CARLYLE REAL ESTATE LTD PARTNERSHIP XV, 10-Q, 1994-11-14

CARLYLE REAL ESTATE LTD PARTNERSHIP XV
10-Q, 1994-11-14
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended September 30, 1994 Commission file #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 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office)(Zip Code)

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

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

PART I FINANCIAL INFORMATION

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

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . . 29

PART II OTHER INFORMATION

Item 3. Defaults on Senior Securities . . . . . . . 41

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

Item 6. Exhibits and Reports on Form 8-K. . . . . . 44

<TABLE>
PART I. FINANCIAL INFORMATION

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

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 1994 AND DECEMBER 31, 1993

(UNAUDITED)

ASSETS
------

<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . $ 871,631 5,020,087
Short-term investments (note 1). . . . . . . . . . . . . . . . . 14,524,940 10,167,294
Interest, rents and other receivables. . . . . . . . . . . . . . 1,249,730 1,092,658
Current portion of notes receivable (net of allowance for
doubtful accounts of $1,466,051 in 1994 and 1993, note 7). . . 17,718 34,073
Escrow deposits and restricted securities (notes 1 and 4(a)) . . 7,912,175 6,151,429
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . 24,576,194 22,465,541
------------ ------------
Investment properties, at cost:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,388,166 37,109,099
Buildings and improvements . . . . . . . . . . . . . . . . . . 358,149,382 376,030,478
------------ ------------
390,537,548 413,139,577
Less accumulated depreciation. . . . . . . . . . . . . . . . . (110,988,858)(107,997,321)
------------ ------------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . . . 279,548,690 305,142,256
------------ ------------
Investment in unconsolidated ventures,
at equity (notes 3 and 11) . . . . . . . . . . . . . . . . . . . 27,509,386 28,554,815
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . 3,649,198 4,305,261
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . 5,769,979 6,719,239
Venture partners' deficits in ventures . . . . . . . . . . . . . . 5,414,474 4,699,065
------------ ------------
$346,467,921 371,886,177
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . . . $ 78,368,901 95,188,325
Current portion of notes payable (note 8). . . . . . . . . . . . 70,701 70,701
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 2,098,612 2,256,478
Amounts due to affiliates (note 10). . . . . . . . . . . . . . . 5,122,333 6,410,710
Accrued interest payable . . . . . . . . . . . . . . . . . . . . 6,605,842 6,130,382
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . 1,635,724 728,334
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . 93,902,113 110,784,930
Notes payable (note 8) . . . . . . . . . . . . . . . . . . . . . . 290,434 361,135
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . 670,478 863,192
Investment in unconsolidated ventures, at equity
(notes 3 and 11) . . . . . . . . . . . . . . . . . . . . . . . . 45,799,514 28,318,569
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 360,000 360,000
Long-term debt, less current portion (note 4). . . . . . . . . . . 246,848,755 245,868,225
------------ ------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . 387,871,294 386,556,051
Venture partners' subordinated equity in ventures. . . . . . . . . 9,243,856 9,901,367
Partners' capital accounts (deficits) (note 1):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . (16,780,819) (15,779,416)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (872,867) (600,866)
------------ ------------
(17,633,686) (16,360,282)
------------ ------------
Limited partners:
Capital contributions, net of offering costs . . . . . . . . . 384,978,681 384,978,681
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . (391,575,251)(368,991,190)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (26,416,973) (24,198,450)
------------ ------------
(33,013,543) (8,210,959)
------------ ------------
Total partners' capital accounts (deficits). . . . . . . (50,647,229) (24,571,241)
------------ ------------
Commitments and contingencies (notes 1, 2, 3, 4, 7, 8 and 9)
$346,467,921 371,886,177
============ ============
<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

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)

<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------------------
1994 1993 1994 1993
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . $13,457,982 13,768,577 39,564,744 40,092,330
Interest income. . . . . . . . . . . . 233,744 123,450 585,203 357,627
----------- ---------- ---------- ----------
13,691,726 13,892,027 40,149,947 40,449,957
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest. . . . . . 8,223,717 8,688,914 25,246,045 26,011,726
Depreciation . . . . . . . . . . . . . 2,894,918 3,114,493 8,769,523 9,288,216
Property operating expenses. . . . . . 6,176,547 5,878,599 17,064,430 16,818,100
Professional services. . . . . . . . . 13,942 15,883 458,688 448,279
Amortization of deferred expenses. . . 293,051 296,891 862,300 917,043
General and administrative . . . . . . 220,000 167,018 532,563 511,745
Provisions for value impairment. . . . -- 916,309 -- 3,083,108
----------- ----------- ---------- ----------
17,822,175 19,078,107 52,933,549 57,078,217
----------- ----------- ---------- ----------
Operating loss. . . . . . . . . . 4,130,449 5,186,080 12,783,602 16,628,260

Partnership's share of loss from
operations of unconsolidated
ventures . . . . . . . . . . . . . . . 4,987,011 23,932,658 14,428,418 33,768,110
Venture partners' share of ventures'
operations . . . . . . . . . . . . . . (630,205) (668,442) (1,693,733) (2,389,837)
----------- ----------- ---------- ----------
Net operating loss . . . . . . . 8,487,255 28,450,296 25,518,287 48,006,533

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

CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------------------
1994 1993 1994 1993
----------- ---------- ----------- -----------
Gain on sale of interests in
unconsolidated ventures
(notes 9(b) and (c)) . . . . . . . . . -- -- -- (2,856,567)
Gain on sale or disposition of
investment properties, net
of venture partner's share of
gain of $776,717 (notes 4(a)(i)
and 9(a)). . . . . . . . . . . . . . . -- -- (1,932,823) --
----------- ----------- ---------- ----------

Net loss . . . . . . . . . . . . $ 8,487,255 28,450,296 23,585,464 45,149,966
=========== =========== ========== ==========

Net loss per limited partner-
ship interest (note 1):
Net operating loss . . . . . . $ 18.33 61.55 55.18 103.86
Net gain on sale of
interests in uncon-
solidated ventures
(notes 9(b) and (c)) . . . . -- -- -- (6.37)
Net gain on sale or dis-
position of investment
properties (notes 4(a)(i)
and 9(a)) . . . . . . . . . -- -- (4.31) --
----------- ----------- ---------- ----------

$ 18.33 61.55 50.87 97.49
=========== =========== ========== ==========
Cash distributions per
limited partnership
interest . . . . . . . . . . . $ 5.00 -- 5.00 --
=========== =========== ========== ==========

<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

NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(23,585,464) (45,149,966)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 8,769,523 9,288,216
Amortization of deferred expenses. . . . . . . . . . . . . . . 862,300 917,043
Long-term debt - deferred accrued interest . . . . . . . . . . 1,421,474 1,542,376
Partnership's share of loss from operations of
unconsolidated ventures. . . . . . . . . . . . . . . . . . . 14,428,418 33,768,110
Venture partners' share of ventures' operations
and gain on sale or disposition of investment
properties . . . . . . . . . . . . . . . . . . . . . . . . . (917,016) (2,389,837)
Provisions for value impairment. . . . . . . . . . . . . . . . -- 3,083,108
Total gain on sale or disposition of investment
properties . . . . . . . . . . . . . . . . . . . . . . . . . (2,709,540) --
Gain on sale of interests in unconsolidated ventures . . . . . -- (2,856,567)
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . (157,072) 109,833
Current portion of notes receivable. . . . . . . . . . . . . . 16,355 180,318
Escrow deposits and restricted securities (note 4(a)). . . . . (1,760,746) (440,300)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 949,260 853,585
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (157,866) 9,703
Amounts due affiliates . . . . . . . . . . . . . . . . . . . . (1,288,377) 753,243
Accrued interest payable . . . . . . . . . . . . . . . . . . . 1,445,777 2,546,363
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . 907,390 1,069,573
Deposits and advances. . . . . . . . . . . . . . . . . . . . . -- (430,000)
Tenant security deposits . . . . . . . . . . . . . . . . . . . (192,714) 79,508
------------ -----------
Net cash provided by (used in) operating
activities . . . . . . . . . . . . . . . . . . . . . . . (1,968,298) 2,934,309
------------ -----------

