JMB INCOME PROPERTIES LTD XII, 10-K405, 1999-03-31

JMB INCOME PROPERTIES LTD XII
10-K405, 1999-03-31
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the fiscal year
ended December 31, 1998 Commission file no. 0-16108

JMB INCOME PROPERTIES, LTD. - XII
(Exact name of registrant as specified in its charter)

Illinois 36-3337796
(State of organization) (I.R.S. Employer Identification No.)

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

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

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

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

None None

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

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

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

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

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

Documents incorporated by reference: None

<PAGE>

TABLE OF CONTENTS

Page
----
PART I

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

Item 2. Properties . . . . . . . . . . . . . . . . . 4

Item 3. Legal Proceedings. . . . . . . . . . . . . . 6

Item 4. Submission of Matters to a
Vote of Security Holders . . . . . . . . . . 6

PART II

Item 5. Market for the Partnership's Limited
Partnership Interests and
Related Security Holder Matters. . . . . . . 6

Item 6. Selected Financial Data. . . . . . . . . . . 7

Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . 9

Item 7A. Quantitative and Qualitative
Disclosures About Market Risk. . . . . . . . 12

Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . 13

Item 9. Changes in and Disagreements
with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . 36

PART III

Item 10. Directors and Executive Officers
of the Partnership . . . . . . . . . . . . . 36

Item 11. Executive Compensation . . . . . . . . . . . 39

Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . 40

Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . 41

PART IV

Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . 41

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 45

<PAGE>

PART I

ITEM 1. BUSINESS

All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report. Capitalized terms used herein, but
not defined, have the same meanings as used in the Notes.

The registrant, JMB Income Properties, Ltd. - XII (the "Partnership"),
was a limited partnership formed in 1984 and governed under the Revised
Uniform Limited Partnership Act of the State of Illinois to invest in
improved income-producing commercial and residential real property. On
August 23, 1985, the Partnership commenced an offering to the public of
$100,000,000 (subject to increase by up to $150,000,000) in Limited
Partnership Interests (the "Interests") pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933 (Registration No.
2-96716). A total of 189,679 Interests were sold to the public at $1,000
per Interest. The offering closed on January 17, 1986. No Investor made
any additional capital contribution after such date. The Investors in the
Partnership shared in their portion of the benefits of ownership of the
Partnership's real property investments according to the number of
Interests held.

The Partnership was engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments had been held by fee title and/or through joint venture
partnership interests. The Partnership's real estate investments were
located throughout the nation and it had no real estate investments located
outside of the United States. A presentation of information about industry
segments, geographic regions, raw materials, or seasonality was not
applicable and would not be material to an understanding of the
Partnership's business taken as a whole. Pursuant to the Partnership
agreement, the Partnership was required to terminate no later than October
31, 2035. The Partnership was self-liquidating in nature. Upon sale of a
particular property, the net proceeds, if any, were generally distributed
or reinvested in existing properties rather than invested in acquiring
additional properties. As discussed further in Item 7, the Partnership
sold its remaining investment properties, wound up its affairs and made a
final liquidating distribution of $76,721,487 to the Limited Partners
($404.47 per Interest) and terminated its operations and dissolved
effective December 31, 1998.

The Partnership made the real property investments set forth in the
following table:

<PAGE>

SALE OR
NAME, TYPE OF PROPERTY DATE OF DISPOSITION
AND LOCATION SIZE PURCHASE DATE TYPE OF OWNERSHIP
- ---------------------- ---------- -------- ------------ ---------------------
<S> <C> <C> <C> <C>
1. Park Center
Financial Plaza
office buildings
San Jose,
California. . . . . 408,000 06/20/85 2/24/98 fee ownership of land and
sq.ft. improvements (through
n.r.a. joint venture partnership)
(a)(c)(e)
2. Topanga Plaza
shopping center
Los Angeles,
California. . . . . 360,000 12/31/85 11/17/98 fee ownership of land and
sq.ft. improvements (through
g.l.a. joint venture partnership)
(a)(f)
3. 40 Broad Street
office building
New York, New York. 247,800 12/31/85 12/30/97 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership) (a)(b)
4. Plaza Hermosa
Shopping Center
Hermosa Beach,
California. . . . . 94,900 09/03/86 1/13/98 fee ownership of land and
sq.ft. improvements (d)
g.l.a.
5. Mid Rivers Mall
shopping center
St. Peters
(St. Louis),
Missouri. . . . . . 323,100 12/12/86 1/30/92 fee ownership of land and
sq.ft. improvements (through
g.l.a. joint venture partnership)
6. First Financial
Plaza
office building
Encino,
California. . . . . 216,000 05/20/87 9/11/96 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)
(a)(b)

<PAGE>

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

(a) Reference is made to the Notes for a description of the joint
venture partnership through which the Partnership has made this real
property investment.

(b) The joint venture sold this property. Reference is made to the
Notes for a further description of such sale.

(c) In March 1996, the joint venture sold the 190 San Fernando
building, one of the buildings in the Park Center Financial Plaza office
complex comprising approximately 5% of the total occupied space, to an
independent third party, and transferred title to one of the parking
garages to the City of San Jose. The original capital percentage reflected
for this property in the table has not been adjusted for such transactions.

Reference is made to the Notes for a description of such transactions.

(d) The Partnership sold this property on January 13, 1998.
Reference is made to the Notes for a description of the sale.

(e) The joint venture sold the remaining buildings in the Park
Center Financial Plaza office complex on February 24, 1998. Reference is
made to the Notes for a description of the sale.

(f) The Partnership sold its interest in this investment property
on November 17, 1998. Reference is made to the Notes for a description of
the sale.

</TABLE>

<PAGE>

The Partnership's remaining real property investments were subject to
competition from similar types of properties (including in certain areas
properties owned by affiliates of the General Partners) in the vicinity in
which they were located. Such competition was generally for the retention
of existing tenants. Additionally, the Partnership was in competition for
new tenants. Approximate occupancy levels for the properties owned in 1998
are set forth in the table in Item 2 below to which reference is hereby
made. The Partnership maintained the suitability and competitiveness of
its properties in their respective markets primarily on the basis of tenant
mix, property aesthetics, effective rents, tenant allowances and service
provided to tenants.

On November 17, 1998, the Partnership sold its interest in the Topanga
Plaza shopping center located in Los Angeles, California. Reference is
made to the Notes for a further description of such transaction.

The Partnership has no employees.

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

ITEM 2. PROPERTIES

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

The following is a listing of principal businesses or occupations and
approximate occupancy levels by quarter during fiscal years 1998 and 1997
for the Partnership's investment properties owned during 1998:

<PAGE>

<TABLE>
<CAPTION>
1997 1998
------------------------- -------------------------
Principal At At At At At At At At
Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------- ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Park Center
Financial Plaza
San Jose, California . . Accounting/
Telecommunications 86% 87% 87% 90% N/A N/A N/A N/A

2. Topanga Plaza
Shopping Center
Los Angeles,
California . . . . . . . Retail 97% 98% 98% 98% 96% 97% 97% N/A

3. Plaza Hermosa
Shopping Center
Hermosa Beach,
California . . . . . . . Retail 91% 91% 91% 91% N/A N/A N/A N/A

- ----------

<FN>

An "N/A" indicates that the property was sold and not owned by the Partnership at the end of the quarter.

</TABLE>

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

At the time of liquidation, the Partnership was not subject to any
pending material legal proceedings.

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

There were no matters submitted to a vote of holders of Interests
during 1997 and 1998.

PART II

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

Immediately prior to the dissolution of the Partnership, there were
13,982 record holders of Interest of the Partnership. There had been no
public market for Interests and it had not been anticipated that a public
market for Interests would develop. Upon request, the Managing General
Partner provided information relating to a prospective transfer of
Interests to an investor desiring to transfer his Interests. The price to
be paid for the Interests, as well as any other economic aspects of the
transaction, was subject to negotiation by the investor.

The Partnership made a liquidating cash distribution to its Limited
Partners, wound up its affairs and dissolved effective December 31, 1998.

Reference is made to Item 6 below for a discussion of cash distribu-
tions to Investors.

Reference is made to Item 7 for a discussion of unsolicited tender
offers received from unaffiliated third parties.

<PAGE>

<TABLE>
ITEM 6. SELECTED FINANCIAL DATA

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO LIQUIDATING DISTRIBUTION)
AND YEARS ENDED DECEMBER 31, 1997, 1996, 1995 AND 1994

(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)

<CAPTION>
1998 1997 1996 1995 1994
------------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Total income, includ-
ing gain on sale of
investment properties
or interest in invest-
ment property in
1998, 1997 and 1996. . . $ 55,200,104 48,208,830 32,521,866 33,940,506 31,152,216
============ ============ =========== =========== ===========
Earnings (loss)
before extra-
ordinary item. . . . . . $ 62,757,631 21,259,326 5,928,741 (1,635,175) (2,235,341)

Extraordinary items
(net of venture
partner's share) . . . . (1,259,118) 393,705 -- -- (2,300,838)
------------ ------------ ----------- ----------- -----------

Net earnings (loss) . . . $ 61,498,513 21,653,031 5,928,741 (1,635,175) (4,536,179)
============ ============ =========== =========== ===========

<PAGE>

1998 1997 1996 1995 1994
------------- ------------ ----------- ------------ ------------
Net earnings (loss)
per Interest (b):
Earnings (loss) before
gains on sales of
investment
properties and
extraordinary items . $ 35.62 36.35 14.70 (9.15) (12.41)
Net gain on sale
of investment properties
or interest in invest-
ment property . . . . 302.39 73.47 15.78 -- --
Extraordinary items,
net . . . . . . . . . (6.57) 1.99 -- -- (11.65)
------------ ------------ ----------- ----------- -----------

Net earnings (loss)
per Interest (b). . . $ 331.44 111.81 30.48 (9.15) (24.06)
============ ============ =========== =========== ===========

Total assets. . . . . . . $ 76,721,487 160,776,991 138,673,945 178,508,742 189,322,387
Long-term debt. . . . . . $ -- 63,123,525 63,630,727 88,670,160 64,470,886
Cash distributions
per Interest (c)(d) . . $ 295.00 30.00 79.50 15.00 10.00
============ ============ =========== =========== ===========

<FN>

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

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

(b) The net earnings (loss) per Interest is based upon the number of Interests outstanding at the end of
each period (189,684).

