JMB MANHATTAN ASSOCIATES LTD, 10-K405, 1996-04-01

JMB MANHATTAN ASSOCIATES LTD
10-K405, 1996-04-01
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 Act of 1934

For the fiscal year
ended December 31, 1995 Commission File Number 0-14547

JMB/MANHATTAN ASSOCIATES, LTD.
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Illinois 36-3339372
(State of organization)(I.R.S. Employer Identification No.)

900 N. Michigan Ave., Chicago, Illinois60611
(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
(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

TABLE OF CONTENTS

Page
----
PART I

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

Item 2. Properties. . . . . . . . . . . . . . . 3

Item 3. Legal Proceedings . . . . . . . . . . . 5

Item 4. Submission of Matters to a
Vote of Security Holders. . . . . . . . 5

PART II

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

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

Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations . . . . . . . . . 12

Item 8. Financial Statements and
Supplementary Data. . . . . . . . . . . 18

Item 9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure. . . . . . . . 57

PART III

Item 10. Director and Executive Officers
of the Partnership. . . . . . . . . . . 57

Item 11. Executive Compensation. . . . . . . . . 60

Item 12. Security Ownership of Certain
Beneficial Owners and Management. . . . 61

Item 13. Certain Relationships and
Related Transactions. . . . . . . . . . 62

PART IV

Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . 62

SIGNATURES . . . . . . . . . . . . . . . . . . . . 67

PART I

ITEM 1. BUSINESS

Unless otherwise indicated, all references to "Notes" are to Notes to
Financial Statements contained in this report. There is substantial doubt
about the Partnership's ability to continue as a going concern (see
discussion below, in Item 7 and in Note 2).

The registrant, JMB/Manhattan Associates, Ltd. (the "Partnership"), is
a limited partnership formed during 1984 and currently governed by the
Revised Uniform Limited Partnership Act of the State of Illinois for the
purpose of acquiring and owning an approximate 25% interest in JMB/NYC
Office Building Associates, L.P. ("JMB/NYC"), an Illinois limited
partnership consisting indirectly of the Partnership and two partnerships
sponsored by an affiliate of the General Partners of the Partnership,
Carlyle Real Estate Limited Partnership - XIII ("Carlyle-XIII"), an
Illinois limited partnership, and Carlyle Real Estate Limited Partnership -
XIV ("Carlyle-XIV"), an Illinois limited partnership. JMB/NYC acquired
interests in three office buildings and the underlying land (the
"Buildings"), through various other joint ventures (each a "Joint Venture"
and collectively, the "Three Joint Ventures"), in New York, New York. On
April 30, 1985, the Partnership commenced a private offering of $62,700,000
of Limited Partnership Interests (the "Interests") pursuant to a Private
Placement Memorandum (the "Private Placement Memorandum") in accordance
with Rules 501-503 and 506 of Regulation D of the Securities Act of 1933.
A total of 1,000 Interests were sold at $62,700 per Interest of which
$14,053 per Interest was due upon admission, with the remaining purchase
price paid in annual installments from 1986 through 1988, except for 41.5
Interests paid for entirely upon subscription. The offering closed on
October 31, 1985. The Limited Partners of the Partnership share in their
portion of the benefits of ownership of the Partnership's real property
investments according to the number of Interests held.

The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title through joint venture partnership
interests. The Partnership's real estate investments are located in New
York City and it has no real estate investments located outside of the
United States. A presentation of information about industry segments,
geographic regions, raw materials or seasonality is not applicable and
would not be material to an understanding of the Partnership's business
taken as a whole. Pursuant to the Partnership Agreement, the Partnership
is required to terminate no later than December 31, 2035. Accordingly, it
was the Partnership's intention to hold its remaining properties for
investment purposes until such time as sale or other disposition appears to
be advantageous or until required to do so. The Partnership is self-
liquidating in nature. At sale of a particular property, the net cash
proceeds, if any, are generally to be distributed or reinvested in existing
properties rather than invested in acquiring additional properties. In
view of, among other things, the current office rental market in New York,
and continuing discussions and negotiations regarding restructuring of the
ownership and financing of the remaining investment properties and the
possible reorganization of the 237 Park Avenue and 1290 ventures, the
Partnership is not able to determine its expected holding period for the
properties (or its interests therein). Reference is made to Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations and Note 2 for further information in this regard.

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

<TABLE>
<CAPTION>
SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1995,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (d) SIZE PURCHASECAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP (b)
- ---------------------- ---------- ------------------------------ ---------------------
<S> <C> <C> <C> <C>

1. 237 Park Avenue
Building
New York, New York 1,140,000 8/14/84 22% fee ownership of land and
sq. ft. improvements (through joint
n.r.a. venture partnerships)(c)(e)
2. 1290 Avenue of
the Americas
Building
New York, New York 2,000,000 7/27/84 47% fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnerships)(c)(e)
3. 2 Broadway
Building
New York, New York 1,600,000 8/14/84 9/18/95 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnerships)(c)(f)
<FN>
- -----------------------

(a) The computation of this percentage does not include amounts invested from sources other than the original
net proceeds of the offering of Interests as described above and in Item 7.

(b) Reference is made to Note 3 and Note 5 of JMB/NYC Office Building Associates, L.P. and Unconsolidated
Ventures Combined Financial Statements and to Schedule III to such Combined Financial Statements filed with this
annual report for the current outstanding principal balances and a description of the long-term mortgage
indebtedness secured by the Partnership's real property investments and the description of the notes payable
secured by JMB/NYC's interests in the joint ventures owning the properties.

(c) Reference is made to Note 2 for a description of the joint venture partnerships through which the
Partnership made this real property investment.

(d) Reference is made to Item 8 - Schedule III of the Combined Financial Statements filed with this annual
report for further information concerning real estate taxes and depreciation.

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

(f) This property has been sold. Reference is made to Note 2.

</TABLE>

Tenants at the Buildings include J. Walter Thompson Company
(approximately 456,000 square feet) and North American Reinsurance Company
(approximately 280,000 square feet) at the 237 Park Avenue Building and
Bank of New York (approximately 167,600 square feet) at the 1290 Avenue of
the Americas Building. A major insurance company has signed a lease for
approximately 506,000 square feet at the 1290 Avenue of the Americas
Building, with occupancy to commence in 1996. Reference is made to Item 6
below for further tenant information. Reference is made to the
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 7 below for a discussion of the operations of the
Partnership and its unconsolidated ventures.

The Partnership's real property investments are subject to competition
from similar types of properties (including properties owned or advised by
affiliates of the General Partners and properties owned by the venture
partners or their affiliates) in the vicinities in which they are located.
Such competition is generally for the retention of existing tenants.
Additionally, there is competition for new tenants in New York City and the
surrounding area where significant vacancies are present. Reference is
made to Item 7 below for a discussion of competitive conditions affecting
the investment properties. Approximate occupancy levels for the properties
are set forth in the table in Item 2 below to which reference is hereby
made. The suitability and competitiveness of the properties depend
primarily on the effective rents, tenant allowances and service provided to
tenants. In the opinion of the Corporate General Partner of the
Partnership, all of the investment properties held at December 31, 1995 are
adequately insured.

Reference is made to Note 4 of JMB/NYC Office Building Associates,
L.P. and Unconsolidated Ventures Combined Financial Statements filed with
this annual report for a schedule of minimum lease payments to be received
in each of the next five years, and in the aggregate thereafter, under
leases in effect at the Partnership's properties as of December 31, 1995.

In September 1995, the 2 Broadway Building was sold to a third party
for a net purchase price, after commissions and certain other payments but
before prorations, of approximately $18.3 million. Reference is made to
Note 2 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 and Note 4 to
which reference is hereby made for a description of such terms and
transactions.

ITEM 2. PROPERTIES

The Partnership owns, indirectly through joint venture partnerships,
an interest in the properties referred to in Item 1 above to which
reference is hereby made for a description of said properties.

The following is a listing of principal businesses or occupations
carried on in and approximate occupancy levels by quarter during fiscal
years 1995 and 1994 for the Partnership's investment properties owned
during 1995:

<TABLE>
<CAPTION>
1994 1995
--------------------------------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 237 Park Avenue
Building
New York,
New York . . . . . Advertising 98% 98% 98% 98% 98% 98% 98% 98%
Insurance
Paper
Real Estate

2. 1290 Avenue of
the Americas
Building
New York,
New York . . . . . Men's Clothing 90% 91% 91% 94% 94% 94% 94% 93%
Financial
Services

3. 2 Broadway
Building
New York,
New York . . . . . Financial
Services 30% 19% 19% 18% 18% 18% N/A N/A

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

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

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

</TABLE>

ITEM 3. LEGAL PROCEEDINGS

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

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

There were no matters submitted to a vote of security holders during
fiscal years 1994 and 1995.

PART II

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

As of December 31, 1995, there were 859 record holders of Interests of
the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. The Interests
have not been registered under the Securities Act of 1933, as amended, or
(with certain exceptions) under State securities laws. Transfers of the
Interests must be made in compliance with applicable Federal and State
securities laws. There are certain conditions and restrictions on the
transfer of Interests, including, among other things, the requirement that
the substitution of a transferee of Interests as a Limited Partner of the
Partnership be subject to the written consent of the Corporate General
Partner. The rights of a transferee of Interests who does not become a
substituted Limited Partner will be limited to the rights to receive his
share of profits or losses and cash distributions from the Partnership, and
such transferee will not be entitled to vote such Interests. No transfer
will be effective until the first day of the next succeeding calendar
quarter after the requisite transfer form satisfactory to the Corporate
General Partner has been received by the Corporate General Partner. The
transferee consequently will not be entitled to receive any cash
distributions or any allocable share of profits or losses for tax purposes
until such next succeeding calendar quarter. Profits or losses from
operations of the Partnership for a calendar year in which a transfer
occurs will be allocated between the transferor and the transferee based
upon the number of quarterly periods in which each was recognized as the
holder of the Interests, without regard to the results of the Partnership's
operations during particular quarterly periods and without regard to
whether cash distributions were made to the transferor or transferee.
Profits or losses arising from the sale or other disposition of Partnership
properties will be allocated to the recognized holder of the Interests as
of the last day of the quarter in which the Partnership recognized such
profits or losses. Cash distributions to a holder of Interests arising
from the sale or other disposition of Partnership properties will be
distributed to the recognized holder of the Interests as of the last day of
the quarterly period with respect to which such distribution is made.

Reference is made to Item 6 below for a discussion of cash
distributions made to limited partners.