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1994 1993
------------ -----------
Cash flows from investing activities:
Net purchases of short-term investments. . . . . . . . . . . . . (4,357,646) (307,874)
Additions to investment properties . . . . . . . . . . . . . . . (948,673) (1,078,758)
Cash proceeds from sale of investment property (note 9(a)) . . . 2,810,896 --
Cash proceeds from sale of interest in unconsolidated
venture (note 9(c)). . . . . . . . . . . . . . . . . . . . . . -- 229,140
Partnership's distributions from unconsolidated ventures . . . . 5,299,588 1,623,612
Partnership's contributions to unconsolidated ventures . . . . . (1,307,593) (545,939)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (222,704) (335,900)
------------ -----------
Net cash provided by (used in) investing activities. . . . 1,273,868 (415,719)
------------ -----------
Cash flows from financing activities:
Principal payments on notes payable. . . . . . . . . . . . . . . (70,701) (70,701)
Principal payments on long-term debt . . . . . . . . . . . . . . (703,264) (758,792)
Venture partners' contributions to ventures. . . . . . . . . . . 249,450 143,400
Distributions to venture partners. . . . . . . . . . . . . . . . (438,987) (185,741)
Distributions to general partners. . . . . . . . . . . . . . . . (272,001) --
Distributions to limited partners. . . . . . . . . . . . . . . . (2,218,523) --
------------ -----------
Net cash used in financing activities. . . . . . . . . . . (3,454,026) (871,834)
------------ -----------
Net increase (decrease) in cash and cash equivalents . . . $ (4,148,456) 1,646,756
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . $ 22,378,794 21,922,987
============ ===========
Non-cash investing and financing activities:
Non-cash gain recognized on sale of interest in
unconsolidated venture (note 9(b)) . . . . . . . . . . . . . $ -- 2,627,427
============ ===========
Sale of investment property (note 9(a)):
Total sale proceeds, net of selling expenses . . . . . . . . $ 16,268,000 --
Principal balance due on mortgage payable. . . . . . . . . . 13,457,104 --
------------ -----------
Cash proceeds from sale of investment property,
net of selling expenses. . . . . . . . . . . . . . . . . $ 2,810,896 --
============ ===========

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

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

Disposition of investment property (note 4(a)(i)):
Balance due on long-term debt canceled . . . . . . . . . . . $ 3,100,000 --
Accrued interest expense on accelerated long-term debt . . . 970,317 --
Reduction of investment property . . . . . . . . . . . . . . (2,023,953) --
Reduction of deferred expenses . . . . . . . . . . . . . . . (16,467) --
------------ -----------
Non-cash gain recognized due to lender realizing
upon security. . . . . . . . . . . . . . . . . . . . . . $ 2,029,897 --
============ ===========

<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

SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)

Readers of this quarterly report should refer to the
Partnership's audited financial statements for the fiscal year
ended December 31, 1993, which are included in the
Partnership's 1993 Annual Report on Form 10-K (File no. 0-
16111 filed on March 28, 1994 (the "Annual Report")), as
certain footnote disclosures which would substantially
duplicate those contained in such audited financial statements
have been omitted from this report.

(1) BASIS OF ACCOUNTING

The accompanying consolidated financial statements
include the accounts of the Partnership and its consolidated
ventures, Eastridge Development Company ("Eastridge"); Daytona
Park Associates ("Park") (see note 4(a)(i)); JMB/160 Spear
Street Associates ("160 Spear"); Villa Solana Associates
("Villa Solana") (sold March 23, 1994, see note 9(a)); 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"); JMB/Owings Mills Associates ("JMB/Owings") (sold June
30, 1993, see note 9(b)); Carlyle - XV Associates, L.P., which
owns an interest in JMB/125 Broad Building Associates, L.P.
("JMB/125"), and JMB/NewPark Associates ("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 nine months ended September 30,
1994 and 1993:

1994 1993
----------------------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------

Net loss . . . $23,585,464 22,293,05645,149,966 13,458,325
Net loss
per limited
partnership
interest. . . $ 50.87 48.23 97.49 27.17
=========== ========== ========== =========

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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

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 pronounce-
ment. 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
September 30, 1994 and December 31, 1993) as cash equivalents
with any remaining amounts (generally with original maturities
of one year or less) reflected as short-term investments being
held to maturity.

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 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, 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)
for Wells Fargo Center - IBM Tower, at September 30, 1993, of
$916,309 for Villa Solana Apartments, and at December 31, 1993
of $7,534,763 for Springbrook Shopping Center. Such
provisions generally reduced the net carrying values of the
investment properties to the then outstanding balance of the
related non-recourse mortgage notes.

(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, is $299,637,926.
During 1989, the Partnership disposed of its interest in the
investment property owned by CBC Investment Company
("Boatmen's"). During 1991, the Partnership sold 62% of its
interest in Harbor and in 1993 sold its remaining 38% interest
in Harbor (note 9(c)). In September 1992, the Partnership
sold the Erie-McClurg Parking Facility. In June 1993, the
Partnership sold its interest in Owings Mills Shopping Center
(note 9(b)). In March 1994, the Partnership, through Villa
Solana Associates, sold Villa Solana Apartments (note 9(a)).
In May 1994, the lender realized upon its security interest in
the Park at Countryside Apartments (note 4(a)(i)). All of the
properties owned at September 30, 1994 were completed and
operating.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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
generally result in a gain to the Partnership for financial
reporting and Federal income tax purposes with no
corresponding distributable proceeds.

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, Woodland Hills
Apartments 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
restructuring, including the mortgage loans related to 125
Broad, 160 Spear Street and RiverEdge Place.

(b) Woodland Hills Apartments

Effective February 1, 1991, the seller/manager 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) was scheduled to mature in June
1994. The maturity date of the first mortgage loan was
extended to November 1, 1994 and both mortgage notes were
refinanced November 2, 1994 (see note 12(b)).

(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.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

During 1989, the Partnership disposed of its interest in
the Boatmen's venture (note 3(c)). During 1991, the
Partnership sold a portion of its interest in the Harbor
venture. In January 1993, the Partnership sold the remaining
portion of its interest in the Harbor venture (note 9(c)). In
June 1993, the Partnership sold its interest in the JMB/Owings
Mills Associates joint venture (note 9(b)). In March 1994,
the Partnership, through Villa Solana Associates, sold the
Villa Solana Apartments to an independent third party (note
9(a)). In May 1994, the lender realized upon its security
interest in the Park at Countryside Apartments (note 4(a)(i)).

(b) JMB/900

As a result of certain defaults by one of the
unaffiliated joint venture partners, an affiliate of the
General Partner 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 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. In addition,
it appears that the unaffiliated venture partners may not have
the financial capabilities to repay amounts advanced on their
behalf. Consequently, a final settlement will likely involve
redirecting to JMB/900 amounts otherwise payable to the
unaffiliated venture partners in accordance with the venture
agreement. There are no assurances that a settlement will be
finalized and that the Partnership and affiliated partner will
be able to recover any amounts from the unaffiliated venture
partners.

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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

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 joint venture partners make payments
totalling $2,325,000 to the Partnership. The remaining notes
do not bear interest and were scheduled to be due May 31,
1993. As of September 30, 1994, 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 September 30, 1994. 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 only to
the extent of the cash collected. There is no assurance that
the remaining delinquent payments will be collected.

(d) JMB/NewPark

In December 1986, the Partnership, through the
JMB/NewPark joint venture partnership, 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.

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 were 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 of NewPark Mall in
early 1993 and such renovation was completed later that year.

(e) 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 counterclaim against the joint
venture partner for breaches of the joint venture agreement
and property management agreement. In November 1991, the
Partnership and the

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 8) 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% per
annum, but the interest only monthly payments are based on 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(a)(vi).

(f) 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").

JMB/125 is a joint venture between Carlyle-XV Associates,
L.P. (in which the Partnership holds an approximate 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) 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 had 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.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 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
September 30, 1994 was 6.25% per annum. The amount of such
outstanding O&Y partner non-recourse loans was approximately
$20,380,000 at September 30, 1994. Due to a major tenant
vacating in 1991, the property operated at a deficit in 1993
and is expected to operate at a deficit in 1994 and for the
next several years. Such deficits through 1995 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 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 required to be
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 125
Broad, the terms of the 125 Broad joint venture agreement
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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

JMB/125 generally would be required to contribute cash to 125
Broad in the amount of its deficit capital account balance.
Taxable gain arising from the sale or other disposition of 125
Broad property generally would be allocated to the joint
venture partner or partners then having a deficit balance in
its or their respective capital accounts in accordance with
the terms of 125 Broad joint venture agreement. However, if
such taxable gain is insufficient to eliminate the deficit
balance in its account in connection with a liquidation of 125
Broad, JMB/125 would be required to contribute funds to 125
Broad (regardless of whether any proceeds were received by
JMB/125 from the disposition of 125 Broad's property) to
eliminate any remaining deficit capital account balance.