(c) Cash distributions from the Partnership are generally not equal to Partnership's income (loss) for
financial reporting or Federal income tax purposes. Each Partner's taxable income (or loss) from the Partnership
in each year is equal to his allocable share of the taxable income (loss) of the Partnership, without regard to
the cash generated or distributed by the Partnership. Accordingly, cash distributions to the Limited Partners
since the inception of the Partnership have not resulted in taxable income to such Limited Partners and have
therefore represented a return of capital.

(d) This amount does not include a liquidating cash distribution of $76,721,487 ($404.47 per Interest) to
the Limited Partners paid by the Partnership on December 31, 1998.

</TABLE>

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

As a result of the public offering as described in Item 1, the
Partnership had approximately $171,306,000, after deducting selling
expenses and other offering costs, with which to make investments in
income-producing commercial real property, to pay legal fees and other
costs (including acquisition fees) related to such investments and for
working capital reserves. A portion of such proceeds was utilized to
acquire the properties described in Item 1 above.

The board of directors of JMB Realty Corporation ("JMB") the managing
general partner of the Partnership, had established a special committee
(the "Special Committee") consisting of certain directors of JMB to deal
with all matters relating to tender offers for Interests in the
Partnership, including any and all responses to such tender offers. The
Special Committee had retained independent counsel to advise it in
connection with any potential tender offers for Interests and had retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any potential tender offers for Interests.

During 1996, 1997 and early 1998, some of the Limited Partners in the
Partnership received from unaffiliated third parties unsolicited tender
offers to purchase up to 4.9% of the Interests in the Partnership at
between $65 and $475 per Interest. The Partnership recommended against
acceptance of these offers on the basis that, among other things, the offer
prices were inadequate. All of such offers have expired. The Partnership
was aware that 8.54% of the Interests were purchased by such unaffiliated
third parties either pursuant to such tender offers or through negotiated
purchases.

In February 1998, the Partnership made a distribution of sale proceeds
primarily related to the sale of the 40 Broad Street office building of
$22,875,888 ($120 per Interest) to the Limited Partners. As previously
reported, commencing in 1996, the Partnership changed from a quarterly
distribution of cash flow from operations to a semi-annual distribution in
May and November of each year. Accordingly, in May 1998, the Partnership
made an operating distribution for the first and second quarters of 1998 of
$953,162 ($5 per Interest) to the Limited Partners. Also in May 1998, the
Partnership made a distribution of $31,454,345 ($165 per Interest) to the
Limited Partners representing sale proceeds primarily related to the sale
of the Plaza Hermosa shopping center and previously undistributed sale
proceeds from the sale of the remaining assets of the Park Center Financial
Plaza office complex. In November 1998, the Partnership made an operating
distribution for the third and fourth quarters of 1998 of $953,162 ($5 per
Interest) to the Limited Partners.

The Partnership made a liquidating cash distribution of $76,721,487
($404.47 per Interest) to the Limited Partners and wound up its affairs and
dissolved effective December 31, 1998.

40 BROAD STREET

JMB-40 Broad Street Associates ("Broad Street") had committed to a
plan to sell the property, and therefore, had classified the property as
held for sale as of July 1, 1997. The property was no longer subject to
continued depreciation beyond such date.

On December 30, 1997, the joint venture sold the 40 Broad Street
office building for $34,735,000 (before selling costs). The joint venture
received approximately $33,155,000 of sale proceeds at closing, of which
the Partnership's share was approximately $22,731,000. Reference is made
to the Notes for a further description of such sale.

<PAGE>

SAN JOSE

TOPANGA PLAZA SHOPPING CENTER

The Topanga venture had committed to a plan to sell the property and
therefore had classified the property as held for sale as of December 31,
1996. The property had no longer been subject to continued depreciation
beyond such date. On November 17, 1998, the Partnership sold its interest
in the Topanga Plaza shopping center to its unaffiliated venture partner
for $86,375,308 ($53,450,000 plus the assumption of the Partnership's share
of the mortgage loan of $32,925,308). The Partnership received
approximately $52,366,000 of net sale proceeds (net of selling costs but
before prorations) at closing. Reference is made to the Notes for a
further description of such sale.

PLAZA HERMOSA SHOPPING CENTER

The property was classified as held for sale or disposition as of
December 1, 1996 and therefore was not subject to continued depreciation.
On January 13, 1998, the Partnership sold the land and related improvements
of the Plaza Hermosa Shopping Center for $13,335,000 (before closing costs
and prorations). The Partnership received approximately $6,500,000 of net
sale proceeds at closing after the repayment by the Partnership of the
property's bond financing with a balance of $6,400,000 and closing costs.
In connection with the sale of the property, as is customary in such
transactions, the Partnership agreed to certain representations, warranties
and covenants with a stipulated survival period which expired, with no
liability to the Partnership, on September 15, 1998. Reference is made to
the Notes for a further description of such transaction.

RESULTS OF OPERATIONS

Significant variances between periods reflected in the accompanying
consolidated financial statements not otherwise reported are primarily the
result of the sales of the First Financial Plaza office building in
September 1996, the 40 Broad Street office building in December 1997, the
Plaza Hermosa shopping center in January 1998, and the Partnership's
interest in the Topanga Plaza shopping center in November 1998.

The increase in cash and cash equivalents at December 31, 1998
(immediately prior to liquidating distribution) as compared to December 31,
1997 is primarily due to the sale proceeds received from the sale of Plaza
Hermosa shopping center in January 1998, the sale of the remaining assets
of the Park Center Financial Plaza office buildings in February 1998, and
the sale of the Partnership's interest in the Topanga Plaza shopping center
in November 1998. The increase was partially offset by the operating
distributions made by the Partnership in May and November 1998, aggregating
$1,906,324 ($10 per Interest) to the Limited Partners and the distributions
of sale proceeds in February and May 1998 of $54,330,233 ($285 per
Interest) to the Limited Partners.

<PAGE>

The decrease in investment in unconsolidated venture at December 31,
1998 as compared to December 31, 1997 and the decrease in the Partnership's
share of earnings (loss) of unconsolidated ventures for the year ended
December 31, 1998 as compared to the year ended December 31, 1997 are
primarily due to the sale of the remaining assets of the Park Center
Financial Plaza office complex in February 1998. The increase in
Partnership's share of earnings (loss) of unconsolidated ventures for the
year ended December 31, 1997 as compared to the year ended December 31,
1996 is primarily due to an increase in earnings of the San Jose venture
due to the San Jose properties being identified as held for sale or
disposition as of December 31, 1996, and therefore, no longer subject to
depreciation beyond such date.

The decrease in rental income for the year ended December 31, 1997 as
compared to the year ended December 31, 1996 is primarily due to the sale
of the First Financial Plaza office building in September 1996. The
decrease for the year ended December 31, 1997 as compared to the year ended
December 31, 1996 is partially offset by the receipt of proceeds totaling
approximately $312,000 during 1997 from The Broadway and Nordstrom,
relating to their share of prorata expenses and costs for repairs and
restorations at the Topanga Plaza Shopping Center following the earthquake
in early 1994.

The decrease in depreciation expense for the year ended December 31,
1997 as compared to the year ended December 31, 1996 is primarily due to
the First Financial Plaza office building being classified as held for sale
as of April 1, 1996, the Topanga Plaza and Plaza Hermosa investment
properties being identified as held for sale or disposition as of
December 31, 1996, and the 40 Broad Street investment property being
identified as held for sale or disposition as of July 1, 1997, and
therefore, no longer subject to depreciation beyond such dates.

The increase in general and administrative expenses for the year ended
December 31, 1998 as compared to the year ended December 31, 1997 is
primarily due to an increase in certain liquidation related costs. The
increase in general and administrative expenses for the year ended December
31, 1997 as compared to the year ended December 31, 1996 is primarily
attributable to an increase in reimbursable costs to affiliates of the
General Partners in 1997.

The Partnership's share of gain on sale of investment properties from
unconsolidated venture of $21,005,670 in 1998 is due to the gain recognized
on the sale of the remaining assets of the Park Center Financial Plaza
investment property in February 1998. The Partnership's share of gain on
sale of investment properties of unconsolidated venture of $1,412,610 in
1996 relates to the sale of the 190 San Fernando building and one of the
parking structures at the San Jose investment property.

The decrease in venture partners' share of consolidated ventures'
operations before extraordinary item for the year ended December 31, 1998
as compared to the year ended December 31, 1997 is primarily due to the
sale of the Partnership's interest in Topanga Plaza in November 1998 and
the sale of the 40 Broad Street investment property in December 1997. The
increase in venture partners' share of consolidated ventures' operations
before extraordinary item for the year ended December 31, 1997 as compared
to the year ended December 31, 1996 is primarily due to the Topanga Plaza
and 40 Broad Street investment properties being identified as held for sale
or disposition as of December 31, 1996 and July 1, 1997, respectively, and
therefore, no longer subject to depreciation beyond such dates. In
addition, the increase is also due to a reduction in assessed real estate
taxes for 1997 at the 40 Broad Street investment property. However, this
increase is partially offset by the sale of the First Financial Plaza
office building in September 1996.

The venture partners' share of gain on sale of investment property of
$6,455,513 in 1997 is the gain on the sale of the 40 Broad Street
investment property in December 1997. The venture partner's share of gain
on sale of investment property of $1,270,596 in 1996 is the gain on the
sale of the First Financial Plaza investment property in September 1996.

<PAGE>

The Partnership's share of extraordinary loss from unconsolidated
venture of $1,259,118 in 1998 consists of loan prepayment premiums of
$1,211,062 and the write-off of the deferred mortgage balance of $48,056
resulting from the sale of the Park Center Financial Plaza investment
property in February 1998.

The extraordinary gain of $393,705 in 1997 is the Partnership's share
of the reversal of the remaining previously accrued costs related to
earthquake damage in 1994. The liability was established in 1994 for
Topanga's share of the estimated repair costs due to the earthquake damage.

This reversal is attributable to repairs which were no longer considered
necessary.

INFLATION

Due to the decrease in the level of inflation in recent years,
inflation generally has not had a material effect on rental income or
property operating expenses. Inflation in future periods is not applicable
since the Partnership wound up its affairs and dissolved in 1998.