<TABLE>
ITEM 6. SELECTED FINANCIAL DATA

JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

YEARS ENDED DECEMBER 31, 1995, 1994, 1993, 1992 AND 1991

(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1995 1994 1993 1992 1991
-------------------------- ----------- ------------------------
<S> <C> <C> <C> <C> <C>
Total income . . . . .$ 405,719 1,649,889 1,500,142 1,380,338 1,189,909
============ ======================== ========================
Operating earnings
(loss) . . . . . . .$ (1,006,925) 1,382,820 1,257,032 1,212,777 1,040,951
Partnership's share of
loss from operations of
unconsolidated venture(6,794,224) (6,266,667)(22,166,989) (7,124,283)(12,323,342)
Partnership's share of
loss on sale of
investment
property . . . . . . (14,789,529) -- -- -- --
Partnership's share of
extraordinary gain on
forgiveness of indebtedness
of unconsolidated
venture. . . . . . . 15,632,407 -- -- -- --
------------ ------------------------ ------------------------
Net loss . . . . . . .$ (6,958,271) (4,883,847)(20,909,957) (5,911,506)(11,282,391)
============ ======================== ========================
Net loss per Interest:
Net operating loss. .$ (7,489) (4,688) (20,494) (5,675) (10,831)
Share of loss on sale of
investment property. (14,642) -- -- -- --
Share of gain on forgiveness
of indebtedness
of unconsolidated
venture. . . . . . . 15,476 -- -- -- --
------------ ------------------------ ------------------------
Net loss per Interest
(b). . . . . . . . .$ (6,655) (4,688) (20,494) (5,675) (10,831)
============ ======================== ========================
Total assets . . . . .$ 1,688,536 18,043,225 16,555,044 15,267,890 14,071,203
Cash distributions per
Interest (b)(c). . .$ 15,000 -- -- -- --
============ ======================== ========================

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

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

(b) The net loss and cash distributions per Interest are based upon
the number of Interests outstanding at the end of each period (1,000).

(c) Cash distributions from the Partnership are generally not equal to
Partnership 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 represented a return of capital for
financial reporting purposes.

</TABLE>

<TABLE>

SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1995

Property
- --------

1290 Avenue of
the Americas
Office Building a) The net rentable feet ("NRF") occupancy
rate and average base rent per square foot
as of December 31 for each of the last
five years were as follows:

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

1991. . . . . 97% 36.25
1992. . . . . 97% 36.94
1993. . . . . 98% 35.78
1994. . . . . 94% 36.93
1995. . . . . 93% 37.32
<FN>

(1) Average base rent per square foot is based on NRF occupied
as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base RentScheduled LeaseLease
b) Significant Tenants Square FeetPer AnnumExpiration DateRenewal Option
------------------- -------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
None - No single tenant represents
10% or more of the net rentable
feet of the property.
</TABLE>

<TABLE>
<CAPTION>
c) The following table sets forth certain
information with respect to the expiration
of leases for the next ten years at the
1290 Avenue of the Americas Office Building:

Annualized Percent of
Number of Approx. Total Base Rent Total 1995
Year Ending Expiring NRF of Expiringof Expiring Base Rent
December 31, Leases (1) Leases (1) Leases Expiring
------------ ------------- -------------------------- -----------
<S> <C> <C> <C> <C> <C> <C>
1996 9 221,930 $ 5,196,228 7%
1997 5 44,258 1,950,084 3%
1998 14 239,010 9,334,656 13%
1999 6 78,422 2,871,480 4%
2000 5 7,540 246,804 --
2001 1 96,700 4,158,096 6%
2002 14 247,390 10,277,412 14%
2003 5 43,607 1,965,444 3%
2004 12 163,190 7,827,036 11%
2005 4 13,990 917,748 1%
<FN>
(1) Excludes leases that expire in 1996 for which
renewal leases or leases with replacement tenants
have been executed as of March 25, 1996.

</TABLE>

Property
- --------

237 Park Avenue
Office Building a) The net rentable feet ("NRF") occupancy rate
and average baserent per square foot as of
December 31 for each of the last five years
were as follows:

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

1991. . . . . 100% 35.03
1992. . . . . 98% 33.35
1993. . . . . 98% 30.85
1994. . . . . 98% 32.23
1995. . . . . 98% 31.14
<FN>
(1) Average base rent per square foot is based on NRF occupied
as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled LeaseLease
b) Significant Tenants Square FeetPer Annum Expiration DateRenewal Option
------------------- -------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>

J. Walter Thompson 456,132 $ 9,529,966 8/2006 N/A
Company
(Advertising Agency)

North American 279,906 10,101,248 8/2001 N/A
Reinsurance Company
(Insurance Company)
</TABLE>

<TABLE>
<CAPTION>
c) The following table sets forth certain
information with respect to the expiration
of leases for the next ten years at the
237 Park Avenue Office Building:

1996 2 5,700 407,640 1%
1997 1 27,110 1,355,496 4%
1998 1 900 432,000 1%
1999 2 28,452 1,147,560 3%
2000 1 3,450 196,656 1%
2001 9 283,001 10,283,328 29%
2002 - -- -- --
2003 2 21,641 873,420 2%
2004 4 9,693 340,380 1%
2005 2 932 86,988 --
<FN>
(1) Excludes leases that expire in 1996 for which
renewal leases or leases with replacement tenants
have been executed as of March 25, 1996.
</TABLE>

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

LIQUIDITY AND CAPITAL RESOURCES

All references to "Notes" are to Notes to Financial Statements
contained in this report. There is substantial doubt about the
Partnership's ability to continue as a going concern (see discussion below
and in Note 2). Certain terms used herein are defined in Note 2.

On April 30, 1985, the Partnership commenced a private offering of
$62,700,000 in Limited Partnership Interests pursuant to a Private
Placement Memorandum. A total of 1,000 Interests were sold at $62,700 per
Interest. The net offering proceeds were utilized primarily for the
payment of the Partnership's bank borrowings and related interest,
additional contributions to JMB/NYC and working capital requirements.

In February 1995, the Partnership distributed $15,000,000 to the
Limited Partners ($15,000 per Interest) and $625,000 to the General
Partners and made a related payment of management fees to the General
Partners of $1,041,667. Such amounts were made out of excess working
capital reserves plus $2,850,000 received from JMB Realty Corporation
("JMB") (an affiliate of the Corporate General Partner) under its working
capital minimum guarantee (as more fully discussed in Note 4). The
Partnership believes that the transactions proposed in an agreement entered
into with the Olympia & York affiliates in October 1994 (as more fully
discussed below and in Note 2), although subject to the satisfaction of
certain conditions, will in substance be effected (with some changes in the
form or structure of such transactions), thereby eliminating any potential
funding obligation of the Partnership in the future. Consequently, the
Partnership's working capital reserves were in excess of the amount
necessary for the future operations of the Partnership.

In addition, JMB, in accordance with its agreement with the
Partnership to guarantee the Partnership a certain minimum return on its
working capital (as more fully discussed in Note 4), has agreed to remit
amounts due under this agreement (approximately $1,689,000 at December 31,
1995) from time to time, as needed, to fund the operations of the
Partnership. Subsequent to the $2,850,000 funding made in March 1995
discussed above, JMB funded an additional $65,000 in December 1995 to pay
for 1995 operating costs. In addition, based on the Partnership's working
capital requirements for 1996 (including repayment of a temporary bank
overdraft at December 31, 1995), approximately $354,000 of amounts due from
JMB have been classified as current assets in the accompanying financial
statements at December 31, 1995.

Occupancy at 1290 Avenue of the Americas decreased slightly to 93%
during 1995. During the third quarter of 1995, the Joint Venture that
owns the building executed a lease with a major insurance company for a
lease of approximately 506,000 square feet of space in the building, for a
fifteen year term with occupancy to commence in 1996. During the fourth
quarter of 1994, the Joint Venture that owns the building negotiated an
amendment with a tenant, Deutsche Bank Financial Products Corporation,
under which the tenant will surrender space on the 12th and 13th floors
(137,568 square feet or approximately 7% of the building's leasable space)
on or before June 30, 1996. The original lease (as amended) was to
terminate on December 31, 2003. The amendment also added space on the 8th
and 9th floors (44,360 square feet or approximately 2% of the building's
leasable space) which will expire on or before December 31, 1997. In
consideration for this amendment, the tenant paid an early termination fee
of $29,000,000 to the Joint Venture on December 1, 1994.

Occupancy at 237 Park Avenue remained at 98% during 1995.

In October 1994, JMB/NYC entered into an agreement (the "Agreement")
with the Olympia & York affiliates to resolve certain disputes which are
more fully discussed below. Certain provisions of the Agreement were
immediately effective and, therefore, binding upon the partners, while
others become effective either upon certain conditions being met or upon
execution and delivery of final documentation. In general, the parties
agreed to: (i) amend the Three Joint Ventures' agreements to eliminate any
funding obligation by JMB/NYC for any purpose in return for JMB/NYC
relinquishing its rights to approve almost all property management,
leasing, sale (certain rights to control a sale would be retained by
JMB/NYC through March 31, 2001) or refinancing decisions and the
establishment of a new preferential distribution level payable to the
Olympia & York affiliates from all future sources of cash, (ii) sell the 2
Broadway Building, and (iii) restructure the first mortgage loan. In
anticipation of this sale and in accordance with the Agreement, the unpaid
first mortgage indebtedness previously allocated to 2 Broadway was
allocated to 237 Park Avenue and 1290 Avenue of the Americas during 1994. A
more detailed discussion of these items is contained below and in Note 2.
As part of the Agreement, in order to facilitate the restructuring, JMB/NYC
and the Olympia & York affiliates agreed to file for each of the Three
Joint Ventures a pre-arranged bankruptcy plan for reorganization under
Chapter 11 of the Bankruptcy Code. In June 1995, the 2 Broadway Joint
Ventures filed their pre-arranged bankruptcy plans for reorganization, and
in August 1995, the bankruptcy court entered an order confirming their
plans of reorganization. In September 1995, the sale of the 2 Broadway
Building was completed. Bankruptcy filings for the other Joint Ventures
are expected to occur in 1996. JMB/NYC is seeking to incorporate much of
the substance of the transactions proposed in the Agreement in the proposed
reorganization plans for the other Joint Ventures, although various
specifics of the proposed transactions are expected to be changed and there
is no assurance such proposed transactions would be substantially
incorporated. In particular, the restructuring of their ownership
interests in the 237 Park and the 1290 Avenue of the Americas properties by
the Olympia & York affiliates and the possible reorganization of the 237
Park Avenue and 1290 ventures discussed below is expected to result in
certain changes to the transactions proposed in the Agreement, although the
extent of such changes has not been determined. Consequently, there are no
assurances that the substance of the transactions contemplated in the
Agreement will be finalized. In any event, there would need to be a
significant improvement in current market and property operating conditions
resulting in a significant increase in the value of the 237 Park Avenue and
1290 Avenue of the Americas properties before JMB/NYC would receive any
significant share of future net proceeds from operations, sale or
refinancing. The contemplated restructuring of the Joint Ventures'
agreements would include the elimination of any funding obligation by
JMB/NYC for any purpose. Consequently, in such event, JMB/NYC would
recognize, for financial reporting purposes, a gain to the extent of the
then current deficit investment balance (which amount was $257,188,201 as
of December 31, 1995). In the event that one or more of the transactions
proposed in the Agreement are not consummated, JMB/NYC and the Partnership
may, among other things, recognize substantial gain for Federal income tax
purposes with no corresponding distributable proceeds.