The Partnership's liability for such contribution, if
any, would be its share, if any, of the liability of JMB/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 an
obligation to make such contribution. Although the amount of
such liability could be material, the Limited Partners of the
Partnership would not be required to make additional
contributions of capital to satisfy such obligation, if any,
of the Partnership.

As described above, the terms of the 125 Broad joint
venture agreement provide that the O&Y partners are obligated
to advance to 125 Broad, 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 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 has appeared unlikely that
the O&Y partners would meet their deficit funding obligations.

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 to 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 125 Broad 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. The only
payment that has been made since was in October 1993 as
described above. 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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 $41,960,000 through September 30,
1994, 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. Due to 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 September 30, 1994, the arrearage under the mortgage
loan had increased to approximately $70,660,000. 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 reserved the entire $41,960,000 of
rent offset by J&H and has also reserved approximately
$32,600,000 of accrued rents receivable relating to such J&H
lease, since the ultimate collectibility 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, approximately $3,858,039 and $3,835,845 for the
nine months ended September 30, 1994 and 1993, respectively,
is included in the Partnership's share of loss from operations
of unconsolidated ventures. JMB/125 has notified the O&Y
partners that their failure to advance funds to cover the
operating deficits constitutes a default under the 125 Broad
joint venture agreement. The O&Y partners had attempted to
negotiate a restructuring of the mortgage loan with the lender
in order to reduce the significant operating deficits which
the property is expected to incur during 1994 and for the next
several years. The negotiations to restructure the loan were
not successful and the O&Y partners are now negotiating to
transfer the property to the lender.

JMB/125 and certain affiliates of O&Y have reached an
agreement in principle to settle their dispute regarding 125
Broad and its property. Under the terms of this agreement in
principle, JMB/125 would assign its interest in 125 Broad to
an affiliate of O&Y and release the O&Y partners from any
claims related to 125 Broad. In return, JMB/125 would receive
a promissory note in the principal amount of $5 million
bearing simple interest at 4.5% per annum with all principal
and accrued interest due at maturity in October 1999, subject
to mandatory prepayments of principal and interest or
acceleration of the maturity date under certain circumstances.

In addition, JMB/125 would receive a release from any claims
of certain O&Y affiliates and would generally be indemnified
against any liability as a general partner of 125 Broad.
Completion of the agreement in principle is subject to the
satisfaction of various conditions, including, among others,
obtaining the consent and cooperation of the mortgage lender
for the property, and there is no assurance that the
transaction will be completed. In the event the transaction
is completed, affiliates of O&Y intend to file a pre-arranged
bankruptcy plan for reorganization of 125 Broad under Chapter
11 of the Bankruptcy Code in order to facilitate 125 Broad's
transfer of the office building to the mortgage lender in
satisfaction of the mortgage debt and other claims. As a
result, the transaction between JMB/125 and the O&Y affiliates
could be subject to challenge by certain creditors resulting
in changes or recission of the transaction. In the event that
the transaction is completed as currently contemplated and not
subsequently modified or rescinded, JMB/125 would no longer
have an ownership interest in the office building, which would
result in net gain for financial reporting and Federal income
tax purposes to JMB/125 (and through JMB/125 and the
Partnership, to the Limited Partners) with no distributable
proceeds. JMB/125 would also be relieved of any obligation to
contribute cash to 125 Broad in the amount of its deficit
capital account balance.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 resulted in uncertainty as to 125 Broad's
ability 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. The Partnership's share of such provision
was $4,841,800 and was included in the Partnership's share of
loss from 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.

(g) JMB/Piper

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

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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.

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

(h) South Tower

The mortgage note secured by the property, as well as the
promissory note secured by the Partnership's interest in the
joint venture are scheduled to mature in December 1994. The
promissory note secured by the Partnership's interest in the
joint venture has been classified at September 30, 1994 and
December 31, 1993 as a current liability in the accompanying
consolidated financial statements. In view of, among other
things, current and anticipated market and leasing conditions
affecting the property, including uncertainty regarding the
amount of space, if any, which IBM will renew when its lease
expires in December 1998, the South Tower Venture, as a matter
of prudent accounting practice, recorded a provision for value
impairment of $67,479,871 (of which $20,035,181 has been
allocated to the Partnership and was reflected in the
Partnership's share of operations of unconsolidated ventures).

Such provision, made as of August 31, 1993, was recorded to
reduce the net carrying value of the Wells Fargo Center to the
then outstanding balance of the related non-recourse debt.
The Partnership and the joint venture have been in discussions
with the respective lenders regarding an extension of the
mortgage note and the promissory note. There is no assurance
that the joint venture or the Partnership will be able to
refinance these notes when they mature in December of 1994.
In the absence of an extension or refinancing of the notes,
the Partnership may decide not to commit any significant
additional amounts to the property. This would likely result
in the Partnership no longer having an ownership interest in
the property, and would result in a gain for financial
reporting and for Federal income tax purposes with no
corresponding distributable proceeds.

(4) LONG-TERM DEBT

(a) Debt Modifications

(i) Park

On May 17, 1994, the lender concluded proceedings to
realize upon its security and took title to the property as
described below.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In March 1988 and November 1991, the mortgage note
secured by Park at Countryside Apartments located in Daytona
Beach, Florida was modified to reduce the monthly installments
payable. The new agreement provided for annually increasing
minimum monthly interest payments from $18,033 (7.0% per
annum) through 1991 to $23,250 (9.0% per annum) for 1995. The
contract rate on the loan remained 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, but after discussions with the
lender, the venture was unable to secure an additional
modification of the loan. Therefore, the loan had been
classified at December 31, 1993 as a current liability in the
accompanying consolidated financial statements. On May 17,
1994, the lender realized upon its mortgage security and took
title to the property. Since the Partnership had received,
through the date of disposition, losses and distributions in
excess of its original cash investment in the property, the
Partnership recognized a gain on disposition in 1994 of
$1,301,257 (net of the venture partner's share of $728,640)
for financial reporting purposes. In addition, the
Partnership expects to recognize a gain in 1994 of
approximately $836,000 (net of venture partner's share of
approximately $397,000) for Federal income tax purposes, with
no corresponding distributable proceeds. The venture remitted
approximately $123,000 of cash flow debt service payments to
the lender in 1994.

(ii) 260 Franklin

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 in December 1991.
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 (scheduled
to be December 1995) or prepayment, the affiliated joint
venture is obligated to pay to the lender a residual interest
amount equal to 60% of the highest amount, if any, of (i) net
sales proceeds, (ii) net refinancing proceeds, or (iii) net
appraisal value, as defined. No amounts have been required to
be accrued for such contingent payments. The affiliated joint
venture is required to (i) escrow excess cash flow from
operations (computed without a deduction for property
management fees and leasing commissions to an affiliate),
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 ($4,921,208 at September 30, 1994 -
including accrued interest) is to be used to cover the costs
of capital and tenant improvement and lease inducements
($1,056,831 used as of September 30, 1994), 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)

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

of approximately $262,000 (9.3% per annum) and $57,000 (12.55%
per annum), respectively, through February 10, 1995.
Beginning March 10, 1995, monthly payments of principal and
interest of approximately $337,000 (for combined first and
second mortgage note) 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 plus accrued interest 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 September 30, 1994, approximately $199,000
has been placed in the escrow account and approximately
$126,000 has been withdrawn for expenditures approved by the
lender.

(iv) RiverEdge Place Building

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
(with a balance of $18,166,294 at September 30, 1994) 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 September 30,
1994, the amount of such principal and interest payments in
arrears is approximately $8,176,000. Therefore, the loan has
been classified at September 30, 1994 and December 31, 1993 as
a current liability in the accompanying consolidated financial
statements.

(v) Villages Northeast

The Villages Northeast joint venture, through a joint
venture with an affiliate of the developer, refinanced the
first mortgage loan secured by the Dunwoody Crossing (Phase
II) Apartments (formerly known as Post Crest) located in
Atlanta Georgia. Effective October 6, 1992, the joint venture
obtained a $9,800,000 replacement loan from an institutional
lender to retire in full satisfaction the original first
mortgage loan.

The new first mortgage loan, which is collateralized by
the property, requires monthly payments of principal and
interest (7.64% per annum) of $73,316 beginning November 1,
1992 and continuing through November 1, 1997, when the
remaining balance is payable. The new lender required the
establishment of an escrow account for real estate taxes to be
deposited on a monthly basis.