YEAR 2000

The Partnership wound up its affairs and dissolved in 1998.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership wound up its affairs and dissolved in 1998. As a
result, there is no meaningful disclosure for this item.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

INDEX

Independent Auditors' Report

Consolidated Balance Sheets, December 31, 1998 (Immediately prior to
liquidating distribution) and December 31, 1997

Consolidated Statements of Operations, year ended December 31, 1998
(Immediately prior to liquidating distribution), and years
ended December 31, 1997 and 1996

Consolidated Statements of Partners' Capital Accounts, year ended
December 31, 1998 (Immediately prior to liquidating
distribution) and years ended December 31, 1997 and 1996

Consolidated Statements of Cash Flows, year ended December 31, 1998
(Immediately prior to liquidating distribution) and years
ended December 31, 1997 and 1996

Notes to Consolidated Financial Statements

Schedules not filed:

All schedules have been omitted as the required information is
inapplicable or the information is presented in the consolidated financial
statements or related notes.

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Partners
JMB INCOME PROPERTIES, LTD. - XII:

We have audited the consolidated financial statements of JMB Income
Properties, Ltd. - XII (a limited partnership) and consolidated ventures as
listed in the accompanying index. These consolidated financial statements
are the responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
JMB Income Properties, Ltd. - XII and consolidated ventures at December 31,
1998 (immediately prior to liquidating distribution) and December 31, 1997,
and the results of their operations and their cash flows for the period
ended December 31, 1998 (immediately prior to liquidating distribution) and
the years ended December 31, 1997 and 1996, in conformity with generally
accepted accounting principles.

KPMG LLP

Chicago, Illinois
March 29, 1999

<PAGE>

<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO LIQUIDATING DISTRIBUTION)
AND DECEMBER 31, 1997

ASSETS
------
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 76,721,487 54,580,706
Rents and other receivables, net of allowance for
doubtful accounts of $25,880 in 1997. . . . . . . . . . . . . . . -- 217,745
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . -- 179,879
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . -- 878,669
------------ -----------

Total current assets. . . . . . . . . . . . . . . . . . . . 76,721,487 55,856,999
------------ -----------

Properties held for sale or disposition . . . . . . . . . . . . . . -- 91,675,837
------------ -----------

Total investment properties . . . . . . . . . . . . . . . . -- 91,675,837

Investment in unconsolidated ventures, at equity. . . . . . . . . . . -- 6,353,682
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . -- 5,000,125
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . -- 1,890,348
------------ -----------

$ 76,721,487 160,776,991
============ ===========

<PAGE>

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------

1998 1997
------------ -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ -- 507,202
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . -- 533,374
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . -- 482,884
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . -- 272,481
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . -- 1,795,941

Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . -- 147,624
Long-term debt, less current portion. . . . . . . . . . . . . . . . . -- 63,123,525
------------ -----------
Commitments and contingencies

Total liabilities . . . . . . . . . . . . . . . . . . . . . -- 65,067,090

Venture partners' subordinated equity in ventures . . . . . . . . . . -- 25,015,702

Partners' capital accounts:
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . 11,123 11,123
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . (11,123) 1,359,410
------------ -----------
-- 1,370,533
------------ -----------
Limited partners (189,684 interests):
Capital contributions, net of offering costs. . . . . . . . . . 172,071,784 171,306,452
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . 59,777,854 (3,091,192)
Cumulative cash distributions . . . . . . . . . . . . . . . . . (155,128,151) (98,891,594)
------------ -----------
76,721,487 69,323,666
------------ -----------
Total partners' capital accounts. . . . . . . . . . . . . . 76,721,487 70,694,199
------------ -----------
$ 76,721,487 160,776,991
============ ===========

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

<PAGE>

<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO LIQUIDATING DISTRIBUTION)
AND YEARS ENDED DECEMBER 31, 1997 AND 1996
<CAPTION>
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . $16,528,284 26,345,595 28,415,164
Interest income . . . . . . . . . . . . . . . . . 1,739,593 1,330,433 1,224,129
Gain on sale of investment properties or
interest in investment property . . . . . . . . 36,932,227 20,532,802 2,882,573
----------- ----------- -----------
55,200,104 48,208,830 32,521,866
----------- ----------- -----------
Expenses:
Mortgage and other interest . . . . . . . . . . . 5,096,161 6,108,328 7,665,413
Depreciation. . . . . . . . . . . . . . . . . . . -- 328,493 4,625,655
Property operating expenses . . . . . . . . . . . 4,999,702 10,106,333 12,174,612
Professional services . . . . . . . . . . . . . . 296,788 280,273 307,504
Amortization of deferred expenses . . . . . . . . 419,608 1,029,488 1,205,175
General and administrative. . . . . . . . . . . . 576,056 483,878 357,395
----------- ----------- -----------
11,388,315 18,336,793 26,335,754
----------- ----------- -----------
43,811,789 29,872,037 6,186,112

Partnership's share of earnings (loss) from
operations of unconsolidated ventures . . . . . . 562,083 1,505,524 611,483
Partnership's share of gain on sale of investment
properties of unconsolidated venture. . . . . . . 21,005,670 -- 1,412,610
Venture partners' share of consolidated ventures'
operations before extraordinary item. . . . . . . (2,621,911) (3,662,722) (1,010,868)
Venture partners' share of gain on sale of
investment property . . . . . . . . . . . . . . . -- (6,455,513) (1,270,596)
----------- ----------- -----------
Earnings (loss) before
extraordinary item. . . . . . . . . . . 62,757,631 21,259,326 5,928,741

Partnership's share of extraordinary loss from
unconsolidated venture. . . . . . . . . . . . . . (1,259,118) -- --
Extraordinary gain (net of venture partner's
share of $285,096). . . . . . . . . . . . . . . . -- 393,705 --
----------- ----------- -----------
Net earnings (loss) . . . . . . . . . . . $61,498,513 21,653,031 5,928,741
=========== =========== ===========

<PAGE>

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED

1998 1997 1996
------------ ------------ ------------
Net earnings (loss) per limited partnership
interest:
Earnings (loss) before gain on sale of
investment properties or interest in
investment property and extraordinary
items. . . . . . . . . . . . . . . . . . . . . $ 35.62 36.35 14.70
Gain on sale of investment properties or
interest in investment property. . . . . . . . 302.39 73.47 15.78
Partnership's share of extraordinary loss
from unconsolidated venture. . . . . . . . . . (6.57) -- --
Extraordinary item, net. . . . . . . . . . . . . -- 1.99 --
----------- ----------- -----------
Net earnings (loss) per limited
partnership interest. . . . . . . . . . $ 331.44 111.81 30.48
=========== =========== ===========

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

<PAGE>

<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS

YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO LIQUIDATING DISTRIBUTION)
AND YEARS ENDED DECEMBER 31, 1997 AND 1996

<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (189,684 INTERESTS)
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ----------------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1995 . . . . $11,123 769,195 -- 780,318 171,306,452 (30,082,749)(78,017,347) 63,206,356

Cash distri-
butions
($79.50 per
limited
partnership
interest). . -- -- -- -- -- -- (15,155,275) (15,155,275)
Net earnings
(loss) . . . -- 146,412 -- 146,412 -- 5,782,329 -- 5,782,329
------- ------- ------- ------- ----------- ----------- ----------- ----------
Balance at
December 31,
1996 . . . . 11,123 915,607 -- 926,730 171,306,452 (24,300,420)(93,172,622) 53,833,410

Cash distri-
butions
($30 per
limited
partnership
interest). . -- -- -- -- -- -- (5,718,972) (5,718,972)
Net earnings
(loss) . . . -- 443,803 -- 443,803 -- 21,209,228 -- 21,209,228
------- --------- ------- --------- ----------- ----------- ----------- ----------

<PAGE>

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS - CONTINUED

GENERAL PARTNERS LIMITED PARTNERS (189,684 INTERESTS)
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ----------------------- -----------

Balance at
December 31,
1997 . . . . 11,123 1,359,410 -- 1,370,533 171,306,452 (3,091,192)(98,891,594) 69,323,666
Capital con-
tributions . -- -- -- -- 765,332 -- -- 765,332
Cash distri-
butions
($295.00 per
limited
partnership
interest). . -- -- -- -- -- -- (56,236,557) (56,236,557)
Net earnings
(loss) . . . -- (1,370,533) -- (1,370,533) -- 62,869,046 -- 62,869,046
------- ---------- ------- ---------- ------------ ----------------------- ----------

Balance at
December 31,
1998 . . . . $11,123 (11,123) -- -- 172,071,784 59,777,854(155,128,151) 76,721,487
======= ========== ======= ========== =========== ======================= ==========

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

<PAGE>

<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO LIQUIDATING DISTRIBUTION) AND
YEARS ENDED DECEMBER 31, 1997 AND 1996

<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . $61,498,513 21,653,031 5,928,741
Items not requiring (providing) cash or
cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . -- 328,493 4,625,655
Amortization of deferred expenses . . . . . . . 419,608 1,029,488 1,205,175
Partnership's share of operations of
unconsolidated venture. . . . . . . . . . . . (562,083) (1,505,524) (611,483)
Partnership's share of gain on sale of
investment properties of unconsolidated
venture . . . . . . . . . . . . . . . . . . . (21,005,670) -- (1,412,610)
Venture partners' share of
ventures' operations, gain on sale and
extraordinary item. . . . . . . . . . . . . . 2,621,911 10,403,333 2,281,464
Gain on sale of investment properties or
interest in investment property . . . . . . . (36,932,227) (20,532,802) (2,882,574)
Partnership's share of extraordinary item
from unconsolidated venture . . . . . . . . . 1,259,118 -- --
Extraordinary item. . . . . . . . . . . . . . . -- (678,801) --
Changes in:
Rents and other receivables . . . . . . . . . . (175,634) 556,962 1,670,049
Prepaid expenses. . . . . . . . . . . . . . . . 589 102,232 (21,947)
Escrow deposits . . . . . . . . . . . . . . . . 472,173 175,247 (153,355)
Accrued rents receivable. . . . . . . . . . . . (239,791) (1,559,728) (289,426)
Accounts payable. . . . . . . . . . . . . . . . 439,541 (389,313) (436,529)
Accrued interest . . . . . . . . . . . . . . . (3,536) (21,067) (6,671)
Unearned rents. . . . . . . . . . . . . . . . . (272,481) (323,242) 572,414
Tenant security deposits. . . . . . . . . . . . (50,507) (53,366) (291,224)
----------- ----------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . 7,469,524 9,184,943 10,177,679
----------- ----------- -----------