In October 1995, certain affiliates of O&Y, including one of the
partners in the Joint Ventures, filed for protection from creditors under
Chapter 11 of the United States Bankruptcy Code. These affiliates of O&Y
are preparing a plan to restructure their ownership interests in the office
buildings, including the 237 Park Avenue and 1290 Avenue of the Americas
office buildings, which could take the form of one or more real estate
investment trusts. Any such restructuring would be subject to the approval
of their various creditors and other affiliates of 0&Y as well as the
bankruptcy court, and would likely result in such creditors collectively
obtaining control of such ownership interests. In connection with such
restructuring, it is expected that 237 Park Avenue Associates and 1290
Associates will seek reorganization under Chapter 11 of the United States
Bankruptcy Code pursuant to a plan agreed upon by their creditors and their
partners, including JMB\NYC. Although JMB\NYC has had discussions with the
Olympia & York affiliates and certain creditors concerning restructuring
proposals and a reorganization of the 237 Park Avenue Associates and 1290
Associates, a proposal for the restructuring of the Olympia & York
affiliates' ownership interests and a plan for the reorganization of the
two Joint Ventures have not been agreed upon. Accordingly, the terms of
such restructuring and reorganization and their effect, if consummated, on
the Joint Ventures and the Olympia & York affiliates' and JMB\NYC's
respective interests therein are subject to change.The Partnership believes
that the substance of these proposed transactions will be effected,
although changes in the form and structure of the proposed transactions are
expected to be required. However, it is possible that one or more of the
proposed transactions contemplated by the Agreement may not be effected as
a result of such restructuring, which could result in, among other things,
JMB/NYC and the Partnership recognizing substantial gain for Federal income
tax purposes with no corresponding distributable proceeds.

JMB/NYC has had a dispute with the Olympia & York affiliates over the
calculation of the effective interest rate with reference to the first
mortgage loan, which covered all three properties, for the purpose of
determining JMB/NYC's deficit funding obligation, as described more fully
in Note 2. During the quarter ended March 31, 1993, an agreement was
reached between JMB/NYC and the Olympia & York affiliates (the "1993
Agreement") which rescinded the default notices previously received by
JMB/NYC and eliminated the operating deficit funding obligation of JMB/NYC
for the period January 1, 1992 through June 30, 1993. Pursuant to the 1993
Agreement, during this period, JMB/NYC recorded interest expense at 1-3/4%
over the short-term U.S. Treasury obligation rate (subject to a minimum
rate of 7% per annum), which is the interest rate on the underlying first
mortgage loan. Under the terms of the 1993 Agreement, during this period,
the amount of capital contributions that the Olympia & York affiliates and
JMB/NYC would have been required to make to the Three Joint Ventures, if
the first mortgage loan bore interest at a rate of 12-3/4% per annum (the
Olympia & York affiliates' interpretation), became a priority distribution
level to the Olympia & York affiliates from the Three Joint Ventures'
annual cash flow or net sale or refinancing proceeds. The 1993 Agreement
also entitled the Olympia & York affiliates to a 7% per annum return on
such unpaid priority distribution level. The 1993 Agreement also provided
that, except as specifically agreed otherwise, the parties each reserved
all rights and claims with respect to each of the Three Joint Ventures and
each of the partners thereof, including, without limitation, the
interpretation of or rights under each of the joint venture partnership
agreements for the Three Joint Ventures. The term of the 1993 Agreement
expired on June 30, 1993. Therefore, effective July 1, 1993, JMB/NYC is
recording interest expense at 1-3/4% over the short-term U.S. Treasury
obligation rate plus any excess operating cash flow after capital costs of
each of the Three Joint Ventures, such sum not to be less than 7% nor
exceed a 12-3/4% per annum interest rate. The Olympia & York affiliates
continued to dispute this calculation for the period commencing July 1,
1993, and contend that a 12-3/4% per annum fixed rate applies. Certain
provisions of the Agreement with the Olympia & York affiliates, when
finalized, would resolve the funding obligation dispute.

The 237 Park Avenue and the 1290 Avenue of the Americas office
buildings currently serve as collateral for the first mortgage loan. A
restructuring of the loan now appears likely to depend upon the
restructuring of the ownership interests of various affiliates of O&Y in a
number of office buildings and the reorganization of the 237 Park Avenue
and 1290 ventures as discussed above. Prior to 1996, the lender asserted
various defaults under the loan. Commencing in January 1996, the Joint
Ventures ceased making monthly debt service payments on the first mortgage
loan. In previous negotiations, the Olympia & York affiliates reached an
agreement with the first mortgage lender whereby effective January 1, 1993,
the Olympia & York affiliates are limited to taking distributions of
$250,000 on a monthly basis from the Three Joint Ventures and reserving the
remaining excess cash flow in a separate interest-bearing account to be
used exclusively to meet the obligations of the Three Joint Ventures as
approved by the lender. Interest on the first mortgage loan is currently
calculated based upon a variable rate related to the short-term U.S.
Treasury obligation rate, subject to a minimum rate on the loan of 7% per
annum. In the absence of the contemplated restructuring, an increase in
the short-term U.S. Treasury obligation rate could result in increased
interest payable on the first mortgage loan by the Three Joint Ventures.

Should a restructuring of the Joint Ventures providing for the
elimination of JMB/NYC's funding obligations in accordance with the
Agreement not be finalized, JMB/NYC may decide not to commit any additional
amounts to the Three Joint Ventures. In addition, under these
circumstances, it is possible that JMB/NYC may determine to litigate these
issues with the Olympia & York affiliates. A decision not to commit any
additional funds or an adverse litigation result could, under certain
circumstances, result in the loss of the interest in the related Joint
Ventures. The loss of an interest in a particular Joint Venture could,
under certain circumstances, permit an acceleration of the maturity of the
related purchase note (each purchase note is secured by JMB/NYC's interest
in the related Joint Venture). Under certain circumstances, the failure to
repay a purchase note could constitute a default under, and permit an
immediate acceleration of, the maturity of the purchase notes for the other
Joint Ventures. In such event, JMB/NYC may decide not to repay, or may not
have sufficient funds to repay, any of the purchase notes and accrued
interest thereon. This could result in JMB/NYC no longer having an
interest in any of the related Joint Ventures, which would result in
substantial net gain for financial reporting and Federal income tax
purposes to JMB/NYC (and through JMB/NYC and the Partnership, to the
Limited Partners) with no distributable proceeds. In such event, the
Partnership would then proceed to terminate its affairs.

Due to the various factors discussed above, it is likely that the
Partnership would not be able to return any significant additional amount
of the Limited Partners' original capital. It should be noted, however,
that in connection with any sale or other disposition (including a
foreclosure) of the properties (or interests therein) owned by the Three
Joint Ventures (or JMB/NYC), the Limited Partners would be allocated
substantial net gain for Federal income tax purposes even though the
Partnership would not be able to return a significant amount of the Limited
Partners' original capital. The Partnership continues to seek a
restructuring of the joint venture agreements as described above.

RESULTS OF OPERATIONS

The results of operations for the years ended December 31, 1995, 1994
and 1993 are primarily attributable to the operations of the real property
investments owned by the Partnership through JMB/NYC and the Three Joint
Ventures as described in Note 2, and interest earned on the Partnership's
working capital.

The decrease in cash and cash equivalents, short-term investments and
interest and other receivables as of December 31, 1995 as compared to
December 31, 1994 is due to the Partnership's use of such resources to make
a distribution to partners of $15,625,000 and the related payment of
management fees to the General Partners of $1,041,667 in February 1995.

The aggregate decrease in amounts due from affiliates as of December
31, 1995 as compared to December 31, 1994 is primarily due to the receipt
of $2,850,000 and $65,000 in February and December 1995, respectively, from
JMB relating to its agreement to guarantee a minimum return on the
Partnership's working capital (as more fully discussed in Note 4),
partially offset by the accrual of additional interest earned on such
guaranteed amounts.

The increase in bank overdraft as of December 31, 1995 as compared to
December 31, 1994 is attributable to the Partnership's temporary bank
overdraft of approximately $155,000 at December 31, 1995 resulting from the
timing of fundings received from JMB relating to its agreement to guarantee
a minimum return on the Partnership's working capital (as more fully
described in Note 4).

The increase in amounts due to affiliates at December 31, 1995 as
compared to December 31, 1994 represents the increased accrued interest on
the Partnership's paid-in capital obligation to Carlyle Investors, Inc.
(the general partner of Property Partners, L.P.) and Carlyle Managers, Inc.
(the general partner of JMB/NYC Office Building Associates, L.P.) ($600,000
and $600,000, respectively) of which the Partnership is a 20% shareholder
(see Note 2).

The decrease in interest income for the year twelve months December
31, 1995 as compared to the twelve months ended December 31, 1994 and the
increase in management fees paid to general partners for the twelve months
ended December 31, 1995 as compared to the twelve months ended December 31,
1994 is due to the lower average of amounts invested in U.S. Government
securities during 1995 as compared to 1994 resulting from the Partnership's
distribution to partners of $15,625,000 and the related payment of
management fees to the General Partners of $1,041,667 in February 1995.
The increase in interest income for the twelve months ended December 31,
1994 as compared to 1993 is primarily due to a higher average balance of
investments in U.S. Government obligations held in 1994 resulting from the
continued suspension of distributions to its partners.

The increase in interest expense for the twelve months ended December
31, 1995 as compared to 1994 and for the twelve months ended December 31,
1994 as compared to 1993 is due to compounding of interest on the
Partnership's obligation to fund, on demand, $600,000 and $600,000 to
Carlyle Investors, Inc. and Carlyle Managers, Inc., respectively, of
additional paid-in capital (see Note 2).

The increase in the Partnership's share of loss from operations of
unconsolidated venture for the twelve months ended December 31, 1995 as
compared to the twelve months ended December 31, 1994 is primarily due to
the loss of rental income as a result of the sale of 2 Broadway in
September 1995. The decrease in Partnership's share of loss from
operations of unconsolidated venture for the twelve months ended December
31, 1994 as compared to the twelve months ended December 31, 1993 is
primarily due to (i) a $192,627,560 provision for value impairment recorded
in 1993 for 2 Broadway due to the potential sale of the property at a sales
price significantly below its net carrying value, (ii) an $11,946,284
provision for doubtful accounts recorded by JMB/NYC in 1993 due to the
uncertainty of collectibility of amounts due from the Olympia & York
affiliates to the Three Joint Ventures, and (iii) an $11,551,049 provision
for doubtful accounts recorded in 1993 by JMB/NYC due to the uncertainty of
collectibility of amounts due from tenants at the Three Joint Ventures'
real estate investment properties. The decrease in the Partnership's share
of loss from operations of unconsolidated ventures for the twelve months
ended December 31, 1994 as compared to the twelve months ended December 31,
1993 is partially offset by the Partnership's share of a decrease in rental
income in 1994 at the 2 Broadway Building due to Bear Stearns vacating its
space (approximately 11% of the building's leasable space) in April 1994
upon the expiration of its lease. (Reference is made to Note 2).

