under the provisions of the Act, except as hereinafter
provided, for the purposes and on the terms and conditions as hereinafter set
forth, and do hereby agree:

1. Name of Partnership. The name of the Partnership shall be
"JMB/125 Broad Building Associates, L.P."

2. Character of the Partnership's Business. The character of the
business of the Partnership will be to acquire, hold, and otherwise use for
profit , either directly or indirectly, an interest in 125 Broad Street
Company, a limited partnership formed pursuant to the Uniform Limited
Partnership Act as in effect in the State of New York, which partnership owns
the improvements on, together with a leasehold interest in, the land more
particularly described on Exhibit A attached hereto, and to engage in any and
all activities related or incidental thereto. Whenever the term "Property"
appears in these Articles such term shall mean any property, real or personal,
tangible or intangible, at any time owned by the Partnership, including the
Partnership's interest in 125 Broad Street Company, and any property at any
time owned by 125 Broad Street Company.

3. Location of the Principal Place of Business. The location of the
principal place of business of the Partnership shall be 900 North Michigan
Avenue, Chicago, Illinois 60611 or such other location as shall be designated
by the Partners.

4. Names and Places of Residence of Partners. The names of the
Partners of the Partnership and their respective addresse
after each respective name as follows:

General Partner Residence

Carlyle Advisors, Inc. 900 North Michigan
Chicago, IL 60611

Limited Partners Residence

Carlyle-XV Associates, L.P. 900 North Michigan
Chicago, IL 60611

Carlyle-XVI Associates, L.P. 900 North Michigan
Chicago,IL 60611

As used herein, the term "Partner" shall refer to any of the General Partner
or Limited Partners and the term "Partners" shall refer to the General Partner
and the Limited Partners collectively and shall include their respective
successors and assigns, as the case may be.

5. Term of Partnership. The term for which the Partnership shall
exist shall be until December 31, 2035 unless sooner terminated as hereinafter
provided.

6. Contributions of the Members of the Partnership.

A. Contributions. The Original Partners have contributed the
sums set forth opposite each Partner's name on the attached Exhibit B. Each
of the Limited Partners have contributed hereto the partnership interests in
the Partnership assigned to them by each of the Original Partners,
respectively. In the event that any Partner makes an additional contributions
to the Partnership or receives a return of all or part of its contributions to
the Partnership, Exhibit B shall be promptly and appropriately amended to
reflect such additional or returned contribution.

B. Withdrawals of Capital. Except as otherwise herein
provided, no Partner shall be entitled to withdraw capital or to receive
distributions of or against capital without the prior written consent of, and
upon the terms and conditions specified by, the General Partner.

C. Capital Accounts. The Partnership shall maintain for each
of the Partners a Capital Account, which shall be the aggregate amount of the
contributions to the Partnership made by such Partner, as set forth in Exhibit
B, reduced by the aggregate amount of any losses allocated, and any
distributions of cash or the fair market value of other assets of the
Partnership made, to such Partner and increased by the aggregate amount of any
profits allocated to such Partner.

D. Loans. Except as provided in Section 8D hereof, all
advances or payments to the Partnership by any Partner shall be deemed to be
loans by such Partner to the Partnership, and the Partner
shall be entitled to interest thereon at such rates per annum as the General
Partner may determine, and the same, together with interest as aforesaid,
shall be repaid before any distribution shall be made hereunder to the other
Partners. No such loan to the Partnership shall be made without the prior
written consent of the General Partner and, unless all of the Partners
otherwise agree, shall be required to be made by all of the Partners in
proportion to their respective Partnership Shares (as hereinafter defined).

7. Partnership Shares.

A. As used herein, "profits and losses" include, without
limitation, each item of Partnership income, gain, loss and deduction as
determined for Federal income tax purposes, and "Partnership Share" means the
proportion which the aggregate capital contributions to the Partnership of a
Partner bear to the aggregate capital contributions to the Partnership of all
of the Partners as set forth in Exhibit B. All net profits or losses from the
operations of the Partnership for a fiscal year or part thereof shall be
allocated to the Partners based upon their respective Partnership Shares.

Any credits of the Partnership for a fiscal year shall be allocated in
the same manner as are profits of the Partnership pursuant to this Section 7A
(without regard to Section 7B), except that any investment tax credit shall be
allocated only among those Partners who were partners (for Federal income tax
purposes) on the date the property with respect to which such credit is earned
was placed in service.

B. There shall be allocated to each Partner (i) the amount of
any profits attributable to interest, "points", financing fees and other
amounts paid by such Partner to the Partnership with respect to loans made by
the Partnership to such Partner and (ii) the amount of any losses attributable
to interest, "points", financing fees and other amounts paid by the
Partnership to a third party lender with respect to borrowings incurred by the
Partnership to make loans by the Partnership to such Partner.

C. (i) All net profits or losses from the sale or other
disposition of all or any substantial portion of the Property shall be
allocated to the Partners in accordance with their respective Partnership
Shares on the date on which the Partnership recognized such profits or losses
for Federal income tax purposes. Notwithstanding allocations in the first
sentence of this Section 7C(i) if, at any time profit or loss, as the case may
be, is realized by the Partnership on the sale or other disposition of all or
any substantial portion of the Property, the Capital Account balances of the
Partners are not in the ratio of their respective Partnership Shares (the
"Equalization Ratio"), then gain shall be allocated to those Partners whose
Capital Account balances are less than they would be if they were in the
Equalization Ratio (or loss shall be allocated to those Partners whose Capital
Account balances are greater than they would be if they were in the
Equalization Ratio), in either case up to and in proportion to the amount
necessary to cause the Capital Account balances of the Partners to be in the
Equalization Ratio and then in accordance with the first sentence in this
Section 7C(i). Notwithstanding any adjustment of the allocation of profits or
losses provided in this Agreement by any judicial body or governmental agency,
the allocations of profits of losses provided in this Agreement shall control
for purposes of this Agreement (or any amendment hereto pursuant to Section
12B), including without limitation, the determination of the Partners' Capital
Accounts.

(ii) The portion of any gain allocated under Section 7C(i) above
that represents ordinary income attributable to "Unrealized Receivables" and
"Substantially Appreciated Inventory Items", as such terms are defined in
Section 751(c) and (d), respectively, of the Internal Revenue Code of 1954, as
amended (the "Code"), shall be allocated among the Partners in the proportions
in which depreciation deductions on the Partnership Property sold, or tax
benefits attributable to or giving rise to such Unrealized Receivables or
Substantially Appreciated Inventory Items, were originally allocated to their
Partnership interests. No Partner shall relinquish such Partner's share of
"Unrealized Receivables" (as such term is defined in Section 751(c) of the
Code) attributable to depreciation recapture in the case of a distribution or
constructive distribution of property arising in connection with admission to
the Partnership of another person as Person.

D. Each distribution to the Partners of cash or other assets of
the Partnership made prior to the dissolution of the Partnership, including,
but not limited to, each distribution of net proceeds received by the
Partnership from the sale or refinancing of all or any substantial portion of
the Property, shall be made to the Partners in accordance with their
respective Partnership Shares owned on the date of such distribution;
provided, however, that if, at the time of any such distribution, the Capital
Account balances of the Partners are not in the Equalization Ratio, then the
proceeds of any such distribution shall be distributed first to the Partners
having Capital Account balances greater than they would be if the Capital
Account balances of all Partners were in the Equalization Ratio, up to and in
proportion to the amount necessary to cause the Capital Account balances of
all Partners to be in the Equalization Ratio, and then in accordance with the
respective Partnership Shares of the Partners on the date of such
distribution. Each distribution of cash or other assets of the Partnership
made after dissolution of the Partnership shall be made in accordance with
Section 11C. Distributions to the Partners will be made in such amounts and
at such times as shall be determined by the General Partner.

E. The Partnership Shares of each of the Partners are as
follows: 1% to the General Partner, 58.712% to Carlyle-XV Associates, L.P.,
and 40.288% to Carlyle-XVI Associates, L.P.

8. Powers, Rights and Duties of the Partners.

A. Except as otherwise provided herein, the General Partner
alone shall have the full, exclusive and complete power, authority and
responsibility to manage and control the affairs and funds of the Partnership
in the ordinary course of its activities for the purposes herein stated,
including the power to take (or omit) all or any such action as he may from
time to time deem appropriate or desirable in connection therewith. In
furtherance of the powers granted to the General Partner herein, and in no way
in limitation thereof, the General Partner, for and on behalf of the
Partnership, shall have full, exclusive and complete power and responsibility
to enter into agreements of whatever nature necessary to effect the
acquisition of the Partnership's assets, and such amendments and restatements
thereof and supplements and modifications thereto as it amy consider to be in
the best interests of the Partnership to perform all duties and obligations,
and exercise all rights, as provided under such agreements in such manner as
it may determine; to act on behalf of the Partnership in dealing with third
parties and to manage, operate and undertake the funds and affairs of the
Partnership for the purposes of conducting its business and of making,
holding, conducting and disposing of assets and investments. The president or
any vice president of the General Partner may act for and in the name of the
Partnership in the exercise by the Partnership of any of its rights and powers
hereunder. In dealing with the president or any vice president of the General
Partner, no person shall be required to inquire into the authority of such
individual acting on behalf of the Partnership to bind the Partnership.
Persons dealing with the Partnership are entitled to rely conclusively on the
power and authority of the president or any vice president of the General
Partner as set forth in this Agreement.

B. Notwithstanding any provision of this Agreement to the
contrary, in the event that the Partners cannot reach unanimous agreement
concerning a decision regarding the sale of all or any substantial portion of
the Property (other than any property owned by a partnership or joint venture,
directly or indirectly through another partnership or joint venture, in which
the Partnership is a partner), the Partner or Partners desiring a sale thereof
(the "Notifying Party") shall give notice to the other Partner or Partners
(the "Notified Party") of the proposed transaction and shall deliver to the
Notified Party with such notice a copy of the bona fide written offer from the
prospective purchaser setting forth the name of the prospective purchaser and
all of the material terms and conditions on which it is intended that the
Property, or specified portion thereof, be sold. The Notified Party shall
then have 30 days after receiving such notice to elect (by giving notice of
the same to the Notifying Party) either (a) to purchase the specified Property
(other than any property owned by a partnership or joint venture, in which the
Partnership is a partner) for the purchase price and on the terms and
conditions as set forth in such offer or (b) to acquire a proportionate share
of the Notifying Party's interest in the Partnership for an amount equal to
the amount which the Notifying Party would have received as its share of the
net proceeds from the sale of the specified Property. In the event that the
Notified Party makes either such election, the Partners shall close on the
transaction as elected by the Notified Party within a period equal to the
later of 90 days after the making of such election or the closing date
specified in such written offer, with the time, place and date (within such
period) as specified by the Notified Party by notice to the Notifying Party
within 30 days after the making of such election. If the Notified Party does
not make either election, then the Notifying Party may conclude a sale of such
specified Property, without the agreement of the Notified Party, at any time
or times within 180 days after the giving of notice of the proposed sale
thereof, for a purchase price and on terms which are at least as favorable to
the Partnership as those contained in the written offer and only to the
purchaser identified in such written offer or to an "Affiliate" (as
hereinafter defined) of such purchaser, if the Affiliate is specified in such
written offer or such notice, but if a sale is not consummated within such
period, then the right of the Notified Party to receive notice and to purchase
or to acquire as aforesaid will continue as to any future proposed sale. In
the event that the Notified Party includes more than one Partner, the election
made by the Notified Party must be consented to by each such Partner and the
purchase from the Notifying Party shall be made by the Partners comprising the
Notified Partner based upon their respective Partnership Shares at the time of
such election; provided, however, that if one such Partner fails or refuses to
consent to either election, the other such Partner may, at its option, make
the election of its choice and undertake the entire purchase or acquisition
from the Notifying Party.

C. Neither the General Partner nor any of its Affiliates shall
be required to manage the Partnership as its sole and exclusive function and
it may have other business interests and may engage in other activities in
addition to those relating to the Partnership, including the making or
management of other investments. Without limitation on the generality of the
foregoing, each Partner recognizes that each Partner was formed for the
purpose of investing in, operating, transferring, leasing and otherwise using
real property and interests therein for profit and engaging in any and all
activities related or incidental thereto and that each Partner will or may
make other investments consistent with such purpose. Neither the Partnership
nor any Partner shall have any right by virtue of this Agreement or the
Partnership relationship created hereby in or to such other ventures or
activities or to the income or proceeds derived therefrom, and the pursuit of
such other ventures or activities by each Partner or any of their Affiliates,
even if competitive with the business of the Partnership, is hereby consented
to by all Partners and shall not be deemed wrongful or improper. Except as
otherwise permitted in this Agreement or in any agreement among the Partners,
no Partner or any Affiliate of a Partner shall be obligated to present any
particular investment opportunity to the Partnership even if such opportunity
is of a character which, if presented to the Partnership, could be taken by
the Partnership, and each Partner or any Affiliate of a Partner shall have the
right to take for its own account, or to recommend to others, any such
particular investment opportunity.

D. "Affiliate(s)" of a person means (i) any officer, director,
employee, shareholder, partner or relative within the third degree of kindred
of such person: (ii) any corporation, partnership, trust or other entity
controlling, controlled by or under common control with such person or any
such relative of such person; and (iii) any officer, director, trustee,
general partner or employee of any entity described in (ii) above. Affiliates
of a Partner may receive commissions when the Partnership buys or sells the
Property or any portion thereof and may be employed to provide property
management for the Partnership or any of the Property, but no commissions or
compensation payable to such Affiliate for the same may exceed the normal and
competitive rates for similar services in the locality where provided. The
Partnership may borrow funds for the purpose of lending such funds to all or
any of its Partners; provided, however, that the cost of such funds charged to
the Partnership (including financing fees, "points" and interest charged with
respect to such funds) by a third party shall not exceed the amount charged by
the Partnership to such Partner or Partners for the use of such funds. The
Partnership may enter into agreements with Affiliates of a Partner to provide
insurance brokerage or similar services to the Partnership or any of the
Property; provided that any such services by Affiliates shall be at rates at
least as favorable to the Partnership as those available from unaffiliated
parties. The validity of any transaction, agreement or payment involving the
Partnership and any Affiliate of a Partner shall not be affected by reason of
the relationship between the Partner and such Affiliate or the approval of
said transaction, agreement or payment by officers, directors or partners of
such Affiliate all or some of whom are also Affiliates of a Partner or are
officers, directors or partners or are otherwise interested in or related to
such Partner or its Affiliates.

E. No Partner nor any Affiliate of any Partner nor any officer,
director, shareholder, employee or partner of any such Affiliate shall be
liable, responsible or accountable in damages or otherwise to the Partnership
or to any other Partner for any action taken or failure to act on behalf of
the Partnership within the scope of the authority conferred on such Partner or
such Affiliate or such other person by this Agreement or by law unless such
action or omission was performed or omitted fraudulently or in bad faith or
constituted wanton and willful misconduct.

F. The Partnership shall indemnify and hold harmless each
Partner, any Affiliate of any Partner and any officer, director, shareholder,
employee or partner of any such Affiliate (the "Indemnified Parties") from and
against any loss, expense, damage or injury suffered or sustained by any
Indemnified Party by reason of any acts, omissions or alleged acts or
omissions arising out of its activities on behalf of the Partnership or in
furtherance of the interest of the Partnership, including, but not limited to,
any judgment, award, settlement, reasonable attorneys' fees and other costs
and expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that the acts or omissions or
alleged acts or omissions upon which such actual or threatened action,
proceeding or claim are based were performed or omitted in good faith and were
not performed or omitted fraudulently or in bad faith or as a result of wanton
and willful misconduct.

G. The Limited Partners shall not participate in the management
or control of the Partnership's business, nor shall they transact any business
for the Partnership, nor shall they have the power to act for or bind the
Partnership, said powers being vested solely and exclusively in the General
Partner as provided herein (and except as provided herein). The Limited
Partners shall not have any personal liability whatever, whether to the
Partnership, to any Partner or to the creditors of the Partnership, for the
debts of the Partnership or any of its losses once it has paid to the
Partnership the amount of its capital contribution set forth in Exhibit B.
The partnership interest of the Limited Partners in the Partnership shall be
fully paid and non-assessable.

H. The General Partner may in its sole discretion, make or seek
to revoke the election referred to in Section 745 of the Internal Revenue Code
of 1986, as amended, (herein the "Code") or any similar provision exacted in
lieu thereof. Each of the Partners will upon request supply the information
necessary to properly give effect to any such election.

I. The General Partner shall, at the Partnership's expense and
within a reasonable time after the close of each fiscal year, cause each
Partner to be furnished with such statements of the Partnership's assets and
liabilities as of the close of such year (if any), such profit and loss
statement for such year (if any), such statement of the capital and profit
account of each Partner (if any), and such other reports (if any), all as the
General Partner may deem appropriate.

J. The General Partner shall, at the Partnership's expense,
cause the Partnership's Federal and state income and other tax returns to be
prepared and filed and shall furnish copies to each Partner of any information
on such returns needed for the preparation of each Partner's own tax returns.

9. Books and Records of the Partnership; Fiscal Year. The General
Partner shall keep and maintain the books and records of the Partnership at
the principal place of business of the Partnership. The fiscal year of the
Partnership shall end on the 31st day of December in each year. The books of
the Partnership shall be kept on the cash or accrual basis, and the
Partnership shall be on the cash or accrual basis for tax purposes, as
determined by the General Partner. The books and records of the Partnership
shall be audited at such times and by such accountants as shall be determined
from time to time by the General Partner. The funds of the Partnership shall
be deposited in such bank accounts or invested in such interest-bearing or
non-interest-bearing investments as shall be determined by
Partner.

10. Transfer of Partnership Interest.

B. Any party or person admitted to the Partnership as a
substituted Partner shall be subject to and bound by all of the provisions of
this Agreement as if originally a party to this Agreement and as a condition
to such admission shall be required to execute a copy of this Agreement as
amended to the date of such admission.

C. A Partner shall have no liability hereunder (including, but
not limited to, any liability as a surety but excluding the repayment of any
outstanding principal and interest on loans made by the Partnership to such
Partner) for any obligations accruing under or in connection with the
Partnership and relating to events occurring after such Partner shall have
sold, assigned or transferred its entire Partnership interest.

11. Dissolution of the Partnership.

A. No act, thing, occurrence, event or circumstances shall
cause or result in the dissolution of the Partnership except the matters
specified in subsection B below.

B. The happening of any one of the following events shall work
a dissolution of the Partnership:

(1) The bankruptcy, resignation, legal incapacity,
dissolution, termination, or expulsion of the General Partner; provided,
however, that in such event the remaining Partners shall have the right to
elect to continue the Partnership's business by depositing at the office of
the Partnership a writing evidencing such an election. No other act shall be
required to effect such continuation;

(2) The sale of all or substantially all of the assets of
the Partnership;

(3) The unanimous agreement in writing by all of the
Partners to dissolve the Partnership; or

(4) The termination of the term of the Partnership
pursuant to Section 5 hereof. Without limitation on the other provisions
hereof, the admission of a new Partner shall not work a dissolution of the
Partnership. Except as otherwise provided in this Agreement, each Partner
agrees that, without the consent of the General Partner, a Partner may not
withdraw from or cause a voluntary dissolution of the Partnership.

C. Upon the occurrence of any of the events specified in
subsection B above causing a dissolution of the Partnership and except as
otherwise provided in subsection B above, the remaining Partner or Partners
shall commence to wind up the affairs of the Partnership and to liquidate its
investments (and in this connection shall have full right and unlimited
discretion to determine in good faith the time, manner and terms of any sale
or sales of Partnership Property). The Partner or Partners obligated to wind
up the affairs of the Partnership as aforesaid shall herein be called the
"Winding-Up Party". The Partners and their legal representatives, successors
and assignees shall continue to share in profits and losses during the period
of liquidation in the same manner and proportion as immediately before the
dissolution. Following the payment of all debts and liabilities of the
Partnership and all expenses of liquidation and subject to the right of the
Winding-Up Party to set up such cash reserves as, and for so long as, it may
deem reasonably necessary, the proceeds of the liquidation and any other funds
of the Partnership shall be distributed to the Partners (after deducting from
the distributive share of a Partner any sum such Partner owes the Partnership)
in accordance with Section 7 hereof. No Partner shall have any right to
demand or receive property other than cash upon dissolution or termination of
the Partnership. Upon the completion of the liquidation of the Partnership
and of the distribution of all Partnership funds, the Partnership shall
terminate and the Winding-Up Party shall have the authority to execute any and
all documents required in its judgment to effectuate the dissolution and
termination of the Partnership. Each Partners shall look solely to the assets
of the Partnership for all distributions with respect to the Partnership and
its capital contributions thereto and share of profits or losses therefrom,
and shall have no recourse therefor against any Partner; provided that nothing
herein contained shall relieve any Partner of such Partner's obligation to pay
any liability or indebtedness owing to the Partnership by such Partner.

12. Notices; Amendment.

A. Any notice which a Partner is required or may desire to give
any other Partner shall be in writing, and may be given by personal delivery
or by mailing the same by United States registered or certified mail, return
receipt required, to the Partner to whom such notice is directed at the
address of such Partner as hereinabove set forth, subject to the right of a
Partner to designate a different address for itself by notice similarly given.
Any notice so given by United States mail shall be deemed to have been given
on the second day after the same is deposited in the United States mail as
registered or certified mail, addressed as above provided, with postage
thereon fully prepaid. Any such notice not given by registered or certified
mail as aforesaid shall be deemed to be given upon receipt of the same by the
party to whom the same is to be given.

B. This Agreement may be amended by written agreement of
amendment executed by all the Partners, but not otherwise.

13. New General Partner. All of the Partners may agree in writing
from time to time to admit to the Partnership one or more new General
Partners. The General Partner may, on behalf of all Partners, cause Exhibit B
hereto and the Partnership's Certificate of Limited Partnership to be
appropriately amended and cause the same to be recorded in the event of each
such appointment. No such addition or substitution of a new General Partner
shall work a dissolution of the Partnership or otherwise affect the continuity
of the Partnership.

14. Miscellaneous. Each Partner hereby irrevocably waives any and all
rights that it may have to maintain any action for partition of any of the
Partnership Property. This Agreement constitutes the entire agreement between
the parties. This Agreement supersedes any prior agreement or understanding
between the parties. This Agreement and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State
of Illinois. Except as herein otherwise specifically provided, this Agreement
shall be binding upon and inure to the benefit of the parties and their legal
representatives, successors and assignees. Captions contained in the
Agreement in no way define, limit or extend the scope or intent of this
Agreement. If any provision of this Agreement, or the application of such
provision to any person or circumstance shall be held invalid, the remainder
of this Agreement, or the application of such provision to other persons or
circumstances, shall not be affected thereby. This Agreement may be executed
in several counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument. The opinion of the
independent certified public accountants retained by the Partnership from time
to time shall be final and binding with respect to all computations and
determinations required to be made under Section 7 hereof (including
computations and determinations in connection with any distribution following
or in connection with dissolution of the Partnership). If the Partnership or
any Partner obtains a judgment against any other party by reason of breach of
this Agreement or failure to comply with the provisions hereof, a reasonable
attorneys' fee as fixed by the court shall be included in such judgment. Any
Partner shall be entitled to maintain, on its own behalf or on behalf of the
Partnership, any action or proceeding against any other Partner or the
Partnership (including, without limitation, any action for damages, specific
performance or declaratory relief) for or by reason of breach by such party of
this Agreement, notwithstanding the fact that any or all of the parties to
such proceeding may then be a partner in the Partnership, and without
dissolving the Partnership as a partnership. No remedy conferred upon the
Partnership or any partner in this Agreement is intended to be exclusive of
any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by stature (subject, however,
to the limitations expressly herein set forth). No waiver by a Partner or the
Partnership of any breach of this Agreement shall be deemed to be a waiver of
any other breach of any kind or nature and no acceptance of payment or
performance by a Partner of the Partnership after any such breach shall be
deemed to be a waiver of any breach of this Agreement whether or not such
Partner or the Partnership knows of such breach at the time it accepts such
payment or performance. No failure or delay on the part of a Partner or the
Partnership to exercise any right it may have shall prevent the exercise
thereof by such Partner or the Partnership at any time such other Partner may
continue to be so in default, and no such failure or delay shall operate as a
waiver of any default.
<PAGE>
Power of Attorney

The undersigned Partners of JMB/125 Broad Building Associates, L.P., a
limited partnership pursuant to the laws of the State of Illinois, hereby
jointly and severally irrevocably constitute and appoint the General Partner
with full power of substitution, their true and lawful attorney-in-fact, in
their name, place and stead to make, execute, sign, acknowledge, record and
file, on behalf of them and on behalf of the Partnership the following:

(i) A Certificate of Limited Partnership and any other
certificates or instruments which may be required to be filed by the
Partnership or the Partners under the laws of the State of Illinois and any
other jurisdiction whose laws may be applicable;

(ii) Such instruments or documents as may be deemed necessary or
desirable by the General Partner in connection with the termination of the
Partnership's business;

(iii) Any and all amendments of the instruments described in
clauses (i) and (ii) above, provided such amendments either are required by
law to be filed or are consistent with the Agreement of Limited Partnership of
the Partnership as it may exist from time to time, or have been authorized by
the particular Partner or Partners; and

(iv) Any amendment of this Agreement authorized to be made by the
General Partner under this Agreement.