The first mortgage loan in the principal amount of
approximately $20,525,000 at September 30, 1994, secured by
the Dunwoody Crossing Phase I and III Apartments was scheduled
to mature in October 1994, and has been classified at
September 30, 1994 and December 31, 1993 as a current
liability in the accompanying consolidated financial
statements. The joint venture owning the property negotiated
an extension of the mortgage loan until December 15, 1994.
The joint venture also reached an agreement in principle with
the current lender for a new loan. The venture has paid a
$645,000 refundable fee (funded by contributions by the
Partnership and Carlyle Real Estate Limited Partnership - XVI)
to secure the interest rate on the proposed loan. This new
loan would require monthly payments of principal and interest
(8.65% per annum) of $171,737 beginning January 15, 1995 and
continuing through December 15, 1997, when the remaining
balance would be payable. There is no assurance that this
proposed transaction will be consummated on these or any other
terms.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

An affiliate of the joint venture partner entered into an
agreement to manage the complexes through December 31, 2002
(subject to earlier termination by either party upon 60 days'
prior written notice) for a fee equal to 5% of the gross
revenues of the complexes. In August 1993, an affiliate of
the General Partners assumed management of the property for a
fee equal to 5% of the gross revenues of the complexes.

(vi) California 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 was extended, as a result of this
modification, to January 1, 2000 when the unpaid balance of
principal and interest is due (including the difference
between the accrual interest and pay rate interest).
Additionally, the joint venture entered into a cash management
agreement which requires monthly net cash flow to be escrowed
(as defined). The excess (of approximately $1,408,000) of the
monthly cash flow paid from March 1993 to September 1994 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 with accrued interest to cover
future costs, including tenant improvements, lease
commissions, and capital improvements, approved by the lender
($323,120 was used as of September 30, 1994). If at any time
the balance in the escrow account exceeds $2,120,000, the
excess will be used to first pay off deferred interest, then
pay principal on the mortgage loan. Any amounts remaining in
the escrow account at the maturity date will be applied
towards the remaining balances of principal and interest on
the loan. The joint venture also was required to fund
$500,000 into the reserve account, upon the execution of the
modification.

(b) Cancellation of Wrap Note

In February 1991, the Partnership entered into an
agreement with the seller of Woodland Hills Apartments. Under
the terms of this agreement, the seller cancelled its wrap-
around mortgage note receivable from the Partnership and
assumed management of the property (see notes 2(b) 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
first and second mortgage loans 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
required monthly payments of interest only in arrears through
June 1, 1994. The maturity date of the first mortgage loan
was extended to November 1, 1994 based on the original terms
of the note, for fees aggregating $35,000. The second
mortgage loan bears interest at 11.7% per annum and required
monthly payments of interest only in arrears until June 1,
1994 when the entire principal balance, and accrued interest
in the amount of $12,253 was due and payable. The Partnership
refinanced both the first and second mortgage notes effective
November 2, 1994 with the lender of the second mortgage loan
(see notes 2(b) and 12(b)).

(5) PARTNERSHIP AGREEMENT

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 adjusted capital investment for each
year (their initial capital investment as reduced by "sale
proceeds" or "refinancing proceeds" previously distributed)
commencing with the third fiscal quarter of 1986.
Accordingly, up to $561,000 of sale proceeds from Erie-McClurg
Parking Facility and $538,500 of sale proceeds from the Villa
Solana Apartments for the General Partners have been deferred.

(6) MANAGEMENT AGREEMENTS

For a fee computed as a percentage of rental income, an
affiliate of the Corporate General Partner assumed management
of the 9701 Wilshire Building (see Note 12(a)), the 21900
Burbank Boulevard Building, the 260 Franklin Street Building,
the Springbrook Shopping Center, the Villa Solana Apartments
(see note 9(a)), RiverEdge Place Building and Village
Northeast Apartments in June 1986, January 1988, May 1988,
July 1989, December 1989, September 1992, and August 1993,
respectively.

(7) 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
$2,121,000 as of September 30, 1994. 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 notes at a rate equal to 3% over the prime
rate. In February 1991, the seller ceased paying monthly
interest required under terms of the notes. The Partnership
has put the seller in default and effective October 31, 1991,
the notes began accruing interest at the default rate. The
Partnership is pursuing its legal remedies against the seller
and certain of its principals. During 1994, two of the
principals which guaranteed the notes became subject to
Chapter 7 bankruptcy proceedings. Subsequently, these
individual's obligations, including their obligations under
the notes were discharged. Additionally, it appears that the
remaining parties to the notes have little or no assets which
the Partnership could pursue for collection. Therefore, it
appears unlikely that any further amounts will be collected.
For financial reporting purposes, the Partnership ceased
accruing interest on the notes 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.

(8) 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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

and its joint venture partner, the joint venture partner is
obligated to pay 40% and the Cal Plaza venture is obligated to
pay 60% (the venture ownership percentages) of the amounts
owed under the promissory notes (to the extent cash flow of
the property is insufficient to pay such amounts, see note
3(e)). During July 1992, July 1993, and June 1994, $70,701 of
principal and $68,788; $60,304 and $51,820 of interest,
respectively, was paid to the tenant from cash flow generated
from operations of the property. As of September 30, 1994,
the outstanding balance of the notes was $361,135.

(9) SALES OF INVESTMENT PROPERTY

(a) Villa Solana Apartments

On March 23, 1994 the Partnership, through Villa Solana
Associates, sold the Villa Solana Apartments located in Laguna
Hills, California. The sale price was $16,600,000 (before
selling costs and prorations). The venture received net sale
proceeds after selling costs and the retirement of the debt
secured by the property, of $2,810,896, of which the
Partnership's share is $2,557,915.

For financial reporting purposes, the venture recognized,
on the date of sale, gain of $679,643 of which the
Partnership's share is $631,566. The venture's gain for
Federal income taxes is approximately $2,614,000, of which the
Partnership's share is approximately $2,421,000.

(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 JMB/Owing'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 JMB/Owing'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
(as defined), 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 partnership
agreement.

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 September 30, 1994, the total
deferred gain of JMB/Owings including

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

principal and interest payments of $1,639,916 received through
September 30, 1994 is $10,205,722, of which the Partnership's
share is $5,102,861. In April 1994, the Partnership paid
approximately $255,000 of Maryland state withholding taxes
related to the sale on behalf of the Limited Partners of the
Partnership.

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% 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.

(10) TRANSACTIONS WITH AFFILIATES

Certain of the Partnership's properties are managed by
affiliates of the General Partners (see Note 6). In October
1994 one of the affiliated property managers agreed to sell
substantially all of its assets to an unaffiliated third
party. In addition, substantially all of the management
personnel of the property manager will also become management
personnel of the purchaser or its affiliates if the sale is
completed. The sale is subject to certain closing conditions.
In the event that the sale is completed, it is expected that
the successor to the affiliated property manager's assets
would act as the property manager of the 21900 Burbank
Boulevard Building, the 260 Franklin Street Building, the
Dunwoody Crossing Apartments and the RiverEdge Place Building
after the sale on the same terms that existed prior to the
sale.

Fees, commissions and other expenses required to be paid
by the Partnership (or its consolidated ventures) to the
General Partners and their affiliates as of September 30, 1994
and for the nine months ended September 30, 1994 and 1993 are
as follows:

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Unpaid at
September 30,
1994 1993 1994
---------- -------- -------------
Property management
and leasing fees. . . . $612,061 682,186 2,255,599
Insurance commissions. . 56,692 63,323 --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . 138,191 113,855 77
-------- ------- ---------

$806,944 859,364 2,255,676
======== ======= =========

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.

Such costs were $138,334 for the nine months ended September
30, 1994, $166,148 for the year ended December 31, 1993 and
$864,110 in the aggregate for the years ended December 31,
1992, 1991, 1990, 1989 and 1988, all of which were paid as of
September 30, 1994. As of December 31, 1993, $847,752 of
reimbursements was being deferred. All of such previously
deferred reimbursements were paid to the Corporate General
Partner and its affiliates in July 1994.

The General Partners and its affiliates have deferred
payment of certain property management and leasing fees as set
forth in the above table. Effective October 1, 1993, the
Partnership began paying property 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. The cumulative deferred
amounts (including the proportionate reimbursements described
above and the deferral of property management fees by one of
the Partnership's unconsolidated entities that stopped
deferring property management fees by means of reimbursement
not included above) aggregated $5,327,735 at September 30,
1994. These amounts (approximately $12 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 and
$538,500 of sale proceeds from the Villa Solana Apartments for
the General Partners is subordinated to the satisfaction of
certain conditions (see note 5).