The Partnership's share of loss on sale of investment property and the
Partnership's share of gain from the extinguishment of indebtedness of
unconsolidated venture for the twelve months ended December 31, 1995 is
primarily due to the Partnership's share of loss from the sale of the 2
Broadway Building and the related share of the gain on the extinguishment
of indebtedness (note 2).

INFLATION

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

To the extent that inflation in future periods would have an adverse
impact on property operating expenses, the effect would generally be offset
by amounts recovered from tenants as many of the long-term leases at the
Partnership's investment properties have escalation clauses covering
increases in the cost of operating the properties as well as real estate
taxes. Therefore, there should be little effect on operating earnings if
the properties remain substantially occupied.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

INDEX

Independent Auditors' Report
Balance Sheets, December 31, 1995 and 1994
Statements of Operations, years ended December 31,
1995, 1994 and 1993
Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1995, 1994 and 1993
Statements of Cash Flows, years ended December 31,
1995, 1994 and 1993

Notes to Financial Statements

SCHEDULES NOT FILED:

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

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

INDEX

Independent Auditors' Report
Combined Balance Sheets, December 31, 1995 and 1994
Combined Statements of Operations, years ended December 31,
1995, 1994, and 1993
Combined Statements of Partners' Capital Accounts (Deficit),
years ended December 31, 1995, 1994 and 1993
Combined Statements of Cash Flows, years ended December 31,
1995, 1994 and 1993

Notes to Combined Financial Statements

SCHEDULE
--------

Combined Real Estate and Accumulated Depreciation III

SCHEDULES NOT FILED:

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

INDEPENDENT AUDITORS' REPORT

The Partners
JMB/Manhattan Associates, Ltd.:

We have audited the financial statements of JMB/Manhattan Associates,
Ltd., a limited partnership (the Partnership), as listed in the
accompanying index. These financial statements are the responsibility of
the General Partners of the Partnership. Our responsibility is to report
on these financial statements based on the results of 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 report.

As discussed in Note 2 to the financial statements, beginning July 1,
1993, the Partnership and its affiliated partners in JMB/NYC Office
Building Associates, L.P. (JMB/NYC) were in dispute with the unaffiliated
venture partners in the real estate ventures over the calculation of the
effective interest rate with reference to the first mortgage loan, which
covers the real estate owned through JMB/NYC's joint ventures. The
Partnership's share of disputed interest aggregated $5,635,000, $6,109,000
and $2,386,000 for the years ended December 31, 1995, 1994 and 1993,
respectively, and has not been included in Partnership's share of loss from
operations of unconsolidated venture in the accompanying financial
statements. In October 1994, JMB/NYC entered into an agreement (the
Agreement) with the unaffiliated venture partners in the real estate
ventures which, when effective, would resolve this dispute by providing
interest at the same rate as the first mortgage loan and would eliminate
any funding obligations by JMB/NYC. However, as discussed in Note 2, there
are no assurances that the Agreement will be finalized and become
effective. The ultimate outcome of this uncertainty cannot presently be
determined.

The accompanying financial statements have been prepared assuming that
the Partnership will continue as a going concern. As discussed in Note 2
of the financial statements, the holder of the first mortgage loan alleged
certain defaults under the loan agreements. Also, commencing in January
1996, the real estate ventures ceased making monthly debt service payments
on the first mortgage loan. Further, JMB/NYC and the unaffiliated venture
partners in the real estate ventures have agreed to file, for each of the
real estate joint ventures, a pre-arranged bankruptcy plan for
reorganization under Chapter 11 of the Bankruptcy Code. Such filings with
respect to the 2 Broadway Ventures occurred in June 1995 with the remaining
filings expected to occur in 1996. These circumstances raise substantial
doubt about the Partnership's ability to continue as a going concern. The
General Partners' plans in regard to these matters are described in Note 2.

The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.

(continued)

Because of the significance of the uncertainties discussed in the
preceding two paragraphs, we are unable to express, and we do not express,
an opinion on the accompanying financial statements.

KPMG PEAT MARWICK LLP

Chicago, Illinois
March 25, 1996

<TABLE>

JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

BALANCE SHEETS

DECEMBER 31, 1995 AND 1994

ASSETS
------
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents, (note 1). . . . . . . . . . . . $ -- 3,784,075
Short-term investments (note 1). . . . . . . . . . . . . . -- 9,912,520
Interest and other receivables . . . . . . . . . . . . . . -- 20,397
Amounts due from affiliates (note 4) . . . . . . . . . . . 354,082 --
------------ -----------
Total current assets . . . . . . . . . . . . . . . 354,082 13,716,992
------------ -----------

Amounts due from affiliates (note 4) . . . . . . . . . . . . 1,334,454 4,326,233
------------ -----------

$ 1,688,536 18,043,225
============ ===========

JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

BALANCE SHEETS - CONTINUED

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

1995 1994
------------ -----------
Current liabilities:
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . $ 155,322 --
Accounts payable . . . . . . . . . . . . . . . . . . . . . 9,922 19,281
Amounts due to affiliates (notes 2 and 4). . . . . . . . . 1,888,718 1,757,445
------------ -----------
Total current liabilities. . . . . . . . . . . . . 2,053,962 1,776,726

Investment in unconsolidated venture, at equity (notes 2 and 5) 77,333,831 71,382,485

Commitments and contingencies (notes 2 and 4)

Partners' capital accounts (deficits) (notes 1 and 3):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . 1,500 1,500
Cumulative net losses. . . . . . . . . . . . . . . . . (4,244,817) (3,941,200)
Cumulative cash distributions. . . . . . . . . . . . . (737,500) (112,500)
------------ -----------
(4,980,817) (4,052,200)
------------ -----------
Limited partners (1,000 Interests):
Capital contributions, net of offering costs . . . . . 57,042,489 57,042,489
Cumulative net losses. . . . . . . . . . . . . . . . . (111,760,929) (105,106,275)
Cumulative cash distributions. . . . . . . . . . . . . (18,000,000) (3,000,000)
------------ -----------
(72,718,440) (51,063,786)
------------ -----------
Total partners' capital accounts (deficits). . . . (77,699,257) (55,115,986)
------------ -----------
$ 1,688,536 18,043,225
============ ===========

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

<TABLE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Interest . . . . . . . . . . . . . . . . . $ 405,719 1,649,889 1,500,142
------------ ------------ ------------
Expenses:
Interest . . . . . . . . . . . . . . . . . 131,272 110,620 53,777
Professional services. . . . . . . . . . . 185,439 99,596 132,706
Management fees paid to general partners . 1,041,667 -- --
General and administrative . . . . . . . . 54,266 56,853 56,627
------------ ------------ ------------
1,412,644 267,069 243,110
------------ ------------ ------------
Operating earnings (loss). . . . . . . (1,006,925) 1,382,820 1,257,032
Partnership's share of loss from
operations of unconsolidated
venture (notes 2 and 5). . . . . . . . . . (6,794,224) (6,266,667) (22,166,989)
------------ ------------ ------------
Net operating loss . . . . . . . . . . (7,801,149) (4,883,847) (20,909,957)
Partnership's share of loss on sale
of investment property (note 2). . . . . . (14,789,529) -- --
------------ ------------ ------------
Loss before extraordinary item . . . . (22,590,678) -- --

Extraordinary item:
Partnership's share of gain on
forgiveness of indebtedness of
unconsolidated venture (note 2). . . . . 15,632,407 -- --
------------ ------------ ------------
Net loss . . . . . . . . . . . . . . . $ (6,958,271) (4,883,847) (20,909,957)
============ ============ ============

JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS - CONTINUED

1995 1994 1993
------------ ------------ ------------

Net loss per limited partnership
interest (notes 1 and 3):
Net operating loss. . . . . . . . . $ (7,489) (4,688) (20,494)
Partnership's share of loss on
sale of investment property. . . . (14,642) -- --
Partnership's share of gain on
forgiveness of indebtedness
of unconsolidated venture. . . . . 15,476 -- --
------------ ------------ ------------
Net loss . . . . . . . . . . . . $ (6,655) (4,688) (20,494)
============ ============ ============

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

<TABLE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (1,000 INTERESTS)
--------------------------------------------- -------------------------------------------------
CONTRI-
BUTIONS
CASH NET OF
CONTRI- NET DISTRI- OFFERING NET CASH
BUTIONS LOSS BUTIONS TOTAL COSTS LOSS DISTRIBUTIONS TOTAL
----------------- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficits)
December 31,
1992. . . . $1,500(3,330,147) (112,500)(3,441,147) 57,042,489(79,923,524) (3,000,000)(25,881,035)
Net loss . . -- (415,699) -- (415,699) -- (20,494,258) -- (20,494,258)
---------------- ----------------------------------------------------------------
Balance
(deficits)
December 31,
1993. . . . 1,500(3,745,846) (112,500)(3,856,846)57,042,489(100,417,782)(3,000,000)(46,375,293)
Net loss . . -- (195,354) -- (195,354) -- (4,688,493) -- (4,688,493)
---------------- ----------------------------------------------------------------
Balance
(deficits)
December 31,
1994. . . . 1,500(3,941,200) (112,500)(4,052,200)57,042,489(105,106,275)(3,000,000)(51,063,786)
Cash distri-
butions
($15,000 per
limited
partnership
interest) . -- -- (625,000) (625,000) -- -- (15,000,000)(15,000,000)
Net loss . . -- (303,617) -- (303,617) -- (6,654,654) -- (6,654,654)
---------------- ----------------------------------------------------------------
Balance
(deficits)
December 31,
1995. . . . $1,500(4,244,817) (737,500)(4,980,817)57,042,489(111,760,929)(18,000,000)(72,718,440)
================ ================================================================
<FN>
See accompanying notes to financial statements.
</TABLE>