The foregoing grant of authority:

(i) Is a Special Power of Attorney coupled with an interest, is
irrevocable and shall survive the death or incapacity of the Partner granting
the power;

(ii) May be exercised by the General Partner on behalf of each
Partner by a facsimile signature or by listing all of the Partners executing
any instrument with a single signature as attorney-in-fact for all of them;
and

(iii) Shall survive the withdrawal, dissolution, legal incapacity,
bankruptcy or resignation of a Partner from the Partnership or the delivery of
an assignment by a Partner of the whole or any portion of his interest in the
Partnership.

IN WITNESS WHEREOF, the undersigned have executed these Amended and Restated
Articles of Limited Partnership of JMB/125 Broad Building Associates, L.P. as of
the day and year first above written.

General Partner Limited Partners

CARLYLE ADVISORS, INC., CARLYLE-XV ASSOCIATES, L.P.,
a Delaware corporation a Delaware limited partnership

By: CARLYLE PARTNERS, INC.,
By: a Delaware corporation,
Brian Ellison General Partner
Vice President

By:
Brian Ellison
Vice President

CARLYLE-XVI ASSOCIATES, L.P.,
a Delaware limited partnership

By: CARLYLE PARTNERS, INC.,
a Delaware corporation,
General Partner

By:
Brian Ellison
Vice President

EXHIBIT A

A 40-story office building containing approximately 1,336,000 rentable
square feet of space and located at 125 Broad Street in New York, New York,
together with a leasehold interest in the underlying land.

EXHIBIT B

CAPITAL
CONTRIBUTIONS
DECEMBER, 1985

PARTNER

Carlyle Real Estate
Limited Partnership-XV $27,138,800

Carlyle Real Estate
Limited Partnership-XVI $ 274,129
-----------
$27,412,929
===========
EXHIBIT B (con't)

ADDITIONAL CAPITAL
CONTRIBUTIONS AS OF
SEPTEMBER 29, 1986

<TABLE>
<CAPTION>
PARTNER INITIAL CAPITAL INTEREST EXPENSE OTHER TOTAL
CONTRIBUTIONS
<S> <C> <C> <C> <C>
Carlyle Real Estate
Limited Partnership-XV $ 27,138,800 $--------------- $ 715,526.50 $27,854,326.50

Carlyle Real Estate
Limited Partnership-XVI $ 274,129 $ 1,272,694.76 $27,580,197.50 $29,127,021.26
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT B (cont'd)
ADDITIONAL CAPITAL CONTRIBUTIONS AS DECEMBER 1, 1986

INITIAL CAPITAL
PARTNER CONTRIBUTIONS INTEREST EXPENSE OTHER TOTAL
<S> <C> <C> <C> <C>
Carlyle Real Estate
Limited Partnership-XV $27,138,000 $367,693.93 $ 6,286,391.80 $33,792,885.73

Carlyle Real Estate
Limited Partnership-XVI $ 274,129 $905,000.38 $22,009,332.20 $23,188,462.03

</TABLE>

EXHIBIT B

TOTAL CAPITAL CONTRIBUTIONS

GENERAL PARTNER CONTRIBUTION TOTAL

Carlyle Advisors, Inc. $ 00000000100 000001%

LIMITED PARTNERS

Carlyle-XV Associates, L.P. $ 33,792.885.73 58.712%

Carlyle-XVI Associates, L.P. $ 23,188,462.03 40.288%

AGREEMENT OF LIMITED PARTNERSHIP

CARLYLE-XV ASSOCIATES, L.P.

This Agreement of Limited Partnership (the "Agreement") made and
entered into as Apr.il_19 993 by and between Carlyle Partners, Inc., a
Delaware corporation, as general partner (hereinafter the "General Partners)
and Carlyle Real Estate Limited Partnership-XV, an Illinois limited
partnership, as limited partner (hereinafter the "Limited Partner" and,
together with the General Partner, sometimes hereinafter collectively referred
to as the "Partners").

WITNESSETH

THAT WHEREAS, the parties hereto desire to form a limited partnership,
(hereinafter the "Partnerships) pursuant to the Revised Uniform Limited
Partnership Act as in effect in the State of Delaware (hereinafter the "Act"),
except as hereinafter provided, for the purposes and term as hereinafter
provided;

NOW, THEREFORE, in consideration of the mutual promises and agreements
herein made and intending to be legally bound thereby, the parties hereto
hereby agree as follows:

1. Name of Partnership. The name of the Partnership shall be
"Carlyle-XV Associates, L.P."

2. Character of the Partnership's Business. The character of the
business of the Partnership will be to acquire, hold and otherwise use for
profit, either directly or indirectly, a limited partnership interest in
IMB/125 Broad Building Associates, L.P., an Illinois limited partnership, and
to engage in any and all activities related or incidental thereto. Whenever
the term "Property" appears in this Agreement, such term shall mean any
property, real or personal, tangible or intangible, at any time owned by the
Partnership, including the Partnership's respective interests in the
aforementioned limited partnership and any property at any time owned by a
partnership or other enterprise in which the Partnership is a partner.

3. Location of the Principal Place of Business. The location of the
principal place of business of the Partnership is 900 North Michigan Avenue,
Chicago, Illinois 60611-1575 or such other location as shall be designated by
the General Partner.

4. Names and Addresses of Partners. The names of the Partners of the
Partnership and their respective addresses are as set forth on exhibit A
attached hereto.

5. Term of Partnership. The term for which the Partnership shall exist
shall be until December 31, 2043, unless earlier dissolved as provided in
Section 11 hereof.

6. Partner's Capital.

A. Capital Contributions.

(i) The capital contribution of each Partner to the
Partnership is set forth opposite such Partner's name on Exhibit A hereto. The
Partners shall bc obligated to make their capital contributions as reflected
in Exhibit A hereto at such times as the General Partner may determine.

(ii) Except as provided in Section 6A(i) above, no
Partner shall have any obligation to make any additional capital contribution
to the Partnership. In the event that, as provided in this Agreement, all or
any part of the capital contribution of any Partner is withdrawn, any Partner
makes an additional capital contribution, additional Partners are admitted to
the Partnership, the Partnership purchases the interest of a Partner, or some
similar change occurs, the General Partner shall promptly, when required,
amend Exhibit A and prepare an amendment to this Agreement and the Certificate
of Limited Partnership to reflect such change. The term "capital contribution"
when used herein, shall mean the capital contribution of each Partner as set
forth on Exhibit A hereto, plus any additional capital contributions which arc
made to the Partnership as permitted under Section 6C hereof.

B. No Right to Return of Contributions. No interest shall be
paid or shall accrue on the capital contribution of any Partner. No Partner
shall be personally liable for the return of the capital contributions of the
other Partners, nor for the return of any Partnership assets. Notwithstanding
the Act or any other provision of law, no Partner shall bc entitled to
withdraw or obtain a return of all or any part of his capital contribution
other than as expressly provided in this Agreement. It is the intent of the
Partners that, unless expressly stated otherwise in a writing furnished to all
the Partners by the Partnership, no distribution (or any part of any
distribution) made to any Partner pursuant to this Agreement shall bc deemed a
return or withdrawal of capital, even if such distribution represents (in full
or in part) an allocation of depreciation or of any other non-cash item
accounted for as a loss or deduction from or offset to income.

C. Additional Contributions of Partners: Admission of
Additional Partners. Any Partner or Partners may make additional contributions
to the capital of the Partnership only with the consent of the General
Partner. The General Partner may admit persons as additional Partners only (i)
upon cecution by such persons of a copy of this Agreement, as it may have been
amended or supplemented and be in effect immediately prior to the time of such
admission and (ii) upon payment by such person(s) of a capital contribution,
whether in cash or Property, which, along with the agreed value thereof, has
been determined by agreement of all of the Partners.

D. Capital Accounts. The Partnership shall maintain a capital
account for each of the Partners which shall be the aggregate amount of the
contributions to the Partnership made by such Partner, as set forth in Exhibit
A hereto, reduced by the aggregate amount of any losses allocated, and any
distributions of cash or the fair market value of other assets of the
Partnership made to such Partner, and increased by the aggregate amount of any
profits allocated to such Partner.

E. Loans. Except as provided in Section 8C hereof, all advances
or payments to the Partnership by any Partner other than the contributions
required or made under Sections 6 or 7 hereof, shall be deemed to be loans by
such Partner to the Partnership, and the Partner making the same shall be
entitled to interest thereon at such rates per annum as the Partners may
agree, and the same, together with interest as aforesaid, shall be repaid
before any distribution shall be made hereunder to the Partners.

No such loan to the Partnership shall be made without the prior written
consent of the Partners and, unless all Partners otherwise agree, shall be
required to be made by all Partners in proportion to their respective
Partnership Shares (as hereinafter defined). With respect to any borrowings by
the Partnership for which there is recourse to the Partners or any of their
respective assets, the Partners shall be liable for such borrowings in
proportion to their respective Partnership Shares (as hereinafter defined) as
determined from time to time.

7. Partnership Shares.

A. As used herein, "profits" or "losses" include, without
limitation, each item of Partnership income, gain, loss and deduction as
determined for Federal income tax purposes, and "Partnership Share" means 99%
to the Limited Partner and 1% to the General Partner. Except as otherwise
provided in this Section 7, all profits or losses from the operations of the
Partnership for a fiscal year or part thereof shall be allocated to the
Partners based upon their respective Partnership Shares. Notwithstanding the
foregoing, to the extent required by Section 704(c) of the Code (as
hereinafter defined) and the regulations promulgated thereunder, income, gain,
loss and deduction with respect to the Property then owned by the Partnership
shall be shared among the Partners so as to take account of the variation
between the basis of the Property to the Partnership and its fair market value
at the time of contribution.

B. Each distribution to the Partners of cash or other assets of
the Partnership (exclusive of cash or other assets relating to a sale or other
disposition of the assets of the Partnership) made prior to the dissolution of
the Partnership, including, but not limited to, each distribution of net cash
flow from the operations of the Partnership shall be made to the Partners in
accordance with their respective Partnership Shares owned on the date of such
distribution. Each distribution of cash or other assets of the Partnership
made after dissolution of the Partnership shall be made in accordance with
Section II.E. hereof. Distributions to the Partners will be made in such
amounts and at such times as shall be determined by the General Partner, or in
the event of the dissolution and liquidation of the Partnership, by the
Winding-Up Party (as hereinafter defined).

8. Powers. Rights and Duties of the Partners.

A. The General Partner alone shall have the full, exclusive and
complete power, authority and responsibility to manage and control the affairs
and funds of the Partnership in the ordinary course of its activities for the
purposes herein stated, including the power to take (or omit) all or any such
action as he may from time to time deem appropriate or desirable in connection
therewith. In furtherance of the powers granted to the General Partner herein,
and in no way in limitation thereof, the General Partner, for and on behalf of
the Partnership, shall have full, exclusive and complete power and
responsibility to enter into agreements of whatever nature necessary to effect
the acquisition of the Partnership's assets, and such amendments and
restatements thereof and supplements and modifications thereto as it may
consider to be in the best interests of the Partnership to perform all duties
and obligations, and exercise all rights, as provided under such agreements in
such manner as it may determine; to act of behalf of the Partnership in
dealing with third parties and to manage, operate and undertake the funds and
affairs of the Partnership for the purposes of conducting its business and of
making, holding, conducting and disposing of assets and investments. The
president or any vice president of the General Partner may act for and in the
name of the Partnership in the exercise by the Partnership of any of its
rights and powers hereunder. In dealing with the president or any vice
president of the General Partner, no person shall be required to inquire into
the authority of such individual acting on behalf of the partnership to bind
the Partnership. Persons dealing with the Partnership are entitled to rely
conclusively on the power and authority of the president or any vice president
of the General Partner as set forth in this Agreement.

B. Neither the General Partner nor any of its Affiliates (as
hereinafter defined) shall be required to manage the Partnership as its sole
and exclusive function and it may have other business interests and may engage
in other activities in addition to those relating to the Partnership,
including the making or management of other investments or businesses. Without
limitation on the generality of the foregoing, each Partner recognizes that
each other Partner was formed for the purpose of investing in, operating,
transferring, leasing and otherwise using real property and interests therein
for profit and engaging in any and all activities related or incidental
thereto and that each Partner will make other investments consistent with such
purpose. Neither the Partnership nor any Partner shall have any right by
virtue of this Agreement or the Partnership relationship created hereby
in or to such other ventures or activities conducted by each Partner or its
Affiliates or to the income or proceeds derived therefrom, and the pursuit of
such other ventures or activities by each Partner or any of its Affiliates,
even if competitive with the business of the Partnership, is hereby consented
to by all Partners and shall not be deemed wrongful or improper. Except as
otherwise provided in this Agreement or in any agreement between the Partners,
no Partner nor any Affiliate of a Partner shall be obligated to present any
particular business or investment opportunity to the Partnership even if such
opportunity is of a character which, if presented to the Partnership, could be
taken by the Partnership, and each Partner and any Affiliate of a Partner
shall have the right to take for its own account, or to recommend to others,
any such particular investment opportunity.

C. "Affiliate(s)" of a Partner means (i) any officer, director,
employee, shareholder, trustee, partner or relative within the third degree of
kindred of such Partner or any other interest in or relation to such Partner;
(ii) any corporation, partnership, trust or other entity controlling,
controlled by or under common control with such Partner or any such relative
of such Partner; and (iii) any officer, director, trustee, shareholder,
partner or employee of any entity described in (ii) above. Affiliates of a
Partner may receive commissions when the Partnership buys and sells the
Partnership's Property or any portion thereof or any real property acquired or
owned by a partnership in which the Partnership is a partner and may be
employed to provide property management for the Partnership or any of the
Property, but no commissions or compensation payable to such Affiliate for the
same may exceed the normal and competitive rates for similar services in the
locality where provided. The Partnership may borrow funds for the purpose of
lending such funds to all or any of its Partners; provided, however, that the
cost of such funds charged to the Partnership (including financing fees,
"points" and interest and other amounts charged with respect to such funds) by
a third party shall not exceed the amount charged by the Partnership to such
Partner or Partners for the use of such funds. The Partnership may enter into
agreements with Affiliates of a Partner to provide insurance brokerage or
similar services to the Partnership or with respect to any of the
Partnership's property; provided that any such services by Affiliates shall be
at rates at least as favorable to the Partnership as those available from
unaffiliated parties. The validity of any transaction, agreement or payment
involving the Partnership and any Affiliate of a Partner shall not be affected
by reason of the relationship between the Partner and such Affiliate or the
approval of said transaction, agreement or payment by officers, directors
or partners of such Affiliate all or some of whom are also Affiliates of a
Partner or are officers, directors or partners or are otherwise interested in
or related to such Partner or its Affiliates.

D. No Partner, employee nor any Affiliate of any Partner shall
bc liable, responsible or accountable in damages or otherwise to the
Partnership or the other Partner for any action taken or failure to act on
behalf of the Partnership within the scope of the authority conferred on such
Partner or such Affiliate or such other person by this Agreement or by law
unless such action or omission was performed or omitted fraudulently or in bad
faith or constituted misconduct or negligence (gross or ordinary).

E. The Partnership shall indemnify and hold harmless each of its
Partners, employees, and any Affiliate of any Partner (the "Indemnified
Parties") from and against any loss, expense, damage or injury suffered or
sustained by any Indemnified Partyby reason of any acts, omissions or alleged
acts or omissions arising out of is activities on behalf of the Partnership or
in furtherance of the interest of the Partnership, including, but not limited
to, any judgment, award, settlement, reasonable attorneys' fees and other
costs and expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim and including any payments made by the
General Partner to any of its officers or directors pursuant to an
indemnification agreement no broader than this Section 8E; provided that the
acts or omissions or alleged acts or omissions upon which such actual or
threatened action, proceeding or claim is based were taken or omitted in good
faith and were not performed or omitted fraudulently or in bad faith or as a
result of misconduct or negligence (gross or ordinary) by such Indemnified
Party.

F. The Limited Partner shall not participate in the management
or control of the Partnership's business, nor shall it transact any business
for the Partnership, nor shall it have the power to act for or bind the
Partnership, said powers being vested solely and exclusively in the General
Partner as provided herein (and except as provided herein). The Limited
Partner shall not have any personal liability whatever, whether to the
Partnership, to any Partner or to the creditors of the Partnership, for the
debts of the Partnership or any of its losses once it has paid to the
Partnership the amount of its capital contribution set forth in Exhibit A. The
partnership interest of the Limited Partner in the Partnership shall be fully
paid and non-assessable.

G. The General Partner may in its sole discretion, make or seek
to revoke the election referred to in Section 754 of the Internal Revenue Code
of 1986, as amended, (herein the "Code") or any similar provision enacted in
lieu thereof. Each of the Partners will upon request supply the information
necessary to properly give effect to any such election.

H. The General Partner shall, at the Partnership's expense and
within a reasonable time after the close of each fiscal year, cause each
Partner to be furnished with such statements of the Partnership's assets and
liabilities as of the close of such year (if any), such profit and loss
statement for such year (if any), such statement of the capital and profit
account of each Partner (if any), and such other reports (if any), all as the
General Partner may deem appropriate.

1. The General Partner shall, at the Partnership's expense,
cause the Partnership's Federal and state income and other tax returns to be
prepared and filed and shall furnish copies to each Partner of any information
on such returns needed for the preparation of each Partner's own tax returns.

9. Books and Records of the Partnership: Fiscal Year. The General
Partner shall keep and maintain the books and records of the Partnership at
the principal place of business of the Partnership. The books of the
Partnership shall be kept on the cash or accrual basis, and the Partnership
shall be on the cash or accrual basis for tax purposes and the Partnership
shall have a fiscal or calendar year, all as determined by the General
Partner. The books and records of the Partnership shall be audited at such
times and by such accountants as shall be determined from time to time by the
General Partner. The funds of the Partnership shall be deposited in such bank
accounts or invested in such interest-bearing or non-interest-bearing
investments, as shall be determined by the General Partner.

10. Transfer of Partnership Interest.

A. No Partner may sell, assign, transfer, encumber or
hypothecate the whole or any part of its Partnership interest (including, but
not limited to, its interest in the capital or profits of the Partnership)
without prior written consent of all of the other Partners. The assignee of
all or any portion of a Partner's interest so assigned shall be admitted to
the Partnership as a substituted Partner only upon the consent of all of the
Partners.

B. Any party or person admitted to the Partnership as a
substituted Partner shall be subject to and bound by all of the provisions of
this Agreement as if originally a party to this Agreement and, as a condition
to such admission, shall be required to execute a copy of this Agreement as
amended or supplemented to the date of such admission.

C. A Partner shall have no liability hereunder (including, but
not limited to, any liability as a surety but excluding liability for the
repayment of any outstanding principal and interest on loans made by the
Partnership to such Partner) for any obligations accruing under or in
connection with the Partnership and relating to events occurring after such
Partner shall have sold, assigned or transferred its entire Partnership
interest.

11. Dissolution of the Partnership.

A. No act, thing, occurrence, event or circumstance shall cause
or result in the dissolution of the Partnership, except the matters specified
in subsection B below. Without limitation on the other provisions hereof, the
admission of a new Partner shall not work a dissolution of the Partnership.
Except as otherwise provided in this Agreement, each Partner agrees that,
without the consent of the other Partner, a Partner may not withdraw from or
cause a voluntary dissolution of the Partnership.

B. The happening of any one of the following events shall work a
dissolution of the Partnership:

(I) The death, bankruptcy, resignation, retirement,
legal incapacity, dissolution, termination or withdrawal of the last remaining
General Partner;

(2) The sale or other disposition of all of the
Partnership's assets (including purchase money security interest), all
liabilities and obligations of the Partnership have been paid and satisfied
and the purposes of the Partnership have been completed; reduction to cash or
cash equivalents of all of the assets of the Partnership;

(3) The unanimous agreement, in writing, of all of the
Partners to dissolve the Partnership;

(4) The termination of the term of the Partnership
pursuant to Section 5 of this Agreement; or

(5) The happening of any other event causing a
dissolution of the Partnership under the Act (other than an event of
withdrawal of the General Partner as set forth in Section 17-402(5) of the Act
or any similar or successor provision enacted in lieu thereof ).

C. In the event of the dissolution of the Partnership for any
reason, the Partners shall have the option, upon the consent of all of them
(other than any Partner which may have become bankrupt or incompetent,
dissolved, terminated or withdrawn from the Partnership), to form a new (or
reform the existing) partnership, on such terms and conditions as may be
agreed upon, for the purpose of continuing the Partnership business. Unless
the Partners so agree, the Partnership shall be liquidated and shall
immediately commence to wind up its affairs as provided in subsection E below.

D. Each Partner shall look solely to the assets of the
Partnership for all distributions with respect to the Partnership and for the
return, if any, of his capital contribution and his share of profits or losses
thereof, and shall have no recourse therefore (upon dissolution or otherwise)
against the General Partner or any other Partner. No Partner shall have any
right to demand or receive Property other than cash at any time, including
dissolution and termination of the Partnership; provided that nothing herein
contained shall relieve any Partner of such Partner's obligation to pay any
liability or indebtedness owing the Partnership by such Partner.

E. Upon the occurrence of any of the events specified in
subsection B above causing a dissolution of the Partnership and except as
otherwise provided in this Section 11, the remaining Partner or Partners shall
commence to wind up the affairs of the Partnership and to liquidate its assets
(and in this connection shall have full right and unlimited discretion to
determine in good faith the time, manner and terms of any sale or sales of the
Partnership's Property). The Partner or Partners obligated to wind up the
affairs of the Partnership as aforesaid are herein called the "Winding-Up
Party. The Partners and their legal representatives, successors and assignees
shall continue to share profits and losses during the period of liquidation in
the same manner and proportion as immediately before the dissolution.
Following the payment of all debts and liabilities of the Partnership and all
expenses of liquidation and subject to the right of the Winding-Up Party to
set up such cash reserves as, and for so long as, it may deem reasonably
necessary, the proceeds of the liquidation and any other funds and assets of
the Partnership shall be distributed to the Partners (after deducting from the
distributive share of a Partner any sum such Partner owes the Partnership) in
accordance with Capital Account balances and Partnership Shares as provided in
Section 7A hereof. Upon the completion of the liquidation of the Partnership
and of the distribution of all Partnership assets, the Partnership shall
terminate and the Winding-Up Party shall have the authority to execute any and
all documents required in its judgment to effectuate the dissolution and
termination of the Partnership.