<PAGE>

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1998 1997 1996
----------- ----------- -----------
Cash flows from investing activities:
Cash proceeds on sale of investment properties
or interest in investment property. . . . . . . 58,866,263 33,154,809 12,985,931
Additions to investment property,
net of related payables . . . . . . . . . . . . (818,247) (1,743,255) (1,583,556)
Partnership's distributions from
unconsolidated ventures . . . . . . . . . . . . 26,662,317 -- 3,588,000
Payment of deferred expenses. . . . . . . . . . . (173,425) (350,070) (624,372)
----------- ----------- -----------
Net cash provided by (used in)
investing activities. . . . . . . . . . 84,536,908 31,061,484 14,366,003
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . (419,078) (458,557) (622,627)
Venture partners' contributions to venture. . . . -- -- 161,356
Distributions to venture partners . . . . . . . . (13,975,348) (2,310,000) (7,561,880)
Distributions to limited partners . . . . . . . . (56,236,557) (5,718,972) (15,155,275)
Special Limited Partner capital contributions
of previously received distributions. . . . . . 765,332 -- --
----------- ----------- -----------
Net cash provided by (used in)
financing activities. . . . . . . . . . (69,865,651) (8,487,529) (23,178,426)
----------- ----------- -----------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . 22,140,781 31,758,898 1,365,256
Cash and cash equivalents,
beginning of year . . . . . . . . . . . 54,580,706 22,821,808 21,456,552
----------- ----------- -----------
Cash and cash equivalents,
end of year . . . . . . . . . . . . . . $76,721,487 54,580,706 22,821,808
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . $ 5,099,697 6,129,395 7,672,084
=========== =========== ===========

<PAGE>

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1998 1997 1996
----------- ----------- -----------

Non-cash investing and financing activities:
Total sales proceeds from sale of investment
property, net of selling expenses . . . . . . . $12,899,949 33,154,809 37,690,486
Principal balance due on mortgage payable . . . . (6,400,000) -- (24,704,555)
----------- ----------- -----------
Cash proceeds from sale of investment
property, net of selling expenses . . . $ 6,499,949 33,154,809 12,985,931
=========== =========== ===========

Sale of interest in investment property:
Gain on sale of interest in
investment property . . . . . . . . . . . . . $32,984,980 -- --
Basis in investment property. . . . . . . . . . 19,381,334 -- --
----------- ----------- -----------
Cash proceeds from sale of interest
in investment property. . . . . . . . . $52,366,314 -- --
=========== =========== ===========

Net assets and venture partner's equity
in venture written off at sale of
investment property . . . . . . . . . . . . . . $13,662,265 -- --
=========== =========== ===========

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

<PAGE>

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO
LIQUIDATING DISTRIBUTION) AND YEARS ENDED DECEMBER 31, 1997 AND 1996

OPERATIONS AND BASIS OF ACCOUNTING

GENERAL

The Partnership held (either directly or through joint ventures)
investments in real estate. Business activities consisted of rentals to a
wide variety of commercial and retail companies, and the ultimate sale or
disposition of such real estate.

The accompanying consolidated financial statements include the
accounts of the Partnership and its majority-owned ventures, Topanga Plaza
Partnership ("Topanga") (prior to the sale of the Partnership's interest in
November 1998), JMB-40 Broad Street Associates ("Broad Street") (prior to
its sale in December 1997), JMB First Financial Associates ("First
Financial", prior to its sale in September 1996) and First Financial's
venture (prior to its sale in September 1996), JMB Encino Partnership,
("Encino"). The effect of all transactions between the Partnership and its
consolidated ventures have been eliminated. The equity method of
accounting has been applied in the accompanying consolidated financial
statements with respect to the Partnership's venture interest in JMB/San
Jose Associates ("San Jose"). Accordingly, the accompanying consolidated
financial statements do not include the accounts of San Jose.

The Partnership's records were maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the ventures as described
above. Such GAAP and consolidation adjustments are not recorded on the
records of the Partnership. The net effect of these items for the year
ended December 31, 1998 (immediately prior to liquidating distribution) and
the year ended December 31, 1997 is summarized as follows:

<PAGE>

<TABLE>
<CAPTION>
1998 1997
-------------------------------------------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Total assets. . . . . . . . . . . . $76,721,487 76,721,487 160,776,991 89,829,763
Partners' capital accounts
(deficits):
General partners. . . . . . . . -- -- 1,370,533 (1,314,353)
Limited partners. . . . . . . . 76,721,487 76,721,487 69,323,666 84,497,148
Net earnings (loss):
General partners. . . . . . . . (1,370,533) 1,314,353 443,803 (129,924)
Limited partners. . . . . . . . 62,869,046 47,695,565 21,209,228 (8,107,640)
Net earnings (loss)
per limited partnership
interest. . . . . . . . . . . . . 331.44 251.45 111.81 42.74
=========== =========== =========== ===========
</TABLE>

<PAGE>

The net earnings (loss) per limited partnership interest was based
upon the number of limited partnership interests outstanding at the end of
each period (189,684).

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

Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from its unconsolidated ventures are considered
cash flow from operating activities to the extent of the Partnership's
cumulative share of net earnings. In addition, the Partnership recorded
amounts held in U.S. Government obligations at cost, which approximates
market. For the purposes of these financial statements, the Partnership's
policy was to consider all such amounts held with original maturities of
three months or less (none and $53,859,686 at December 31, 1998 and 1997,
respectively) as cash equivalents, which included investments in an
institutional mutual fund which held U.S. Government obligations, with any
remaining amounts (generally with original maturities of one year or less)
reflected as short-term investments being held to maturity.

Deferred expenses consisted primarily of commitment fees and loan
related costs which were amortized over the term of the related mortgage
loans, and lease commissions which were amortized over the term of the
related leases, using the straight-line method.

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

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

The Partnership had acquired, either directly or through joint
ventures three shopping centers, two office buildings and an office
complex. All of the properties have been sold or disposed of by the
Partnership. The cost of the investment properties represented the total
cost to the Partnership or its consolidated ventures plus miscellaneous
acquisition costs.

Depreciation on the properties had been provided over the estimated
useful lives of the various components as follows:

YEARS
-----
Building and improvements -- straight-line. 30
Personal property -- straight-line. . . . . 5
==

Maintenance and repairs were generally charged to operations as
incurred. Significant betterments and improvements were capitalized and
depreciated over their estimated useful lives.

<PAGE>

Statement of Financial Accounting Standards No. 121 ("SFAS 121")
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" was issued in March 1995. The Partnership
adopted SFAS 121 as required in the first quarter of 1996. SFAS 121
required that the Partnership record an impairment loss on its properties
held for investment whenever their carrying value could not be fully
recovered through estimated undiscounted future cash flows from their
operations and sale. The amount of the impairment loss to be recognized
would be the difference between the property's carrying value and the
property's estimated fair value. The Partnership's policy was to consider
a property to be held for sale or disposition when the Partnership had
committed to a plan to sell or dispose of such property and active
marketing activity had commenced or was expected to commence in the near
term, or the Partnership had concluded that it may dispose of the property
by no longer funding operating deficits or debt service requirements of the
property thus allowing the lender to realize upon its security. In
accordance with SFAS 121, any properties identified as "held for sale or
disposition" were no longer depreciated. Adjustments for impairment loss
for such properties (subsequent to the date of adoption of SFAS 121) were
made in each period as necessary to report these properties at the lower of
carrying value or fair value less costs to sell. In certain situations,
such estimated fair value could have been less than the existing non-
recourse debt which was secured by the property.

Under the prior impairment policy, provisions for value impairment
were recorded with respect to investment properties whenever the estimated
future cash flows from a property's operations and projected sale were less
than the property's net carrying value. The amount of any such impairment
loss recognized by the Partnership was limited to the excess, if any, of
the property's carrying value over the outstanding balance of the
property's non-recourse indebtedness.

Certain investment properties were pledged as security for the long-
term debt, for which there was no recourse to the Partnership.

INVESTMENT PROPERTIES

PLAZA HERMOSA SHOPPING CENTER

During September 1986, the Partnership acquired a multi-building
neighborhood shopping center in Hermosa Beach, California. The
Partnership's purchase price for the shopping center was $18,290,000, of
which $11,890,000 was paid in cash at closing. The balance of the purchase
price was represented by bond financing in the amount of $6,400,000.

This financing was secured by a letter of credit facility which was
ultimately secured by a deed of trust on the property. In December 1994,
upon expiration of the letter of credit, the Partnership obtained a long-
term replacement letter of credit with a new lender and simultaneously
retired the original bond financing and issued new bonds to the existing
bondholders in the aggregate amount of $6,400,000. The replacement letter
of credit was scheduled to expire in December 1997, but was extended for a
two year period in 1997.

The property was managed by an affiliate of the General Partners of
the Partnership for a fee calculated as 4% of gross receipts of the
property.

As the Partnership had committed to a plan to sell the property, the
property was classified as held for sale as of December 1, 1996 and
therefore was not subject to continued depreciation after such date.

<PAGE>

On January 13, 1998, the Partnership sold the land, building and
related improvements of the Plaza Hermosa Shopping Center to an
unaffiliated third party for a sale price of $13,335,000 (before selling
costs and prorations). The Partnership received approximately $6,500,000
of net sale proceeds at closing, after the repayment by the Partnership of
the property's bond financing with a balance of $6,400,000 and closing
costs. The sale resulted in a gain in 1998 of approximately $3,947,000 and
$2,356,000 for financial reporting and Federal income tax purposes,
respectively, all of which was allocable to the Partnership. In connection
with the sale of the property, as is customary in such transactions, the
Partnership agreed to certain representations, warranties and covenants
with a stipulated survival period which expired, with no liability to the
Partnership, on September 15, 1998.

VENTURE AGREEMENTS - GENERAL

The Partnership was a party to operating venture agreements and made
capital contributions to the respective ventures as discussed below. Under
certain circumstances, either pursuant to the venture agreements or due to
the Partnership's obligations as a general partner, the Partnership may
have been required to make additional cash contributions to the ventures.

SAN JOSE

The Partnership acquired, through San Jose, an interest in an existing
office building complex in San Jose, California (Park Center Financial
Plaza) consisting of ten office buildings, a parking and retail building
(185 Park Avenue) and two parking garage structures.

The property was managed by an unaffiliated third party for a fee
calculated as 3% of gross receipts.

The partners of San Jose were the Partnership and JMB Income
Properties, Ltd.-XI, another partnership sponsored by the Managing General
Partner of the Partnership ("JMB-XI"). The terms of San Jose's partnership
agreement generally provided that contributions, distributions, cash flow,
sale or refinancing proceeds and profits and losses would be distributed or
allocated to the Partnership and JMB-XI in their respective 50% ownership
percentages.