<TABLE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . $ (6,958,271) (4,883,847) (20,909,957)
Items not requiring (providing) cash or
cash equivalents:
Partnership's share of loss from
operations of unconsolidated venture . . 6,794,224 6,266,667 22,166,989
Partnership's share of loss on sale
of investment property . . . . . . . . . 14,789,529 -- --
Partnership's share of gain from
forgiveness of indebtedness of
unconsolidated venture . . . . . . . . . (15,632,407) -- --
Changes in:
Interest and other receivables . . . . . . 20,397 28,332 186,988
Accounts payable . . . . . . . . . . . . . (9,359) (1,259) (17,265)
Amounts due to affiliates. . . . . . . . . 131,273 106,620 53,777
----------- ----------- -----------
Net cash provided by (used in)
operating activities . . . . . . . (864,614) 1,516,513 1,480,532
----------- ----------- -----------
Cash flows from investing activities:
Net sales and maturities of
short-term investments . . . . . . . . . . 9,912,520 1,091,305 1,827,475
Partnership's contributions to
unconsolidated venture . . . . . . . . . . -- -- (6,390)
----------- ----------- -----------
Net cash provided by
investing activities . . . . . . . 9,912,520 1,091,305 1,821,085
----------- ----------- -----------
Cash flows from financing activities:
Bank overdraft . . . . . . . . . . . . . . 155,322 -- --
Distributions to limited partners. . . . . (15,000,000) -- --
Distributions to general partners. . . . . (625,000) -- --
Change in amounts due from affiliates. . . 2,637,697 (1,139,570) (1,099,706)
----------- ----------- -----------
Net cash used in financing activities (12,831,981) (1,139,570) (1,099,706)
----------- ----------- -----------

JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS - CONTINUED

1995 1994 1993
----------- ----------- -----------

Net increase (decrease) in cash and
cash equivalents . . . . . . . . . (3,784,075) 1,468,248 2,201,911

Cash and cash equivalents,
beginning of year. . . . . . . . . 3,784,075 2,315,827 113,916
----------- ----------- -----------
Cash and cash equivalents,
end of year. . . . . . . . . . . . $ -- 3,784,075 2,315,827
=========== =========== ===========

Supplemental disclosure of
cash flow information:
Cash paid for mortgage and
other interest . . . . . . . . . . . . . . $ -- -- --
=========== =========== ===========
Non-cash investing and financing activities:
Contributions payable to unconsolidated
venture (note 2) . . . . . . . . . . . . $ -- -- 1,200,000
=========== =========== ===========

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

JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1994 AND 1993

(1) OPERATIONS AND BASIS OF ACCOUNTING

The Partnership holds (through joint ventures) an equity investment
portfolio of commercial real estate in the city of New York, New York.
Business activities consist of rentals to a variety of commercial
companies, and the ultimate sale or disposition of such real estate.

The equity method of accounting has been applied in the accompanying
financial statements with respect to the Partnership's (indirect) interest
in JMB/NYC Office Building Associates, L.P. ("JMB/NYC") through Property
Partners, L.P. Accordingly, the financial statements do not include the
accounts of Property Partners, L.P. or JMB/NYC.

The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying 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"). Such
GAAP and consolidation adjustments are not recorded on the records of the
Partnership. The net effect of these items for the years ended December 31,
1995 and 1994 is summarized as follows:

1995 1994
-------------------------------------------------------------
TAX BASIS
GAAP BASIS (Unaudited) GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------

Total assets . . . . . . . . . $ 1,688,536 12,083,306 18,043,225 28,870,196
Partners' capital accounts
(deficits):
General partners . . . . . . (4,980,817) (22,805,104) (4,052,200) (22,008,973)
Limited partners . . . . . . (72,718,440) (75,295,495) (51,063,786) (45,808,838)
Net income (loss):
General partners . . . . . . (303,617) (171,131) (195,354) 21,949
Limited partners . . . . . . (6,654,654) (14,486,657) (4,688,493) 526,775
Net income (loss) per
limited partnership
interest . . . . . . . . . . (6,655) (14,487) (4,688) 527
============ ============ ============ ============

</TABLE>

The net loss per limited partnership interest is based upon the number
of limited partnership interests outstanding at the end of each period
(1,000). Deficit capital accounts will result, through the duration of the
Partnership, in the recognition of net gain for financial reporting and
Federal income tax purposes to the Limited Partners. Reference is made to
note 3 for a discussion of the allocations of profits and losses.

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

Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. The Partnership records amounts held in
U.S. Government obligations at cost which approximates market. For the
purposes of these statements, the Partnership's policy is to consider all
such amounts held with original maturities of three months or less ($0 and
$3,757,085 at December 31, 1995 and 1994, respectively) as cash equivalents
with any remaining amounts reflected as short-term investments being held
to maturity.

Statement of Financial Accounting Standards No. 107 ("SFAS 107"),
"Disclosures about Fair Value of Financial Instruments", requires all
entities to disclose the SFAS 107 value of all financial assets and
liabilities for which it is practicable to estimate. Value is defined in
the Statement as the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or
liquidation sale. The Partnership believes the carrying amount of its
financial instruments classified as current assets and liabilities
approximates SFAS 107 value due to the relatively short maturity of these
instruments. The Partnership has no other significant financial
instruments.

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.

Certain reclassifications have been made to the 1994 and 1993
financial statements to conform with the 1995 presentation.

During March 1995, 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. SFAS 121, when effective,
will require that the Partnership record an impairment loss on its long-
lived assets to be held and used whenever their carrying value cannot be
fully recovered through estimated undiscounted future cash flows from
operations and sale. The amount of the impairment loss to be recognized
would be the difference between the long-lived asset's carrying value and
the asset's estimated fair value. Any long-lived assets identified "to be
disposed of" would no longer be depreciated. Adjustments for impairment
loss would be made in each period as necessary to report these assets at
the lower of historical cost and fair value less costs to sell. In certain
situations, such estimated fair value could be less than the existing non-
recourse debt which is secured by the property. There would be no
assurance that any estimated fair value of these assets would ultimately be
obtained by the Partnership in any future sale or disposition transaction.

Under the current impairment policy, provisions for value impairment
are recorded with respect to investment properties whenever the estimated
future cash flows from a property's operations and projected sale are less
than the property's net carrying value. The amount of any such impairment
loss recognized by the Partnership is limited to the excess, if any, of
the property's carrying value over the outstanding balance of the
property's non-recourse indebtedness. An impairment loss under SFAS 121
would be determined without regard to the nature or the balance of such
non-recourse indebtedness. Upon the disposition of a property with the
related extinguishment of long-term debt for which an impairment loss has
been recognized under SFAS 121, the Partnership would recognize, at a
minimum, a net gain (comprised of gain on extinguishment of debt and gain
or loss on sale or disposition of property) for financial reporting
purposes to the extent of any excess of the then outstanding balance of the
property's non-recourse indebtedness over the then carrying value of the
property, including the effect of any reduction for impairment loss under
SFAS 121.

The Partnership will adopt SFAS 121 as required in the first quarter
of 1996. Based upon the Partnership's current assessment of the full
impact of adopting SFAS 121, it is not anticipated that any significant
additional provisions for value impairment would be required for the
properties owned by the Partnership's unconsolidated ventures in the first
period of implementation of SFAS 121. In addition, upon the disposition of
an impaired property, the Partnership would generally recognize more net
gain for financial reporting purposes under SFAS 121 than it would have
under the Partnership's current impairment policy, without regard to the
amount, if any, of cash proceeds received by the Partnership in connection
with the disposition. Although implementation of this new accounting
statement could significantly impact the Partnership's reported earnings,
there would be no impact on cash flows. Further, any such impairment loss
would not be recognized for Federal income tax purposes.

(2) VENTURE AGREEMENTS

The Partnership owns indirectly through Property Partners, L.P. and
JMB/NYC an interest in (i) the 237 Park Avenue Associates venture which
owns a 23-story office building, (ii) the 1290 Associates venture which
owns a 44-story office building, and (iii) the 2 Broadway Associates and 2
Broadway Land Co. ventures which sold their 32-story office building in
September 1995 as discussed below (together "Three Joint Ventures" and
individually a "Joint Venture"). All of the buildings are located in New
York, New York. In addition to JMB/NYC, the partners of the Three Joint
Ventures include O&Y Equity Company, L.P. and O&Y NY Building Corp.
(hereinafter sometimes referred to as the "Olympia & York affiliates"),
both of which are affiliates of Olympia and York Developments, Ltd.
(hereinafter sometimes referred to as "O&Y").

JMB/NYC is a limited partnership among Property Partners, L.P.,
Carlyle-XIV Associates, L.P. and Carlyle-XIII Associates, L.P. as limited
partners and Carlyle Managers, Inc. as the sole general partner. The
Partnership is a 20% shareholder of Carlyle Managers, Inc. and related to
this investment, has an obligation to fund, on demand, $600,000 of
additional paid-in capital to Carlyle Managers, Inc. (reflected in amounts
due to affiliates in the accompanying financial statements). The
Partnership currently holds, indirectly as a limited partner of Property
Partners, L.P., an approximate 25% limited partnership interest in JMB/NYC.

The sole general partner of Property Partners, L.P. is Carlyle Investors,
Inc., of which the Partnership is a 20% shareholder. Related to this
investment, the Partnership has an obligation to fund, on demand, $600,000
of additional paid-in capital (reflected in amounts due to affiliates in
the accompanying financial statements). The general partner in each of
JMB/NYC and Property Partners, L.P. is an affiliate of the Partnership.
For financial reporting purposes, the allocation of profits and losses of
JMB/NYC to the Partnership is 25%.

The terms of the JMB/NYC venture agreement generally provide that
JMB/NYC's share of the Three Joint Ventures' annual cash flow, sale or
refinancing proceeds, operating and capital costs (to the extent not
covered by cash flow from a property) and profit and loss will be
distributed to, contributed by or allocated to the Partnership in
proportion to its (indirect) share of capital contributions to JMB/NYC. As
discussed below, an agreement (the "Agreement") with the Olympia & York
affiliates, when effective, would provide first for allocation of cash flow
to the Olympia & York affiliates to the level of certain Preference
Amounts, as defined. The Agreement would also, among other things, provide
for no further allocation from the Joint Ventures of depreciation,
amortization or operating losses and the allocation of operating income
from the Joint Ventures only to the extent of cash flow distributions to
JMB/NYC.