Previously deferred partnership management fees of
$724,121 related to the years 1989 through 1992 and deferred
distributions of $249,591 related to the years 1990 through
1992 were paid to the General Partners in August 1994.

Effective January 1, 1994, certain officers and directors
of the Corporate General Partner acquired interests in a
company which, among other things, has provided and continues
to provide certain property management services to certain of
the properties owned by the Partnership. Such acquisition had
no effect on the fees payable by the Partnership under any
existing agreements with such Company. The fees earned by
such company from the Partnership for the nine months ended
September 30, 1994 were approximately $18,000.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

(11) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION

Summary income statement information for JMB/Piper,
JMB/Piper II, JMB/900, South Tower, JMB/Owings and JMB/125,
for the nine months ended September 30, 1994 and 1993 is as
follows:

1994 1993
----------- -----------
Total income of
properties. . . . . . . . $103,621,998 104,698,380
============ ===========
Operating loss of
ventures. . . . . . . . . $ 43,138,503 108,255,066
============ ===========
Gain on sale of
interest in in-
vestment property . . . . $ -- 11,638,047
============ ===========
Net loss. . . . . . . . . . $ 43,138,503 96,617,019
============ ===========
Partnership's share
of loss . . . . . . . . . $ 13,935,633 27,690,536
============ ===========

(12) SUBSEQUENT EVENTS

(a) 9701 Wilshire Building

On October 6, 1994, the Partnership sold the 9701
Wilshire Building. The purchaser is not affiliated with the
Partnership or its General Partners.

The sale price for the 9701 Wilshire Building was
$17,950,000 (before selling costs and prorations), all of
which was received in cash at closing. The Partnership
received net sale proceeds after selling costs and the
retirement of the debt secured by the property of $1,059,531.
As a result of the sale, the Partnership expects to recognize
a gain in 1994 of approximately $2,100,000 for financial
reporting purposes and a loss of approximately $3,000,000 for
federal income tax purposes.

(b) Woodland Hills Apartments

On November 2, 1994, the Partnership refinanced the first
and second mortgage loans secured by the Woodland Hills
Apartments in the principal amounts of $6,800,000 and
$1,256,667, respectively, with the lender of the second
mortgage loan.

The new non-recourse first mortgage loan in the amount of
$8,175,000, which is collateralized by the property, requires
monthly payments of interest only at a rate of 4% above the
GECC commercial paper rate (approximately 8.75% at the funding
date of the loan) through October 1, 1997 when the principal
balance is due and payable.

(13) ADJUSTMENTS

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

PART I. FINANCIAL INFORMATION

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

LIQUIDITY AND CAPITAL RESOURCES

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

At September 30, 1994, the Partnership and its
consolidated ventures had cash and cash equivalents of
approximately $872,000. Such funds and short-term investments
of approximately $14,525,000 are available for the
Partnership's share of leasing costs and capital improvements
at 160 Spear Street Building, Springbrook Shopping Center,
Eastridge Mall and 260 Franklin Street, 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), 900
Third Avenue, Eastridge Mall and Springbrook Shopping Center
as well as distributions to partners 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 operating 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 previously deferred
management and leasing fees payable to them in an aggregate
amount of $5,327,735 (approximately $12 per interest) through
September 30, 1994. These amounts, which do not bear
interest, are expected to be paid in future periods. The
Partnership paid $847,752 of previously deferred
reimbursements to the Corporate General Partner and its
affiliates in July 1994. The Partnership also paid previously
deferred partnership management fees and distributions of
$724,121 and $249,591, respectively, to the General Partners
in August 1994. Effective October 1, 1993, the Partnership
and its consolidated ventures began paying property management
and leasing fees on a current basis. Reference is made to
Note 10 relating to this deferral and subsequent partial
payment of distributions, fees and reimbursements.

The Partnership and its consolidated ventures have
currently budgeted in 1994 approximately $1,740,000 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 approximately $3,590,000. 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, as
well as cash and short-term investments currently held.
However, most of the Partnership's investment properties are
either restricted as to their use of excess cash flow by
escrow agreements negotiated pursuant to loan modifications or
are currently experiencing deficits as discussed below.
During October 1994, the Partnership sold the 9701 Wilshire
Building for a sales price of $17,950,000 as further described
in Note 12(a).

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. 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
generally result in a gain to the Partnership for financial
reporting and Federal income tax purposes with no
corresponding distributable proceeds.

Certain 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, Woodland Hills
Apartments and the Dunwoody Apartments (Phases 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
restructuring, including the mortgage loans related to 125
Broad, 160 Spear Street and RiverEdge Place. The current
status of the attempts to extend, 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 remained
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 for $16,600,000, before closing
costs, as described in Note 9.

The first mortgage note secured by the Woodland Hills
Apartments in the principal amount of $6,800,000 was scheduled
to mature on November 1, 1994 (due to the Partnership
obtaining an extension from June 1, 1994 for fees aggregating
$35,000). The second mortgage note secured by the property in
the principal amount of $1,256,667 matured June 1, 1994. The
Partnership refinanced both notes with the lender of the
second mortgage note effective November 2, 1994. Reference is
made to Notes 4(b) and 12(b).

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. Based on current and anticipated
market conditions, the Partnership and the joint venture
partners were unwilling to commit any additional amounts to
the property since the likelihood of recovering any such
amounts was remote. Consequently, the lender realized upon
its mortgage security interest and took title to the property
on May 17, 1994. The loan in the principal amount of
$3,100,000, was classified at December 31, 1993 as a current
liability in the accompanying consolidated financial
statements. Reference is made to Note 4(a)(i).

The first mortgage loan in the principal amount of
approximately $20,525,000 at September 30, 1994, secured by
the Dunwoody Crossing Phases I and III Apartments was
scheduled to mature in October 1994, and has been classified
as a current liability at September 30, 1994 and December 31,
1993 in the accompanying consolidated financial statements.
The joint venture owning the property negotiated an extension
of the mortgage loan until December 15, 1994. The joint
venture also reached an agreement in principle with the
current lender for a new loan. The venture has paid a
$645,000 refundable fee (funded by contributions by the
Partnership and Carlyle Real Estate Limited Partnership - XVI)
to secure the interest rate on the proposed loan. The new
loan would require monthly payments of principal and interest
(8.65% per annum) of $171,737 beginning January 15, 1995 and
continuing through December 15, 1997 when the remaining
balance would be payable. There is no assurance that this
proposed transaction will be consummated on these or any other
terms.<PAGE>
In June 1993, JMB/Owings sold its interest in the Owings
Mills Shopping Center for $9,416,000 represented by a purchase
price note. In April 1994, the Partnership paid approximately
$255,000 of Maryland state withholding taxes related to the
sale on behalf of the Limited Partners of the Partnership.
Reference is made to Note 9(b).

Piper Jaffray Tower

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

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

160 Spear Street Building

Due to the rental concessions granted to facilitate
leasing, the property operated at an approximate break-even
level in 1993, and is expected to operate an approximate
break-even level in 1994. As more fully discussed in Note
4(a)(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 has approached 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 it is likely the Partnership would 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, which
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 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 may continue over the next few
years. The current competitive market in downtown Manhattan
has significantly affected the 125 Broad Street Building, as
the occupancy has decreased to 54% at September 30, 1994
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, 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 to 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 low 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 the next 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. Based on the facts discussed
above and as described more fully in Note 3(f), 125 Broad
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 125 Broad'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 loan 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 discussed below, it has appeared
unlikely that the O&Y partners would meet their deficit
funding obligations.

The O&Y partners have failed to advance necessary funds
to 125 Broad as required under the 125 Broad joint venture
agreement, and as a result, 125 Broad defaulted on its
mortgage loan, which has an outstanding principal balance of
$277,000,000 in June 1992 by failing to pay approximately
$4,722,000 of the semi-annual interest payment due on the
loan. The only payment that has been made since was in
October 1993. 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 the joint venture for its lease at the 125 Broad
Street Building in the amount of approximately $41,960,000
through September 30, 1994, 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. Due to 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 September 30, 1994, the
arrearage of principal and interest under the mortgage loan
had increased to approximately $70,660,000. 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 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, JMB/125 has reserved the entire $41,960,000 of rent
offset by J&H and has also reserved approximately $32,600,000
of accrued rents receivable relating to such J&H lease, since
the ultimate collectibility 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 $3,858,039 and $3,835,845 for the nine months
ended September 30, 1994 and 1993, respectively, and is
included in the Partnership's share of loss from operations of
unconsolidated ventures. JMB/125 has notified the O&Y
partners that their failure to advance funds to cover the
operating deficits constitutes a default under the 125 Broad
joint venture agreement. The O&Y partners had attempted to
negotiate a restructuring of the mortgage loan with the lender
in order to reduce the significant operating deficits which
the property is expected to incur during 1994 and for the next
several years. The negotiations to restructure the loan were
not successful and the O&Y partners are now negotiating to
transfer the property to the lender.