During August 1994, San Jose received notification from the
Redevelopment Agency of the City of San Jose of its offer to purchase one
of the parking garage structures in the office building complex, for an
approved Agency project for $4,090,000. The price offered was deemed by
the Agency to be just compensation in compliance with applicable laws
concerning eminent domain. During 1995, the Agency filed a condemnation
action in court to proceed to obtain the garage pursuant to such laws. In
late 1995, San Jose and the Agency reached a mutually acceptable agreement
on the transfer of the garage. In March 1996, the sale was consummated.
Under the transfer agreement, San Jose received replacement parking spaces
for its tenants in a nearby city-owned parking structure for a term of
fifty-five years in addition to the aforementioned purchase price of
$4,090,000. San Jose recognized a gain of approximately $2,036,000 and
$1,857,000, respectively, for financial reporting and Federal income tax
purposes in 1996, of which approximately $1,018,000 and $928,500,
respectively, was allocated to the Partnership.

In March 1996, San Jose sold the 190 San Fernando Building to an
independent third party. The sale price of the building was $1,753,000
(before selling costs), and was paid in cash at closing. San Jose
recognized a gain of approximately $789,000 and $21,000, respectively, for
financial reporting and Federal income tax purposes in 1996, of which
approximately $394,500 and $10,500, respectively, was allocated to the
Partnership.

<PAGE>

As San Jose had committed to a plan to sell the properties, the 190
San Fernando Building and the parking structures were classified as held
for sale or disposition as of January 1, 1996 and therefore were not
subject to continued depreciation. The San Jose venture subsequently
committed to a plan to sell the balance of the complex, and classified the
remaining assets as held for sale as of December 31, 1996 and these assets
have, therefore, no longer been subject to continued depreciation beyond
such date.

On February 24, 1998, the joint venture that owned the property ("San
Jose") sold the land, buildings, related improvements and personal property
of the remaining assets of the Park Center Financial Plaza office complex
to an unaffiliated third party for a sale price of $76,195,000 (before
selling costs and prorations). San Jose received approximately $49,537,000
of net sale proceeds at closing (of which the Partnership's share was
approximately $24,768,500), after the repayment by San Jose of the mortgage
loans secured by the 170 Almaden, 150 Almaden and 185 Park Avenue buildings
with a balance of approximately $23,281,000, loan prepayment premiums of
approximately $2,422,000 and closing costs. The sale resulted in a gain in
1998 of approximately $41,654,000 and $22,600,000 for financial reporting
and Federal income tax purposes, respectively, of which approximately
$20,827,000 and $11,300,000 of gain was allocated to the Partnership,
respectively. The gain for financial reporting purposes includes the
effects of previously recorded provisions for value impairment for all
buildings in the complex of approximately $24,600,000, of which the
Partnership's share was approximately $12,300,000. In connection with the
sale, San Jose recorded in 1998 an extraordinary loss for financial
reporting purposes totaling approximately $2,518,000 as a result of loan
prepayment premiums of approximately $2,422,000 and the write-off of the
deferred mortgage balance of approximately $96,000, of which the
Partnership's share was approximately $1,211,000 and $48,000, respectively.

In connection with the sale of the property, as is customary in such
transactions, San Jose agreed to certain representations, warranties and
covenants with a stipulated survival period which expired, with no
liability to the Partnership, on November 15, 1998.

TOPANGA

In December 1985, the Partnership acquired a 58% interest in the
Topanga Plaza Shopping Center in the Woodland Hills area of Los Angeles,
California. The aggregate purchase price for the Partnership's interest in
the venture was approximately $25,263,000, which was paid in cash at
closing. Under the terms of the joint venture agreement, the Partnership
generally would be allocated or distributed 58% of profits and losses, cash
flow from operations and sale or refinancing proceeds.

On January 17, 1994, an earthquake occurred in Los Angeles, California
with its epicenter in the town of Northridge, approximately six miles from
Topanga Plaza Shopping Center. The estimated costs at Topanga for which
the joint venture was responsible was approximately $11.9 million. The
majority of these costs were subject to recovery under the joint venture's
earthquake insurance policy. In the second quarter of 1996, Topanga
received, in the aggregate, approximately $513,000 from Robinson-May and
Montgomery Ward, relating to their prorata share of expenses and costs for
repairs and restorations to the Topanga Plaza Shopping Center following the
earthquake. During 1997, Topanga received, in the aggregate, approximately
$312,000 from The Broadway and Nordstrom, relating to their prorata share
of expenses and costs for repairs and restorations to the Topanga Plaza
Shopping Center following the earthquake.

During the third quarter of 1997, $678,801 of the approximate $770,000
of remaining previously accrued costs related to earthquake damage in 1994,
was reversed and recognized as an extraordinary gain. This liability was
established in 1994 for Topanga's share of the estimated repair costs due
to the earthquake damage. This reversal is attributable to repairs which
were no longer considered necessary as a result of previously overestimated
repair costs.

<PAGE>

The Topanga venture committed to a plan to sell the property and
therefore classified the property as held for sale as of December 31, 1996.

The property was no longer subject to continued depreciation beyond such
date.

On November 17, 1998, the Partnership sold its interest in the Topanga
Plaza shopping center to its unaffiliated venture partner for $86,375,308
($53,450,000 in cash plus the assumption of the Partnership's share of the
mortgage loan of $32,925,308). The Partnership received approximately
$52,366,000 of net sale proceeds (net of selling costs but before
prorations) at closing. The sale resulted in a gain in 1998 of $32,984,980
for financial reporting purposes and $52,534,159 for Federal income tax
purposes.

40 BROAD STREET

During December 1985, the Partnership acquired, through Broad Street,
a joint venture with JMB Income Properties, Ltd.-X, a partnership sponsored
by an affiliate of the Managing General Partner, a 68.56% interest in the
40 Broad Street office building in New York, New York. Broad Street's
purchase price for the building, which was paid in cash at closing, was
approximately $65,100,000 of which the Partnership provided approximately
$44,630,000.

The Partnership was allocated or distributed profits and losses, cash
flow from operations and sale or refinancing proceeds in the ratio of its
capital contributions to Broad Street, which is 68.56%.

The property was managed by an unaffiliated third party for a fee
calculated as 2% of gross receipts.

As the Partnership had committed to a plan to sell the property as of
July 1, 1997, the property was classified as held for sale as of that date,
and therefore, was not subject to continued depreciation.

On December 30, 1997, the Partnership, through a joint venture
partnership (the "Affiliated Joint Venture") with JMB Income Properties,
Ltd. - X (a partnership sponsored by the Managing General Partner of the
Partnership), sold the land, building, related improvements and personal
property of the 40 Broad Street office building to an unaffiliated third
party for a sale price of $34,735,000 (before selling costs). The sale
resulted in a gain of $20,532,803 (due to provisions for value impairment
totaling approximately $52,000,000 recorded in 1990 and 1991, of which the
Partnership's share was approximately $35,651,000), of which the
Partnership's share was $14,077,289 and a loss of $9,703,264, of which the
Partnership's share was $6,652,557 in 1997 for financial reporting and
Federal income tax purposes, respectively. In addition, in connection with
the sale of the property, as is customary in such transactions, the
Affiliated Joint Venture agreed to certain representations, warranties and
covenants with a stipulated survival period which expired, with no
liability to the Partnership, on December 1, 1998.

FIRST FINANCIAL

On May 20, 1987, the Partnership, through First Financial, a joint
venture with JMB-XIII, acquired an interest in a general partnership
("Encino") with an affiliate of the developer ("Encino Venture Partner").
Encino owned an office building in Encino (Los Angeles), California. First
Financial made an initial investment in the aggregate amount of
approximately $49,812,000 to Encino.

<PAGE>

In November 1987, First Financial caused Encino to obtain a third
party first mortgage loan in the amount of $30,000,000. The proceeds of
such loan were distributed to First Financial to reduce its contribution
and to the Encino Venture Partner who subsequently repaid a $15,500,000
loan from First Financial. Thus, the total cash investment of First
Financial for its interest in the office building, after consideration of
the funding of the $30,000,000 permanent financing, was approximately
$20,000,000, of which the Partnership's share was approximately
$12,500,000.

The first mortgage loan on the property matured November 1, 1995.
Effective November 1, 1995, Encino and the existing lender amended and
restated the existing mortgage loan. The new principal balance of the
amended note at November 1, 1995 was $24,970,148. This amount was
comprised of the then outstanding principal portion of $28,970,148 on the
original $30,000,000 note less a required $4,000,000 principal paydown by
Encino, all of which was advanced by First Financial at closing of which
the Partnership's share of such paydown was $2,500,000. The amended loan
had an interest rate of 8.67% and a term of two years resulting in a
maturity date of November 1, 1997.

In order to finalize the loan extension described above, the
Partnership and its affiliated partner advanced approximately $4.0 million
(approximately $2.5 million by the Partnership) to the joint venture to
fund the required principal paydown and related loan fees. A capital call
had been made on the unaffiliated joint venture partner for its share of
the total required amount; however, the unaffiliated joint venture partner
indicated that it did not intend to fund its required share. The
Partnership and its affiliated partner reached an agreement with the
unaffiliated partner to modify the joint venture agreement. In April 1996,
the unaffiliated partner became a limited partner as a result of this
modification.

The First Financial office building was classified as held for sale as
of April 1, 1996 and therefore was not subject to continued depreciation
since such date.

On September 11, 1996, the joint venture sold the First Financial
office building to an unaffiliated third-party for a sale price of
$37,900,000 (before selling costs and prorations). The joint venture
received approximately $13,000,000 of net sale proceeds at closing (which
reflected the assumption by the buyer of the mortgage loan with a current
balance of approximately $24,700,000 and closing costs), substantially all
of which were allocable to First Financial pursuant to the Encino venture
agreement. The sale resulted in approximately $2,880,000 and $18,800,000
of gain for financial reporting purposes and Federal income tax purposes in
1996, respectively, of which approximately $1,612,000 and $2,000 of gain
was allocated to the Partnership, respectively.

The Encino partnership agreement generally provided that First
Financial was entitled to receive (after any participating amounts due to
Pepperdine University pursuant to its tenant lease) from cash flow from
operations (as defined) an annual cumulative preferred return equal to 8.9%
of its capital contributions. Any remaining cash flow was to be split
equally between First Financial and the Encino Venture Partner. Pepperdine
University, under its tenant lease, was entitled to an amount based on 6.6%
of the Venture Partner's share of the office building's net operating
profit and net sale profit (as defined). All of Encino's operating profits
and losses before depreciation were allocated to First Financial in 1996.