In October 1994, JMB/NYC entered into the Agreement with the Olympia &
York affiliates to resolve certain disputes which are more fully discussed
below. Certain provisions of the Agreement became immediately effective
and, therefore, binding upon the partners, while others become effective
either upon certain conditions being met or upon execution and delivery of
final documentation. In general, the parties agreed to: (i) amend the
Three Joint Ventures' agreements to eliminate any funding obligation by
JMB/NYC for any purpose in return for JMB/NYC relinquishing its rights to
approve almost all property management, leasing, sale (certain rights to
control a sale were to be retained by JMB/NYC through March 31, 2001) or
refinancing decisions and the establishment of a new preferential
distribution level payable to the Olympia & York affiliates from all future
sources of cash, (ii) sell the 2 Broadway Building, and (iii) restructure
the first mortgage loan. In anticipation of this sale and in accordance
with the Agreement, the unpaid first mortgage indebtedness previously
allocated to 2 Broadway was allocated to 237 Park Avenue and 1290 Avenue of
the Americas during 1994. As part of the Agreement, in order to facilitate
the restructuring, JMB/NYC and the Olympia & York affiliates agreed to file
for each of the Three Joint Ventures a pre-arranged bankruptcy plan for
reorganization under Chapter 11 of the Bankruptcy Code. In June 1995, the
2 Broadway Joint Ventures filed their pre-arranged bankruptcy plans for
reorganization, and in August 1995, the bankruptcy court entered an order
confirming their plans of reorganization. In September 1995, the sale of
the 2 Broadway Building was completed. Bankruptcy filings for the other
Joint Ventures are expected to occur in 1996. JMB/NYC is seeking to
incorporate much of the substance of the transactions proposed in the
Agreement in the proposed reorganization plans for the other Joint
Ventures, although various specifics of the proposed transactions are
expected to be changed and there is no assurance that such proposed
transactions would be substantially incorporated. In particular, the
restructuring of their ownership interests in the 237 Park and the 1290
Avenue of the Americas properties by the Olympia & York affiliates and the
possible reorganization of the 237 Park Avenue and 1290 ventures discussed
below is expected to result in certain changes to the transactions proposed
in the Agreement, although the extent of such changes has not been
determined. Consequently, there are no assurances that the substance of
the transactions contemplated in the Agreement will be finalized. In any
event, there would need to be a significant improvement in current market
and property operating conditions resulting in a significant increase in
the value of the 237 Park Avenue and 1290 Avenue of the Americas properties
before JMB/NYC would receive any significant share of future net proceeds
from operations, sale or refinancing. The contemplated restructuring of
the Joint Ventures' agreements would include the elimination of any funding
obligation by JMB/NYC for any purposes. Consequently, in such event,
JMB/NYC would recognize, for financial reporting purposes, a gain to the
extent of the then current deficit investment balance (which amount was
$257,188,201 as of December 31, 1995). In the event that one or more of
the transactions proposed in the Agreement are not consummated, JMB/NYC and
the Partnership may, among other things, recognize substantial gain for
Federal income tax purposes with no corresponding distributable proceeds.

In October 1995, certain affiliates of O&Y, including one of the
partners in the Joint Ventures, filed for protection from creditors under
Chapter 11 of the United States Bankruptcy Code. These affiliates of O&Y
are preparing a plan to restructure their ownership interests in various
office buildings, including the 237 Park Avenue and 1290 Avenue of the
Americas office buildings, which could take the form of one or more real
estate investment trusts. Any such restructuring would be subject to the
approval of their various creditors and other affiliates of O&Y as well as
the bankruptcy court, and would likely result in such creditors
collectively obtaining control of such ownership interests. In connection
with such restructuring, it is expected that 237 Park Avenue Associates and
1290 Associates will seek reorganization under Chapter 11 of the United
States Bankruptcy Code pursuant to a plan agreed upon by their creditors
and their partners, including JMB\NYC. Although JMB\NYC has had
discussions with the Olympia & York affiliates and certain creditors
concerning restructuring proposals and a reorganization of 237 Park Avenue
Associates and 1290 Associates, a proposal for the restructuring of the
Olympia & York affiliates' ownership interests and a plan for the
reorganization of the two Joint Ventures have not been agreed upon.
Accordingly, the terms of such restructuring and reorganization and their
effect, if consummated, on the Joint Ventures and the Olympia & York
affiliates' and JMB\NYC's respective interests therein are subject to
change. The Partnership believes that the substance of these proposed
transactions will be effected, although changes in the form and structure
of the proposed transactions are expected to be required. However, it is
possible that one or more of the proposed transactions contemplated by the
Agreement may not be effected as a result of such restructuring, which
could result in, among other things, JMB/NYC and the Partnership
recognizing substantial gain for Federal income tax purposes with no
corresponding distributable proceeds.

JMB/NYC purchased a 46.5% interest in each of the Three Joint Ventures
for approximately $173,600,000, subject to a long-term first mortgage loan
which has been allocated between the individual Joint Ventures. A portion
of the purchase price was represented by four 12-3/4% promissory notes (the
"Purchase Notes") which have an aggregate outstanding principal balance of
$33,272,592 and $34,158,225 at December 31, 1995 and December 31, 1994,
respectively. Such Purchase Notes, which contain cross-default provisions,
and are non-recourse to JMB/NYC, are secured by JMB/NYC's interests in the
Three Joint Ventures, and such Purchase Note relating to the purchase of
the interest in the ventures formerly owning the 2 Broadway Building is
additionally secured by JMB/NYC's interest in $19,000,000 of distributable
sale proceeds from the other two Joint Ventures. A default under the
Purchase Notes would include, among other things, a failure by JMB/NYC to
repay a Purchase Note upon acceleration of the maturity, and could cause an
immediate acceleration of the Purchase Notes for the other Joint Ventures.
The Purchase Notes provide for monthly interest only payments on the
principal and accrued interest based upon the level of distributions
payable to JMB/NYC discussed below. If the distributions paid or payable
to JMB/NYC are insufficient to cover monthly interest on the Purchase
Notes, then the shortfall interest (as defined) accrues and compounds
monthly. Interest accruals total $47,164,545 at December 31, 1995 as no
payments were made on any of the Purchase Notes during 1995 and 1994. All
of the principal and accrued interest on the Purchase Notes is due in 1999
or, if earlier, on the sale or refinancing of the related property. The
Agreement with the Olympia & York affiliates, when effective, would provide
for an extension of the due dates on the Purchase Notes. It further
provides for the cancellation of indebtedness under the 2 Broadway Purchase
Notes in excess of $19 million. As discussed more fully below, in
September 1995 the 2 Broadway Joint Ventures concluded the sale of the 2
Broadway Building at a price which did not provide any proceeds to JMB/NYC
to repay the related Purchase Notes. Consequently, principal and accrued
interest on the 2 Broadway Purchase Notes in the amount of $62,529,627 was
discharged and $19,000,000 of the 2 Broadway Purchase Notes has been re-
allocated and is payable out of JMB/NYC's share of distributable cash flow
or sale proceeds, if any, from the other two Joint Ventures.

Subsequent to 1991, pursuant to the agreement (the "1993 Agreement")
reached in March, 1993 between JMB/NYC and the Olympia & York affiliates,
for the period January 1, 1992 to June 30, 1993, as discussed below, gross
income was allocable to the Olympia & York affiliates to the extent of the
distributions of excess monthly cash flow received for the period with the
balance of operating profits or losses allocated 46.5% to JMB/NYC and 53.5%
to the Olympia & York affiliates. Beginning July 1, 1993, operating
profits or losses, in general, are allocated 46.5% to JMB/NYC and 53.5% to
the Olympia & York affiliates. The Agreement with the Olympia & York
affiliates, when effective, would provide for no further allocation to
JMB/NYC of depreciation, amortization or operating losses and the
allocation of operating income only to the extent of cash flow
distributions, if any, during the remaining term of the Joint Ventures.
There was no allocation of depreciation, amortization or operating income
or losses to JMB/NYC for Federal income tax purposes in 1994 or 1995.
However, JMB/NYC did recognize a loss of $55,357,404 on the sale (as
described below) of the 2 Broadway Building for Federal income tax purposes
in 1995.

Under the terms of the Three Joint Ventures' agreements, the Olympia &
York affiliates were obligated to make capital contributions to the Three
Joint Ventures to pay any operating deficits (as defined) and to pay a
preferred return through December 31, 1991 to JMB/NYC. JMB/NYC did not
receive its preferred return for the fourth quarter 1991 and the Olympia &
York affiliates applied JMB/NYC's preferred return to 1992 disputed
interest calculations (see below). Subsequent to 1991, capital
contributions to pay for property operating deficits and other requirements
that may be called for under the Three Joint Ventures' agreements are
required to be shared 46.5% by JMB/NYC and 53.5% by the Olympia & York
affiliates. The Olympia & York affiliates have alleged that pursuant to
the Three Joint Ventures' agreements between the Olympia & York affiliates
and JMB/NYC, the effective rate of interest with reference to the first
mortgage loan for the purpose of calculating JMB/NYC's share of operating
cash flow or deficits after 1991 is as though the rate were fixed at 12-
3/4% per annum (versus the variable short-term U.S. Treasury obligation
rate plus 1-3/4% per annum (with a minimum 7%) payable on the first
mortgage loan). JMB/NYC believes that, commencing in 1992, the Three Joint
Ventures' agreements require an effective rate of interest with reference
to the first mortgage loan, based upon each Joint Venture's allocable share
of the loan, to be 1-3/4% over the variable short-term U.S. Treasury
obligation rate plus any excess monthly operating cash flow after capital
costs of each of the Three Joint Ventures, such sum not to be less than a
7% nor to exceed a 12-3/4% per annum interest rate, rather than the 12-3/4%
per annum fixed rate that applied prior to 1992. The Olympia & York
affiliates have disputed this calculation of interest expense and contended
that the 12-3/4% per annum fixed rate applied after 1991.

The 1993 Agreement rescinded the default notices previously received
by JMB/NYC and eliminated the alleged operating deficit funding obligation
of JMB/NYC for the period January 1, 1992 through June 30, 1993. Pursuant
to the 1993 Agreement, during this period, JMB/NYC recorded interest
expense at the interest rate on the underlying first mortgage loan. Under
the terms of the 1993 Agreement, during this period, the amount of capital
contributions that the Olympia & York affiliates and JMB/NYC would have
been required to make to the Three Joint Ventures, if the first mortgage
loan bore interest at a rate of 12-3/4% per annum (the Olympia & York
affiliates' interpretation), became a priority distribution level to the
Olympia & York affiliates from the Three Joint Ventures' annual cash flow
or net sale or refinancing proceeds. The 1993 Agreement also entitled the
Olympia & York affiliates to a 7% per annum return on such unpaid priority
distribution level. The 1993 Agreement also provided that, except as
specifically agreed otherwise, the parties each reserved all rights and
claims with respect to each of the Three Joint Ventures and each of the
partners thereof, including, without limitation, the interpretation of or
rights under each of the joint venture partnership agreements for the Three
Joint Ventures. As a result of the above noted agreement with the Olympia
& York affiliates, the cumulative priority distribution level payable to
the Olympia & York affiliates at December 31, 1995 is approximately
$55,000,000. The term of the 1993 Agreement expired on June 30, 1993.
Therefore, effective July 1, 1993, JMB/NYC is recording interest expense at
1-3/4% over the variable short-term U.S. Treasury obligation rate plus any
excess operating cash flow after capital costs of the Three Joint Ventures,
such sum not to be less than a 7% nor exceed a 12-3/4% per annum interest
rate. The Olympia & York affiliates continued to dispute this calculation
and for the period commencing July 1, 1993 contend that a 12-3/4% per annum
fixed rate applies. Based upon this interpretation, interest expense for
the Three Joint Ventures for the twelve months ended December 31, 1995 was
$115,730,680. Based upon the amount of interest determined by JMB/NYC for
the twelve months ended December 31, 1995, interest expense for the Three
Joint Ventures was $67,258,773. The cumulative effect of recording the
interest expense calculated by JMB/NYC is to reduce the losses of the Three
Joint Ventures by $121,543,336 (of which the Partnership's share is
$14,129,413) for the period July 1, 1993 through December 31, 1995 and to
correspondingly reduce what would otherwise be JMB/NYC's funding obligation
with respect to the Three Joint Ventures.