12. Personal Property.

A. A Partner's interest in the Partnership shall be personal
property for all purposes. All real and other Property owned by the
Partnership shall be deemed to be owned by the Partnership as an entity (and
may be held in the name of a nominee for the Partnership), and no Partner,
individually, shall have any ownership of such Property. The Partners agree
that the Property of the Partnership is not and will not be suitable for
partition. Accordingly, each of the Partners hereby irrevocably waives any and
all rights he may have to maintain any action for partition of any Property of
the Partnership.

B. Whenever, either under this Agreement or under applicable
law, it is provided that there shall be voting or approval by all Partners,
each Partner shall vote in Partnership matters, insofar as is necessary,
according to the ratio which his capital contribution to the Partnership as
set forth on Exhibit A hereto bears to the combined capital contributions of
all Partners to the Partnership as set forth on Exhibit A hereto.

13. New General Partner.

A. All the Partners may agree in writing from time to time to
admit to the Partnership one or more new General Partners. The General Partner
may, on behalf of all Partners, cause Exhibit A hereto and the Partnership's
Certificate of Limited Partnership to be appropriately amended and cause the
same to be recorded in the event of each such appointment. No such addition or
substitution of a new General Partner shall work a dissolution of the
Partnership or otherwise affect the continuity of the Partnership.

B. The death, resignation, withdrawal, bankruptcy, incompetence
or legal incapacity of a General Partner shall not cause a dissolution of the
Partnership (unless such General Partner is the last remaining General
Partner) but the rights of such former General Partner or his personal
representative, or other successor, to share in the profits or losses in the
Partnership, to receive distributions from the Partnership and otherwise to
receive the benefit of his interest in the Partnership shall be treated as if
such former General Partner or his personal representative or other successor
had received his interest in the Partnership from a Limited Partner, and, with
the consent of the General Partner, such former General Partner or his
personal representative or other successor shall become a Limited Partner in
the Partnership being deemed to have made the same capital contribution to the
Partnership as such former General Partner, and this Agreement and the
Certificate of Limited Partnership shall be amended to reflect the capital
contribution deemed made by such person or successor as a Limited Partner,
subject to the terms and conditions of this Agreement. Any such General
Partner, or the estate of a deceased General Partner, shall remain liable for
all debts and obligations of such General Partner prior to the date of death,
withdrawal or removal.

14. Notices: Amendment.

A. Any notice which a Partner is required or may desire to give
any
other Partner shall be in writing, and may be given by personal delivery or by
mailing the same by United States registered or certified mail, return receipt
requested, to the Partner to whom such notice is directed at the address of
such Partner as set forth on Exhibit A hereto, subject to the right of a
Partner to designate a different address for itself by notice similarly given.
Any notice so given by United States mail shall be deemed to have been given
on the second day after the same is deposited in the United States mail as
registered or certified mail, addressed as above provided, with postage
thereon fully prepaid. Any such notice not given by registered or certified
mail as aforesaid shall be deemed to be given upon receipt of the same by the
party to whom the same is to be given.

B. This Agreement may be amended by written agreement of
amendment executed by all of the Partners, but not otherwise.

15. Miscellaneous. This Agreement constitutes the entire agreement
between the Partners concerning the subject matter hereof. This Agreement
supersedes any prior agreement or understanding between the Partners regarding
the subject matter hereof. This Agreement and the rights of the Partners
hereunder shall be governed by and

interpreted in accordance with the laws of the State of Delaware. Except as
herein otherwise specifically provided, this Agreement shall be binding upon
and inure to the benefit of the Partners and their legal representatives,
successors and assignees. Captions contained in this Agreement in no way
define, limit or extend the scope or intent of this Agreement. If any
provision of this Agreement, or the application of such provision to any
person or circumstance, shall be held invalid, the remainder of this
Agreement, or application of such provision to other persons or circumstances,
shall not be affected thereby. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The opinion of the independent
certified public accountants retained by the Partnership from time to time
shall be final and binding with respect to all computations and determinations
required to be made under Section 7 hereof (including computations and
determinations in connection with any distribution following or in connection
with the dissolution of the Partnership). If the Partnership or any Partner
obtains a judgment against any other party by reason of breach of this
Agreement or failure to comply with the provisions hereof, a reasonable
attorneys' fee as fixed by the court shall be included in such judgment. Any
Partner shall be entitled to maintain, on its own behalf or on behalf of the
Partnership, any action or proceeding against any other Partner or the
Partnership (including, without limitation, any action for damages, specific
performance or declaratory relief) for or by reason of breach by such party of
this Agreement, notwithstanding the fact that any or all of the parties to
such proceeding may then be a Partner in the Partnership, and without
dissolving the Partnership as a partnership. No remedy conferred upon the
Partnership or either Partner in this Agreement is intended to be exclusive of
any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute (subject, however,
to the limitations expressly herein set forth). No waiver by a Partner or the
Partnership of any breach of this Agreement shall be deemed to be a waiver
of any other breach of any kind or nature and no acceptance of payment or
performance by a Partner of the Partnership after any such breach shall be
deemed to be a waiver of any breach of this Agreement whether or not such
Partner or the Partnership knows of such breach at the time it accepts such
payment or performance. No failure or delay on the part of a Partner or the
Partnership to exercise any right it may have shall prevent the exercise
thereof by such Partner or the Partnership at any time such other Partner may
continue to be in default hereunder, and no such failure or delay shall
operate as a waiver of any breach or default.

mjs.agreemts.carlyle. 1 4

Power of Attorney.

The undersigned Partners of Carlyle-XV Associates, L.P., a limited
partnership formed under the laws of the State of Delaware, hereby jointly and
severally irrevocably constitute and appoint the General Partner with full
power of substitution, their true and lawful attorney-in-fact, in their name,
place and stead to make, execute, sign, acknowledge, record and file, on
behalf of them and on behalf of the Partnership the following:

(i) A Certificate of Limited Partnership and any other
certificates or instruments which may be required to be filed by the
Partnership or the Partners under the laws of the State of Delaware and any
other jurisdiction whose laws may be applicable;

(ii) Such instruments or documents as may be deemed necessary
or desirable by the General Partner in connection with the termination of the
Partnership business;

(iv) Any amendment of this Agreement authorized to be made by
the General Partner under this Agreement.

The foregoing grant of authority:

(i) Is a Special Power of Attorney coupled with an interest, is
irrevocable and shall survive the death or incapacity of the Partner granting
the power;

(ii) May be exercised by the General Partner or any of them on
behalf of each Partner by a facsimile signature or by listing all of the
Partners executing any instrument with a single signature as attorney-in-fact
for all of them; and

(iii) Shall survive the withdrawal, dissolution, legal
incapacity, bankruptcy or resignation of a Partner from the Partnership or the
delivery of an assignment by a Partner of the whole or any portion of his
interest in the Partnership.

IN WITNESS WHEREOF, the undersigned have executed this Agreement of
Limited Partnership of Carlyle-XV Associates, L.P. as of this l9th day of
April, 1993.

General Partner Limited Partner

Carlyle Partners, Inc. Carlyle Real Estate Limited Partnership-XV
a Delaware corporation an Illinois limited partnership

By: JMB Realty Corporation
a Delaware corporation
NEIL G. BLUHM Corporate General Partner
-------------
Neil G. Bluhm
President
NEIL G. BLUHM
-------------
Neil G. Bluhm
President

EXHIBIT A

Partner Name and Address Capital
Contribution

Carlyle Partners, Inc. $ 10.00
900 North Michigan Avenue
Chicago, Illinois 60611-1575

Carlyle Real Estate Limited Partnership-XV $ 990.00
900 North Michigan Avenue
Chicago, Illinois 60611-1575

$ 1 ,000.00

Travelers Loan No. 204366

CASH MANAGEMENT AGREEMENT

THIS CASH MANAGEMENT AGREEMENT (this "AGREEMENT") is made as of
the 22nd day of December, 1993, by and among C-C CALIFORNIA PLAZA PARTNERSHIP,
a California general partnership having an office at 2121 North California
Boulevard, Suite 230, Walnut Creek, California 94596 ("BORROWER"), THE
TRAVELERS LIFE AND ANNUITY COMPANY, having an office at 2215 York Road, Suite
504, Oak Brook, Illinois 60521, Attention: Managing Director ("LENDER") and
CYGNA DEVELOPMENT SERVICES, INC., a California corporation, having an office
at 2121 North California Boulevard, Suite 230, Walnut Creek, California 94596
("MANAGER").

RECITALS:

This Agreement is based upon the following recitals:

(a) Borrower is indebted to Lender for certain deed of trust
obligations in the aggregate outstanding principal amount of $57,675,704.31
(the "LOAN"), which Loan is evidenced by the Note and secured by the Deed of
Trust, which documents are described on EXHIBIT A attached hereto. The Deed
of Trust grants to Lender a first priority security interest in the property
commonly known as California Plaza, 2121 North California Boulevard, Walnut
Creek, California (the "PROPERTY"). Pursuant to the Deed of Trust, among
other things, Borrower assigned to Lender Borrower's interest in all leases
and occupancy agreements of whatever form then or thereafter affecting all or
any part of the Property and any and all guarantees, extensions and
modifications thereof (the "LEASES") and all deposits, rents, issues, profits,
revenues, royalties, benefits and income of every nature of and from the
Property (the "RENTS"). The Note and the Deed of Trust, together with all
other documents and instruments originally executed and delivered in
connection with the Loan, as described more fully in EXHIBIT A attached
hereto, are hereinafter called the "ORIGINAL LOAN DOCUMENTS".

(b) Borrower failed to pay when due (after expiration of
applicable grace periods, if any) the full installment in the amount of
$525,136.08 representing principal and interest due under the Note on March 1,
1993.

(c) Borrower has proposed that such default and certain other
subsequent defaults be resolved through a modification of the Loan pursuant to
which payment of a portion of the interest due would be deferred and the
maturity date extended.

(d) Lender is willing to enter into such a modification only if,
among other things, Borrower executes and delivers to Lender (i) this Cash
Management Agreement and (ii) the Modification Agreement and certain other
documents amending and restating the Original Loan Documents (the
"MODIFICATION DOCUMENTS"), which documents are described more fully in
EXHIBIT B attached hereto (the Original Loan Documents, as so amended and
restated by the Modification Documents, are hereinafter collectively referred
to as the "LOAN DOCUMENTS").

(e) Borrower and Manager have entered into a certain Management
and Leasing Agreement dated as of June 30, 1986, as amended by agreements
dated as of July 30, 1986, November 26, 1991 and December 21, 1993 (as so
amended, the "MANAGEMENT AGREEMENT") pursuant to which Manager is managing the
operation and leasing of the Property.

NOW, THEREFORE, in consideration of the above recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby mutually acknowledged, the parties hereto do hereby agree as follows:

1. Affirmation of Recitals. The recitals set forth above are
true and correct and are incorporated herein by this reference.

2. Cash Collateral. (a) Borrower hereby affirms that all Rents
and the other payments, if any, assigned to Lender under the Loan Documents
(collectively, the "ASSIGNED PAYMENTS"), all deposits to the Cash Collateral
Disbursement Account, the Reserve Account, the Security Deposits Account (as
such terms are hereinafter defined) and all proceeds of such accounts and
interest on the proceeds of such accounts (hereinafter collectively referred
to as the "CASH COLLATERAL") are subject to the existing first priority lien
and security interest of Lender as created by the Original Loan Documents and
continued by the Loan Documents. In addition to, and without limitation of,
any such continuing security interest, Borrower hereby affirms Lender's
security interest in and to all Cash Collateral as security for the
obligations to Lender under the Loan Documents and Borrower acknowledges and
agrees that Lender has an absolute, present, possessory and "choate" perfected
security interest in and to the Rents and the other Assigned Payments. On
demand, from time to time, Borrower agrees to execute and deliver to Lender
and hereby authorizes Lender to execute in the name of Borrower to the extent
Lender may lawfully do so, financing statements, chattel mortgages or
comparable security instruments as may reasonably be requested or required by
Lender to perfect or continue the satisfaction of its security interest in the
Cash Collateral Disbursement Account, the Reserve Account, the Security
Deposits Account and all other accounts provided for herein.

(b) The $4,271,000.00 of cash flow from the Property for the
calendar years 1992 and 1993 currently held by Travelers shall be applied as
follows: (i) $30,000 shall be transferred to the Cash Collateral Disbursement
Account in order to establish a minimum account balance to be used by Borrower
and Manager from time to time as necessary to fund short-term shortfalls of
Assigned Payments to pay Operating Expenses without resorting to the formal
procedure set forth in subparagraph 3(c) hereof for larger and longer-term
shortfalls, and to be replenished by deposit of the Assigned Payments
collected during the next subsequent calendar month in accordance with
subparagraph 3(d) hereof (such minimum account balance, the "WORKING CAPITAL
BALANCE"), (ii) $3,845,046.95 shall be paid to Lender as interest payable
under the Note (as modified and amended by the Modification Agreement) on the
first day of each month commencing March 1, 1993 through December 1, 1993,
(iii) $149,753.79 shall be transferred to the real estate tax escrow described
in subparagraph 3(d)(i) of this Agreement (iv) $78,665.00 shall be transferred
to the insurance escrow described in subparagraph 3(d)(ii) of this Agreement
and (v) the remaining $167,534.26 shall be placed into the Reserve Account.

3. Application of Assigned Payments. (a) From and after the
date hereof, Manager shall collect all Rents and the other Assigned Payments
as agent of and in trust for Lender, and upon collection, will deposit all
Rents and other Assigned Payments into Account No. 0585-107212 with Wells
Fargo Bank (the "CASH COLLATERAL DISBURSEMENT ACCOUNT"), which Cash Collateral
Disbursement Account has been established in a depositary institution to be
approved by, and in the name of Manager as trustee for the benefit of Lender
and will be held by Manager in such institution as agent of and in trust for
Lender. Borrower and Manager shall take all reasonably necessary actions and
shall otherwise reasonably cooperate to ensure that all the Assigned Payments
are promptly deposited in the Cash Collateral Disbursement Account, including
without limitation immediately depositing any such amounts inadvertently held
by Borrower or Manager and not deposited in the Cash Collateral Disbursement
Account as provided in this paragraph. Lender shall have the absolute and
unconditional right, at any time (and regardless of whether a default has
occurred under this Agreement or the Loan Documents), to modify the
arrangements for the collection and application of Cash Collateral under this
Agreement by giving written notice to the tenants at the Property (the
"TENANTS") in the form of EXHIBIT C attached hereto (which notices will, at
Lender's request, be joined by Borrower and Manager), whereby the Tenants will
be required to pay all Rents directly to an account maintained by and in the
name of Lender. Upon such modification, and provided that no default beyond
applicable notice and cure periods then exists by Manager under this Agreement
or by Borrower under this Agreement or any of the Loan Documents, this
Agreement will be modified as necessary to reflect that (i) all Rents and
other Assigned Payments are to be sent directly by Tenants to such account and
(ii) Lender will make available to Manager that portion of the Rents and the
other Assigned Payments as provided in this Agreement, but subject to all of
the limitations and restrictions set forth in this Agreement as well as all of
the rights of Lender under this Agreement.

(b) During each calendar month during the term hereof, Manager
shall pay from the Cash Collateral Disbursement Account those expenses
relating to the operation and maintenance of the Property (the "OPERATING
EXPENSES") as more particularly set forth in the annual operating budget for
the Property prepared by Borrower for such calendar year and approved by
Lender (the "OPERATING BUDGET") or as otherwise approved by Lender in writing.

The approved form of Operating Budget for each calendar year during the term
of the Loan is attached hereto as EXHIBIT D. In addition, Manager may
disburse monies in the Cash Collateral Disbursement Account for emergency
expenses relating to the Property required to prevent or limit damage or
injury to persons or property, provided that Manager notifies both Borrower
and Lender of such disbursements no later than the first business day
thereafter and provides to Lender a complete accounting of such expenses
within five (5) business days of such disbursements. Notwithstanding any
contrary provision hereof, in no event or under any circumstance (other than
as set forth in the preceding sentence) shall Manager, without having received
the prior written approval of Lender, which approval will be granted or
withheld promptly (but may be withheld in Lender's sole and absolute
discretion), disburse monies from the Cash Collateral Disbursement Account for
payment of: (i) an Operating Expense in a particular category (as such
categories are set forth in the form of Attachment 1 to the Operating Budget
attached hereto as Exhibit D) (A) for a given calendar month in an amount in
excess of one hundred ten percent (110%) of the amount allocated for such
category of Operating Expense in the Operating Budget for such calendar month
plus the amount by which the aggregate amount allocated for such category of
Operating Expense for all prior months of said calendar year exceeds the
amount actually disbursed by Manager for each category of Operating Expense
for such prior calendar months, or (B) in any particular calendar year in an
amount in excess of one hundred five percent (105%) of the amount allocated
for such category of Operating Expense in the Operating Budget for such
calendar year (provided, however, that with respect to current utilities, real
estate taxes, expenses for insurance provided on a competitively bid basis,
the full amount of such Operating Expenses may be disbursed from the Cash
Collateral Disbursement Account regardless of the amount allocated for such
categories of Operating Expenses in the Operating Budget); and provided
further, with respect to any repairs and maintenance categories that appear on
the Operating Budget or any approved leasing costs, an amount up to the full
amount allocated to such category on the Operating Budget (or such approved
leasing costs) for the calendar year may be disbursed from the Cash Collateral
Disbursement Account in any calendar month provided the aggregate amount
disbursed from the Cash Collateral Disbursement Account for such category over
the calendar year does not exceed one hundred five percent (105%) of the
amount allocated for such category of Operating Expense in the Operating
Budget for such calendar year; (ii) expenses, including those for capital
expenditures, not identified in the Operating Budget; or (iii) any category of
Operating Expense unless such expense is actually incurred prior to the
Termination Date (as hereinafter defined). Furthermore, Manager shall in no
event or under any circumstance make any further disbursements from the Cash
Collateral Disbursement Account after the tenth (10th) day of any calendar
month unless, on or before such date (i) Borrower has delivered to Lender the
accountings and statements with respect to the Property that are required to
be delivered in such month to Lender pursuant to the provisions of
subparagraphs 4(a) and 4(c) of this Agreement; (ii) Manager has furnished
Lender with (A) an aging report for accounts receivable and payable for the
Property and (B) a certified statement in the form of EXHIBIT E attached
hereto from Manager, certifying that all payroll and other taxes required by
applicable law to be withheld for the preceding month with respect to the
Property have been so withheld, and will be delivered in good and sufficient
funds to the appropriate taxing authorities on or prior to the date
established by law for such delivery; and (iii) Manager has remitted to Lender
all Excess Cash Collateral for the prior month, as required by subpara-
graph 3(d) of this Agreement. In addition, Lender shall have the right to
request that Manager furnish Lender with evidence of payment of all or certain
of the Operating Expenses for a prior calendar month or months for the
Property, which evidence shall be in the form of invoices marked "paid-in-
full" or such other evidence of payment reasonably satisfactory to Lender
including, without limitation, copies of checks accompanied by the invoices
paid by said checks.

(c) In the event that the available balance in the Cash
Collateral Disbursement Account (inclusive of the Working Capital Balance) is
insufficient to pay a particular Operating Expense set forth in the Operating
Budget (such an event, a "SHORTFALL"), then, in such case, Borrower may issue
to Lender a written request to disburse Cash Collateral for payment of such
Operating Expense from the Reserve Account (as hereinafter defined) (each such
request, a "REQUEST"). Provided that no default shall exist and be continuing
under this Agreement and provided that Borrower complies with all of the
provisions of this subparagraph 3(c), within ten (10) business days from the
receipt of such Request, Lender shall disburse payment of any Shortfall from
the Reserve Account. The following additional conditions shall apply to any
Requests made by Borrower seeking Lender's approval for the use of Cash
Collateral in the Reserve Account for payment of Operating Expenses:

(i) Each Request shall be in the form of EXHIBIT F attached
hereto, shall specify the amount and payee of each item of Operating Expense
and shall be accompanied by evidence reasonably satisfactory to Lender of the
incurrence of such expense by Borrower;

(ii) If the Request is to pay for Capital Expenditures, it shall
be accompanied by (w) invoices or other evidence substantiating the actual
incurrence of items of Capital Expenditures which are covered in the Request,
(x) if required by Lender and if the Capital Expenditure involves a physical
improvement to the Property, a certificate of a consultant to Lender (based
upon an on-site inspection) in which such consultant shall verify that any
work for which payment is sought under the Request has actually been
performed, (y) evidence that all work for which payment is sought under the
Request shall comply with all applicable laws, rules, restrictions, orders and
regulations of governmental authorities, and that all necessary permits,
certificates, licenses and other approvals relating to such work have been
obtained and are in full force and effect, and (z) lien waivers (which may be
conditional with respect to payments not yet received) and other documents
required under applicable law or reasonably required by Lender;

(iii) No more than one (1) Request may be made in any calendar
month;

(iv) Notwithstanding any contrary provision hereof, in no event
or under any circumstance shall Lender be required to pay from the Reserve
Account, (A) any item of any Request unless such expense is actually incurred
by Borrower prior to the Termination Date (as hereinafter defined) and the
Request for such item is received by Lender not later than thirty (30) days
subsequent to the Termination Date, (B) unless otherwise included within
clause (A), any item of any Request which is properly payable after the date
of such Request, (C) any Request which is not accompanied by evidence
satisfactory to Lender of the incurrence of such expense by Borrower and the
insufficiency of funds in the Cash Collateral Disbursement Account, (D) any
Request for funds in excess of available Cash Collateral in the Reserve
Account or (E) any item of any Request that is over thirty (30) days past due
(other than with respect to items subject to a bona fide dispute which are
less than sixty (60) days past due);

(v) Borrower and Manager shall not have defaulted (beyond the
expiration of applicable grace and cure periods, if any) in any of their
respective obligations under this Agreement; and

(vi) Borrower shall not have defaulted (beyond the expiration of
applicable grace and cure periods, if any) in any of its obligations under any
of the Loan Documents.

Simultaneously with the execution of this Agreement and as described in
subparagraph 2(b) of this Agreement, Lender is depositing $167,534.26 of cash
flow from the Property into the Reserve Account and Borrower is depositing an
additional $500,000.00 into the Reserve Account, all of which monies are to be
held and disbursed pursuant to the provisions of this Agreement.