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, the affiliated joint venture reached an agreement with
the lender to modify the long-term mortgage note secured by
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 lease
commissions to an affiliate) to be used to cover the cost of
capital and tenant improvements and lease inducements (as
defined) which are the primary components of the anticipated
operating deficits noted above 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. The Partnership's share of such fees and lease
commissions is approximately $640,000 at September 30, 1994.
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
would be significant costs related to releasing this space.
In addition, the long-term mortgage loan matures January 1,
1996. If the affiliated joint venture is unable to refinance
or extend the mortgage loan, the Partnership may decide not to
commit any significant additional funds to the property. 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
purposes.

900 Third Avenue Building

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

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 9.

Wells Fargo Center

The Wells Fargo Center operates in the Downtown Los
Angeles office market, which has become extremely competitive
over the last several years with the addition of several new
buildings that has resulted in a high vacancy rate of
approximately 25% in the marketplace. In 1992, two major law
firm tenants occupying approximately 11% of the building's
space approached the joint venture indicating that they were
experiencing financial difficulties and desired to give back a
portion of their leased space in lieu of ceasing business
altogether. The joint venture reached agreements which
resulted in a reduction of the space leased by each of these
tenants. The Partnership is also aware that a major tenant,
IBM, leasing approximately 58% of the tenant space in the
Wells Fargo Building, is sub-leasing or attempting to sub-
lease approximately one-half of its space which is scheduled
to expire in December 1998. The Partnership expects that the
competitive market conditions will have an adverse affect on
the building through lower effective rental rates achieved on
releasing of existing space which expires or is given back
over the next several years. The Partnership's share of
distributions from the joint venture for 1992 and 1993 were
insufficient to cover the debt service on the promissory note
secured by the Partnership's interest in the joint venture.
Such shortfall was due to rental concessions granted to
facilitate leasing of space taken back from the two tenants
noted above and the expansion of one of the other major
tenants in the building. The property is expected to produce
cash flow in 1994. The mortgage note secured by the property,
as well as the promissory note secured by the Partnership's
interest in the joint venture are scheduled to mature in
December 1994. The promissory note secured by the
Partnership's interest in the joint venture has been
classified at September 30, 1994 and December 31, 1993 as a
current liability in the accompanying consolidated financial
statements. In view of, among other things, current and
anticipated market and leasing conditions affecting the
property, including uncertainty regarding the amount of space,
if any, which IBM will renew when its lease expires in
December 1998, the South Tower Venture, as a matter of prudent
accounting practice, recorded a provision for value impairment
of $67,479,871 (of which $20,035,181 has been allocated to the
Partnership and was reflected in the Partnership's share of
operations of unconsolidated ventures). Such provision, made
as of August 31, 1993, was recorded to reduce the net carrying
value of the Wells Fargo Center to the then outstanding
balance of the related non-recourse debt. The Partnership and
the joint venture have been in discussions with the respective
lenders regarding an extension of the mortgage note and the
promissory note. There is no assurance that the joint venture
or the Partnership will be able to refinance these notes when
they mature in December of 1994. In the absence of an
extension or refinancing of the notes, the Partnership may
decide not to commit any significant additional amounts to the
property. This would likely result in the Partnership no
longer having an ownership interest in the property, and would
result in a gain for financial reporting and for Federal
income tax purposes with no corresponding distributable
proceeds. The property did not sustain any significant damage
as a result of the January 1994 earthquake in southern
California. Reference is made to Note 1.

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 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 Partnership took this course 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
loan secured by the RiverEdge Place Building and the
Partnership continues to negotiate with the lender to
restructure the mortgage note with a current outstanding
balance of $18,166,294 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. 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.

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. However, the Partnership has begun
to conduct inspections of certain joints in the structural
steel frame of the building. The Partnership will monitor the
results and perform additional repairs as necessary. While
the Partnership carried earthquake insurance on this property,
it is anticipated that the total damages will not exceed the
policy's deductible amount. Although the property produced
cash flow to the Partnership in 1993 and for the first nine
months of 1994, 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. Most of the tenant space expiring in 1995 and
1996 is occupied by two tenants. The Partnership is in the
process of negotiating new leases with such tenants. There
can be no assurance that the Partnership will be able to
retain these tenants. 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 then
outstanding balance of the related non-recourse financing.

NewPark Associates

NewPark Associates commenced a renovation of NewPark Mall
in early 1993 and such renovation was completed later that
year. The excess proceeds from the refinancing of NewPark
Associates' loans are expected to be sufficient to pay for
substantially all of the renovation as well as tenant
improvement costs anticipated to be incurred in connection
with leasing vacant space at the mall. NewPark Mall may be
subject to increased competition from a new mall that is
scheduled 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. The property
is expected to produce cash flow in 1994, however, as
discussed below, net cash flow is to be escrowed. 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 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(a)(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 ($323,120 used as of
September 30, 1994). 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 then outstanding balance of the related non-recourse
mortgage note. Reference is made to Notes 1 and 4(a)(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. 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. 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.

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.

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 then outstanding balance of the related non-recourse
financing. Reference is made to Note 1. The Partnership has
entered into a letter of intent with a prospective purchaser
for the sale of the property which is contingent upon a tenant
relocating to the above-mentioned vacant space. There can be
no assurance that the Partnership will be able to finalize
this sale. The potential sale of the property would likely
result in a gain for financial reporting and a loss for
federal income tax purposes.

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. The property is expected to
operate at a small deficit in 1994.

The 9701 Wilshire Building 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 September 30, 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 remained the same on the loan as prior to
the original maturity date. The unpaid principal and interest
matured on September 30, 1994, and thus, the loan has been
classified at September 30, 1994 and December 31, 1993 as a
current liability in the accompanying consolidated financial
statements. On October 6, 1994, the property was sold and the
outstanding debt was retired as described in Note 12(a).

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.

Though the economy has recently shown signs of
improvement and financing is generally becoming more available
for certain types of higher-quality properties in healthy
markets, real estate lenders are typically requiring a lower
loan-to-value ratio for mortgage financing than in the past.
This has made it difficult for owners to refinance real estate
assets at their current debt levels unless the value of the
underlying property has appreciated significantly. As a
consequence, and due to the weakness of some of the local real
estate markets in which the Partnership's properties operate,
the Partnership is taking steps to preserve its working
capital. Therefore, the Partnership is carefully scrutinizing
the appropriateness of any possible 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.

Due to the factors discussed above, it is likely that the
Partnership will hold certain of its investment properties
longer than originally anticipated in order to maximize the
return to the Limited Partners. On March 23, 1994, the
Partnership received proceeds from the sale of the Villa
Solana Apartments as more fully described in Note 9(a). In
August 1994, $2,218,523 ($5 per Interest) was distributed to
the Limited Partners and $22,410 was distributed to the
General Partners out of such proceeds. Although the
Partnership expects to distribute sales proceeds from the
disposition of the Partnership's remaining assets, without a
dramatic improvement in market conditions Limited Partners will receive
significantly less than half of their original investment.
However, in connection with sales or other dispositions
(including transfers to lenders) of properties (or interests
therein) owned by the Partnership or its joint ventures, the
Limited Partners may be allocated substantial gain for Federal
income tax purposes, regardless of whether any proceeds are
distributable from such sale or other disposition.

RESULTS OF OPERATIONS

The decrease in cash and cash equivalents and
corresponding increase in short-term investments at September
30, 1994 as compared to December 31, 1993 is primarily due to
the 1994 sale and maturity of U.S. Government obligations
classified as cash equivalents at December 31, 1993 and the
purchase of U.S. Government obligations classified as short-
term investments at September 30, 1994. Reference is made to
Note 1.

The increase in interest, rents and other receivables at
September 30, 1994 as compared to December 31, 1993 is
primarily due to the timing of rental payments received at the
RiverEdge Place Building.

The increase in the balance of escrow deposits and
restricted securities and accrued real estate taxes at
September 30, 1994 as compared to December 31, 1993 is
primarily due to the timing of real estate tax payments at
certain of the Partnership's investment properties. The
increase in escrow deposits and restricted securities is also
due to the continued escrow of excess cash flow pursuant to
the loan modifications at the 260 Franklin Street Building and
the Cal Plaza office building. Reference is made to Notes
4(a)(ii) and 4 (a)(vi).