Certain provisions of the Agreement with the Olympia & York
affiliates, when effective, would resolve the funding obligation dispute.
In general, the priority distribution level created in the 1993 Agreement
and JMB/NYC's alleged funding obligation subsequent to June 30, 1993 would
be eliminated in return for the creation of a new preferential distribution
level to the Olympia & York affiliates payable from all sources of
available cash ("Preference Amount"). Such Preference Amount would be
$81,500,000 for 1290 Avenue of the Americas and $38,500,000 for 237 Park
Avenue and both amounts would bear interest at 9% per annum, compounded
monthly, retroactively effective May 1, 1994. Net proceeds available, if
any, after repayment of the Preference Amounts plus interest, would then be
distributable in accordance with the original terms of the Three Joint
Ventures' Agreements which provide for, in general, that net proceeds from
all sources will be distributable 46.5% to JMB/NYC and 53.5% to the Olympia
& York affiliates, subject to, as described above, repayment by JMB/NYC of
its remaining Purchase Notes.

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

The Partnership's potential liability for such contribution, if any,
would be its share, if any, of the liability of JMB/NYC and would depend
upon, among other things, the amounts of JMB/NYC's and the Olympia & York
affiliates' respective capital accounts at the time of a sale or other
disposition of Joint Venture property, the amount of JMB/NYC's share of the
taxable gain attributable to such sale or other disposition of the Joint
Venture property and the timing of the dissolution and liquidation of the
Joint Venture. Although the amount of such liability could be material,
the Limited Partners of the Partnership would not be required to make
additional contributions of capital to satisfy such obligation, if any, of
the Partnership. The Partnership's deficit investment balance in JMB/NYC as
reflected in the balance sheet (aggregating $78,535,221 at December 31,
1995) does not necessarily represent the amount, if any, the Partnership
would be required to pay to satisfy a deficit capital account restoration

obligation. Under the Agreement with the Olympia & York affiliates,
subject to the satisfaction of certain conditions, any deficit capital
account funding obligation of JMB/NYC to the Joint Ventures would be
eliminated.

In September 1995, the 2 Broadway Joint Ventures concluded the sale of
2 Broadway with a third party for a net purchase price, after commissions
and certain other payments but before prorations, of approximately
$18,300,000. As a result of this sale, the Partnership recognized, for
financial reporting purposes, its share of the loss on the sale of
investment property of $14,789,529 (which includes the Partnership's share
($10,113,054) of the write-off of JMB/NYC's remaining investment in the 2
Broadway Joint Ventures), offset by a gain of $15,632,407 which represents
the Partnership's share of JMB/NYC's related gain on the forgiveness of
indebtedness (as more fully discussed above). Such sale did not result in
the dissolution and termination of the 2 Broadway Building Joint Ventures
for the purposes of the deficit capital account balance computation as
described above. Due to the anticipated sale of the 2 Broadway building at
a sales price significantly below its original carrying value, net of
depreciation, a provision for value impairment was recorded at December 31,
1993 for financial reporting purposes for $192,627,560, which was allocated
$136,534,366 and $56,093,194 to the Olympia & York affiliates and JMB/NYC,
respectively. Such provision was allocated to the joint venture partners
to reflect their respective ownership percentages before the effect of the
non-recourse Purchase Notes including accrued interest.

The 237 Park Avenue and the 1290 Avenue of the America's office
buildings currently serve as collateral for the first mortgage loan. Prior
to 1996, the lender asserted various defaults under the loan. Commencing
in January 1996, the Joint Ventures ceased making monthly debt service
payments on the first mortgage loan. A restructuring of the loan now
appears likely to depend on the restructuring of the ownership interest of
various affiliates of O&Y in a number of office buildings and the
reorganization of the 237 Park Avenue and 1290 ventures, as discussed
above. The Olympia & York affiliates reached an agreement with the first
mortgage lender whereby effective January 1, 1993, the Olympia & York
affiliates are limited to taking distributions of $250,000 on a monthly
basis from the Three Joint Ventures and reserving the remaining excess cash
flow in a separate interest-bearing account to be used exclusively to meet
the obligations of the Three Joint Ventures as approved by the lender.
Interest on the first mortgage loan is currently calculated based upon a
variable rate related to the short-term U.S. Treasury obligation rate,
subject to a minimum rate on the loan of 7% per annum.

Should a restructuring of the Joint Ventures providing for the
elimination of JMB/NYC's funding obligations in accordance with the
Agreement not be finalized, JMB/NYC may decide not to commit any additional
amounts to the Three Joint Ventures. In addition, under these
circumstances, it is possible that JMB/NYC may determine to litigate these
issues with the Olympia & York affiliates. A decision not to commit any
additional funds or an adverse litigation result could, under certain
circumstances, result in the loss of JMB/NYC's interest in the related
Joint Ventures. The loss of an interest in a particular Joint Venture
could, under certain circumstances, permit an acceleration of the maturity
of the related Purchase Note (each Purchase Note is secured by JMB/NYC's
interest in the related venture). Under certain circumstances, the failure
to repay a Purchase Note could constitute a default under, and permit an
immediate acceleration of, the maturity of the Purchase Notes for the other
Joint Ventures. In such event, JMB/NYC may decide not to repay, or may not
have sufficient funds to repay, any of the Purchase Notes and accrued
interest thereon. This could result in JMB/NYC no longer having an
interest in any of the related Joint Ventures, which would result in
substantial net gain for financial reporting and Federal income tax
purposes to JMB/NYC (and through JMB/NYC and the Partnership, to the
Limited Partners) with no distributable proceeds. In such event, the
Partnership would then proceed to terminate its affairs.

The properties are being managed by an affiliate of the Olympia and
York affiliates for a fee equal to 1% of gross receipts. An affiliate of
the Olympia and York affiliates performs maintenance and repair work and
construction of certain tenant improvements at the investment properties.
Additionally, the Olympia and York affiliates have lease agreements and
occupy approximately 95,000 square feet of space at 237 Park Avenue at
rental rates which approximate market.

(3) PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Limited
Partners and 4% to the General Partners. However, certain provisions of
the Federal income tax law prohibit the allocation of net tax losses to the
Limited Partners if the net tax losses exceed the Limited Partners' current
basis in the Partnership. The Limited Partners' basis in the Partnership
is essentially equal to their initial capital contributions less cumulative
cash distributions and tax losses incurred plus the Limited Partners' share
of the minimum taxable gain from a hypothetical disposition of the
properties. For the years ended December 31, 1993, 1994 and 1995, the
Limited Partners were allocated tax losses in an amount equal to their
share of the increase in the Partnership's minimum taxable gain during
1993, 1994 and 1995. Profits from the sale or other disposition of all or
substantially all of the Partnership's interest in JMB/NYC or of the
properties are to be allocated to the General Partners to the greater of 1%
of such profits or the amount of cash distributable to the General Partners
from any such sale or disposition (as described below), plus an additional
amount of such profits, if necessary, to reduce deficits in the General
Partners' capital accounts to a level consistent with the gain anticipated
to be realized from future sales. Losses from the sale of all or
substantially all of the Partnership's interest in JMB/NYC or of the
properties are to be allocated 1% to the General Partners. The remaining
sale or disposition profits and losses are allocable to the Limited
Partners. All such profits or losses generally will be allocated among the
Limited Partners in proportion to their percentage interests in the
Partnership, subject to allocations of taxable gain among the Limited
Partners in order to equalize their capital accounts as a result of
disproportionate allocations of losses during the offering period.

The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon dissolution
and termination of the Partnership. Distributions of "Distributable Cash"
(as defined) of the Partnership are allocated 90% to the Limited Partners
and 10% to the General Partners (of which 6.25% constitutes a management
fee).

The Partnership Agreement provides that the General Partners shall
receive as a distribution of the proceeds (net after expenses and
liabilities and retained working capital) from the sale or refinancing of a
real property 3% of the Partnership's proportionate share of the selling
price for any property sold and that the net remaining proceeds be
distributed 85% to the Limited Partners and 15% to the General Partners.
However, such distribution is subordinated such that the Limited Partners
shall receive 99% of such net sale or refinancing proceeds and the General
Partners shall receive 1% until the Limited Partners (i) have received
cumulative cash distributions from the Partnership's operations which, when
combined with net 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 reduced by net sale or
refinancing proceeds previously distributed) commencing with the first
fiscal quarter of 1989 and (ii) have received cash distributions of net
sale or refinancing proceeds in an amount equal to the Limited Partners'
aggregate initial capital investment in the Partnership. The 3% General
Partner distribution discussed above is further subordinated to repayment
to the General Partners of any principal and interest due on certain loans
made by the General Partners to the Partnership.

(4) TRANSACTIONS WITH AFFILIATES

In accordance with the Partnership Agreement, the General Partners are
required to loan back to the Partnership, for distribution to the Limited
Partners, their share of Distributable Cash (as defined) if a distribution
made to all partners in a particular quarter does not result in a
distribution to the Limited Partners which equates to a 7% per annum return
on their adjusted capital investment. Consequently, for the distributions
made to the partners in 1989 and 1990, the General Partners have loaned
$300,000 of Distributable Cash, as defined, (including such amounts
reflected as a management fee to the General Partners) to the Partnership
for distribution to the Limited Partners. Any amounts loaned bear interest
at a rate not to exceed 10% per annum (currently 10% per annum). As of
December 31, 1995, $216,728 represented interest earned on such loans, all
of which was unpaid. These loans and accrued interest can be repaid upon
sale or refinancing only after the Limited Partners have received an amount
equal to their contributed capital plus any deficiency in a stipulated
return thereon. In 1995, the General Partners received their share of
Distributable Cash in the amount of $1,666,667 (including $1,041,667 paid
as a partnership management fee). Since the Limited Partners' share of the
Distributable Cash resulted in a distribution to them for the quarter in
excess of a 7% per annum return on their adjusted capital investment, the
General Partners were not required to loan their share of Distributable
Cash back to the Partnership.