(d) On the last business day of December, 1993, and on the last
business day of each calendar month thereafter, Manager shall remit to Lender
from the Cash Collateral Disbursement Account an amount equal to the amount by
which the Rents and other Assigned Payments deposited in the Cash Collateral
Disbursement Account during the calendar month exceeds the aggregate of
(x) the Operating Expenses paid from the Cash Collateral Disbursement Account
in such calendar month, including any amounts represented by any checks
written for Operating Expenses for such calendar month which have not yet
cleared through the Cash Collateral Disbursement Account and (y) an amount, if
any, necessary to restore the Working Capital Balance in the Cash Collateral
Disbursement Account back to $30,000 (such excess amounts are herein referred
to as "EXCESS CASH COLLATERAL"), which remittance will be done by wire
transfer made in accordance with the instructions set forth on EXHIBIT G
attached hereto or as otherwise directed by Lender. Simultaneously with the
delivery of any Excess Cash Collateral to Lender as aforesaid, Manager shall
furnish Lender and Borrower with a complete accounting of all Cash Collateral
received by Manager and all expenditures of Cash Collateral made during such
month. Excess Cash Collateral payable to Lender on the last business day of
each calendar month shall be applied by Lender on or about the first business
day of the following calendar month in the following order and priority:

(i) An amount equal to one-twelfth of the amount sufficient to
pay real property taxes payable for the Property, or estimated by Lender to be
payable, by Borrower for the ensuing twelve (12) months shall be deposited by
Lender into a real property tax escrow account maintained by Lender. The
monies in the real property tax escrow account shall be held and disbursed by
Lender as provided in paragraph 3 of the Deed of Trust (as modified and
amended by the Modification Agreement);

(ii) An amount equal to one-twelfth of the amount sufficient to
pay all premiums and other charges for the insurance required to be maintained
under the Deed of Trust (as modified and amended by the Modification
Agreement), or estimated by Lender to be payable, for the ensuing twelve (12)
months shall be deposited by Lender into an insurance escrow account
maintained by Lender. The monies in the insurance escrow account shall be
held and disbursed by Lender toward the payment of insurance premiums and
charges;

(iii) Towards the payment of interest that is due and payable
under the Note (as modified and amended by the Modification Agreement);

(iv) Lender shall deposit into an interest bearing account
established by and in the name of First National Bank of Chicago (the "ACCOUNT
AGENT"), as trustee for the benefit of Lender (the "RESERVE ACCOUNT") an
amount that is necessary to bring (or replenish, as the case may be) the
balance of the Reserve Account to $2,120,000.00;

(v) Toward all "Deferred Interest" accrued under the Note (as
modified and amended by the Modification Agreement); and

(vi) Toward the repayment of the outstanding principal balance of
the Note (as modified and amended by this Agreement).

(e) Account Agent shall have sole control and responsibility for
management of the Reserve Account and all monies deposited into such account.
At any time and from time to time Lender may redesignate the name or title of
or the manner in which the Reserve Account is held, but in each instance
otherwise subject to the terms and provisions of this Agreement. The Reserve
Account shall be at all times maintained with financial institutions chosen by
Lender and shall bear interest initially at a rate equal to the then current
yield on three-month U.S. Treasury bills less seventy (70) basis points. The
monies contained in the Reserve Account may be transferred by Account Agent
from time to time to any other account chosen by Lender, provided that the
monies shall remain subject to the terms and provisions of this Agreement.
The Reserve Account shall without further act or instrument be deemed to be
assigned to Lender and shall constitute additional security for the payment of
the Debt. The Reserve Account shall be administered by Account Agent, with
any disbursements to Manager to be made in accordance with subparagraph 3(c)
of this Agreement. Lender shall have the sole, absolute and unconditional
right, at any time after the date hereof, without notice, to designate a third
party attorney, accountant or property manager acceptable to Lender to
administer the Reserve Account on its behalf in accordance with the provisions
of this Agreement, which shall by instrument in form and substance
satisfactory to Lender in all respects, be assumed by any such third party
attorney, accountant or property manager. Borrower agrees that the reasonable
fees of Lender (including the fee of Account Agent), and the reasonable fees
of such other attorney, accountant or property manager incurred in
establishing and administering the Reserve Account, which fees shall be equal
to $10,000 per year in the aggregate, shall be payable on
January 1 of each calendar year out of the Cash Collateral. Borrower
acknowledges that any third party attorney, accountant or property manager
designated subsequent to the execution hereof to administer the Reserve
Account shall hold the proceeds thereof as agent of and in trust for the use
and benefit of Lender and for application in accordance with the terms of this
Agreement.

(f) Lender may from time to time, at its sole option and in its
sole and absolute discretion, upon the written petition of Borrower, authorize
in writing the expenditure of Cash Collateral from the Cash Collateral
Disbursement Account or the Reserve Account for expenses not identified in the
Operating Budget or for purposes not otherwise authorized herein and Lender
agrees to respond to any such request for an expenditure in a prompt fashion.
Lender and Borrower acknowledge that in lieu of Borrower paying the following
costs incurred in connection with the modification of the Loan out of pocket
(i.e., not from the cash flow generated by the Property), Lender shall pay out
of the proceeds of the Reserve Account: the reasonable attorneys' fees and
disbursements of Borrower and Lender's counsel for legal services rendered in
connection with the modification of the Loan, any title premium or charges
incurred in connection with the issuance of endorsements to the title policies
issued in connection with the Loan, any recording charges with respect to the
recording of any of the Modification Documents and the reasonable fees charged
by the escrow agent pursuant to the Escrow Agreement described on Exhibit B
attached hereto.

(g) Except as otherwise expressly set forth herein, Borrower and
Manager acknowledge and agree that no disbursements shall be made from the
Cash Collateral Disbursement Account unless such disbursements are consistent
with the Operating Budget then in effect (subject to the permitted variances
as set forth in subparagraph 3(b) of this Agreement) or are otherwise approved
in writing by Lender. Borrower and Manager further acknowledge and covenant
that all Rents and other Assigned Payments and all funds deposited in the Cash
Collateral Disbursement Account shall be used solely for the payment of
approved Operating Expenses and the use of such funds for any other purpose
shall constitute a default under this Agreement and an event of default under
the Loan Documents.

(h) Borrower and Manager agree that should any account payable
relating to the Property remain unpaid for a period in excess of sixty (60)
days, such occurrence shall constitute a default under this Agreement and an
event of default under the Loan Documents (other than with respect to any bona
fide dispute, provided Manager has escrowed from the Cash Collateral pursuant
to an arrangement satisfactory to Lender an amount sufficient to include any
attorneys' fees incurred with respect to such dispute and otherwise
satisfactory to Lender, in its reasonable discretion, to pay such bona fide
dispute; it being agreed, however, that (i) the rights of the party seeking
payment from the escrowed funds will not be affected by the occurrence of the
Termination Date and (ii) upon the occurrence of the Termination Date all
rights of Borrower under such escrow arrangement shall automatically and
without further act or notice required, be assigned over to Lender). In no
event or under any circumstances whatsoever (and notwithstanding anything to
the contrary which may be contained in or implied in this Agreement to the
contrary) shall Lender be required to make any advances for any expenses
relating to the operation, maintenance, management or marketing of the
Property. The foregoing sentence shall not constitute a waiver by Borrower or
Manager of their right to use amounts deposited in the Cash Collateral
Disbursement Account or to make a Request for the disbursal of monies by
Lender from the Reserve Account in accordance with the terms of this
Agreement.

(i) Lender reserves the right to approve and to change the
depository banks holding the Cash Collateral Disbursement Account, the Reserve
Account, the Security Deposits Account or any other account maintained under
this Agreement, and Borrower and Manager agree to cooperate with Lender to
promptly effect any such transfer.

(j) Manager shall submit to Borrower and Lender (i) on or before
November 15, 1994 and on or before November 15 of each subsequent year, a
comprehensive preliminary proposed Operating Budget (containing full and
complete breakdowns of all categories of expense, as such categories are set
forth in the form of Attachment 1 to the Operating Budget attached hereto as
Exhibit D, including, without limitation, Capital Expenditures, as defined
below and rebates to then-existing tenants) for the ensuing calendar year for
Borrower's and Lender's review; and (ii) on or before December 15, 1993 and on
or before December 15 of each subsequent year, Borrower shall submit the final
comprehensive proposed Operating Budget (containing full and complete
breakdowns of all categories of expenses, including, without limitation,
Capital Expenditures, as defined below, and rebates to then-existing tenants)
for the ensuing calendar year for review by Borrower and Lender. Provided
Manager has delivered the preliminary and final proposed Operating Budgets on
or before the dates set forth above, Lender shall notify Borrower as to
whether Lender approves such final comprehensive proposed Operating Budget
within thirty (30) days of receipt by Lender. Such proposed annual Operating
Budget shall be in the form attached hereto as EXHIBIT D and shall include
comparative figures for amounts actually spent for each expense listed therein
for the calendar year in which the Operating Budget is delivered for review.
In addition to the foregoing, each proposed annual Operating Budget shall
specify parameters for the leasing of any space at the Property, which
parameters shall include, among other things, the following information,
broken down by size and/or location of the space to be leased at the Property:
lease term, gross fixed and additional rent, effective rent (net of any tenant
concessions), rental or other concessions to be granted prospective tenants
(including rental abatements) and a description and the cost of any
improvements to be performed on behalf of prospective tenants. If a proposed
Operating Budget has not been approved prior to January 1 of the calendar year
covered by such Operating Budget, the most recently approved Operating Budget
will remain in effect and be utilized until agreement is reached on a new
budget, provided that current utilities, real estate taxes and insurance
expenses (if the insurance is provided on a competitively bid basis) may be
paid as Operating Expenses regardless of the budget allocations set forth on
the most recently approved Operating Budget. Furthermore, no monies will be
applied towards capital improvement items regardless of whether the most
recently approved Operating Budget contains line items for Capital
Expenditures (other than for ongoing multi-year capital repair projects or
leasing costs which have received the prior approval of Lender). The term
"CAPITAL EXPENDITURES" as used in this Agreement shall mean any and all
expenditures (i) with respect to the Property which would be capitalized
instead of expensed in accordance with generally accepted accounting
principles consistently applied, (ii) for an addition or replacement to the
Property with a useful life of more than one (1) year, (iii) for an
improvement that prolongs the useful life of the Property, and (iv) for
reimbursement of the costs of tenant improvements and leasing commissions
pursuant to Leases which meet the leasing parameters set forth in an approved
Operating Budget or otherwise have been approved in writing by Lender, and
such other capital and tenant expenditures as may be approved by Lender in
writing, in Lender's sole and absolute discretion.

(k) Nothing contained in this Agreement (including, without
limitation, the provisions of paragraph 3 of this Agreement regarding the
application of Excess Cash Collateral) shall limit or qualify in any manner
(i) the obligations of Borrower under the Loan Documents, including without
limitation, the obligation of Borrower to make all principal, interest and
other payments at the time and manner required under the Note (as modified and
amended by the Modification Agreement), or (ii) the right of Lender to pursue
all rights and remedies available under the Loan Documents, at law, equity or
otherwise in the event of the occurrence of any default under the Loan
Documents.

(l) Notwithstanding anything to the contrary contained in this
Agreement, in the event an insured loss occurs with respect to the Property,
Lender confirms that the insurance proceeds shall be applied in the manner
provided in paragraph 6 of the Deed of Trust.

4. Reporting. (a) Borrower shall deliver to Lender or cause
Manager to deliver to Lender, not later than the tenth (10th) day of each
month following any month (or portion thereof) during the term hereof, (x) a
detailed accounting of the cash income from the Property for the preceding
calendar month and a detailed accounting of the cash expenses for the Property
for the preceding calendar month, which accountings shall include, without
limitation, a monthly balance sheet, a profit and loss statement (cash basis),
a schedule of all accounts receivable and accounts payable (to the extent
ascertainable by the date such report is required and including whether any
rents or other charges are delinquent), a bank statement and bank
reconciliation for the Cash Collateral Disbursement Account and such other
statements and information as Lender shall reasonably request, (y) a certified
current rent roll of the Property identifying therein all current Tenants
(with appropriate contact persons), the spaces they use or occupy, their
monthly rental and other obligations, the commencement and termination dates
of all Leases in effect at the Property, and (z) a schedule of the security
deposits held pursuant to such Leases and such other information as Lender
shall reasonably request.

(b) If the reports delivered under clause (x) of subparagraph
4(a) above reveal an underpayment of Excess Cash Collateral with respect to
the period covered by such reports, simultaneously with the sending of such
reports, the underpayment will be sent to Lender from the Cash Collateral
Disbursement Account by wire transfer in accordance with the instructions set
forth on EXHIBIT G attached hereto or as otherwise directed by Lender, which
amount will be applied by Lender in the manner that such underpayment would
have been applied had such underpayment been received with the prior monthly
payment to Lender of Excess Cash Collateral. If the reports delivered under
clause (x) of subparagraph 4(a) above reveal an overpayment of Excess Cash
Collateral with respect to the period covered by such reports, and Lender
confirms in writing such overpayment to Borrower and Manager, Manager shall
be entitled to reduce the next payment of Excess Cash Collateral by an amount
equal to such overpayment.

(c) Whenever any action, suit or proceeding is commenced against
the Borrower or the Property or is threatened in writing to be commenced
against the Borrower or the Property, the Borrower shall (or shall cause
Manager to), within five (5) business days of such commencement or receipt of
such threat, as the case may be, notify Lender of such action, suit or
proceeding or of such threatened action, suit or proceeding, as the case may
be (which notice will include, without limitation, a description of the amount
and nature of the claim), and as long as such action, suit or proceeding or
such threatened action, suit or proceeding, as the case may be, is continuing,
Borrower will update Lender on a monthly basis on the status of such action,
suit or proceeding or of such threatened action, suit or proceeding, as the
case may be.

(d) All accounts, reports and statements delivered to Lender
pursuant to subparagraphs 4(a) and (c) above shall be certified by Manager or
by the Chief Financial Officer of Borrower or, if none, its managing general
partner as being true, complete and correct in all material respects as of the
date of such certification, and shall be accompanied by all invoices and such
other documentation as Lender may reasonably request to substantiate and
verify the actual incurrence of such expenses by Borrower identified therein.

(e) Borrower and Manager agree that Lender and its agents and
employees shall at all times have the right upon reasonable notice and during
normal business hours to inspect, audit and make copies of the books, records,
reports and financial and accounting information relating to the Property
maintained by Borrower or Manager. In addition, in the event that Lender
determines from any such inspection or audit that Borrower or Manager failed
to pay over to Lender any net cash flow from the Property, for the period of
February 1, 1993 through November 30, 1993, Borrower or Manager, as the case
may be, shall reimburse Lender for such net cash flow immediately upon written
notice of such failure, it being understood that Manager shall only be liable
for the obligation set forth in the sentence up to the amount of such net cash
flow which Manager did not pay over to Borrower or Lender. Such net cash flow
shall be deposited in the Reserve Account.

5. Waiver of Management Fees. Neither Borrower nor Manager will
pay Borrower or any entity or person affiliated with Borrower (including
Borrower's partners) any management fees, commissions or other compensation of
any kind or nature with respect to the management, leasing, development or
administration of the Property during the term of this Agreement, other than
fees due to Manager under the Management Agreement; it being agreed, however,
that the foregoing shall not preclude Cash Collateral being applied by
Borrower or Manager toward payment of the usual and customary insurance
commissions obtained by Borrower, provided that the insurance is provided on a
competitively-bid basis and provided that such payments are otherwise made in
accordance with the terms of this Agreement. Furthermore, neither Borrower
nor Manager shall enter into any agreement amending, modifying, restating,
replacing, extending, renewing or terminating the Management Agreement without
the prior written consent of Lender.

6. Termination and Default. (a) At any time upon the occurrence
of any default beyond applicable grace and cure periods by Borrower or Manager
under this Agreement or by Borrower under the Loan Documents, Lender may, in
addition to electing to exercise any and all of its rights and remedies under
the Loan Documents or at law or in equity, by written notice to Borrower and
Manager, elect to terminate this Agreement, in which event (and notwith-
standing anything to the contrary which may be contained or implied in this
Agreement) the terms of the Deed of Trust shall govern the application of
Rents and other Assigned Payments, it being expressly acknowledged that upon
any such termination Lender shall have the absolute and unconditional right
either to: (i) direct Manager, with respect to the Cash Collateral
Disbursement Account, and/or Account Agent, with respect to the Reserve
Account, to maintain the account balances then existing in said accounts plus
any new monies subsequently deposited therein and to enjoin said parties from
disbursing any amounts from said accounts for any purpose whatsoever or (ii)
to apply all Rents and other Assigned Payments (then held or thereafter
received, but subject, with respect to security deposits, to the rights of
Tenants) to the payment of principal, interest and other sums due under the
Loan in such order and priority as Lender, in its sole and absolute
discretion, shall elect. Termination of this Agreement shall not affect the
right of Lender to collect the Rents should Lender elect to exercise its
rights under the Deed of Trust. The date that Lender gives a notice to
terminate this Agreement as described above is herein referred to as the
"TERMINATION DATE". Upon the occurrence of the Termination Date, Lender
expressly reserves the right (i) to enjoin the disbursement of any amounts
held in the Cash Collateral Disbursement Account, Reserve Account or any other
account maintained in connection with the Loan for whatever purpose, by notice
to Manager, Account Agent or the holder of any other such accounts as set
forth above; (ii) to notify the bank holding the Cash Collateral Disbursement
Account and/or the Reserve Account that Lender shall have the sole, exclusive
and absolute authority to make disbursements or transfers from such accounts
or (iii) to withdraw all monies contained in the Cash Collateral Disbursement
Account, the Reserve Account and any other accounts maintained in connection
with the Loan (irrespective of whether such monies constitute Excess Cash
Collateral), or alternatively, with respect to the Cash Collateral
Disbursement Account, to require Manager and/or Account Agent to immediately
remit to Lender on demand all sums in the Cash Collateral Disbursement Account
and/or the Reserve Account. Lender shall apply all such monies received from
Manager and Account Agent under clause (iii) above against the Borrower's
obligations under the Loan Documents (but subject, with respect to security
deposits, to the rights of Tenants), including without limitation, the payment
of principal, interest and other sums evidenced and secured by the Loan
Documents (all said principal, interest and other sums being herein referred
to as the "DEBT"), whether or not then due and payable and in such order,
priority and proportions as Lender shall determine in its sole and absolute
discretion; provided, however, that Lender will leave in the Cash Collateral
Disbursement Account an amount sufficient to pay Operating Expenses (including
any leasing commissions owing to the Manager under the terms of the Management
Agreement) which have been incurred prior to the Termination Date (but not
with respect to any accounts payable which are more than thirty (30) days past
due, except for (i) items subject to a bona fide dispute which are less than
sixty (60) days past due and (ii) items for which monies have been reserved in
accordance with the provisions of subparagraph 3(h) of this Agreement), or
which otherwise relate to Operating Expenses incurred no more than thirty (30)
days prior to the Termination Date (but only if Lender has not made other
arrangements for the payment of such Operating Expenses). In no event shall
such Operating Expenses to be so paid from the Cash Collateral Disbursement
Account following the Termination Date be in excess of amounts permitted to be
paid by Manager under this Agreement for such Operating Expenses and in no
event shall such Operating Expenses be incurred subsequent to Lender (other
than as approved by Lender) having commenced a foreclosure action against the
Property or having obtained the appointment of a receiver for the Property and
Borrower having received notice of such commencement or such appointment or
Lender (or its assignee, designee or nominee) having taken title to the
Property pursuant to the terms of the Modification Agreement and Borrower
having received notice of such transfer of title. In addition to the
foregoing, at any time on or after the Termination Date, Lender shall have the
right to terminate the Management Agreement with or without cause on fifteen
(15) days' notice to Manager and Borrower.

(b) No failure to exercise or delay by Lender in exercising any
right, power or privilege under the Loan Documents, at law or in equity shall
preclude any other or further exercise thereof, or the exercise of any other
right, power or privilege. The rights and remedies provided in this Agreement
and the Loan Documents are cumulative and not exclusive of each other or of
any right or remedy provided by law or in equity. Lender expressly reserves
any and all rights and remedies available to it under the Loan Documents, at
law or in equity, including, without limitation, the right to accelerate the
Loan and to commence an action to foreclose the Deed of Trust (judicially or
by power of sale) or petition for the appointment of a receiver, irrespective
of whether this Agreement is in effect or has been terminated in accordance
with the provisions contained in this paragraph 6, it being expressly agreed
that the termination of this Agreement shall in no event or under any
circumstances be a condition precedent to the exercise by Lender of any of
such rights and remedies.

(c) Simultaneously with the execution of this Agreement,
Borrower and Manager have executed and delivered to Lender undated written
notices (collectively, the "NOTICES") instructing each Tenant and future
tenant to pay Rents to Lender in the manner more particularly set forth in
such Notices. Borrower acknowledges and agrees that Lender shall have the
absolute and unconditional right to send the Notices to the Tenants and future
tenants upon the occurrence of any event which would permit Lender to
terminate this Agreement in accordance with the terms of this paragraph 6.
Borrower hereby grants to Lender (and all persons designated by Lender
including, without limitation, First National Bank of Chicago or any other
financial institution designated by Lender) the full right, power and
authority, which shall be deemed to be coupled with an interest, to endorse
and deposit all checks pertaining to the Property delivered for deposit into
the account described in the Notices, whether or not made payable to Borrower,
Lender, Manager or otherwise, and Borrower agrees to execute all necessary or
appropriate documentation confirming the authority granted hereby. Neither
Borrower nor Manager shall hereafter deliver any notice or other written
communication containing contrary payment instructions for the Rents or any
other Assigned Payments to any Tenant or future tenant of the Property unless
such notice or communication shall have been approved by Lender in writing,
which approval may be withheld by Lender in its sole and absolute discretion.

7. Security Deposits Account. As of the date hereof, Borrower
has deposited $192,237.26 representing all amounts being held as security
deposits under the Leases into a separate interest-bearing escrow account
(which interest shall periodically be paid into the Reserve Account, unless
the terms of a Lease or applicable state law require otherwise, in which event
such escrow account shall retain such interest or such interest shall be paid
as required by applicable law or such Lease) in Lender's exclusive possession
and control (the "SECURITY DEPOSITS ACCOUNT") which monies represent all
security deposits under existing Leases. Lender shall furnish Borrower
account statements with respect to the Security Deposits Account not more than
quarterly during any calendar year. In addition, Borrower has furnished
Lender with a complete accounting of all security deposits required to be held
by Borrower under the Leases presently in effect. Borrower or Manager, as the
case may be, shall remit to Lender all future security deposits from Tenants
of the Property for deposit into the Security Deposits Account. Neither
Borrower nor Manager shall have any right to withdraw or otherwise use, apply
or credit such funds (except as provided in the next sentence or to return
same to a Tenant in accordance with the provisions of a Lease) without the
prior written consent of Lender. Borrower or Manager shall notify Lender in
writing in advance of the need to return a particular security deposit to a
Tenant or of the right of Borrower to retain the security deposit under the
terms of the applicable Lease, and if Borrower is entitled to retain a
security deposit, then all such amounts shall be transferred by Lender
promptly into the Cash Collateral Disbursement Account to be treated as Cash
Collateral and applied in accordance with the provisions of paragraph 3 of
this Agreement. Borrower hereby grants to Lender a security interest in
Borrower's interest, if any, in the Security Deposits Account and this
Agreement shall constitute a security agreement upon said account. On demand,
Borrower agrees to execute and deliver to Lender and hereby authorizes Lender
to execute in the name of Borrower to the extent Lender may lawfully do so,
financing statements, chattel mortgages or comparable security instruments as
may be requested or required by Lender to perfect its security interest in the
Security Deposits Account and Borrower's interest in the monies held in the
Security Deposits Account. The foregoing provisions shall not constitute a
waiver of any claim Lender may have against Borrower or Manager, if any, by
reason of any misapplication and/or misrepresentation by Borrower, Manager or
their respective agents or employees of security deposits and Borrower and
Manager hereby indemnify and hold Lender harmless from and against any loss,
liability, damage or expense in connection with any such misapplication and/or
misrepresentation by Borrower, Manager or their respective agents or
employees.

8. Leases. Borrower has delivered to Lender original or
certified copies (as amended and modified) of (i) all Leases and (ii) all
other contracts and agreements which currently affect the use, operation,
maintenance or occupancy of the Property. Manager, for itself and its agents
and employees, shall agree at all times to maintain, operate and endeavor to
lease-up the Property in a professional and diligent manner.