The Encino partnership agreement also generally provided that net sale
proceeds and net refinancing proceeds (as defined), after any amounts due
to Pepperdine University pursuant to its tenant lease, were to be
distributed: first, to First Financial in an amount equal to the
deficiency, if any, in its cumulative preferred return as described above;
next, to First Financial in the amount of its capital contributions; next,
to the Encino Venture Partner in an amount equal to $400,000; any remaining
proceeds were to be split equally between First Financial and the Encino
Venture Partner.

<PAGE>

The terms of the First Financial partnership agreement provided that
annual cash flow, net sale or refinancing proceeds, and tax items were to
be distributed or allocated, as the case may be, to the Partnership in
proportion to its 62.5% share of capital contributions.

The office building was managed by an affiliate of the Encino Venture
Partner for a fee based upon a percentage of rental receipts (as defined)
of the property.

LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1998 and
1997:
1998 1997
----------- -----------
10-1/8% mortgage note secured by
the Topanga Plaza shopping center
in Los Angeles, California; payable
in monthly installments of principal
and interest of $523,225 through
January 2002 when the remaining
balance was due and payable
(Partnership's share assumed upon
sale of the Partnership's interest
in November 1998). . . . . . . . $ -- 57,230,727

Floating rate bond financing
(certificates), secured by the
Plaza Hermosa Shopping Center
in Hermosa Beach, California;
the certificates bore interest
based on a floating rate
which was adjustable weekly
(as defined), with a maximum
interest rate of 13.5%, interest
only was payable monthly through
December 2023 when the entire
outstanding balance was due and
payable (repaid upon sale
in January 1998) . . . . . . . . -- 6,400,000
----------- -----------
Total debt. . . . . . . -- 63,630,727
Less current portion
of long-term debt . . -- 507,202
----------- -----------
Total long-term debt. . $ -- 63,123,525
=========== ===========

PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement, net profits or
losses of the Partnership from operations were allocated 96% to the Limited
Partners and 4% to the General Partners. Profits from the sale or
refinancing of investment properties were allocated to the General
Partners: (i) in an amount equal to the greater of 1% of such profits or
the amount of cash distributable to the General Partners from any such sale
or refinancing (as described below); and (ii) in order to reduce deficits,
if any, in the General Partners' capital accounts to a level consistent
with the gain anticipated to be realized from the sale of properties.
Losses from the sale or refinancing of investment properties were allocated
1% to the General Partners. The remaining sale or refinancing profits and
losses were allocated to the Limited Partners.

<PAGE>

The General Partners were not required to make any capital contri-
butions except under certain limited circumstances upon termination of the
Partnership. In general, distributions of cash from operations were made
90% to the Limited Partners and 10% to the General Partners. However, a
portion of such distributions to the General Partners was subordinated to
the Limited Partners' receipt of a stipulated return on capital.

The Partnership Agreement provided that the General Partners would
receive as a distribution from the sale of a real property by the
Partnership, amounts equal to the cumulative deferrals of any portion of
their 10% cash distribution and 2-1/2% of the selling price, and that the
remaining proceeds (net after expenses and retained working capital) would
be distributed 85% to the Limited Partners and 15% to the General Partners.

However, notwithstanding such allocations, the Limited Partners would
receive 100% of such net sale proceeds until the Limited Partners (i) had
received cumulative cash distributions from the Partnership's operations
which, when combined with a sale or refinancing proceeds previously
distributed, equal a 6% annual return on the Limited Partners' average
capital investment for each year (their initial capital investment as
reduced by sale or refinancing proceeds previously distributed) commencing
with the second fiscal quarter of 1986, (ii) had received cash
distributions of sale or refinancing proceeds in an amount equal to the
Limited Partners' aggregate initial capital investment in the Partnership,
and (iii)had received cash distributions of sale and refinancing proceeds
and of the Partnership's operations, in an amount equal to the Limited
Partners' initial capital investment in the Partnership plus a 10% annual
return on the Limited Partners' average capital investment. As the above
levels of return were not achieved, the General Partners did not receive
any portion of the proceeds from the sales of properties by the
Partnership.

Additionally, as the Limited Partners received less distributions than
their original investment, the General Partners' share of operating
distributions previously deferred of approximately $8,897,000 as of
December 31, 1998 was paid to the Limited Partners (or used for other
Partnership obligations). Pursuant to the terms of the Partnership
Agreement, the Special Limited Partner of the Partnership was required to
contribute, to the Partnership, the amount of all distributions it
previously received from operating cash and sales and refinancing proceeds
due to the fact that the Limited Partners had not received sale or
refinancing proceeds in an aggregate amount equal to their capital
contributions. In December 1998, the Special Limited Partner contributed
$765,332 in accordance with this provision, which amount was distributed to
the Limited Partners, other than the Special Limited Partner, in
conjunction with the liquidating distribution in 1998.

LEASES

During 1998, the Partnership and its consolidated ventures' principal
assets (prior to their sale in 1998) were two shopping centers. Contingent
rent (based on sales by property tenants) included in rental income was as
follows:

1996. . . . . . . . . . $301,919
1997. . . . . . . . . . 183,895
1998. . . . . . . . . . 182,437
========

TRANSACTIONS WITH AFFILIATES

The Partnership, pursuant to the Partnership Agreement, was permitted
to engage in various transactions involving the Managing General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates for the years ended December 31, 1998, 1997 and 1996 are
as follows:

<PAGE>

UNPAID AT
DECEMBER 31,
1998 1997 1996 1998
-------- -------- -------- ------------
Property management
and leasing fees . . . . $ 4,122 79,670 70,792 --
Insurance
commissions. . . . . . . 18,451 22,214 34,632 --
Reimbursement (at cost)
for accounting
services . . . . . . . . 15,474 24,372 9,642 --
Reimbursement (at cost)
for portfolio manage-
ment services. . . . . . 56,151 39,225 25,996 --
Reimbursement (at cost)
for legal services . . . 7,932 11,542 8,683 --
Reimbursement (at cost)
for administrative
charges and other
out-of-pocket expenses . 7,933 842 1,026 --
Partnership winding-up
fee. . . . . . . . . . . 6,056 -- -- --
-------- -------- -------- ------
$116,119 177,865 150,771 --
======== ======== ======== ======

Certain of the Partnership's properties were managed by affiliates of
the General Partners or their assignees for fees computed as a percentage
of certain rents received by the properties.

During 1994, certain officers and directors of the Managing General
Partner acquired interests in a company which provided certain property
management services to a property owned by the Partnership. The fees
earned by such company from the Partnership for the years ended
December 31, 1998, 1997 and 1996 were none and approximately $32,500 and
$39,000, respectively, all of which had been paid at December 31, 1998.

In accordance with the subordination requirements of the Partnership
Agreement, the General Partners deferred receipt of their distributions of
net cash flow from the Partnership (the cumulative amount of such
distributions aggregate approximately $8,897,000 at December 31, 1998),
which were extinguished without payment upon liquidation of the
Partnership.

INVESTMENT IN UNCONSOLIDATED VENTURE

Summary of financial information for San Jose as of and for the years
ended December 31, 1998 and 1997 is as follows:

1998 1997
------------ ------------

Current assets. . . . . . . . . . $ -- 4,819,672
Current liabilities . . . . . . . -- (619,337)
------------ ------------
Working capital . . . . . . -- 4,200,335
Investment property, net. . . . . -- 30,803,149
Other assets, net . . . . . . . . -- 1,204,478
Long-term debt. . . . . . . . . . -- (22,961,889)
Other liabilities . . . . . . . . -- (181,229)
Venture partners' equity. . . . . -- (6,711,162)
------------ ------------
Partnership's capital . . . $ -- 6,353,682
============ ============

<PAGE>

1998 1997
------------ ------------
Represented by:
Invested capital. . . . . . . . $ 48,767,680 48,767,680
Cumulative distributions. . . . (52,152,818) (25,490,500)
Cumulative loss . . . . . . . . 3,385,138 (16,923,498)
------------ ------------
$ -- 6,353,682
============ ============
Total income. . . . . . . . . . . $ 2,482,154 9,404,683
============ ============
Expenses. . . . . . . . . . . . . $ 1,357,987 6,393,636
============ ============
Gain on sale of
investment property . . . . . . $ 41,653,860 --
============ ============
Extraordinary loss. . . . . . . . $ (2,518,236) --
============ ============
Net earnings. . . . . . . . . . . $ 40,259,791 3,011,047
============ ============

Total income, expenses, gain on disposition of investment property and
net earnings for the above-mentioned venture for the year ended
December 31, 1996 were $9,238,168, $8,015,203, $2,825,220 and $4,048,185,
respectively.

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

There were no changes of or disagreements with accountants during 1998
and 1997.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

The Managing General Partner of the Partnership was JMB Realty
Corporation ("JMB"), a Delaware corporation, substantially all of the
outstanding stock of which is owned, directly or indirectly, by certain of
its officers, directors, members of their families and their affiliates.
JMB, as the Managing General Partner, had responsibility for all aspects of
the Partnership's operations. ABPP Associates, L.P., an Illinois limited
partnership with JMB as its sole general partner, was one of the Associate
General Partners of the Partnership and is also the sole general partner of
Income Partners - XII, an Illinois limited partnership that was the other
Associate General Partner of the Partnership. The limited partners of ABPP
Associates, L.P. are generally officers, directors and affiliates of JMB or
its affiliates.

The Partnership was subject to certain conflicts of interest arising
out of its relationships with the General Partners and their affiliates as
well as the fact that the General Partners and their affiliates are engaged
in a range of real estate activities. Certain services were provided to
the Partnership or its investment properties by affiliates of the General
Partners, including property management services and insurance brokerage
services. In general, such services were to be provided on terms no less
favorable to the Partnership than could be obtained from independent third
parties and were otherwise subject to conditions and restrictions contained
in the Partnership Agreement. The Partnership Agreement permitted the
General Partners and their affiliates to provide services to, and otherwise
deal and do business with, persons who may have been engaged in
transactions with the Partnership, and permitted the Partnership to borrow
from, purchase goods and services from, and otherwise to do business with,
persons doing business with the General Partners or their affiliates. The
General Partners and their affiliates may have been in competition with the
Partnership under certain circumstances, including, in certain geographical
markets, for tenants and/or for the sale of property. Because the timing
and amount of cash distributions and profits and losses of the Partnership
may have been affected by various determinations by the General Partners
under the Partnership Agreement, including whether and when to sell a
property, the establishment and maintenance of reasonable reserves and the
determination of the sources (i.e., offering proceeds, cash generated from
operations or sale proceeds) and uses of such reserves, the timing of
expenditures and the allocation of certain tax items under the Partnership
Agreement, the General Partners may have had a conflict of interest with
respect to such determinations.