The decrease in land, buildings and improvements, current
portion of long-term debt and tenant security deposits at
September 30, 1994 as compared to December 31, 1993 is
primarily due to the sale of Villa Solana Apartments on March
23, 1994 and to the lenders obtaining legal title to the Park
at Countryside Apartments on May 17, 1994. In addition, such
actions are the reason for the gain on sale or disposition of
investment properties for the nine months ended September 30,
1994 consisting of the $631,566 gain on sale of the Villa
Solana Apartments and $1,301,257 gain on disposition of the
Park at Countryside Apartments. Reference is made to Note
4(a)(i) and 9(a).

The decrease in the balance of accounts payable at
September 30, 1994 as compared to December 31, 1993 is
primarily due to the timing of certain operating expense
payments at the 160 Spear Street building and 260 Franklin
Street office building.

The decrease in amounts due to affiliates at September
30, 1994 as compared to December 31, 1993 is primarily due to
the payment of previously deferred salary and overhead
reimbursements of $847,752 to the Corporate General Partner
and its affiliates and payment of previously deferred
partnership management fees of $724,121 to the General
Partners. Reference is made to Note 10.

The increase in accrued interest payable at September 30,
1994 as compared to December 31, 1993 is primarily due to the
accrual of approximately $1,890,000 in 1994 of unpaid interest
on the mortgage loan secured by the Riveredge Place investment
property. Reference is made to Note 4(a)(iv). The increase
is partially offset by the lenders obtaining title to the Park
at Countryside Apartments on May 17, 1994. Reference is made
to Note 4(a)(i).

The decrease in notes payable at September 30, 1994 as
compared to December 31, 1993 is due to the June, 1994
principal payment on promissory notes related to the
California Plaza office building. Reference is made to Note
8.

The decreases in rental income, mortgage and other
interest, depreciation and amortization of deferred expenses
for the three and nine months ended September 30, 1994 as
compared to the three and nine months ended September 30, 1993
are primarily due to the lenders obtaining legal title to the
Park at Countryside Apartments on May 17, 1994 and to the sale
of Villa Solana Apartments on March 23, 1994. Reference is
made to Notes 4(a)(i) and 9(a). The decreases in rental
income are partially offset by the receipt of approximately
$395,000 of lease termination fees at the 9701 Wilshire
Building in July 1994.

The increase in interest income for the three and nine
months ended September 30, 1994 as compared to three and nine
months ended September 30, 1993 is primarily due to higher
effective yields being earned on U.S. Government obligations
held by the Partnership during 1994 and to higher average
balances of U.S. Government obligations being held in 1994 due
to the temporary investment of Villa Solana sale proceeds.
Reference is made to Note 9(a).

The increase in property operating expenses for the three
and nine months ended September 30, 1994 as compared to the
three and nine months ended September 30, 1993 is primarily
due to an increase in repair and maintenance and other
operating costs at the Dunwoody Crossing Apartments,
California Plaza and 260 Franklin investment properties
(partially recoverable from tenants). The increase is
partially offset by the lenders obtaining legal title to the
Park at Countryside Apartments on May 17, 1994 and the sale of
Villa Solana Apartments on March 23, 1994. Reference is made
to Notes 4(a)(i) and 9(a).

The provision for value impairment for the nine months
ended September 30, 1993 relates to the provision for value
impairment of $2,166,799 recorded at June 30, 1993 at Cal
Plaza and the $916,309 provision recorded at September 30,
1993 at Villa Solana Apartments. The provision for value
impairment for the three months ended September 30, 1993
relates to the provision recorded at September 30, 1993 at
Villa Solana Apartments. Reference is made to Note 1.

The decrease in Partnership's share of loss from
operations of unconsolidated ventures for the three and nine
months ended September 30, 1994 as compared to the three and
nine months ended September 30, 1993 is primarily due to the
provision for value impairment recorded at August 31, 1993 at
Wells Fargo Center (of which the Partnership's share is
$20,035,181).

The decrease in venture partners' share of ventures'
operations for the nine months ended September 30, 1994 as
compared to the nine months ended September 30, 1993 is
primarily due to the venture partner at the California Plaza
investment property not being allocated any losses in 1994, as
a result of the impairment recorded at California Plaza at
June 30, 1993 which resulted in the write-off of the venture
partner's deficit investment balance at June 30, 1993.
Reference is made to Note 1.

The gain on sale of interests in unconsolidated ventures
for the nine months ended September 30, 1993 relates to the
$229,140 gain on sale of the remaining interest in Harbor
Overlook Limited Partnership in January 1993 and the
$2,627,427 gain on the Partnership's sale of interest in
JMB/Owings in June 1993. Reference is made to Notes 9(b) and
(c).
PART II. OTHER INFORMATION

ITEM 3. DEFAULTS ON SENIOR SECURITIES

The mortgage loan secured by the 125 Broad Street
property is in default at September 30, 1994 due to the
partial payment of scheduled debt service since June 1992.
The mortgage loan secured by the Park at Countryside
Apartments was in default due to the venture ceasing the
required debt service payments in October 1993, prior to the
lender realizing upon its mortgage security interest in the
property on May 17, 1994. The second mortgage loan secured by
the Woodland Hills Apartments matured June 1, 1994. However,
the Partnership refinanced the loan effective November 2,
1994. In addition, in July, 1992, the Partnership ceased
making debt service payments on the mortgage loan secured by
the RiverEdge Place Building. Reference is made to Notes
3(f), Notes 4(a)(i), 4(b), 4(a)(iv) and 12(b) of Notes to
Consolidated Financial Statements filed with this quarterly
report and the discussion of those investment properties in
Liquidity and Capital Resources contained in the Management's
Discussions and Analysis of Financial Condition section of
this quarterly report for discussions of such loan defaults,
which are hereby incorporated herein by reference.

<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION

OCCUPANCY

The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties.
<CAPTION>
1993 1994
-------------------------------------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 900 Third Avenue Building
New York, New York. . . . . . . . . . . . . . . . 91% 94% 94% 95% 94% 94% 94%
2. Piper Jaffray Tower
Minneapolis, Minnesota 97% 98% 98% 98% 99% 99% 98%
3. RiverEdge Place
Fulton County (Atlanta), Georgia. . . . . . . . . 85% 83% 84% 89% 87% 88% 89%
4. Wells Fargo Center - IBM Tower
Los Angeles, California . . . . . . . . . . . . . 98% 98% 98% 98% 97% 97% 97%
5. Villa Solana Apartments
Laguna Hills, California. . . . . . . . . . . . . 94% 91% 91% 91% N/A N/A N/A
6. Eastridge Mall
Casper, Wyoming . . . . . . . . . . . . . . . . . 90% 90% 90% 91% 91% 92% 92%
7. Woodland Hills Apartments
DeKalb County (Atlanta), Georgia. . . . . . . . . 96% 87% 98% 92% 89% 98% 100%
8. Park at Countryside Apartments
Port Orange (Daytona Beach), Florida. . . . . . . 97% 95% 97% 99% 98% N/A N/A
9. 160 Spear Street Building
San Francisco, California . . . . . . . . . . . . 93% 95% 94% 91% 91% 88% 88%
10. 21900 Burbank Boulevard Building
Los Angeles (Woodland Hills), California. . . . . 98% 98% 100% 99% 99% 100% 100%
11. 125 Broad Street Building
New York, New York. . . . . . . . . . . . . . . . 72% 72% 72% 54% 54% 54% 54%
12. Owings Mills Shopping Center
Owings Mills (Baltimore County), Maryland . . . . 93% N/A N/A N/A N/A N/A N/A
13. 260 Franklin Street Building
Boston, Massachusetts . . . . . . . . . . . . . . 97% 98% 97% 99% 99% 99% 99%
14. 9701 Wilshire Building
Beverly Hills, California . . . . . . . . . . . . 92% 96% 93% 93% 89% 89% 89%
15. California Plaza
Walnut Creek, California. . . . . . . . . . . . . 94% 96% 97% 95% 95% 99% 98%
16. Dunwoody Crossing (Phase I, II and III)
Apartments
DeKalb County (Atlanta), Georgia. . . . . . . . . 94% 96% 93% 90% 91% 93% 91%
17. NewPark Mall
Newark (Alameda County), California . . . . . . . 71% 73% 80% 81% 80% 80% 80%
18. Springbrook Shopping Center
Bloomingdale, Illinois. . . . . . . . . . . . . . 95% 95% 95% 74% 74% 71% 71%
<FN>
- --------------------

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

</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

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 for December 31,
1992 on Form 10-K (File No. 0-16111) 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 Exhibit 4-B to the
Partnership's report for December 31, 1992 on Form 10-K (File
No. 0-16111) 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 for December 31, 1992 on Form 10-K (File
No. 0-16111) 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 for December 31, 1992 on Form 10-K (File
No. 0-16111) dated March 19, 1993.