9. No Waiver. Upon the occurrence of the Termination Date and
subject to the provisions of the last sentence of subparagraph 6(a) of this
Agreement, Lender expressly reserves the right to withdraw and apply all
monies contained in the Cash Collateral Disbursement Account, the Reserve
Account and any other escrow accounts maintained by Lender in connection with
the Loans (irrespective of whether such monies constitute Excess Cash
Collateral) against the Debt whether or not then due and payable and in such
order, priority and proportions as Lender shall determine in its sole and
absolute discretion. No failure to exercise or delay by Lender in exercising
any right, power or privilege under the Loan Documents, at law or in equity
shall preclude any other or further exercise thereof, or the exercise of any
other right, power or privilege. The rights and remedies provided in this
Agreement and the Loan Documents are cumulative and not exclusive of each
other or of any right or remedy provided by law or in equity. Except as
otherwise expressly provided in the Loan Documents, no notice to or demand
upon Borrower in any instance shall, in itself, entitle Borrower to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the right of Lender to any other or further action in any
circumstances without notice or demand.

10. Expenses, Attorneys' Fees. Lender is hereby authorized to
reimburse itself from the Reserve Account or to direct Manager to reimburse
Lender from the Cash Collateral Disbursement Account for all amounts
reasonably incurred by or on behalf of Lender from and after the date hereof
for attorneys' fees and all other expenses reasonably incurred by or on behalf
of Lender in connection with the enforcement of this Agreement following the
occurrence of a default hereunder. In the event any dispute shall arise
concerning the subject matter of this Agreement and the Lender prevails in
such dispute, Lender shall be entitled to recover its reasonable attorneys'
fees and costs incurred in connection therewith, including without limitation,
all costs of trial, appellate and bankruptcy proceedings. The rights and
remedies of Lender contained in this paragraph shall be in addition to, and
not in lieu of, the rights and remedies contained in the Loan Documents and as
otherwise provided by law or in equity.

11. Borrower to Encourage Payment, Collections. Borrower and
Manager will use their usual and customary procedures to collect Rents up to
the institution of suit, including sending delinquency notices and phone
calls. At such time as Borrower or Manager would ordinarily take action to
collect past-due accounts, Borrower or Manager, as the case may be, shall
notify Lender that it recommends that a collection action be instituted.
Lender shall then have the option, with respect to any leases covering more
than 10,000 square feet of the Property, of authorizing Borrower or Manager,
or both, to take such action, either on Borrower's name or its own name, as
Lender deems appropriate to collect the delinquent Rents or Lender shall
undertake on behalf of Borrower to take such action as Lender deems
appropriate to collect the delinquent Rents; provided, however, that with
respect to leases covering less than 10,000 square feet of the Property,
Borrower or Manager shall take such actions to collect past due accounts as
Borrower deems appropriate in its sole discretion. All reasonable attorneys'
fees and costs incurred by Borrower in the collection of delinquent Rents
shall be approved by Lender for payment from the Cash Collateral Disbursement
Account or the Reserve Account in accordance with subparagraphs 3(a) or 3(c)
hereof, respectively.

12. Carryover of this Agreement in the Event of Bankruptcy. In
the event either Borrower or any general partner of Borrower ("GENERAL
PARTNERS") files for relief under Title 11 of the United States Code, as
amended (the "BANKRUPTCY CODE"), or an order of relief is granted as to any of
them under the Bankruptcy Code, the following provisions shall be applicable.
Notwithstanding anything in this paragraph 12 to the contrary, however,
neither Borrower nor any of the General Partners shall have Lender's consent
to use the Cash Collateral until a Cash Collateral Order or Stipulation
incorporating the following provisions has been signed by Lender and entered
and approved by a bankruptcy court under Section 363 of the Bankruptcy Code.
Borrower and General Partners (on behalf of themselves and each of their
prospective bankruptcy estates) enter into the following provisions in
consideration of the procedures provided in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which Borrower and
General Partners acknowledge:

This Agreement to be a Cash Collateral Order. Borrower and
General Partners agree that, in the event Borrower or any of the General
Partners files a petition for relief under the Bankruptcy Code with any
bankruptcy court, or is subjected to any petition under the Bankruptcy Code
which results in any order of relief under the Bankruptcy Code, and the debtor
in that proceeding wishes to use Cash Collateral as defined in the Bankruptcy
Code and/or this Agreement, then this Agreement shall without modification be
deemed to be a stipulation between Lender and Borrower and/or any of the
General Partners, as applicable, for a Cash Collateral Order pursuant to
Section 363 of the Bankruptcy Code. Borrower, General Partners (on behalf of
themselves and each of their prospective bankruptcy estates) and Lender hereby
agree that they shall cooperate in and shall not in any way resist having this
Agreement become and be fully incorporated in, without change or modification,
a Cash Collateral Order or Stipulation immediately entered, subject to court
approval, by a bankruptcy court under Section 363 of the Bankruptcy Code and
before any use of Cash Collateral as defined in Section 363 of the Bankruptcy
Code and/or this Agreement and that Cash Collateral shall only be used as
provided in this Agreement. Such order shall permit the use of Cash
Collateral only until the end of the exclusive period under Section 1121(b) of
the Bankruptcy Code, and no longer, and shall incorporate all of the other
terms provided by this Agreement, and specifically Sections 12(ii) through
12(vi) below; provided, however, that nothing herein shall be deemed to
restrict Lender's absolute right, at any time, to seek to limit or terminate
the exclusive period under Section 1121(b) of the Bankruptcy Code or any of
Lender's other rights or remedies under the Loan Documents, the Bankruptcy
Code or otherwise; and provided, further, that Borrower does not represent,
warrant or guarantee that any creditor, committee or trustee acting in the
bankruptcy case, or the bankruptcy court, sua sponte, will not object to one
or more of the terms or conditions in Section 12(ii) through 12 (vi) below
provided that this provision shall not be deemed an admission by Lender that
any such party has any right or cause to make any such objection. Borrower
and General Partners also agree and acknowledge that the Rents and the other
Assigned Payments are and shall be deemed to be in any such proceeding "Cash
Collateral" as that term is defined in Section 363 of the Bankruptcy Code.

(i) Adequate Protection. As adequate protection for the
use of Cash Collateral, Borrower and General Partners agree that Lender shall
be deemed in the proceeding, to the extent it is determined that
Section 552(a) of the Bankruptcy Code applies to limit Lender's interest under
the Loan Documents and this Agreement, to have a continuing perfected post-
bankruptcy interest and pledge in all Leases and all Rents and other Assigned
Payments whether entered into or derived from the Property prior or subsequent
to the later to occur of the filing of the petition or the order for relief.
As further adequate protection for Borrower's use of the Rents and the other
Assigned Payments, Borrower agrees to maintain at all times an adequate and
appropriate amount and coverage of insurance covering its assets in amounts
not less than that required under the Loan Documents, naming Lender as a loss
payee as its interest may appear, provided a sufficient portion of the Rents
is made available for such purpose.

(ii) Priority Claim To The Extent Lender's Security
Decreased. All Rents and the other Assigned Payments are Cash Collateral, and
to the extent they are used and consumed after filing or entry of any Cash
Collateral Order, Borrower and General Partners specifically agree that they
are collateral for a secured claim under Section 506 of the Bankruptcy Code in
the amount so used. To the extent the collateral securing Lender's claim in
the bankruptcy proceeding is thereafter deemed or proves to be insufficient to
pay Lender's claim in full, Lender's secured claim shall be deemed to have
been inadequately protected by the provisions of the Cash Collateral Order,
and it shall therefore have an administrative expense claim in the proceeding
with super priority over any and all administrative expenses of the kind
specified in Section 503(b) and 507(b) of the Bankruptcy Code, which super
priority shall be equal to the priority provided under the provisions of
Section 364(c)(1) of the Bankruptcy Code over all other costs and
administrative expenses incurred in the case of the kind specified in, or
ordered pursuant to, Section 105, 326, 330, 331, 503(b), 506(c), 507(a),
507(b) or 726 of the Bankruptcy Code and shall at all times be senior to the
rights of Borrower, General Partners or any successor trustee in the resulting
bankruptcy proceeding or any subsequent proceeding under the Bankruptcy Code.

(iii) No Renewal of Exclusive Period, Relief from Automatic
Stay. Borrower and General Partners agree that if it or any of them is a
debtor in a proceeding under the Bankruptcy Code, and the bankruptcy court
enters a Cash Collateral Order, then, subject to the approval of the
bankruptcy court, such Cash Collateral Order shall provide that if Borrower or
any of the General Partners, as the case may be, does not file a Plan within
the exclusive period provided by Section 1121(b) of the Bankruptcy Code,
Lender shall, without the necessity of any additional notice to the debtor or
to other creditors, or any hearing or any further order of the bankruptcy
court, have immediate relief from stay under Bankruptcy Code Section 362 to
commence and complete foreclosure on the Property, conduct and complete sale
thereunder, and either purchase itself or sell to a third party under the
provisions of the Loan Documents and according to applicable non-bankruptcy
laws, and to take any other action permitted under the Loan Documents and
applicable non-bankruptcy law. Nothing in this subsection 12(iii) shall be
deemed to in any way limit Lender's right, at any time, to limit or terminate
the exclusive period under Section 1121 of the Bankruptcy Code.

(iv) Further Relief From Automatic Stay. Borrower and
General Partners specifically agree that, for valuable consideration as stated
herein, subject to bankruptcy court approval, Lender shall be deemed to have
the relief from the automatic stay under Section 362 of the Bankruptcy Code in
order to effectuate the provisions of this Section 12. As an alternative, if
Lender requests such relief, Borrower or General Partners, as the case may be,
shall not object to or oppose Lender from having immediate relief, subject to
bankruptcy court approval, from the automatic stay under Section 362 of the
Bankruptcy Code, such relief being limited to modification of the stay (i) to
implement the provisions of this Agreement permitting the use of Cash
Collateral, (ii) to permit the filing of financing statements or other
instruments and documents evidencing Lender's interests in the Rents, the
other Assigned Payments and the Leases after the filing of the petition or
order for relief, whichever is later, (iii) to permit Lender's application of
the Rents and the other Assigned Payments as provided herein, and (iv) to
permit the relief provided for in subsection 12(iii).

(v) Perfection. During the pendency of the case, any of
the rights granted hereunder or by the Deed of Trust shall be confirmed as
security interests or liens, and shall be deemed present, "choate", fully
perfected and presently fully enforceable without the necessity of the filing
of any additional documents or commencement of proceedings otherwise required
under non-bankruptcy law for the perfection or enforcement of security
interests, with such perfection and enforcement being binding upon Borrower,
General Partners and any subsequently appointed trustee, either in Chapter 11
or under any other Chapter of the Bankruptcy Code, and upon other creditors of
Borrower or General Partners, as the case may be, who have or who may
hereafter extend secured or unsecured credit to Borrower or General Partners.

(vi) Nothing in this Section 12 shall be deemed in any way
to limit or restrict any of Lender's rights to seek in the bankruptcy court
any relief that Lender, in its sole discretion, may deem appropriate, in the
event that a case under the Bankruptcy Code is commenced by or against
Borrower or any of the General Partners, and in particular, Lender shall be
free to move for an immediate vacation of the automatic stay under Section 362
of the Bankruptcy Code, to terminate the exclusive period under Section 1121
of the Bankruptcy Code, and/or to dismiss the filed bankruptcy case.

13. Lender Not Liable for Expenses. Nothing in this Agreement
shall be intended or construed to hold Lender liable or responsible for any
expense, disbursement, liability or obligation of any kind or nature
whatsoever, including, but not limited to, wages, salaries, payroll taxes,
withholding, benefits or other amounts payable to or on behalf of Borrower or
General Partners, whether or not there is sufficient money in the Cash
Collateral Disbursement Account and/or the Reserve Account to pay such
expenses or costs and whether any present or future creditor attempts to
assert a claim against Lender or the Property, including, but not limited to,
any attempt in any bankruptcy proceeding to assert a claim under
Section 506(c) of the Bankruptcy Code, or any other provision of the
Bankruptcy Code. Nothing contained in the preceding sentence shall be
construed as relieving Lender of its obligations to comply with the express
provisions of this Agreement. In any case commenced under any provision of
the Bankruptcy Code by or against Borrower, Lender does not consent to any
"carve-out", nor shall the Borrower nor any of the General Partners seek the
imposition of any "carve-out" for any costs, fees or expenses of any kind or
nature of the Borrower's bankruptcy estate, as against either (x) any of
Borrower's past, present or future property together with any proceeds or
products of the same (and whether or not any of such property together with
the proceeds or products thereof is Lender's collateral) or (y) as against
Lender, its collateral or its indebtedness.

14. Management Agreement. In the event and to the extent that
the terms and provisions of the Management Agreement conflict with those of
this Agreement, the terms and provisions of this Agreement shall override
those of the Management Agreement. Manager acknowledges and agrees that
amendments and modifications of the Management Agreement will be binding on
Lender only to the extent such amendments and modifications have been approved
in writing by Lender. Lender may terminate the Management Agreement upon
termination of this Agreement as set forth in subparagraph 6(a) hereof.

15. No Joint Venture. This Agreement shall not constitute a
joint venture or partnership agreement of any kind between the parties hereto
or otherwise create the relationship of joint venturers or partners among the
parties hereto. Nothing contained herein shall characterize or be deemed to
characterize Lender as a "mortgagee-in-possession".

16. Modifications. If any or all of the provisions of this
Agreement are hereafter modified, vacated or stayed by subsequent order of any
court, such stay, modification or vacation shall not affect the validity and
enforceability of any contractual right, property right, lien, security
interest or priority authorized hereby with respect to any of the Rents or the
other Assigned Payments which are deemed by this Agreement to be Cash
Collateral and which have been used pursuant to this Agreement and the Loan
Documents. Notwithstanding such stay, modification or vacation, any uses of
Rents or the other Assigned Payments after the effective date of such
modification, stay or vacation, shall be governed in all respects by the
original provisions of this Agreement, and Lender shall be entitled to all of
the rights, privileges and benefits, including any interest, liens, security
interests, priorities and collection rights granted herein, with respect to
all Rents and other Assigned Payments which are used thereafter. Unless it
explicitly consents in writing at the time of such modification, stay or
vacation, Lender does not by the terms hereof consent to any modifications of
this Agreement.

17. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of California without regard to its
conflict of laws principles.

18. Benefit. This Agreement shall to the extent legally
permissible be binding upon and shall inure to the benefit of Lender,
Borrower, Manager and their respective successors and assigns, including, but
not limited to, any trustee that may be appointed under the Bankruptcy Code or
any state court receiver. The provisions of paragraph 12 of this Agreement
shall be binding upon General Partners and their respective successors,
assigns, heirs, estates and representatives. In no event or under any
circumstances shall any third party be deemed a third party beneficiary of
this Agreement.

19. Consent to Agreement. Borrower and each General Partner
acknowledges for itself that it has thoroughly read and reviewed the terms and
provisions of this Agreement and is familiar with same, that the terms and
provisions contained herein are clearly understood by it and have been fully
and unconditionally consented to by it and that Borrower and each General
Partner has had full benefit and advice of counsel of its own selection, or
the opportunity to obtain the benefit and advice of counsel of its own
selection, in regard to understanding the terms, meaning and effect of this
Agreement, and that this Agreement has been entered into by Borrower and each
General Partner freely, voluntarily, with full knowledge and without duress,
and that in executing this Agreement, Borrower and each General Partner are
relying on no other representations, either written or oral, express or
implied, made by Lender, or by any other party hereto, and that the
consideration received by Borrower and each General Partner hereunder has been
actual and adequate.

20. Miscellaneous. This Agreement is made for the sole
protection of Lender, Borrower, Manager and their respective successors and
assigns. No other person shall have any right whatsoever hereunder. Any
notice, demand or other communication which any party hereto may desire or may
be required to give to any other party hereto shall be in writing, and shall
be deemed given (a) if and when personally delivered, (b) upon receipt if sent
by a nationally recognized overnight courier addressed to a party at its
address set forth below, or (c) on the third (3rd) business day after being
deposited in United States registered or certified mail, postage prepaid,
addressed to a party at its address set forth below, or to such other address
as the party to receive such notice may have designated to all other parties
by notice in writing in accordance herewith:

If to Lender:
The Travelers Life and Annuity Company
2215 York Road
Suite 504
Oak Brook, Illinois 60521
Attention: Managing Director
General Counsel

With copies to:

The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
Attention: Travelers Realty Investment
Company

and

Battle Fowler
280 Park Avenue
New York, New York 10017
Attention: Lawrence Mittman, Esq.
Dean A. Stiffle, Esq.

If to Borrower:

C-C California Plaza Partnership
c/o Carlyle Real Estate Limited
Partnership-XV
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attention: Robert J. Chapman

With copies to:

Pircher, Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, California 90067-6077
Attention: Real Estate Notices (P.G.N.)

Cygna Limited One
c/o Cygna Development Corporation
2121 North California Boulevard - Suite 230
Walnut Creek, California 94596
Attention: Ben Kacyra

and

Greene, Radovsky, Maloney & Share
Spear Street Tower - Suite 4200
1 Market Plaza
San Francisco, California 94105
Attention: Russell Pollock, Esq.

If to Manager:

Cygna Development Services, Inc.
2121 North California Boulevard
Suite 230
Walnut Creek, California 94596

With copies to:

Greene, Radovsky, Maloney & Share
Spear Street Tower - Suite 4200
1 Market Plaza
San Francisco, California 94105
Attention: Russell Pollock, Esq.

Each party entitled to receive notice under this Agreement may designate a
change of address by notice given to the other parties at least ten (10) days
prior to the date such change of address is to become effective. Time shall
be of the strictest essence in the performance of each and every one of the
provisions hereof. If any of the provisions of this Agreement is held to be
invalid or unenforceable, the remaining provisions shall remain in effect
without impairment. This Agreement may not be modified, amended or terminated
except by an agreement in writing executed by all of the parties hereto.

21. Counterparts. It is understood and agreed that this
Agreement may be executed in telecopied or original counterparts, each of
which shall, for all purposes, be deemed an original and all of such
counterparts, taken together, shall constitute one and the same Agreement,
even though all of the parties hereto may not have executed the same
counterpart of this Agreement.

22. Recourse Obligations. Borrower and its general partner,
Carlyle Real Estate Limited Partnership-XV, an Illinois limited partnership
("CARLYLE") (but none of the partners of Carlyle, including, without
limitation, JMB Realty Corporation ("JMB"), a Delaware corporation, nor any of
Carlyle's partners' respective successors and assigns), respectively, shall be
liable personally and on a full recourse basis to Lender for any and all
losses, costs, expenses and liabilities of any kind or nature whatsoever
incurred by Lender as a result of any act of Borrower or Carlyle which
knowingly or intentionally prevents or materially impedes or hinders the
collection or application of the Rents and the other Assigned Payments as
provided in this Agreement; provided, however, that Carlyle shall only be
liable with respect to acts of Borrower directly caused by Carlyle (and not by
any other person or entity, including any other partner in Borrower).
Borrower and Borrower's general partner, Cygna Limited One, a California
limited partnership ("CL1"), respectively, shall also be liable personally and
on a full recourse basis to Lender for any and all such losses, costs,
expenses, and liabilities incurred by Lender as a result of any act of
Borrower or CL1 which knowingly or intentionally prevents or materially
impedes or hinders the collection or application of the Rents and the other
Assigned Payments as provided in this Agreement; provided however, that CL1
shall only be liable with respect to acts of Borrower directly caused by CL1
(and not by any other person or entity, including any other partner or
Borrower). In addition, CL1 shall be liable as set forth above with respect
to any acts of Manager, for which acts Manager also shall be personally liable
to Lender on a full recourse basis. The provisions of the foregoing sentence
shall be limited to the circumstances described in such sentence and shall not
otherwise affect the exculpatory provisions of the Loan Documents as they
relate to the payment of the Debt.

23. Signatories. Each undersigned general partner signatory of
Borrower represents that it is a general partner of Borrower and that it is
executing this Agreement on behalf of Borrower and, with respect to
paragraphs 12, 13, 18, 19 and 22 of this Agreement, also in its separate
capacity as a general partner of Borrower, and that such execution has been
duly authorized by all necessary partnership action.

24. Exculpation. Notwithstanding anything in this Agreement to
the contrary, but subject to the provisions of this paragraph 24, without in
any manner releasing, impairing or otherwise affecting the Note, the Deed of
Trust or any other instrument securing the Note or the validity thereof or
hereof or the lien of the Deed of Trust, there is no personal liability of
Borrower or any partner in Borrower hereunder or under any of the Loan
Documents, and no monetary or deficiency judgment shall be sought or enforced
against Borrower; provided, however, that a judgment may be sought against
Borrower to the extent necessary to enforce the right of Lender in, to or
against the Property securing the indebtedness evidenced by the Note and
covered by the Deed of Trust and the other Loan Documents. Notwithstanding
any of the foregoing, nothing contained in this paragraph shall be deemed to
prejudice the rights of Lender: (i) to recover any fraudulently misapplied
Restoration Funds, Insurance Proceeds or Condemnation Proceeds (all as defined
in the Deed of Trust) as well as any expenditures, damages or costs (including
without limitation reasonable attorneys' fees) incurred by Lender as a result
of such fraudulent misapplication, (ii) to recover any expenditures, damages
or costs (including without limitation reasonable attorneys' fees) incurred by
Lender as a result of Borrower's fraud, material and intentional
misrepresentation or intentional destruction of the Property or (iii) to
enforce the personal recourse obligations set forth in paragraph 22 of this
Agreement. All references in this paragraph to the Note, Deed of Trust and
Loan Documents shall be deemed to mean the Note, Deed of Trust and Loan
Documents as modified and amended by the Modification Agreement.

25. Waiver of California Statutes. Borrower acknowledges that
it is in default under the terms and conditions of the Loan Documents as of
the execution hereof, that Lender presently has the right to enforce the terms
of the Loan Documents, and that this Agreement is being entered into pursuant
to the request of Borrower. Borrower further acknowledges that all of the
terms and conditions of this Agreement have been carefully negotiated between
Borrower and Lender and that Borrower has been fully represented during those
negotiations by competent legal counsel of Borrower's choosing, including
counsel licensed to practice in the state of California. Borrower understands
that Lender is entering into this Agreement in reliance upon, and in
consideration of, among other things, the following waiver by Borrower of
various provisions of California law. Accordingly, Borrower hereby waives, to
the fullest extent permitted by law, the protections of (i) Section 726 of the
California Code of Civil Procedure (providing that a creditor has only one
form of action to enforce a debt secured by real property) and (ii) Sections
580a and 580d of the California Code of Civil Procedure (providing for the
limitation of deficiency judgments), but only for the purpose of allowing
Lender to foreclose on any collateral expressly pledged to Lender under the
Loan Documents (and, without limitation to the foregoing, no deficiency
judgment following a foreclosure sale may be enforced personally against
Borrower or its partners, but rather may be enforced solely against such other
collateral as may be expressed pledged to Lender under the Loan Documents).

Borrower represents and warrants to Lender that Borrower has discussed
the meaning and effect of the foregoing waivers with Borrower's legal counsel
and that Borrower understands fully the legal consequence of Borrower's
providing such waivers to Lender. Borrower covenants to Lender not to assert
any rights under any of the foregoing statutes in opposition to any action
taken by Lender to enforce Lender's rights under this Agreement or any other
Loan Document.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

IN WITNESS WHEREOF, this Agreement has been executed by the
parties hereto in manner and form sufficient to bind them, as of the day and
year first set forth above.

THE TRAVELERS LIFE AND ANNUITY COMPANY,
a Connecticut corporation

By: _________________________________
Name:
Title:

C-C CALIFORNIA PLAZA PARTNERSHIP
a California general partnership

By: Carlyle Real Estate Limited Partnership-XV,
an Illinois limited partnership,
General Partner

By: JMB Realty Corporation, a Delaware
corporation, General Partner

By: _______________________
Name:
Title:

By: Cygna Limited One, a California limited
partnership, General Partner

By: Cygna Development Corporation, a
California corporation, General Partner

By: _______________________
Name:
Title:

CYGNA DEVELOPMENT SERVICES, INC., a
California corporation

By: _________________________________
Name:
Title:

EXHIBIT A

[ORIGINAL LOAN DOCUMENTS]

NOTE: The term "Note" as used herein shall mean that certain
Note Secured by Deed of Trust dated December 18, 1986 in the principal amount
of $58,000,000 given by Borrower to Lender.