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

<PAGE>

SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------

Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Chief Financial Officer 2/22/96
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Executive Vice President 1/02/87
Chief Executive Officer 8/01/93
Glenn E. Emig Executive Vice President 1/01/93
Chief Operating Officer 1/01/95
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91

There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the Managing General Partner to be held on
June 2, 1999. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Managing General Partner to be held on June 2,
1999. There are no arrangements or understandings between or among any of
said directors or officers and any other person pursuant to which any
director or officer was elected as such.

JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-XI ("Carlyle-XI"), Carlyle Real Estate Limited Partnership-XIII
("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV
("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV ("Carlyle-XV"),
and Carlyle Income Plus, L.P.-II ("Carlyle Income Plus-II"), and the
managing general partner of JMB Income Properties, Ltd.-V ("JMB Income-V"),
JMB Income Properties, Ltd.-VII ("JMB Income-VII"), JMB Income Properties,
Ltd.-X ("JMB Income-X"), and JMB Income Properties, Ltd.-XI ("JMB
Income-XI"). JMB is also the sole general partner of the associate general
partner of most of the foregoing partnerships. Most of the foregoing
directors and officers are also officers and/or directors of various
affiliated companies of JMB, including Arvida/JMB Managers, Inc. (the
general partner Arvida/JMB Partners, L.P. ("Arvida")). Most of such
directors and officers are also partners, directly or indirectly, of
certain partnerships which are or were associate general partners in the
following real estate limited partnerships, among others: the Partnership,
Carlyle-XI, Carlyle-XIII, Carlyle-XIV, Carlyle-XV, JMB Income-VII, JMB
Income-X, JMB Income-XI, and Carlyle Income Plus-II.

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

Judd D. Malkin (age 61) is an individual general partner of JMB
Income-V. Mr. Malkin has been associated with JMB since October, 1969.
Mr. Malkin is also a director of Urban Shopping Centers, Inc., an affiliate
of JMB that is a real estate investment trust in the business of owning,
managing and developing shopping centers. He is a Certified Public
Accountant.

<PAGE>

Neil G. Bluhm (age 61) is an individual general partner of JMB
Income-V. Mr. Bluhm has been associated with JMB since August, 1970. Mr.
Bluhm is also a principal of Walton Street Capital, L.L.C., which sponsors
real estate investment funds, and a director of Urban Shopping Centers,
Inc. He is a member of the Bar of the State of Illinois and a Certified
Public Accountant.

Burton E. Glazov (age 60) has been associated with JMB since June,
1971 and served as an Executive Vice President of JMB until December 1990.
Mr. Glazov is currently retired. He is a member of the Bar of the State of
Illinois.

Stuart C. Nathan (age 57) has been associated with JMB since July,
1972. He is a member of the Bar of the State of Illinois.

A. Lee Sacks (age 65) has been associated with JMB since December,
1972. He is also the President and a director of JMB Insurance Agency,
Inc.

John G. Schreiber (age 52) has been associated with JMB since
December, 1970 and served as an Executive Vice President of JMB until
December 1990. Mr. Schreiber is President of Schreiber Investments, Inc.,
which is engaged in the real estate investing business. He is also a
senior advisor and partner of Blackstone Real Estate Advisors, L.P., an
affiliate of the Blackstone Group, L.P. Mr. Schreiber is also a director
of Urban Shopping Centers, Inc., a trustee of Amli Residential Property
Trust and a director of a number of investment companies advised or managed
by T. Rowe Price Associates, Inc., and its affiliates. He holds a Masters
degree in Business Administration from Harvard University Graduate School
of Business.

H. Rigel Barber (age 50) has been associated with JMB since March,
1982. He holds a J.D. degree from the Northwestern Law School and is a
member of the Bar of the State of Illinois.

Glenn E. Emig (age 51) has been associated with JMB since December,
1979. Prior to becoming Executive Vice President of JMB in 1993, Mr. Emig
was Executive Vice President and Treasurer of JMB Institutional Realty
Corporation. He holds a Masters Degree in Business Administration from the
Harvard University Graduate School of Business and is a Certified Public
Accountant.

Gary Nickele (age 46) has been associated with JMB since February,
1984. He holds a J.D. degree from the University of Michigan Law School
and is a member of the Bar of the State of Illinois.

Gailen J. Hull (age 50) has been associated with JMB since March,
1982. He holds a Masters degree in Business Administration from Northern
Illinois University and is a Certified Public Accountant.

Howard Kogen (age 63) has been associated with JMB since March, 1973.
He is a Certified Public Accountant.

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

The Partnership had no officers or directors. The General Partners of
the Partnership were entitled to receive a share of cash distributions,
when and as cash distributions were made to the Investors, and a share of
profits or losses. Reference is also made to the Notes for a description
of such transactions, distributions and allocations. No such cash
distributions were paid to the General Partners in 1998, 1997 and 1996.

An affiliate of the Managing General Partner provided property
management services to the Partnership for 1997 for the Plaza Hermosa
Shopping Center in Hermosa Beach, California at a fee calculated at 4% of
the gross receipts of the property. In 1998, the affiliates earned
property management and leasing fees amounting to $4,122, all of which were
paid at December 31, 1998. As set forth in the Prospectus of the
Partnership, the Managing General Partner was required to negotiate such
agreements on terms no less favorable to the Partnership than those
customarily charged for similar services in the relevant geographical area
and such agreements could be terminated by either party thereto, without
penalty, upon 60 days' notice.

The General Partners of the Partnership were reimbursed for their
salaries, salary-related and direct expenses relating to the administration
of the Partnership and the operation of the Partnership's real property
investments. In 1998, the Managing General Partner received reimbursement
for such expenses and salaries in the amount of $87,490, all of which was
paid at December 31, 1998. The Managing General Partner received no
disbursement agent and data processing fees in 1998.

JMB Insurance Agency, Inc., an affiliate of the Managing General
Partner of the Partnership, earned and received insurance brokerage
commissions in 1998 aggregating $18,451 in connection with the providing of
insurance coverage for the real property investments of the Partnership.
Such commissions were at rates set by insurance companies for the classes
of coverage involved.

Pursuant to a winding up agreement between the Partnership and the
Managing General Partner, in consideration of the Managing General
Partner's assumption of residual liabilities of the Partnership upon its
termination, the Partnership paid the Managing General Partner $6,056 and
transferred to the Managing General Partner any residual rights to the
coverage and benefits of insurance on behalf of the Partnership and other
residual rights.

The Partnership was permitted to engage in various transactions
involving affiliates of the Managing General Partner of the Partnership.
The relationship of the Managing General Partner (and its directors and
officers) to its affiliates is set forth above in Item 10 above and
Exhibit 21 hereto.

<PAGE>

<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) No person or group was known by the Partnership to own beneficially more than 5% of the outstanding
Interests of the Partnership immediately prior to its liquidation.

(b) The Managing General Partner, its officers and directors and the Associate General Partners beneficially
owned the following Interests of the Partnership immediately prior to its liquidation:

NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership
Interests and
Assignee Interests
Therein JMB Realty Corporation 5 Interests (1) Less than 1%
indirectly

Limited Partnership
Interests and
Assignee Interests
Therein Managing General Partner, 5 Interests (1) Less than 1%
its officers and indirectly
directors and the
Associate General
Partners as a group

<FN>
(1) Included 5 interests owned by the Initial Limited Partner of the Partnership for which JMB Realty
Corporation, as its indirect majority shareholder, was deemed to have sole voting and investment power.

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

Reference is made to Item 10 for information concerning ownership of the Managing General Partner.

(c) There existed no arrangement, known to the Partnership, the operation of which may have resulted in a
change in control of the Partnership.

</TABLE>

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There were no significant transactions or business relationships with
the Managing General Partner, affiliates or their management other than
those described in Items 10 and 11 above.

PART IV

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

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

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

2. Exhibits.

3-A. The Prospectus of the Partnership dated August
23, 1985 as supplemented December 9, 1985 and January 10, pursuant to Rules
424 (b) and 424 (c), as filed with the Commission is hereby incorporated
herein by reference. Copies of pages 8-12, 61-64 and A-8 to A-12 are
hereby incorporated herein by reference to Exhibit 3-A to the Partnership's
Report on Form 10-K for December 31, 1992 (File No. 0-16108) dated March
19, 1993.

3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, which agreement is
hereby incorporated herein by reference to Exhibit 3-B to the Partnership's
Report on Form 10-K for December 31, 1992 (File No. 0-16108) dated March
19, 1993.

3-C. Acknowledgement of rights and duties of the
General Partners of the Partnership between ABPP Associates, L.P. (a
successor Associated General Partner of the Partnership) and JMB Realty
Corporation as of December 31, 1995 is hereby incorporated herein by
reference to the Partnership's report for June 30, 1996 on Form 10-Q (File
No. 0-16108) dated August 9, 1996.

4-A. Mortgage loan agreement between Topanga and
Connecticut General Life Insurance Company dated January 31, 1992 relating
to Topanga Plaza in Los Angeles, California is hereby incorporated herein
by reference to Exhibit 4-A to the Partnership's Report on Form 10-K for
December 31, 1992 (File No. 0-16108) dated March 19, 1993.

4-B. Amended and restated mortgage loan agreement
between First Financial and The Prudential Insurance Company of America
dated November 21, 1995 relating to First Financial Plaza in Encino,
California is hereby incorporated herein by reference to the Partnership's
Report for December 31, 1995 on Form 10-K (File No. 0-16108) dated March
25, 1996.

<PAGE>

4-C. Mortgage loan modification agreement between
Topanga and Connecticut General Life Insurance dated January 31, 1993
relating to Topanga Plaza in Los Angeles, California is hereby incorporated
herein by reference to Exhibit 4 of the Partnership's Report on Form 10-Q
(File No. 0-16108) dated November 11, 1993.

4-D. Letter of credit agreement between JMB Income
Properties, Ltd-XII and Dresdner Bank AG dated November 15, 1994 relating
to the letter of credit extension at Plaza Hermosa is hereby incorporated
herein by reference to Exhibit 4-D of the Partnership's Report on Form 10-K
for December 31, 1994 (File No. 0-16108) dated March 27, 1995.