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

10-D. Acquisition documents relating to the
purchase by the Partnership of the NBG 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.

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 Partnership'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 (File No. 2-95382) 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 (File No. 2-95382) 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 (File No. 2-95382) 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 to the Partnership's report for December 31, 1989 on
Form 10-K (File No. 0-16111) dated March 28, 1990.

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 to the Partnership's report for December 31, 1989
on Form 10-K (File No. 0-16111) dated March 28, 1990.

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.

10-W.* Second Amendment to Real Estate Purchase
Agreement dated September 3, 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. Amended and Restated Articles of Partnership
of JMB/125 Broad Building Associates, dated April 21, 1993
between Carlyle Advisors, Inc. and Carlyle-XV Associates, L.P.
relating to the 125 Broad Street Building, is hereby incor-
porated herein by reference to the Partnership's report for
December 31, 1993 on Form 10-K (File No. 0-16111) dated March
28, 1994.

10-Y. Documents relating to the modification of the
mortgage loan secured by California Plaza are hereby
incorporated herein by reference to the Partnership's report
for December 31, 1993 on Form 10-K (File No. 0-16111) dated
March 28, 1994.

10-Z. Agreement for Purchase and Sale of Real
Estate and Related Property related to the sale of Villa
Solana Apartments dated February 7, 1994 between Villa Solana
Associates ("Seller") and EQR-Villa Solana Vistas, Inc.
("Purchasers") is incorporated herein by reference to the
Partnership's report for June 30, 1994 on Form 10-Q (File No.
0-16111) dated August 12, 1994.

10-AA. Amendment to the Agreement for Purchase and
Sale of Real Estate and Related Property related to the sale
of Villa Solana Apartments dated February 25, 1994 between
Villa Solana Associates ("Seller") and EQR-Villa Solana
Vistas, Inc. ("Purchasers") is incorporated herein by
reference to the Partnership's report for June 30, 1994 on
Form 10-Q (File No. 0-16111) dated August 12, 1994.

10-BB. Second Amendment to Agreement for Purchase
and Sale of Real Estate and Related Property related to the
sale of Villa Solana Apartments dated March 4, 1994 between
Villa Solana Associates ("Seller") and EQR-Villa Solana
Vistas, Inc. ("Purchaser") is incorporated herein by reference
to the Partnership's report for June 30, 1994 on Form 10-Q
(File No. 0-16111) dated August 12, 1994.

10-CC. Takeover agreement relating to Johnson &
Higgins space at the 125 Broad Building is incorporated herein
by reference to the Partnership's report for March 31, 1994 on
Form 10-Q (File No. 0-16111) dated May 11, 1994.

10-DD. First Amendment to Loan Documents relating to
the mortgage loan secured by Dunwoody Crossing Apartments
(Phases I and III) is filed herewith.

27. Financial Data Schedule of the Partnership
for the period ended September 30, 1994 is filed herewith.

---------------
* 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 report on Form 8-K has been
filed for the quarter covered by this report:

(i)
None

SIGNATURES

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

BY: JMB Realty Corporation
(Corporate General Partner)

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

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

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

FIRST AMENDMENT TO LOAN DOCUMENTS
---------------------------------

This First Amendment to Loan Documents (the "AMENDMENT") is made as of
September 30, 1994, by and between VNE Partners, Ltd., a Georgia limited
partnership ("BORROWER") and The Prudential Insurance Company of America, a
New Jersey corporation (the "LENDER").

RECITALS:
---------

A. Borrower has executed and delivered to Lender a Real Estate Note,
dated September 29, 1987 (the "NOTE"), payable to the order of Lender, in the
original principal amount of Twenty One Million Dollars (21,000,000.00).

B. To secure the payment of all amounts due under the Note, borrower
executed and delivered to Lender a Deed of Trust and Security Agreement dated
September 29, 1987, which was recorded with the DeKalb County, Georgia
Recorder's Office on September 30, 1987 in Deed Book 5959, page 363 (the "DEED
OF TRUST"), encumbering, among other things, the property legally described on
Exhibit A attached hereto (the "PROPERTY").

C. Borrower and Lender acknowledge that the Maturity Date (as that
term is defined in the Note) of the Note is October 1, 1994.

D. Borrower has submitted to Lender that certain First Mortgage Loan
Application, dated September 20, 1994, for a $21,500,000 loan, to be secured
by the Property (the "NEW LOAN"). Borrower and Lender acknowledge that the
New Loan will not close prior to October 1, 1994, and therefore have agreed to
extend the Maturity Date.

E. Borrower and Lender desire to amend the Note, Deed of Trust, and
any and all other documents securing and/or delivered in connection with the
loan ( the "LOAN") evidenced by the Note (the Note, the Deed of Trust and all
such other documents are herein collectively called the "LOAN DOCUMENTS") to
extend the Maturity Date until December 15, 1994.

AGREEMENT
---------

NOW, THEREFORE, in consideration for the recitals set forth above which
recitals are hereby-incorporated herewith and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged,
Borrower and Lender agree as follows:

1. The definition of "Maturity Date" in the Note is hereby changed
from October 1, 1994 to December 15, 1994. The date of October 1, 1994
contained in the fourth paragraph on page 4 of the Deed of Trust is hereby
changed to December 15, 1994.

1
2. Notwithstanding anything else in the Note or other Loan Documents
to the contrary, Borrower shall have the right, without payment of any premium
or penalty, to prepay the Loan in whole or in part, including all interest due
on the amount so prepaid, at any time prior to December 15, 1994.

3. As a condition precedent to Lender's obligation to execute this
Amendment, Borrower shall pay Lender all unpaid accrued interest and late
charges under the Note.

4. All capitalized terms used herein and not otherwise defined herein
shall have the meaning provided to them in the Deed of Trust.

5. All references in the Loan Documents to the Note, Deed of Trust,
and the Loan Documents shall be deemed to refer to those documents as amended
hereby. Except as expressly modified hereby, all terms and provisions of the
Note, the Deed of Trust and the Loan Documents shall remain in full force and
effect in accordance with their respective terms.

6. This document may be executed in counterparts, each of which shall
be deemed an original and both of which together shall constitute one
document.

7. Borrower acknowledges that, as of the date hereof, Lender is not
in default under the Loan Documents. Lender acknowledges that, as of the date
hereof, Borrower is not in default under the Loan Documents.

8. The liability of Borrower and any other person or entity hereunder
shall be limited to the same extent and in the same manner as is set forth in
Section 4.01 of the Deed of Trust.

[NO FURTHER TEXT ON THIS PAGE]

2
IN WITNESS WHEREOF, the parties hereto have executed this document as of
the year and day first set forth above.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation

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

VNE PARTNERS, LTD.,
a Georgia limited partnership

By: Villages Northeast Associates,
an Illinois general partnership,
General Partner

By: Carlyle Real Estate Limited Partnership-XV,
an Illinois limited partnership,
General Partner

By: JMB Realty Corporation,
a Delaware corporation,
General Partner

By:
-----------------------------
K. Jay Weaver
Vice President

<ARTICLE> 5

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

<CIK> 0000761023
<NAME> CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV

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

<CASH> 871,631
<SECURITIES> 14,524,940
<RECEIVABLES> 9,179,623
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24,576,194
<PP&E> 390,537,548
<DEPRECIATION> (110,988,858)
<TOTAL-ASSETS> 346,467,921
<CURRENT-LIABILITIES> (93,902,113)
<BONDS> (246,848,755)
<COMMON> 0
0
0
<OTHER-SE> 50,647,299
<TOTAL-LIABILITY-AND-EQUITY> (346,467,921)
<SALES> (39,564,744)
<TOTAL-REVENUES> (40,149,947)
<CGS> 0
<TOTAL-COSTS> 26,696,253
<OTHER-EXPENSES> 991,251
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,246,045
<INCOME-PRETAX> 12,783,602
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,518,287
<DISCONTINUED> (1,932,823)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,585,464
<EPS-PRIMARY> 50.87
<EPS-DILUTED> 0

</TABLE>