DEED OF TRUST: The term "Deed of Trust" as used herein shall mean
that certain First Deed of Trust and Security Agreement With Assignment of
Rents and Leases and Fixture Filing dated as of December 18, 1986 in the
principal amount of $58,000,000 given by Borrower to First American Title
Insurance Company and Lender and recorded on December 18, 1986 as Document
Number 86-229768 in Book 13327, Page 243, Contra Costa County Records,
California.

The Original Loan Documents also include all filings made in accordance with
the Uniform Commercial Code with respect to the documents listed on this
Exhibit A as well as all other documents or instruments evidencing, securing
or relating to the indebtedness of the Note.

EXHIBIT B

[MODIFICATION DOCUMENTS]

MODIFICATION AGREEMENT: The term "Modification Agreement" as used herein
shall mean that certain Agreement of Modification of Note, Deed of Trust, and
other Loan Documents dated as of the date hereof between Borrower and Lender.

The Modification Documents also include the following additional documents:

(i) This Agreement;

(ii) that certain Escrow Agreement among Borrower, Lender and Chicago
Title and Trust Company, as escrow agent; and

(iii)all filings made in accordance with the Uniform Commercial Code
with respect to the documents listed on this Exhibit B.

EXHIBIT C

[NOTICE TO TENANTS]

Tenant's Name:
Tenant's Address:

Attention: General Manager

Re: [Lease or License] dated _______________ between
(C-C California Plaza Partnership), as landlord,
and __________________, as tenant, [as amended] [such lease
or license, as amended,] the
["Lease" or "License"]

Gentlemen:

This Letter shall confirm to you that notwithstanding any previous
communications received by you from either or both of the undersigned and
notwithstanding anything to the contrary contained in the Lease [or License],
you are hereby directed by the undersigned to make your check payable to
___________________ _____ and to send all payments of rents, additional rents
and all other payments due or to become due under the Lease [or License] as
follows:

__________________________
__________________________
__________________________

Each check should include the notation: Account No. _______________.

You are also hereby notified that the terms of this letter are
irrevocable and cannot be terminated, modified, abrogated or vitiated in any
respect whatsoever except by a writing signed by _________________
____________________________________________________.

Sincerely yours,

_____________________________________
________________________

By:________________________________
Name:
Title:

C-C CALIFORNIA PLAZA PARTNERSHIP,
a California general partnership

By: Carlyle Real Estate Limited
Partnership-XV,
an Illinois limited partnership,
General Partner

By: JMB Realty Corporation,
a Delaware corporation,
General Partner

By:___________________________
Name:
Title:

By: Cygna Limited One, a California limited
partnership, General Partner

By: Cygna Development Corporation,
a California corporation,
General Partner

By:___________________________
Name:
Title:

CYGNA DEVELOPMENT SERVICES, INC.
a California corporation

By:_____________________________________
Name:
Title:

EXHIBIT D

[OPERATING BUDGET]

To Be Attached
EXHIBIT E

[CERTIFICATION OF MANAGER]

The undersigned, _________________________, hereby certifies to
you that on behalf of C-C California Plaza Partnership, a California general
partnership ("BORROWER") he has paid all federal, state and local income
taxes, FICA taxes, FUTA taxes, federal and state unemployment taxes and any
and all other taxes required to be withheld by Borrower from its employee
payroll to date as referenced in that certain Budget dated ______________
delivered to you for Borrower's operating period from ________________________
to ___________________________. The undersigned further certifies that he has
withheld and paid over to the appropriate taxing authorities, any and all
state and local sales and use taxes due on goods sold or services rendered
during such operating period.

IN WITNESS WHEREOF, the undersigned has executed and delivered
this certification as of this ___ day of __________, 199_.

By: ___________________________

Title: ________________________

Witness:

_____________________________________

EXHIBIT F

[FORM OF REQUEST]

___________________, 199_

The Travelers Life and Annuity Company
2215 York Road
Suite 504
Oak Brook, Illinois 60521

Re: Request No._______ for Cash Collateral in the Amount of
$________________
Travelers Loan No. 204366-0

Gentlemen:

This request refers to that certain Cash Management Agreement
("AGREEMENT") dated ________________________, 1993, among The Travelers Life
and Annuity Company ("LENDER"), C-C California Plaza Partnership ("BORROWER")
and Cygna Development Services, Inc. ("MANAGER"). All capitalized terms which
are not otherwise defined herein shall have the meaning given to such term in
the Agreement.

This certifies that pursuant to paragraph 3(c) of the Agreement,
Borrower is entitled to request, and hereby does request, disbursement from
available funds in the Reserve Account, of the amounts listed on Schedule I
hereto, each of which is required to pay ordinary, necessary and reasonable
operating expenses of the Property.

Attached are invoices and other substantiation for the amounts
requested.

The exculpation provisions set forth in paragraph 24 of the
Agreement are incorporated herein by reference as if set forth in their
entirety.

Very truly yours,

C-C CALIFORNIA PLAZA PARTNERSHIP,
a California general partnership

By: Carlyle Real Estate Limited
Partnership-XV, an Illinois
limited partnership,
General Partner

By: JMB Realty Corporation, a
Delaware corporation,
General Partner

By: ___________________________
Name:
Title:

By: Cygna Limited One, a California limited
partnership, General Partner

By: Cygna Development Corporation, a
California corporation,
General Partner

By: __________________________
Name:
Title:
EXHIBIT G

(Wiring Instructions)

The Travelers Life and Annuity Company
Chase Manhattan Bank
New York, New York 10005

ABA No.: 021-000-021

Acct. No.: 910-2-524155

Attn.: Investment Administration

Ref.: TIC Loan No. 204366-0
Travelers Loan No. 204366

ESCROW AGREEMENT

AGREEMENT dated as of December 22, 1993 entered into
among C-C CALIFORNIA PLAZA PARTNERSHIP, a California general partnership
having an office at 2121 North California Boulevard, Suite 230, Walnut Creek,
California 94596 (hereinafter referred to as Borrower); THE TRAVELERS LIFE AND
ANNUITY COMPANY, a Connecticut corporation, having an address at 2215 York
Road, Suite 504, Oak Brook, Illinois 60521 (hereinafter referred to as
Lender); and CHICAGO TITLE AND TRUST COMPANY, having an office at 171 North
Clark Street, Chicago, Illinois 60601 (hereinafter referred to as Escrow
Agent);

W I T N E S S E T H:

WHEREAS, Borrower has borrowed from Lender the original principal
sum of $58,000,000.00 (the "LOAN"), the indebtedness of which Loan is
evidenced by the Note and secured by the Deed of Trust (as such terms are
defined in Exhibit A attached hereto) encumbering Borrower's fee estate in the
real property and improvements more particularly described in the Deed of
Trust (the "PROPERTY");

WHEREAS, Borrower has permitted certain defaults to occur under
the Loan and as of the date hereof Lender is entitled to foreclose its
interest in the Property;

WHEREAS, Borrower has requested that for the time being Lender
refrain from foreclosing its interest in the Property and has requested that
Lender enter into among other agreements, that certain Agreement of
Modification of Note, Deed and Trust and Other Loan Documents (the
"MODIFICATION AGREEMENT") amending the Note and the Deed of Trust and
extending the maturity date of the Loan;

WHEREAS, Lender has refused to refrain from foreclosing its
interest in the Property for the time being or to execute and deliver the
Modification Agreement unless Borrower executes this Agreement and delivers a
deed to the Property and various other documents in escrow pursuant hereto;
and

WHEREAS, in consideration of Lender's agreement to refrain from
foreclosing its interest in the Property for the time being, to extend the
maturity of the Loan and to execute and deliver the Modification Agreement,
Borrower and Lender have executed various documents which are to be deposited
into escrow and held in escrow pursuant to the provisions of this Agreement.

NOW, THEREFORE, in consideration of ten dollars ($10) and other
good and valuable consideration, the receipt of which is hereby acknowledged,
Borrower, Lender and Escrow Agent hereby covenant and agree as follows:

1. Transfer Documents. Borrower acknowledges and agrees that in
order to enable Lender to avoid the time and expense of pursuing a foreclosure
upon the occurrence of a default beyond applicable grace and cure periods, if
any, under the Loan Documents (as defined in Exhibit A), on the date hereof,
original copies of the documents and instruments described in Exhibit B
attached hereto (hereinafter referred to as the Transfer Documents) executed
by Borrower have been delivered to Escrow Agent.

2. Receipt by Escrow Agent. Escrow Agent acknowledges receipt of
the Transfer Documents and agrees to establish an escrow (hereinafter referred
to as the Escrow) and hold the Transfer Documents in escrow pursuant to the
provisions of this Agreement.

3. Breaking of Escrow. Upon the receipt by Escrow Agent of a
certification in the form of Exhibit C attached hereto (the "TRANSFER
DIRECTION NOTICE"), Escrow Agent shall immediately complete, by dating and
filling in all blanks as appropriate, and deliver to Lender or Lender's
nominee, designee or assignee the Transfer Documents, it being understood that
the Property may be transferred to Lender, its nominee, designee or assignee,
as directed by Lender. Borrower hereby authorizes and empowers Lender as
attorney-in-fact of Borrower, to complete the Transfer Documents as described
above and to execute any such further documentation as is reasonably necessary
to effectuate any such transfer; provided, however, that Lender shall not
execute pursuant to said power of attorney any further documentation that
would create any recourse liability on behalf of Borrower or any of its
partners. The power of attorney granted to Lender pursuant to this paragraph
shall be deemed coupled with an interest and shall be irrevocable.
Notwithstanding anything to the contrary contained in this Agreement, it is
expressly understood that (i) Borrower shall not be responsible for the
payment of any deed tax, sales tax or similar tax imposed as a result of the
execution, delivery and recordation of the Transfer Documents, (ii) Borrower
shall not be responsible for the payment of any title premiums or other title
charges with respect to the issuance of the owner's title policy insuring the
Transfer Documents and (iii) all documents and instruments required to be
delivered by Borrower or actions required to be taken by Borrower pursuant to
this Agreement shall be without recourse, cost or liability of any sort
whatsoever to Borrower or any of its direct or indirect present or future
partners.

4. Transfer Absolute. Borrower acknowledges and agrees that at
the time the Transfer Documents and all additional documents and actions
contemplated by this Agreement are properly delivered to Lender pursuant to
the provisions hereof (a) they are intended to effect a present and absolute
conveyance and unconditional transfer of the Property, the Account Proceeds,
the leases affecting the Property and all income and revenue therefrom,
furniture, fixtures and equipment and all licenses, rights and privileges
associated therewith, to the extent assignable, and are not given as security,
(b) Borrower will deliver to Lender, its nominee, designee or assignee
possession (subject to the rights of tenants, occupants and licensees) and
enjoyment of the Property and the other property transferred pursuant to the
Transfer Documents concurrently with the delivery to Lender of the Transfer
Documents and Lender, its nominee, designee or assignee shall thereafter have
the immediate right to occupy, operate, use, sell and transfer the same or any
part thereof for its own account, at its sole and absolute discretion and (c)
title to the Property shall remain subject to the Deed of Trust to the full
extent of the indebtedness secured thereby, and recording of the Deed
(described in Exhibit B attached hereto) shall not result in a merger of
Lender's interest as beneficiary under the Deed of Trust with Lender's
interest as fee title holder pursuant to the Deed.

5. Cumulative Remedies. Nothing contained in this Agreement
shall preclude Lender from pursuing foreclosure of the Deed of Trust upon an
Event of Default or failure to pay the Debt upon maturity, or any other rights
and remedies under the Deed of Trust or the other Loan Documents (as defined
in the Deed of Trust), instead of or in addition to directing the Escrow Agent
to deliver the Transfer Documents to Lender in accordance with the provisions
of this Agreement and effectuating a transfer to Lender, its nominee, designee
or assignee, pursuant to the Transfer Documents. Upon a default under the
Loan Documents beyond applicable notice and cure periods, if any, or failure
to pay the Debt in full on the maturity, Borrower shall within five (5) days
of demand by Lender (unless the Debt shall have been paid in full within such
five (5) day period) deliver to Lender, in a form and content acceptable to
Lender, a stipulation of the facts, necessary to obtain a judgment of
foreclosure uncontested by Borrower and a quitclaim deed of Borrower's
redemption rights and Lender shall have the absolute right to file the same
and complete a foreclosure of the Deed of Trust and a transfer of the Property
pursuant to the terms thereof. Any documents or instrument required to be
delivered under this paragraph shall be without recourse, cost or liability of
any sort whatsoever to Borrower.

6. Specific Performance. The provisions of this Agreement shall
be enforceable by an action for specific performance.

7. Termination of Escrow. Upon payment in full to Lender of the
Debt, Lender shall by written notice to Escrow Agent terminate the Escrow and
deliver the Transfer Documents to Borrower whereupon the Transfer Documents
shall be deemed cancelled and null and void. Except as to deposits of funds
for which Escrow Agent has received express written direction concerning
investment or other handling, the parties hereto agree that the Escrow Agent
shall be under no duty to invest or reinvest any deposits at any time held by
it hereunder; and, further, that Escrow Agent may commingle such deposits with
other deposits or with its own funds in the manner provided for the
administration of funds under Section 2-8 of the Corporate Fiduciary Act (Ill.
Rev. Stat. 1989, Ch 17, Par. 1552-8) and may use any part or all such funds
for its own benefit without obligation of any party for interest or earnings
derived thereby, if any. Provided, however, nothing herein shall diminish
Escrow Agent's obligation to apply the full amount of the deposits in
accordance with the terms of these escrow trust instructions. In the event
the Escrow Agent is requested to invest deposits hereunder, Escrow Agent is
not to be held responsible for any loss of principal or interest which may be
incurred as a result of making the investments or redeeming said investment
for the purposes of these escrow trust instructions.

8. Provisions Regarding Escrow Agent. (a) Escrow Agent shall
have no duties or responsibilities other than those expressly set forth
herein. Escrow Agent shall have no duty to enforce any obligation of any
person to make any delivery or to enforce any obligation of any person to
perform any other act. Escrow Agent shall be under no liability to the other
parties hereto or to anyone else by reason of any failure on the part of any
party hereto or any maker, guarantor, endorser or other signatory of any
document or any other person to perform such person's obligations under any
such document. Except for amendments to this Agreement hereinafter referred
to and except for joint instructions given to Escrow Agent by Borrower and
Lender relating to the Transfer Documents, Escrow Agent shall not be obligated
to recognize any agreement between any or all of the persons referred to
herein.

(b) In its capacity as Escrow Agent, Escrow Agent shall not be
responsible for the genuineness or validity of any security, instrument,
document or item deposited with it and shall have no responsibility other than
to faithfully follow the instructions contained herein, and shall not be
responsible for the validity or enforceability of any security interest of any
party and it is fully protected in acting in accordance with any written
instrument given to it hereunder by any of the parties hereto and reasonably
believed by Escrow Agent to have been signed by the proper person. Escrow
Agent may assume that any person purporting to give any notice hereunder has
been duly authorized to do so.

(c) It is understood and agreed that the duties of Escrow Agent
are purely ministerial in nature. Escrow Agent shall not be liable to the
other parties hereto or to anyone else for any action taken or omitted by it,
or any action suffered by it to be taken or omitted, in good faith and in the
exercise of reasonable judgment, except for acts of willful misconduct or
gross negligence. Escrow Agent may rely conclusively and shall be protected
in acting upon any order, notice, demand, certificate, opinion or advice of
counsel (including counsel chosen by Escrow Agent), statement, instrument,
report or other paper or document (not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the truth and
acceptability of any information therein contained) which is reasonably
believed by Escrow Agent to be genuine and to be signed or presented by the
proper person or persons. Except as set forth in paragraphs 3 and 7 of this
Agreement, Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Agreement or any of
the terms hereof, unless evidenced by a final judgment or decree of a court of
competent jurisdiction in the State of California or a Federal court in such
State, or a writing delivered to Escrow Agent signed by the proper party or
parties and, if the duties or rights of Escrow Agent are affected, unless it
shall give its prior written consent thereto.

(d) Escrow Agent shall have the right to assume in the absence of
written notice to the contrary from the proper person or persons that a fact
or an event by reason of which an action would or might be taken by Escrow
Agent does not exist or has not occurred, without incurring liability to the
other parties hereto or to anyone else for any action taken or omitted, or any
action suffered by it to be taken or omitted, in good faith and in the
exercise of reasonable judgment, in reliance upon such assumption.

(e) Escrow Agent may resign as Escrow Agent hereunder upon giving
five (5) days' prior written notice to that effect to each of the parties to
this Agreement. In such event, the successor Escrow Agent shall be a
reputable law firm or a nationally recognized title insurance company,
selected by Lender and approved by Borrower, which approval will not be
unreasonably withheld or unduly delayed. Such party that will no longer be
serving as Escrow Agent shall deliver, against receipt, to such successor
Escrow Agent, the Transfer Documents, if any, held by such party, to be held
by such successor Escrow Agent pursuant to the terms and provisions of this
Agreement. If no such successor has been designated on or before the
effective date of such party's resignation, its obligations as Escrow Agent
shall continue until such successor is appointed; provided, however, its sole
obligation thereafter shall be to safely keep all documents and instruments
then held by it and to deliver the same to the person, firm or corporation
designated as its successor or until directed by a final order or judgment of
a court of competent jurisdiction in the State of California or a Federal
Court in such State, whereupon Escrow Agent shall make disposition thereof in
accordance with such order or judgment. If no successor Escrow Agent is
designated and qualified within five (5) days after Escrow Agent's resignation
is effective, such party that will no longer be serving as Escrow Agent may
apply to any court of competent jurisdiction for the appointment of a
successor Escrow Agent.

(f) In the event Escrow Agent is the attorney for any party
hereto, Escrow Agent shall be entitled to represent such party in any matter,
including any litigation in connection herewith.

9. Miscellaneous Provisions. (a) No failure or delay on the
part of a party to this Agreement in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power preclude any other or further exercise thereof or the
exercise of any other right or power hereunder. No modification or waiver of
any provision of this Agreement and no consent to any departure by any party
to this Agreement therefrom shall be effective unless the same shall be in
writing and signed by the party against whom such modification, waiver or
consent is being sought to be enforced against, and then such waiver,
modification or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on any party to this
Agreement in any case shall, of itself, entitle such party to any other or
further notice or demand in similar or other circumstances.

(b) This Agreement may only be modified, amended, changed,
discharged or terminated by an agreement in writing signed by all of the
parties hereto.

(c) Each of the parties to this Agreement (and the undersigned
representatives of such parties, if any) has the full power, authority and
legal right to execute this Agreement and to keep and observe all of the
terms, covenants and provisions of this Agreement on such parties' respective
parts to be performed or observed.

(d) Any notice, request, direction or demand given or made under
this Agreement shall be in writing and shall be hand delivered or sent by
Federal Express or other reputable overnight national courier service, and
shall be deemed given when received at the following addresses whether hand
delivered or sent by Federal Express or other reputable overnight national
courier service:

If to Borrower:

C-C California Plaza Partnership
c/o Carlyle Real Estate Limited
Partnership-XV
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attention: Robert J. Chapman

With copies to:

Pircher, Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, California 90067-6077
Attention: Real Estate Notices (P.G.N.)

Cygna Limited One
c/o Cygna Development Corporation
2121 North California Boulevard - Suite 230
Walnut Creek, California 94596
Attention: Ben Kacyra

and

Greene, Radovsky, Maloney & Share
Spear Street Tower
Suite 4200
1 Market Plaza
San Francisco, California 94105
Attention: Russell Pollock, Esq.

If to Lender:

The Travelers Life and Annuity Company
2215 York Road, Suite 504
Oak Brook, Illinois 60521
Attention: Managing Director
General Counsel

and

The Travelers Insurance Company
One Tower Square, 13 SHS
Hartford, Connecticut 06183-2020
Attention: Travelers Realty Investment
Company

With a copy to:

Battle Fowler
280 Park Avenue
New York, New York 10017
Attention: Lawrence Mittman, Esq.
Dean A. Stiffle, Esq.

If to Escrow Agent:

Chicago Title and Trust Company
171 North Clark Street
Chicago, Illinois 60601
Attention: Ms. Nancy Castro

Each party to this Agreement may designate a change of address by notice given
to the other party fifteen (15) days prior to the date such change of address
is to become effective.

(e) If any term, covenant or provision of this Agreement shall be
held to be invalid, illegal or unenforceable in any respect, this Agreement
shall be construed without such term, covenant or provision.

(f) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.

(g) This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the specific matters
agreed to herein and the parties hereto acknowledge that no oral or other
agreements, understandings, representations or warranties exist with respect
to this Agreement or with respect to the obligations of the parties hereto
under this Agreement, except those specifically set forth in this Agreement.

(h) This Agreement is, and shall be deemed to be, a contract
entered into under and pursuant to the laws of the State of Illinois and shall
be in all respects governed, construed, applied and enforced in accordance
with the laws of the State of Illinois. No defense given or allowed by the
laws of any other state or country shall be interposed in any action or
proceeding hereon unless such defense is also given or allowed by the laws of
the State of Illinois.
(i) The parties hereto agree to submit to personal jurisdiction
in the State of Illinois in any action or proceeding arising out of this
Agreement.

(j) Paragraph 21 of the Modification Agreement ("Exculpation") is
hereby incorporated by reference with the same force and effect as if such
paragraph appeared in this Agreement.

(k) This Agreement may be executed in one or more counterparts by
some or all of the parties hereto, each of which counterparts shall be an
original and all of which together shall constitute a single agreement.

10. Waiver of California Statutes. Borrower acknowledges that
it is in default under the terms and conditions of the documents evidencing
and securing the Loan (the "Loan Documents") as of the execution hereof, that
Lender presently has the right to enforce the terms of the Loan Documents, and
that this Agreement is being done pursuant to the request of Borrower.
Borrower further acknowledges that all of the terms and conditions of this
Agreement have been carefully negotiated between Borrower and Lender and that
Borrower has been fully represented during those negotiations by competent
legal counsel of Borrower's choosing, including counsel licensed to practice
in the state of California. Borrower understands that Lender is entering into
this Agreement in reliance upon, and in consideration of, among other things,
the following waiver by Borrower of various provisions of California law.
Accordingly, Borrower hereby waives, to the fullest extent permitted by law,
the protections of (i) Section 726 of the California Code of Civil Procedure
(providing that a creditor has only one form of action to enforce a debt
secured by real property) and (ii) Sections 580a and 580d of the California
Code of Civil Procedure (providing for the limitation of deficiency
judgments), but only for the purpose of allowing Lender to foreclose on any
collateral expressly pledged to Lender under the Loan Documents (and, without
limitation to the foregoing, no deficiency judgment following a foreclosure
sale may be enforced personally against Borrower or its partners, but rather
may be enforced solely against such other collateral as may be expressed
pledged to Lender under the Loan Documents).

Borrower represents and warrants to Lender that Borrower has
discussed the meaning and effect of the foregoing waivers with Borrower's
legal counsel and that Borrower understands fully the legal consequence of
Borrower's providing such waivers to Lender. Borrower covenants to Lender not
to assert any rights under any of the foregoing statutes in opposition to any
action taken by Lender to enforce Lender's rights under this Agreement or any
other Loan Document.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]

IN WITNESS WHEREOF, Borrower, Lender and Escrow Agent have duly
executed this Agreement the day and year first above written.