4-E. Mortgage loan agreement, Amended and Restated
Deed of Trust, Security Agreement with assignment of Rents and Fixture
Filing and Real Estate tax escrow and Security Agreement between San Jose
and Connecticut General Life Insurance Co. dated November 30, 1994 is
hereby incorporated herein by reference to Exhibit 4-E to the Partnership's
Report on Form 10-K for December 31, 1994 (File No. 0-16108) dated March
27, 1995.

10-A. Acquisition documents including the venture
agreement relating to the purchase by the Partnership of Topanga Plaza in
Los Angeles, California, are hereby incorporated by reference to the
Partnership's Report on Form 8-K (File No. 0-16108) dated December 31,
1985.

10-B. Acquisition documents including the venture
agreement relating to the purchase by the Partnership of First Financial
Plaza in Encino, California are hereby incorporated by reference to the
Partnership's Report on Form 8-K (File No. 0-16108) dated June 3, 1987.

10-C. Acquisition documents including the venture
agreement relating to the purchase by the Partnership of 40 Broad Street in
New York, New York, are hereby incorporated by reference to the
Partnership's Report on Form 8-K (File No. 0-16108) dated December 31,
1985.

10-D. Third Amendment to amended and restated
partnership agreement of JMB Encino Partnership L.P. dated April 24, 1996
between JMB First Financial Associates and JMB Encino Partnership are
hereby incorporated by reference to the Partnership's report on Form 10-Q
(File No. 0-16108) dated May 10, 1996.

10-E. Purchase Agreement and Amendments thereto dated
August 9, 1996 relating to the sale of First Financial Plaza by JMB Encino
Partnership, L.P. are hereby incorporated herein by reference to the
Partnership's report for September 11, 1996 on Form 8-K (File No. 0-16108)
dated September 26, 1996.

<PAGE>

10-F. Sale documents relating to the sale of the 40
Broad Street office building in New York, New York are hereby incorporated
by reference to the Partnership's report for December 30, 1997 on Form 8-K
(File No. 0-16108) dated January 14, 1998.

10-G. First Amendment to the Purchase-Sale Agreement
dated February 10, 1998 relating to the sale by San Jose of the Park Center
Financial Plaza office complex in San Jose, California between JMB/San Jose
Associates and Divco West Properties, LLC are hereby incorporated by
reference to the Partnership's report for December 31, 1997 on Form 10-K
(File No. 0-16108) dated March 25, 1998.

10-H. Purchase-Sale Agreement with exhibits dated
December 3, 1997 relating to the sale by San Jose of the Park Center
Financial Plaza office complex in San Jose, California between JMB/San Jose
Associates and Divco West Properties, LLC are hereby incorporated by
reference to the Partnership's report for December 31, 1997 on Form 10-K
(File No. 0-16108) dated March 25, 1998.

10-I. Purchase-Sale Agreement with amendments thereto
dated November 25, 1997 relating to the sale by the Partnership of the
Plaza Hermosa Shopping Center in Hermosa Beach, California between JMB
Income Properties, Ltd. - XII and Pacific Retail Trust are hereby
incorporated by reference to the Partnership's report for December 31, 1997
on Form 10-K (File No. 0-16108) dated March 25, 1998.

10-J. Letter Agreement between JMB Income Properties,
Ltd-XII and Topanga Plaza LLC regarding the sale of the Partnership's
interest in Topanga Plaza dated November 16, 1998 is hereby incorporated
herein by reference to the Partnership's report for November 17, 1998 on
Form 8-K (File No. 0-16108) dated December 2, 1998.

10-K. Partnership Interest Purchase Agreement between
JMB Income Properties, Ltd-XII and Topanga Plaza LCC dated November 17,
1988 is hereby incorporated herein by reference to the Partnership's report
for November 17, 1998 on form 8-K (File No. 0-16108) dated December 2,
1998.

10-L. Winding Up Agreement dated December 29, 1998, by
and between the Partnership and JMB Realty Corporation is hereby
incorporated by reference to the Partnership's report for December 31, 1998
on Form 8-K (File No. 0-16108) dated January 12, 1999.

21. List of Subsidiaries

24. Powers of Attorney

27. Financial Data Schedule

<PAGE>

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

Although certain additional long-term debt instruments of the
Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such agreements
to the Securities and Exchange Commissions upon request.

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

The Partnership's Report on Form 8-K (File No. 0-16108) for
November 17, 1998, dated December 2, 1998 describing the Partnership's sale
of its interest in Topanga Plaza was filed.

The Partnership's Report on Form 8-K (File No. 0-16108) for
December 31, 1998, dated January 12, 1999 describing the Partnership's
liquidating cash distribution and winding up of its affairs was filed.

No annual report or proxy material for 1998 has been sent to the
Partners of the Partnership. An annual report will be sent to the Partners
subsequent to this filing.

<PAGE>

SIGNATURES

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

JMB INCOME PROPERTIES, LTD. - XII

By: JMB Realty Corporation
Managing General Partner

GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 22, 1999

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

By: JMB Realty Corporation
Managing General Partner

JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and
Chief Financial Officer
Date: March 22, 1999

NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 22, 1999

H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 22, 1999

GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 22, 1999

GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 22, 1999

A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 22, 1999

By: STUART C. NATHAN*
Stuart C. Nathan, Executive Vice President
and Director
Date: March 22, 1999

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

GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 22, 1999

<PAGE>

JMB INCOME PROPERTIES, LTD. - XII

EXHIBIT INDEX

DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------- ----

3-A. Pages 8-12, 61-64 and A-8 to A-12 of
the Prospectus of the Partnership
dated August 23, 1985, as supple-
mented on December 9, 1985 and
January 10, 1986 Yes

3-B. Amended and Restated Agreement of
Limited Partnership Yes

3-C. Acknowledgement of rights and duties
of the General Partners of the
Partnership dated August 9, 1996
between ABPP Associates, L.P. and
JMB Realty Corporation Yes

4-A. Mortgage loan agreement related to
Topanga Plaza Yes

4-B. Mortgage loan agreement related to
First Financial Plaza Yes

4-C. Mortgage loan modification agreement
related to Topanga Plaza Yes

4-D. Letter of credit agreement related to
Plaza Hermosa Yes

4-E. Mortgage loan agreement related to
Park Center Plaza Yes

10-A. Acquisition documents related to
Topanga Plaza Yes

10-B. Acquisition documents related to
First Financial Plaza Yes

10-C. Acquisition documents related to
40 Broad Street Yes

10-D. Third Amendment to amended and
restated partnership agreement of
JMB Encino Partnership L.P. dated
April 24, 1996 between JMB First
Financial Associates and JMB Encino
Partnership Yes

10-E. Purchase Agreement and Amendments
thereto dated August 9, 1996 relating
to the sale of First Financial Plaza
by JMB Encino Partnership, L.P. Yes

<PAGE>

DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------- ----

10-F. Sale documents related to the
40 Broad Street office building Yes

10-G. First Amendment to the Purchase-
Sale Agreement related to the
Park Center Financial Plaza
office complex Yes

10-H. Purchase-Sale Agreement related
to the Park Center Financial Plaza
office complex Yes

10-I. Purchase-Sale Agreement with
amendments thereto related to
the Plaza Hermosa Shopping Center Yes

10-J. Letter Agreement regarding the sale
of the Partnership's interest in
Topanga Plaza Yes

10-K. Purchase Agreement related to the
sale of the Partnership's interest
in Topanga Plaza Yes

10-L. Winding Up Agreement Yes

21. List of Subsidiaries No

24. Powers of Attorney No

27. Financial Data Schedule No

EXHIBIT 21

LIST OF SUBSIDIARIES

The Partnership was a general partner in JMB/San Jose Associates, an
Illinois general partnership which held title to Park Center Financial
Plaza prior to its sale in February 1998. The Partnership was a general
partner in Topanga Plaza Partnership, a California general partnership
which held title to Topanga Plaza prior to the Partnership's sale of its
interest in Topanga Plaza in November 1998. The Partnership was a general
partner in JMB-40 Broad Street Associates, an Illinois general partnership
which held title to the 40 Broad Street Building prior to its sale in
December 1997. The Partnership's interest in the foregoing joint venture
partnerships, and the results of their operations are included in the
consolidated financial statements of the Partnership filed with this annual
report.

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the managing general partner of JMB INCOME PROPERTIES,
LTD. - XII, do hereby nominate, constitute and appoint GARY NICKELE, GAILEN
J. HULL, DENNIS M. QUINN or any of them, attorneys and agents of the
undersigned with full power of authority to sign in the name and on behalf
of the undersigned officers a Report on Form 10-K of said partnership for
the fiscal year ended December 31, 1998, and any and all amendments
thereto, hereby ratifying and confirming all that said attorneys and agents
and any of them may do by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 29th day of January, 1999.

H. RIGEL BARBER
- -----------------------
H. Rigel Barber Chief Executive Officer

GLENN E. EMIG
- -----------------------
Glenn E. Emig Chief Operating Officer

The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1998,
and any and all amendments thereto, the 29th day of January, 1999.

GARY NICKELE
-----------------------
Gary Nickele

GAILEN J. HULL
-----------------------
Gailen J. Hull

DENNIS M. QUINN
-----------------------
Dennis M. Quinn

<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 29th day of January, 1999.

NEIL G. BLUHM
- ----------------------- President and Director
Neil G. Bluhm

JUDD D. MALKIN
- ----------------------- Chairman and Chief Financial Officer
Judd D. Malkin

A. LEE SACKS
- ----------------------- Director of General Partner
A. Lee Sacks

STUART C. NATHAN
- ----------------------- Executive Vice President
Stuart C. Nathan Director of General Partner

GARY NICKELE
-----------------------
Gary Nickele

GAILEN J. HULL
-----------------------
Gailen J. Hull

DENNIS M. QUINN
-----------------------
Dennis M. Quinn

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998

<CASH> 76,721,487
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 76,721,487
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 76,721,487
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 76,721,487
<TOTAL-LIABILITY-AND-EQUITY> 76,721,487
<SALES> 16,528,284
<TOTAL-REVENUES> 55,200,104
<CGS> 0
<TOTAL-COSTS> 5,419,310
<OTHER-EXPENSES> 872,844
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,096,161
<INCOME-PRETAX> 43,811,789
<INCOME-TAX> 0
<INCOME-CONTINUING> 41,751,961
<DISCONTINUED> 21,005,670
<EXTRAORDINARY> (1,259,118)
<CHANGES> 0
<NET-INCOME> 61,498,513
<EPS-PRIMARY> 331.44
<EPS-DILUTED> 331.44

</TABLE>