C-C CALIFORNIA PLAZA PARTNERSHIP, a
California general partnership

By: Carlyle Real Estate Limited
Partnership-XV, an Illinois limited partnership, General Partner

By: JMB Realty Corporation,
a Delaware corporation,
General Partner

By: ________________________
Name:
Title:

By: Cygna Limited One, a California
limited partnership, General Partner

By: Cygna Development Corporation,
a California corporation, General Partner

By: ________________________
Name:
Title:

THE TRAVELERS LIFE AND ANNUITY COMPANY, a
Connecticut corporation

By: ___________________________________
Name:
Title:

CHICAGO TITLE AND TRUST COMPANY,
as Escrow Agent

By: ____________________________________
Name:
Title:

Exhibit A

(DEFINITIONS)

Deed of Trust: Deed of Trust and Security Agreement with
Assignment of Rents and Leases and Fixture Filing dated as of December 18,
1986 in the principal amount of $58,000,000 given by Borrower to First
American Title Insurance Company and Lender and recorded as Document No. 86-
229768 in Book 13327, Page 243, Contra Costa County Records, California.

Note: Note Secured by Deed of Trust dated
December 18, 1986 in the principal amount of $58,000,000 given by Borrower to
Lender.

Property: The real property and all improvements
located thereon encumbered by the Deed of Trust.

Debt: All principal, interest, contingent
interest and other sums of any nature whatsoever which may or shall become due
and owing under the Note or Deed of Trust, as each may have been modified by
the Modification Agreement, or the other documents evidencing or securing the
Loan.

Loan Documents: The term "Loan Documents" shall mean all
documents and instruments executed and delivered by Borrower, Carlyle Real
Estate Limited Partnership-XV or Cygna Limited One in connection with the
Loan, as modified and amended from time to time.

Exhibit B

(Transfer Documents)

Transfer Documents:

1. Deed executed by Borrower

2. Bill of Sale executed by Borrower

3. Omnibus Assignment executed by Borrower

4. FIRPTA Certificate executed by Borrower

Exhibit C

(Letterhead of Travelers)

Transfer Direction Notice

__________ __, 199_

Chicago Title and Trust Company
111 West Washington Avenue
Chicago, Illinois 60602
Attn: Ms. Nancy Castro

Dear Sirs:

Reference is made to that certain Escrow Agreement dated as of
__________ __, 1993 entered into among C-C California Plaza Partnership, The
Travelers Life and Annuity Company ("Lender") and First American Title
Insurance Company (the "Escrow Agreement").

Lender hereby directs you to release from the Escrow and deliver
to Lender the Transfer Documents.

All terms not otherwise specifically defined in this Transfer
Direction Notice shall have the meaning given to such terms in the Escrow
Agreement.

The undersigned hereby certifies to you that (i) he/she is a
representative of Lender, (ii) he/she has the full power and authority to sign
and deliver this Transfer Direction Notice, (iii) a default occurred under the
Deed of Trust, the Modification Agreement or one of the other Loan Documents
and continued beyond the expiration of applicable notice and cure periods, if
any and (iv) Lender has the right to receive the Transfer Documents under the
terms of the Escrow Agreement and the Modification Agreement.

THE TRAVELERS LIFE AND ANNUITY COMPANY

By: __________________________________
Name:
Title:

AGREEMENT OF MODIFICATION OF NOTE,
DEED OF TRUST AND OTHER LOAN DOCUMENTS

THIS AGREEMENT made as of the 22nd day of December, 1993, between C-C
CALIFORNIA PLAZA PARTNERSHIP, a California general partnership having an
office at 2121 North California Boulevard, Suite 230, Walnut Creek, California
94596 (hereinafter referred to as "BORROWER"); and THE TRAVELERS LIFE AND
ANNUITY COMPANY, a Connecticut corporation having an office at 2215 York Road,
Suite 504, Oak Brook, Illinois 60521 (hereinafter referred to as "LENDER");

W I T N E S S E T H :

WHEREAS, Lender has previously made a loan of up to $58,000,000
(hereinafter referred to as the "LOAN") to Borrower, which Loan is (i)
evidenced by the NOTE (as defined in Exhibit A attached hereto) and (ii)
secured by, inter alia, the DEED OF TRUST (as defined in Exhibit A attached
hereto) covering the fee interest of Borrower in the PROPERTY (as defined in
Exhibit A attached hereto);

WHEREAS, Borrower committed the Prior Defaults (as defined in
Exhibit A attached hereto), and as a result thereof, Lender declared Borrower
in default under the Loan;

WHEREAS, Borrower has proposed that such Prior Defaults be
addressed through a modification of the Loan pursuant to which payment of a
portion of the interest due would be deferred and the maturity date extended;

WHEREAS, Lender is willing to enter into such modification of the
Loan so as to defer a portion of the interest due and to extend the maturity
date only if, among other things, Borrower agrees to modify and amend the
terms of the Loan Documents (as defined in Exhibit A attached hereto) executed
and delivered prior to the date hereof on the terms and conditions set forth
herein;

NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower hereby represents and warrants to and covenants and
agrees with Lender as follows:

1. Modification and Amendment of the Note. As of the date
hereof, the Note, without further act or instrument, shall be deemed modified
and amended in the following respects:

(i) The address of Lender, as it appears in the first paragraph
of the Note, is hereby deleted and the following address inserted in its
place: "2215 York Road, Suite 504, Oak Brook, Illinois 60521."

(ii) From and after February 1, 1993 interest shall accrue on the
outstanding principal balance of the Note at a per annum rate equal to
10.375% (hereinafter referred to as the "CONTRACT RATE"), which interest
will be payable on March 1, 1993 and on the first day of each calendar
month thereafter through and including January 1, 2000. All accrued and
unpaid interest (including, without limitation, any Deferred Interest,
as hereinafter defined), principal and any other amounts evidenced by
the Note shall be due and payable on January 1, 2000 (subject to
Lender's right to accelerate the indebtedness evidenced by the Note, as
expressly set forth therein). Notwithstanding anything to the contrary
contained in this subparagraph (ii), for the period commencing on
February 1, 1993 and ending on the date that all Deferred Interest has
been repaid in full in accordance with the provisions of
subparagraph 3(d)(v) of the Cash Management Agreement (such period
herein referred to as the "DEFERRAL PERIOD"), interest will accrue at
the Contract Rate on the outstanding principal balance of the Note, and
interest will be payable under the Note at a per annum rate of 8%
(hereinafter referred to as the "DEFERRAL PERIOD PAYMENT RATE"). The
difference between (i) the amount of interest accruing at the Contract
Rate on the outstanding principal balance of the Note during each one
month period of time during the Deferral Period and (ii) the amount of
interest payable at the Deferral Period Payment Rate on the outstanding
principal balance of the Note during each one month period of time
during the Deferral Period (herein referred to as "DEFERRED INTEREST")
shall accrue and be payable on January 1, 2000 (as such date of payment
may be accelerated as described above) subject to the prior application
of any amounts under subparagraph 3(d)(v) of the Cash Management
Agreement, it being understood and agreed that no interest shall accrue
on the Deferred Interest (other than interest at the Default Rate, as
defined in the Note, following an acceleration of the indebtedness
following a default). The outstanding principal balance of the Note as
of February 1, 1993 is $57,675,704.31.

(iii) The term "Deed of Trust" as used in the Note shall be deemed
to refer to the Deed of Trust, as modified and amended by this
Agreement.

(iv) The term "Loan Documents" as used in the Note shall be
deemed to refer to the Loan Documents, as modified and amended by this
Agreement.

(v) The following subparagraph 3(a)(i) is hereby added to the
Note between subparagraphs 3(a) and 3(b) of the Note:

"(a)(i) if the Termination Date shall occur under that
certain Cash Management Agreement dated as of December 22,
1993 entered into among Maker, Holder and Cygna Development
Services (the "Cash Management Agreement")."

(vi) The third and fourth paragraphs (not counting the preamble
paragraphs) of paragraph 4 of the Note are hereby deleted and shall be
deemed of no further force and effect.

(vii) Nothing contained in paragraph 5 of the Note shall be deemed
to prejudice the rights of Lender to enforce the personal recourse
obligations created under paragraph 22 of the Cash Management Agreement.

(viii) Paragraph 6 of the Note is hereby deleted and shall be
deemed of no further force and effect.

(ix) Paragraph 12 of the Note is deleted in its entirety and the
following is inserted in its place:
"12. Notices. Any notice, demand or other communication
which any party hereto may desire or may be required to give
to any other party hereto shall be in writing, and shall be
deemed given (a) if and when personally delivered, (b) upon
receipt if sent by a nationally recognized overnight courier
addressed to a party at its address set forth below, or (c) on
the third (3rd) business day after being deposited in United
States registered or certified mail, postage prepaid,
addressed to a party at its address set forth below, or to
such other address as the party to receive such notice may
have designated to all other parties by notice in writing in
accordance herewith:

If to Holder:
The Travelers Life and Annuity Company
2215 York Road
Suite 504
Oak Brook, Illinois 60521
Attention: Managing Director
General Counsel

With copies to:

The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
Attention: Travelers Realty Investment
Company

and

Battle Fowler
280 Park Avenue
New York, New York 10017
Attention: Lawrence Mittman, Esq.
Dean A. Stiffle, Esq.

If to Maker:

C-C California Plaza Partnership
c/o Carlyle Real Estate Limited
Partnership-XV
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attention: Robert J. Chapman

With copies to:

Pircher, Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, California 90067-6077
Attention: Real Estate Notices (P.G.N.)

Cygna Limited One
c/o Cygna Development Corporation
2121 North California Boulevard - Suite 230
Walnut Creek, California 94596
Attention: Ben Kacyra

and

Greene, Radovsky, Maloney & Share
Spear Street Tower
Suite 4200
1 Market Plaza
San Francisco, California 94105
Attention: Russell Pollock, Esq.

Each party entitled to receive notice under this Note may
designate a change of address by notice given to the other
parties at least ten (10) days prior to the date such change
of address is to become effective."

2. Modification and Amendment of the Deed of Trust. As of the
date hereof, the Deed of Trust, without further act or instrument, shall be
deemed modified and amended in the following respects:

(i) The address of Lender, as it appears in the first paragraph
of page one of the Deed of Trust, is hereby deleted and the following
address inserted in its place: "2215 York Road, Suite 504, Oak Brook,
Illinois 60521."

(ii) The term "Note" as used in the Deed of Trust shall be deemed
to refer to the Note, as modified and amended by this Agreement.

(iii) The following subparagraph 12(a)(i) is hereby added to
paragraph 12 of the Deed of Trust between subparagraphs 12(a) and 12(b):
"(a)(i) if the Termination Date shall occur under that
certain Cash Management Agreement dated as of December 22,
1993 entered into among Trustor, Beneficiary and Cygna
Development Services (the "Cash Management Agreement")."

(iv) Paragraph 31 of the Deed of Trust is deleted in its entirety
and the following is inserted in its place:
"31. Addresses for Notices. Any notice, demand or other
communication which any party hereto may desire or may be
required to give to any other party hereto shall be in
writing, and shall be deemed given (a) if and when personally
delivered, (b) upon receipt if sent by a nationally recognized
overnight courier addressed to a party at its address set
forth below, or (c) on the third (3rd) business day after
being deposited in United States registered or certified mail,
postage prepaid, addressed to a party at its address set forth
below, or to such other address as the party to receive such
notice may have designated to all other parties by notice in
writing in accordance herewith:
If to Beneficiary:
The Travelers Life and Annuity Company
2215 York Road
Suite 504
Oak Brook, Illinois 60521

Attention: Managing Director
General Counsel

With copies to:

The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183

Attention: Travelers Realty Investment Company

and

Battle Fowler
280 Park Avenue
New York, New York 10017

Attention: Lawrence Mittman, Esq.
Dean A. Stiffle, Esq.

If to Trustor:

C-C California Plaza Partnership
c/o Carlyle Real Estate Limited
Partnership-XV
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attention: Robert J. Chapman

With copies to:

Pircher, Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, California 90067-6077
Attention: Real Estate Notices (P.G.N.)

Cygna Limited One
c/o Cygna Development Corporation
2121 North California Boulevard - Suite 230
Walnut Creek, California 94596
Attention: Ben Kacyra

and

Greene, Radovsky, Maloney & Share
Spear Street Tower
Suite 4200
1 Market Plaza
San Francisco, California 94105
Attention: Russell Pollock, Esq.

Each party entitled to receive notice under this Deed of
Trust may designate a change of address by notice given to
the other parties at least ten (10) days prior to the date
such change of address is to become effective."

(v) The third and fourth paragraphs of paragraph 34 of the Deed
of Trust are hereby deleted and shall be deemed of no further force and
effect.

(vi) Paragraph 35 of the Deed of Trust is hereby deleted and
shall be deemed of no further force and effect.

(vii) Nothing contained in paragraph 37 of the Deed of Trust shall
be deemed to prejudice the rights of Lender to enforce the personal
recourse obligations created under paragraph 22 of the Cash Management
Agreement.

3. Deed In Escrow. (a) Borrower acknowledges and agrees that
in order to avoid the time and expense of pursuing a foreclosure of the Deed
of Trust, in consideration of Lender's agreement to enter into this Agreement
and to modify the Loan, Borrower has delivered the TRANSFER DOCUMENTS (as
defined in Exhibit A attached hereto) to the ESCROW AGENT (as defined in
Exhibit A attached hereto). Upon the occurrence of a default under and as
defined in the Note or the Deed of Trust (both as modified and amended by this
Agreement), this Agreement or any other document or instrument executed or
delivered in connection with the Loan or its modification (such other
documents are hereinafter collectively referred to as, the "OTHER LOAN
DOCUMENTS") which continues beyond the expiration of applicable notice and
cure periods, if any, or upon failure to pay all principal, interest and other
sums due under the Note (as modified and amended by this Agreement) upon
maturity, Lender or Lender's nominee, designee or assignee shall have the
absolute and unconditional right, at its option, without further notice
required to be given to Borrower or any other persons, parties or entities, to
remove the Transfer Documents from escrow and record the deed which
constitutes one of the Transfer Documents (hereinafter referred to as the
"DEED"). Borrower shall, within three (3) business days of request by Lender
or Lender's nominee, designee or assignee, sign and deliver to Lender upon
demand an updated affidavit required for purposes of Section 1445 of the
Internal Revenue Code, and, to the extent required by Lender's counsel to
consummate the transactions described in this sentence, such other documents
necessary or required to effect a full and complete transfer of Borrower's
title to the Property and all income and revenue therefrom and all licenses,
rights and privileges associated therewith pursuant to the provisions of this
paragraph, and to enable Lender or Lender's nominee, designee or assignee to
obtain an owner's policy of title insurance (or "open" commitment for an
owner's policy of title insurance) containing an anti-merger endorsement, if
available, and any such other endorsements as may be reasonably requested by
Lender or Lender's nominee, designee or assignee (provided that such policy,
commitment or endorsements are available in the marketplace). In no event
shall any such additional or updated documents impose any personal liability
upon Borrower or its direct and indirect or future constituent partners. In
the event the Transfer Documents are removed from escrow in accordance with
the provisions of this Agreement and the Escrow Agreement, at Lender's
election, title to the Property shall remain subject to the lien of the Deed
of Trust (as modified and amended by this Agreement) to the full extent of the
indebtedness secured thereby, and recording of the Deed or any of the other
Transfer Documents shall not result in a merger of the Lender's interest as
beneficiary under the Deed of Trust (as modified and amended by this
Agreement) with that of it as fee title holder.

(b) A transfer pursuant to the terms of the preceding
subparagraph (a) is referred to herein as a "DEED IN LIEU TRANSFER". At the
option of Lender, any such Deed in Lieu Transfer may be made to Lender or its
nominee, designee or assignee. Borrower further acknowledges and agrees:
(i) that at the time the Transfer Documents and all additional documents and
actions contemplated by this paragraph (the "ADDITIONAL REQUIREMENTS") are
properly delivered to Lender out of escrow pursuant to the terms of this
paragraph 3, they are intended to effect a present and absolute conveyance and
unconditional transfer of Borrower's interest in the Property, and all
Borrower's right, title, interest, income, revenues, receipts, rents,
royalties and profits in connection therewith, and are not given as security;
and (ii) Lender has advised Borrower and Borrower confirms that, upon proper
delivery of and compliance with the Transfer Documents and the Additional
Requirements in accordance with this paragraph 3, Lender does not intend to
purchase or continue the business of Borrower at the Property, to be a
successor to any such business or to have any liability for the debts, acts or
omissions of Borrower, its employees or agents, and Lender intends only to be
liable for its own debts, acts or omissions which take place from and after
the date of recording of the Deed or any of the other Transfer Documents; and
(iii) Borrower will deliver Borrower's right to possession and enjoyment of
the Property concurrently with the recording of the Deed and Lender shall
thereafter have the immediate right to operate, use, sell and/or transfer the
Property or any part thereof for its own account, at its sole and absolute
discretion.

(c) Nothing contained in this paragraph 3 shall preclude Lender
from pursuing foreclosure of the Deed of Trust (as modified and amended by
this Agreement) or any other rights and remedies under any of the Loan
Documents (as modified and amended by this Agreement), instead of or in
addition to removing the Transfer Documents from escrow and recording the
Deed, and in such event, Borrower agrees to sign and deliver to Lender (at
Lender's cost and expense), in a form and content reasonably acceptable to
Lender, a stipulation of the facts necessary to obtain a judgment of
foreclosure uncontested by Borrower and a quitclaim deed of Borrower's
redemption rights and Borrower agrees not to impede, hinder or delay any
foreclosure by power of sale; provided, however, that such stipulation does
not impose any personal liability upon Borrower or its direct and indirect
present or future constituent partners. If and when Lender completes a
foreclosure (through recording of a deed) of the Deed of Trust (as modified
and amended by this Agreement) or when all principal, interest and other sums
due under the Note and the other Loan Documents (all as modified and amended
by this Agreement) are paid in full or otherwise satisfied, Lender shall cause
the Transfer Documents to be cancelled and returned to Borrower for
destruction, and they shall be of no force and effect. The provisions of this
paragraph 3 shall be enforceable by an action for specific performance.

4. Cash Management Agreement. Simultaneously with the execution
of this Agreement, and in consideration of Lender entering into this
Agreement, Borrower, Cygna Development Services and Lender are executing and
delivering a Cash Management Agreement dated as of the date hereof (the "CASH
MANAGEMENT AGREEMENT") governing the collection and application of rents,
revenues, income, profits and proceeds of the Property. In the event of any
conflict or ambiguity between the terms, covenants and conditions of the Note,
the Deed of Trust or any of the Other Loan Documents, all as modified and
amended by this Agreement, and the terms, covenants and conditions of the Cash
Management Agreement, the terms, covenants and conditions which shall enlarge
the rights and remedies of Lender and the interest of Lender in the Property
and the rents, revenues, income, profits and proceeds of the Property, afford
Lender greater financial security in the Property and the rents, revenues,
income, profits and proceeds of the Property and better assure payment of the
Loan in full, shall govern and control.

5. Representations and Warranties. Borrower represents and
warrants to Lender as follows:

(a) Borrower has all requisite partnership power and
authority to execute and deliver this Agreement and the documents
contemplated hereby and to carry out its obligations hereunder and the
transactions contemplated hereby. This Agreement has been, and the
documents contemplated hereby or otherwise executed and delivered in
connection herewith, have been duly executed and delivered by Borrower
and constitute the legal, valid and binding obligations enforceable
against Borrower in accordance with their respective terms subject to
the application of bankruptcy, insolvency, moratorium and similar laws
affecting rights of creditors and principles of equity, and are not in
violation of or in conflict with, nor do they constitute a default
under, any term or provision of the organizational documents of Borrower
or any of its general partners, or any of the terms of any agreement or
instrument to which Borrower or any of its general partners is or may be
bound, or any agreement or instrument affecting the Property, or to the
best of Borrower's knowledge, any provision of any applicable law,
ordinance, rule or regulation of any governmental authority or of any
provision of any applicable order, judgment or decree of any court,
arbitrator or governmental authority.

(b) Except as set forth in Exhibit B attached hereto and
made a part hereof, Borrower has no knowledge, nor has Borrower received
any written notice of any action, proceeding or litigation, or
proceeding by any organization, person, individual or governmental
agency (including, without limitation, any employee or former employee,
tenant, lessee, contractor, subcontractor, mechanic, materialmen or
laborer, architect, engineer, managing agent, leasing agent, real estate
broker or similar party) against or specifically relating to the
Property or any portion of the Property.

(c) To the best of Borrower's knowledge, there is no
pending or threatened condemnation of the Property or of any building or
other improvement located on any portion of the Property.

(d) Lender may be required, under Section 6050J of the
Internal Revenue Code, to submit to the Internal Revenue Service
Borrower's taxpayer identification number in connection with the
transactions contemplated hereby. Borrower hereby warrants and
represents that its taxpayer identification number is 36-3450380.

(e) To Borrower's actual knowledge, (i) no Hazardous
Materials (as hereinafter defined) are currently present at the Property
(or have been present at the Property at anytime in the past) other than
those used, stored and contained in quantities, and in such manner, that
do not violate any law or regulation relating thereto (including,
without limitation, heating oil, cleaning fluids and supplies,
refrigerants and paint), and (ii) the Property is in compliance with all
applicable local, state or federal environmental laws, rules, ordinances
and regulations ("ENVIRONMENTAL REGULATIONS"). As used in this
Agreement, "HAZARDOUS MATERIALS" means any dangerous, toxic or hazardous
pollutants, contaminants, chemicals, wastes, materials or substances, as
defined in or governed by the provisions of any Environmental
Regulations, including, without limitation, urea-formaldehyde,
polychlorinated biphenyls, asbestos, asbestos-containing materials,
nuclear fuel or waste and petroleum products, or any other waste,
material, substance, pollutant or contaminant which would subject the
owner of the Property to any damages, penalties or liabilities under any
applicable Environmental Regulation. Lender acknowledges that Borrower
has informed Lender that Borrower has not ordered or received any report
as to the presence of Hazardous Materials at the Property or compliance
with Environmental Regulations in connection with this Agreement or the
modification of the Loan or the Loan Documents.

(f) Borrower (i) has sufficient knowledge and experience in
financial and business matters so as to enable it to evaluate the merits
and risks of transactions like the transactions contemplated hereby, and
(ii) by virtue of its sufficient knowledge and experience in financial
and business matters in transactions such as the transactions
contemplated hereby, Borrower is not in a significantly disparate
bargaining position with respect to such transactions.

6. Release of Lender. (a) Borrower hereby releases and forever
discharges Lender, its agents, servants, employees, directors, officers,
attorneys, branches, affiliates, subsidiaries, successors and assigns and all
persons, firms, corporations and organizations in its behalf of and from all
damage, loss, claims, demands, liabilities, obligations, actions and causes of
action whatsoever which Borrower may now have or claim to have against Lender,
as of the date hereof, whether presently known or unknown, and of every nature
and extent whatsoever on account of or in any way touching, concerning,
arising out of or founded upon the Loan Documents, as herein or concurrently
herewith modified, including but not limited to, all such loss or damage of
any kind heretofore sustained, or that may arise as a consequence of the
dealings between the parties up to and including the date hereof with respect
to the Note, the Deed of Trust, this Agreement, the Other Loan Documents or
the Property.
Borrower expressly waives any rights or benefits available under
Section 1542 of the Civil Code of the State of California which provides as
follows:

"A general release does not extend to claims which a
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him
must have materially affected his settlement with the
debtor."

(b) By entering into this Agreement, the Cash Management
Agreement and by otherwise effecting the modification of the Loan described in
this Agreement, Lender is not, and shall not be deemed to be, participating
in, directing, or influencing in any manner whatsoever the management of
Borrower's business, including, without limitation, the operation of the
Property or improvements located thereon. Borrower hereby acknowledges and
agrees that Lender is not participating in the management of Borrower's
business.

7. References. All references in the Loan Documents to (i) the
Loan shall be deemed to refer to the Loan as amended and modified pursuant to
the terms of this Agreement, and (ii) the Loan Documents shall be deemed to
refer to the Loan Documents as modified and amended pursuant to the terms of
this Agreement. All references in the Other Loan Documents to (i) the Note
shall be deemed to refer to the Note, as amended and modified by this
Agreement, (ii) the Deed of Trust shall be deemed to refer to the Deed of
Trust, as amended and modified pursuant to the provisions of this Agreement,
and (iii) the Other Loan Documents shall be deemed to refer to the Other Loan
Documents as amended and modified pursuant to the provisions of this
Agreement.

8. Ratification. Borrower hereby acknowledges and agrees that
the Loan, as amended pursuant to the terms of this Agreement, shall be secured
by, among other things, the Deed of Trust, as modified and amended pursuant to
the provisions of this Agreement, and shall be evidenced by the Note, as
modified and amended pursuant to the provisions of this Agreement. Borrower
hereby assumes and agrees to perform all of the terms, covenants and
provisions contained in the Note, the Deed of Trust and the Other Loan
Documents, all as modified and amended pursuant to the provisions of this
Agreement. Borrower and Lender agree that all of the terms, covenants and
conditions of the Note, the Deed of Trust and the Other Loan Documents, except
as expressly amended and modified pursuant to the provisions of this
Agreement, remain in full force and effect.

9. No Defenses. Borrower acknowledges and agrees that there are
no offsets, defenses or counterclaims of any nature whatsoever with respect to
(i) the Note, the Deed of Trust or any of the Other Loan Documents or (ii) the
payment of the indebtedness evidenced by the Note and secured by, among other
things, the Deed of Trust (hereinafter referred to as the "DEBT"). Borrower
acknowledges that Borrower's obligation to pay the Debt in accordance with the
provisions of the Note, the Deed of Trust and the Other Loan Documents is and
shall at all times continue to be absolute and unconditional in all respects,
and shall at all times be valid and enforceable irrespective of any other
agreements or circumstances of any nature whatsoever which might otherwise
constitute a defense to (i) the Note, the Deed of Trust or the Other Loan
Documents or the respective obligations of Borrower under such documents and
instruments (including, without limitation, the obligation to pay the Debt) or
(ii) the obligations of any other person relating to the Note, the Deed of
Trust and the Other Loan Documents or the obligations of Borrower under such
documents and instruments or otherwise with respect to the Loan, and Borrower
absolutely, unconditionally and irrevocably waives any and all right to assert
any defense, setoff, counterclaim (other than compulsory counterclaims) or
crossclaim of any nature whatsoever with respect to the obligation to pay the
Debt in accordance with the provisions of the Note, the Deed of Trust and the
Other Loan Documents or the obligations of any other person relating to the
Note, the Deed of Trust and the Other Loan Documents or the obligations of
Borrower under such documents and instruments or otherwise with respect to the
Loan in any action or proceeding brought by Lender to collect the Debt, or any
portion thereof, or to enforce, foreclose and realize upon the liens and
security interests created by the Deed of Trust or any other document or
instrument securing repayment of the Debt, in whole or in part.
Notwithstanding the foregoing to the contrary, nothing herein shall limit
Borrower's right to bring a separate cause of action against Lender, provided
that such action would not (i) seek to preclude Lender from exercising its
remedies under the Note, the Deed of Trust or the Other Loan Documents or (ii)
if raised, upon motion of Borrower be consolidated with any prior action
brought by Lender under the Note, the Deed of Trust or the Other Loan
Documents unless a failure to so consolidate said action would result in the
inability to prosecute the claim upon which such action is based because such
claim would be deemed to be a compulsory counterclaim. All references in this
paragraph to the Note, the Deed of Trust, and the Other Loan Documents shall
mean the Note, the Deed of Trust and the Other Loan Documents as amended and
modified by this Agreement.

10. Waiver by Borrower. Borrower hereby waives for itself and
its partners (i) to the extent permitted by applicable law, all rights to
exercise or to attempt to exercise any right of redemption with respect to the
Property, or if such waivers are not permitted by applicable law, Borrower
hereby agrees to reduce the time period for redemption to the shortest period
of time permitted by applicable law and Borrower hereby agrees that it shall
not, nor shall any person or entity acting on its behalf or upon its (or any
of its partners') instigation, exercise or attempt to exercise any right of
redemption with respect to the Property or bid or cause any other person or
entity to bid at a foreclosure sale of the Property; and (ii) all rights to
contest the validity, binding effect or enforceability of this Agreement or of
the provisions hereof and Borrower hereby agrees that it shall not, nor shall
any person or entity acting on its behalf or upon its (or any of its
partners') instigation, directly or indirectly, contest the validity, binding
effect or enforceability of this Agreement or any of the provisions hereof.
The foregoing shall not be deemed a waiver by Borrower of any claim or right
to take action or bring a compulsory counterclaim against Lender for any
default or breach of its obligations under this Agreement or the other Loan
Documents (as modified and amended by this Agreement).

11. Lift Stay Agreement. Borrower hereby agrees that, in
consideration of the recitals and mutual covenants contained herein, and for
other good and valuable consideration (including the agreement of Lender to
modify the Loan pursuant to this Agreement), the receipt and sufficiency of
which are hereby acknowledged, in the event (a) Borrower or any of its general
partners shall (i) file with any bankruptcy court of competent jurisdiction or
be the subject of any petition under Title 11 of the United States Code, as
amended, (ii) be the subject of any order for relief issued under such Title
11 of the United States Code, as amended, (iii) file or be the subject of any
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future federal
or state act or law relating to bankruptcy, insolvency or other relief for
debtors, (iv) have sought or consented to or acquiesced in the appointment of
any trustee, receiver or liquidator for itself or for any substantial portion
of its assets, (v) be the subject of any order, judgment or decree entered by
any court of competent jurisdiction approving a petition filed against such
party for any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future federal
or state act or law relating to bankruptcy, insolvency or relief for debtors,
and as a result of any of the matters set forth in (a) above, (b) Lender's
ability to complete a sale at foreclosure or other conveyance of the Property
or to exercise or enforce any of Lender's other rights or remedies under the
Note, the Deed of Trust or the Other Loan Documents (all as modified and
amended pursuant to the provisions of this Agreement) at law or in equity is
interfered with, impeded or otherwise impaired because of a stay of such sale
or conveyance in such proceeding, then in any such event Borrower agrees that
any such action described in clause (i) through (v) above shall have been
filed to frustrate or delay a foreclosure proceeding, in bad faith, and in
abrogation of this Agreement and should be deemed to have been so filed by the
Bankruptcy Court, and Lender shall thereupon be automatically entitled to
relief from any automatic stay imposed by Section 362 of Title 11 of the
United States Code, as amended, or otherwise (provided that Borrower's
agreement that any such action shall have been taken in bad faith shall be
solely for the purpose of determining whether Lender is entitled to relief
from the automatic stay and shall not be used against Borrower for any other
purpose), on or against the exercise of the rights and remedies otherwise
available to Lender as provided in the Loan Documents (as modified and amended
pursuant to the provisions of this Agreement) or as otherwise provided by law
and, in the event of the occurrence of any of the events described in clauses
(i) through (v) above, neither Borrower nor any of its general partners will
take any action to impede, restrain or restrict Lender's rights and remedies
under this Agreement or otherwise, whether under Sections 105 or 362 of
Title 11 of the United States Code or otherwise. In addition, Borrower waives
the right to extend the one hundred twenty (120) day period under which the
debtor has the exclusive right to file a plan of reorganization in any case
involving Borrower as debtor under Title 11 of the United States Code.

12. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY LAW, THE
PARTIES HERETO EACH IRREVOCABLY AND UNCONDITIONALLY WAIVE THE RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF
OR OTHERWISE RELATING TO THE NOTE, THE DEED OF TRUST OR ANY OF THE OTHER LOAN
DOCUMENTS (ALL AS AMENDED AND MODIFIED BY THIS AGREEMENT).

13. Further Modifications. This Agreement may not be modified,
amended or terminated, except by an agreement in writing signed by the parties
hereto.

14. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

15. Counterparts. This Agreement may be executed in one or more
counterparts by some or all of the parties hereto, each of which counterparts
shall be an original and all of which together shall constitute a single
agreement.

16. Not a Novation. This Agreement constitutes a modification of
the Loan Documents, and is not intended to and shall not terminate or
extinguish any of the indebtedness or obligations under the Note, the Deed of
Trust or any of the Other Loan Documents in such a manner as would constitute
a novation of the original indebtedness or obligations under the Note, the
Deed of Trust, or any of the Other Loan Documents, nor shall this Agreement
affect or impair the priority of any liens created thereby, it being the
intention of the parties hereto to carry forward all liens and security
interests securing payment of the Note, which liens and interests are
acknowledged by Borrower to be valid and subsisting against the Property, and
any other collateral for the Loan.

17. Severability. If any term, covenant or provision of this
Agreement shall be held to be invalid, illegal or unenforceable in any
respect, this Agreement shall, at Lender's option, be construed without such
term, covenant or provision.

18. Construction. This Agreement has been negotiated at arms'
length between persons knowledgeable in the matters dealt with herein. Each
party has been represented by experienced and knowledgeable counsel.
Accordingly, any rule of law or any other statutes, legal decisions or common
law principles of similar effect that would require interpretation of any
ambiguities in this Agreement against the party that has drafted it are of no
application and are hereby expressly waived.

19. Further Assurances. Borrower shall execute and deliver or
cause to be executed and delivered such assignments, agreements, partnership
authorization and other documentation as Lender shall reasonably require to
create, evidence and assure the modifications and agreements herein contained
and the rights conferred upon the parties hereby.

\EL Waiver of Prior Defaults. In consideration of this
Agreement and the modification of the Loan, Lender hereby waives its rights
with respect to enforcement against Borrower of the Prior Defaults and all
other defaults, known or unknown, which occurred prior to the date hereof but
which are not continuing or in existence today. This waiver shall not be a
waiver of any default under the Loan Documents prior to the date hereof which
continues or is in existence as of the date hereof nor a waiver of any
default, monetary or non-monetary, subsequent to the date hereof, to which
Lender expressly reserves all rights to which it is entitled under law and
under the Loan Documents, as amended and restated by this Agreement. Lender
hereby waives as a default Borrower's failure to make the debt service
payments under the Note that were due and payable on the first day of
March, 1993 and the first day of each month thereafter through December 1,
1993 which payments are being replaced by the interest payments due under the
Note as amended and modified by this Agreement.

21. Exculpation. Without in any manner releasing, impairing or
otherwise affecting the Note, the Deed of Trust or any other instrument
securing the Note or the validity thereof or hereof or the lien of the Deed of
Trust, there is no personal liability of Borrower or any partner in Borrower
hereunder or under any of the Loan Documents, and no monetary or deficiency
judgment shall be sought or enforced against Borrower; provided, however, that
a judgment may be sought against Borrower to the extent necessary to enforce
the right of Lender in, to or against the Property securing the indebtedness
evidenced by the Note and covered by the Deed of Trust and the other Loan
Documents. Notwithstanding any of the foregoing, nothing contained in this
paragraph shall be deemed to prejudice the rights of Lender: (i) to recover
any fraudulently misapplied Restoration Funds, Insurance Proceeds or
Condemnation Proceeds (all as defined in the Deed of Trust) as well as any
expenditures, damages or costs (including without limitation reasonable
attorneys' fees) incurred by Lender as a result of such fraudulent
misapplication, (ii) to recover any expenditures, damages or costs (including
without limitation reasonable attorneys' fees) incurred by Lender as a result
of Borrower's fraud, material and intentional misrepresentation or intentional
destruction of the Property or (iii) to enforce the personal recourse
obligations set forth in paragraph 22 of the Cash Management Agreement. All
references in this paragraph to the Note, Deed of Trust and Loan Documents
shall be deemed to mean the Note, Deed of Trust and Loan Documents as modified
and amended by this Agreement. Notwithstanding anything in this paragraph 21
to the contrary, neither general partner of Borrower shall have any personal
liability hereunder or under any of the Loan Documents with respect to a
material and intentional misrepresentation by Borrower concerning the matters
set forth in paragraph 5(e) hereof unless such general partner had actual
knowledge of the matters constituting such misrepresentation.

22. Leasing. Notwithstanding anything to the contrary which may
be contained in the Note, the Deed of Trust or any of the Other Loan Documents
(as each of the foregoing is amended and modified by this Agreement), Borrower
shall not enter into any lease, or permit any party to enter into any lease on
its behalf, with respect to the Property or any portion thereof without having
received the prior written consent of Lender (which consent may be withheld by
Lender in the exercise of its sole and absolute discretion) in the event that
such lease does not comply with the leasing parameters set forth in the annual
Operating Budget for the Property submitted in accordance with, and more
particularly described in, subparagraph 3(j) of the Cash Management Agreement
as defined in Exhibit A attached hereto. Lender shall have no obligation to
consider a request to approve a lease for space at the Property unless Lender
has been provided with a complete copy of the Lease, comprehensive financial
information on the prospective tenant and a comprehensive summary of the costs
and expenses that will be incurred by Borrower in connection with the lease.

23. Waiver of California Statutes. Borrower acknowledges that
it is in default under the terms and conditions of the Loan Documents as of
the execution hereof, that Lender presently has the right to enforce the terms
of the Loan Documents, and that this Agreement is being entered into pursuant
to the request of Borrower. Borrower further acknowledges that all of the
terms and conditions of this Agreement have been carefully negotiated between
Borrower and Lender and that Borrower has been fully represented during those
negotiations by competent legal counsel of Borrower's choosing, including
counsel licensed to practice in the state of California. Borrower understands
that Lender is entering into this Agreement in reliance upon, and in
consideration of, among other things, the following waiver by Borrower of
various provisions of California law. Accordingly, Borrower hereby waives, to
the fullest extent permitted by law, the protections of (i) Section 726 of the
California Code of Civil Procedure (providing that a creditor has only one
form of action to enforce a debt secured by real property) and (ii) Sections
580a and 580d of the California Code of Civil Procedure (providing for the
limitation of deficiency judgments), but only for the purpose of allowing
Lender to foreclose on any collateral expressly pledged to Lender under the
Loan Documents (and, without limitation to the foregoing, no deficiency
judgment following a foreclosure sale may be enforced personally against
Borrower or its partners, but rather may be enforced solely against such other
collateral as may be expressed pledged to Lender under the Loan Documents).

Borrower represents and warrants to Lender that Borrower has
discussed the meaning and effect of the foregoing waivers with Borrower's
legal counsel and that Borrower understands fully the legal consequence of
Borrower's providing such waivers to Lender. Borrower covenants to Lender not
to assert any rights under any of the foregoing statutes in opposition to any
action taken by Lender to enforce Lender's rights under this Agreement or any
other Loan Document.

24. Assignment of Loan. Notwithstanding anything in the Loan
Documents (as amended and modified by this Agreement) to the contrary, Lender
shall have the absolute and unconditional right to assign, sell or otherwise
transfer all or any portion of its interest in the Loan, any security given
therefor, or its interest under the Loan Documents (as amended and modified by
this Agreement).

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

IN WITNESS WHEREOF, Borrower and Lender have duly executed this
Agreement as of the day and year first above written.

C-C CALIFORNIA PLAZA PARTNERSHIP, a
California general partnership

By: Carlyle Real Estate Limited
Partnership-XV, an Illinois limited
partnership, General Partner

By: JMB Realty Corporation,
a Delaware corporation,
General Partner

By: ____________________________
Name:
Title:

By: Cygna Limited One, a California limited
partnership, General Partner

By: Cygna Development Corporation, a
California corporation, General
Partner

By: ____________________________
Name:
Title:

THE TRAVELERS LIFE AND ANNUITY COMPANY

By: _______________________________________
Name:
Title:

The undersigned parties are joining this
Agreement to acknowledge and confirm their
agreement to paragraphs 11 and 21 of this
Agreement.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP-
XV, an Illinois limited partnership

By: JMB Realty Corporation, a Delaware
corporation, General Partner

By: __________________________________
Name:
Title:

CYGNA LIMITED ONE, a California limited
partnership

By: Cygna Development Corporation, a
California corporation

By:__________________________________
Name:
Title:
<PAGE>
State of _______________)
County of ______________) ss.

On ________________ before me, _____________________ personally appeared
____________________ personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of
which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Signature__________________________________

(This area for official seal.)

<PAGE>
State of _______________)
County of ______________) ss.

WITNESS my hand and official seal.

Signature__________________________________

(This area for official seal.)

<PAGE>
State of _______________)
County of ______________) ss.

WITNESS my hand and official seal.

Signature__________________________________

(This area for official seal.)

<PAGE>
State of _______________)
County of ______________) ss.

WITNESS my hand and official seal.

Signature__________________________________

(This area for official seal.)

<PAGE>
State of _______________)
County of ______________) ss.

WITNESS my hand and official seal.

Signature__________________________________

(This area for official seal.)

EXHIBIT A

(Certain Definitions)

Cash Management Agreement: The term "Cash Management Agreement" as used in
this Agreement shall mean the Cash Management Agreement dated the date hereof
by and among Borrower, Lender and Cygna Development Services, as manager of
the Property.

Deed of Trust: The term "Deed of Trust" as used in this Agreement shall mean
that certain Deed of Trust and Security Agreement with Assignment of Rents and
Leases and Fixture Filing dated as of December 18, 1986 in the principal
amount of $58,000,000 given by Borrower to First American Title Insurance
Company and Lender and recorded on December 18, 1986 as Document No. 86-229768
in Book 13327, Page 243, Contra Costa County Records, California.

Escrow Agent: The term "Escrow Agent" as used in this Agreement shall mean
Chicago Title and Trust Company.

Loan Documents: The term "Loan Documents" as used in this Agreement shall
mean the Note, the Deed of Trust and any other document or instrument executed
and delivered in connection with the Loan.

Note: The term "Note" as used in this Agreement shall mean that certain Note
Secured by Deed of Trust dated December 18, 1986 in the principal amount of
$58,000,000 given by Borrower to Lender.

Prior Defaults: The term "Prior Defaults" as used in this Agreement shall
mean those certain defaults committed by Borrower prior to the date hereof and
declared by Lender under the Loan Documents, including, without limitation,
Borrower's failure to pay when due (after expiration of applicable grace
periods, if any) the full installment in the amount of $525,136.08
representing principal and interest due under the Note on March 1, 1993).

Property: The term "Property" as used in this Agreement shall mean the land
and improvements known as California Plaza and located at 2121 North
California Boulevard, Walnut Creek, California as more particularly described
on Schedule A attached hereto.

Transfer Documents: The term "Transfer Documents" as used in this Agreement
shall mean that certain Escrow Agreement dated as of the date hereof by and
among Borrower, Lender and Escrow Agent and the Deed, Bill of Sale,
Assignment, Section 1445 (FIRPTA) Affidavit and any other document and
instrument delivered into escrow pursuant thereto.

SCHEDULE A

(Description of Premises)

EXHIBIT B

(Description of Litigation)

C-C California Plaza Associates v. Dillingham Construction N.A., Inc., Case
No. C91-03449 filed in Superior Court, Contra Costa County, California.

Travelers Loan No. 204366

C-C CALIFORNIA PLAZA PARTNERSHIP

and

THE TRAVELERS LIFE AND ANNUITY COMPANY

_________________________________________

AGREEMENT OF MODIFICATION OF NOTE,
DEED OF TRUST AND OTHER LOAN DOCUMENTS
_________________________________________

Dated: As of December 22, 1993

Location: 2121 North California Boulevard
Walnut Creek, California

RECORD AND RETURN TO:

Battle Fowler
280 Park Avenue
New York, New York 10017

Attention: Steven Koch, Esq.

<TABLE>
Exhibit 21

<CAPTION>
List of Subsidiaries

<S> <C> <C>
The Partnership is a partner of the following joint ventures: JMB/Piper Jaffray Tower Associates, a general
partnership, which is a partner in (i) OB Joint Venture II, a general partnership, which is a partner of 222 South
Ninth Street Limited Partnership, a limited partnership, which holds title to the Piper Jaffray Tower office building
in Minneapolis, Minnesota, and (ii) OB Joint Venture, a general partnership, which holds title to the land underlying
the Piper Jaffray Tower office building; JMB/Piper Jaffray Tower Associates II, a general partnership which also
is a partner in OB Joint Venture, a general partnership, which holds title to the land underlying the Piper Jaffray
Tower office building; 900 3rd Avenue Associates, a general partnership, which is a partner of Progress Partners,
a general partnership, which holds title to 900 Third Avenue Building located in New York, New York; Maguire
Thomas Partners - South Tower, a limited partnership, which holds title to Wells Fargo Center - IBM Tower located
in Los Angeles, California; Villa Solana Associates, a general partnership, which holds title to Villa Solana
Apartments located in Laguna Hills, California; East Ridge Development Company, a limited partnership, which
holds title to Eastridge Mall located in Casper, Wyoming; Daytona Park Associates, a limited partnership which holds
title to Park at Countryside Apartments located in Port Orange, Florida; JMB/160 Spear Street Associates, a general
partnership, which holds title to 160 Spear Street building located in San Francisco, California; Carlyle-XV
Associates, L.P., a limited partnership which is a partner in JMB/125 Broad Building Associates, L.P., a limited
partnership, which is a partner in 125 Broad Street Company, a limited partnership, which holds title to 125 Broad
Street Building, located in New York, New York; 260 Franklin Street Associates, a general partnership, which holds
title to the 260 Franklin Street Building located in Boston, Massachusetts; C-C California Plaza Partnership, a general
partnership, which holds title to the California Plaza office building in Walnut Creek, California; Villages Northeast
Associates, a general partnership, which is a partner in VNE Partners, Ltd., a limited partnership, which holds title
to three apartment complexes located in DeKalb County (Atlanta) Georgia; and JMB/NewPark Associates, a general
partnership, which is a partner in NewPark Associates, a general partnership, which holds title to the NewPark Mall
in Newark, California. Reference is made to Note 3 for a description of the terms of such venture partnerships.
</TABLE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the managing general partner of JMB
Income Properties, Ltd. - XV, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys
and agents of the undersigned with full power of authority to sign in the
name and on behalf of the undersigned officer or directors a Report on Form
10-K of said partnership for the fiscal year ended December 31, 1993, and any
and all amendments thereto, hereby ratifying and confirming all that said
attorneys and agents and any of them may do by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 23rd day of March, 1994.

JUDD D. MALKIN
- - ------------------- Chairman and Director
Judd D. Malkin

NEIL G. BLUHM
- - ------------------- President and Director
Neil G. Bluhm

H. RIGEL BARBER
- - ------------------- Chief Executive Officer
H. Rigel Barber

JEFFREY R. ROSENTHAL
- - ----------------------- Chief Financial Officer
Jeffrey R. Rosenthal

The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and directors,
a Report on Form 10-K of said partnership for the fiscal year ended
December 31, 1993, and any and all amendments thereto, the 23rd day of
March, 1994.

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

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

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

POWER OF ATTORNEY
-----------------

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and
directors of JMB Realty Corporation, the managing general partner of JMB
Income Properties, Ltd. - XV, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name and
on behalf of the undersigned officer or directors a Report on Form 10-K of
said partnership for the fiscal year ended December 31, 1993, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
the 26th day of January, 1994.

STUART C. NATHAN
_________________________ Executive Vice President and Director of
Stuart C. Nathan General Partner

A. LEE SACKS
_________________________ Director of General Partner
A. Lee Sacks

The undersigned hereby acknowledge and accept such power of authority to
sign, in the name on behalf of the above named officer and directors, a Report
on Form 10-K of said partnership for the fiscal year ended December 31, 1993,
and any and all amendments thereto, the 26th day of January, 1994.

GARY NICKELE
______________________
Gary Nickele

GAILEN J. HULL
______________________
Gailen J. Hull

DENNIS M. QUINN
___________________________
Dennis M. Quinn