The Corporate General Partner and its affiliates are entitled to
reimbursement for direct expenses and out-of-pocket expenses relating to
the administration of the Partnership and operation of the Partnership's
real property investments. Additionally, the Corporate General Partner and
its affiliates are entitled to reimbursements for portfolio management,
legal and accounting services. Such costs were $16,393, $15,058 and
$18,393 for 1995, 1994 and 1993, respectively, all of which was paid at
December 31, 1995. Affiliates were also entitled in 1995 to reimbursement
for other administrative charges of $7,466, all of which was unpaid at
December 31, 1995.

Effective October 1, 1995, the Corporate General Partner of the
Partnership engaged independent third parties to perform certain
administrative services for the Partnership which were previously performed
by and partially reimbursed to affiliates of the General Partners. Use of
such third parties is not expected to have a material effect on the
operations of the Partnership.

As more fully discussed in note 2, the Partnership has an obligation
to fund, on demand, $600,000 and $600,000 to Carlyle Investors, Inc. and
Carlyle Managers, Inc., respectively, of additional paid-in capital
(reflected in the amounts due to affiliates in the accompanying financial
statements). As of December 31, 1995, these obligations bore interest of
5.83% per annum and interest accrued on these obligations was $171,989.

In accordance with an agreement between JMB Realty Corporation ("JMB")
(an affiliate of the Corporate General Partner) and the Partnership, JMB
has guaranteed that the Partnership will receive a certain minimum return
on its working capital (as defined), including amounts previously accrued
under the minimum return guarantee. In March 1995, JMB paid $2,850,000 of
the accrued amount due under this agreement to the Partnership. In
addition, JMB has agreed to remit amounts due under this agreement
(approximately $1,689,000 at December 31, 1995) from time to time, as
needed, to fund the operations of the Partnership. Accordingly, in
December 1995, JMB funded an additional $65,000 to pay for 1995 Partnership
operating costs. Based on the Partnership's working capital requirements
for 1996, (including repayment of a temporary bank overdraft at December
31, 1995), approximately $354,000 of amounts due from JMB have been
classified as current in the accompanying financial statements at December
31, 1995. The balance of JMB's obligation, if any, will be paid at the
discretion of the Corporate General Partner, but no later than the time of
dissolution and termination of the Partnership.

(5) INVESTMENT IN UNCONSOLIDATED VENTURE

Summary combined financial information for JMB/NYC and unconsolidated
ventures as of and for the years ended December 31, 1995 and 1994 is as
follows:

1995 1994
------------ -----------

Current assets . . . . . . . . . . $ 13,898,980 44,191,548
Current liabilities (includes $902,603,491
and $913,398,422 of current portion
of long-term debt at December 31,
1995 and December 31, 1994) . . . (930,523,456) (941,725,934)
------------ -----------
Working capital (deficit) . . . (916,624,476) (897,534,386)
------------ -----------
Investment property, net . . . . . 649,606,970 718,682,403
Accrued rent receivable. . . . . . 52,194,637 51,254,978
Deferred expenses. . . . . . . . . 18,168,925 11,698,403
Other liabilities. . . . . . . . . (85,039,094) (149,171,447)
Venture partners' deficit. . . . . 213,270,871 192,486,174
------------ -----------
Partnership's capital (deficit) $(68,422,167) (72,583,875)
============ ===========
Represented by:
Invested capital. . . . . . . . . $ 52,586,784 52,586,784
Cumulative net losses . . . . . . (111,635,202) (115,796,910)
Cumulative cash
distributions. . . . . . . . . (9,373,749) (9,373,749)
------------ -----------
$(68,422,167) (72,583,875)
============ ===========
Total income . . . . . . . . . . . $163,838,267 147,761,499
============ ===========
Expenses applicable to operating loss$180,511,256 183,850,523
============ ===========
Net loss . . . . . . . . . . . . . $(16,672,989) (36,089,024)
============ ===========

Total income and net loss for the year ended December 31, 1995
includes a loss on sale of investment property of $38,214,703, offset by an
extraordinary gain on forgiveness of indebtedness of $62,529,627 related to
the sale of the 2 Broadway building in September 1995. (Reference is made
to note 2).

Also, for the year ending December 31, 1993, total income was
$168,002,257, expenses applicable to operating loss were $411,977,853 and
the net loss was $243,975,596 for JMB/NYC and the unconsolidated ventures.

INDEPENDENT AUDITORS' REPORT

The Partners
JMB/Manhattan Associates, Ltd.:

We have audited the combined financial statements of JMB/NYC Office
Building Associates, L.P. (JMB/NYC) and unconsolidated ventures as listed
in the accompanying index. In connection with our audits of the combined
financial statements, we also have audited the financial statement schedule
as listed in the accompanying index. These combined financial statements
and financial statement schedule are the responsibility of the General
Partners of JMB/Manhattan Associates, Ltd. (the Partnership). Our
responsibility is to report on these combined financial statements and
financial statement schedule based on the results of our audits.

As discussed in Note 2 of the Partnership's notes to the financial
statements, incorporated by reference in Note 2 of the combined financial
statements, beginning July 1, 1993, JMB/NYC was in dispute with the
unaffiliated venture partners in the real estate ventures over the
calculation of the effective interest rate with reference to the first
mortgage loan, which covers the real estate owned through JMB/NYC's joint
ventures. The disputed interest aggregated $48,472,000, $52,550,000 and
$20,521,000 for the years ended December 31, 1995, 1994 and 1993,
respectively, and has not been included in mortgage and other interest in
the accompanying combined financial statements. In October 1994, JMB/NYC
entered into an agreement (the Agreement) with the unaffiliated venture
partners in the real estate ventures which, when effective, would resolve
this dispute by providing interest at the same rate as the first mortgage
loan and would eliminate any funding obligations by JMB/NYC. However, as
discussed in Note 2, there are no assurances that the Agreement will be
finalized and become effective. The ultimate outcome of this uncertainty
cannot presently be determined.

The accompanying combined financial statements and financial statement
schedule have been prepared assuming that JMB/NYC and unconsolidated
ventures will continue as going concerns. As discussed in Note 2 of the
Partnership's notes to financial statements, incorporated by reference in
Note 2 of the combined financial statements, the holder of the first
mortgage loan alleged certain defaults under the loan agreements. Also,
commencing in January 1996, the real estate ventures ceased making monthly
debt service payments on the first mortgage loan. Further, JMB/NYC and the
unaffiliated venture partners in the real estate ventures have agreed to
file, for each of the real estate joint ventures, a pre-arranged bankruptcy
plan for reorganization under Chapter 11 of the Bankruptcy Code. Such
filings with respect to the 2 Broadway ventures occurred in June of 1995

(continued)

with the remaining filings expected to occur in 1996. These circumstances
raise substantial doubt about JMB/NYC and unconsolidated ventures' ability
to continue as going concerns. The General Partners' plans in regard to
these matters are also described in Note 2 of the Partnership's notes to
the financial statements. The combined financial statements and financial
statement schedule do not include any adjustments that might result from
the outcome of this uncertainty.

Because of the significance of the uncertainties discussed in the
preceding two paragraphs, we are unable to express, and we do not express,
an opinion on the accompanying combined financial statements and financial
statement schedule.

KPMG PEAT MARWICK LLP

Chicago, Illinois
March 25, 1996

<TABLE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED BALANCE SHEETS

DECEMBER 31, 1995 AND 1994

ASSETS
------
<CAPTION>
1995 1994
-------------- -------------
<S> <C> <C>
Current assets:
Cash (including amounts held by property manager). . . . . $ 647,722 1,529,078
Restricted funds (note 1). . . . . . . . . . . . . . . . . 9,356,055 23,929,599
Rents and other receivables (net of allowance for
doubtful accounts of $9,455,898 for 1995 and
$8,167,305 for 1994) . . . . . . . . . . . . . . . . . . 2,378,248 3,234,487
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . 977,891 13,918,412
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . 492,957 1,425,723
Tenant notes receivable. . . . . . . . . . . . . . . . . . 46,107 154,249
Due from the O&Y affiliates (net of allowance for
uncollectibility of $15,417,785 for 1995 and
$13,608,787 for 1994) (note 1) . . . . . . . . . . . . . -- --
-------------- -------------

Total current assets . . . . . . . . . . . . . . . 13,898,980 44,191,548
-------------- -------------

Investment properties, at cost (notes 1, 2, 3
and Schedule III):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . 163,939,715 168,798,314
Buildings and improvements . . . . . . . . . . . . . . . . 799,898,096 956,574,507
-------------- -------------
963,837,811 1,125,372,821
Less accumulated depreciation. . . . . . . . . . . . . . . 314,230,841 406,690,418
-------------- -------------
Total investment properties,
net of accumulated depreciation. . . . . . . . . 649,606,970 718,682,403
-------------- -------------
Accrued rents receivable (note 1). . . . . . . . . . . . . . 52,194,637 51,254,978
Deferred expenses (note 1) . . . . . . . . . . . . . . . . . 18,168,925 11,698,403
-------------- -------------
$ 733,869,512 825,827,332
============== =============

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED BALANCE SHEETS - CONTINUED

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

1995 1994
-------------- -------------
Current liabilities:
Current portion of long-term debt (note 3) . . . . . . . . $ 902,603,491 913,398,422
Accounts payable and accrued expenses. . . . . . . . . . . 5,980,842 4,666,201
Tenant allowances payable. . . . . . . . . . . . . . . . . -- 2,809,707
Accrued interest . . . . . . . . . . . . . . . . . . . . . 5,341,844 5,557,267
Unearned rent (note 4) . . . . . . . . . . . . . . . . . . 16,597,279 13,724,100
Interest payable to the O&Y affiliates . . . . . . . . . . -- 1,570,237
-------------- -------------
Total current liabilities. . . . . . . . . . . . . 930,523,456 941,725,934

Unearned rent (note 4) . . . . . . . . . . . . . . . . . . . 4,109,000 19,704,669
Notes payable (note 5) . . . . . . . . . . . . . . . . . . . 33,272,592 34,158,225
Deferred interest payable (note 5) . . . . . . . . . . . . . 47,164,545 93,853,559
Tenant security deposits . . . . . . . . . . . . . . . . . . 492,957 1,454,994
-------------- -------------

Commitments and contingencies (notes 1 and 2)

Total liabilities. . . . . . . . . . . . . . . . . 1,015,562,550 1,090,897,381
Partners' capital accounts (deficits) (note 2):
JMB/Manhattan Associates, Ltd.:
Capital contributions. . . . . . . . . . . . . . . . . . 52,586,784 52,586,784
Cumulative net losses. . . . . . . . . . . . . . . . . . (111,635,202) (115,796,910)
Cumulative cash distributions. . . . . . . . . . . . . . (9,373,749) (9,373,749)
-------------- -------------
(68,422,167) (72,583,875)
-------------- -------------
Venture partners:
Capital contributions. . . . . . . . . . . . . . . . . . 600,043,293 599,993,293
Cumulative net losses. . . . . . . . . . . . . . . . . . (731,429,414) (710,594,717)
Cumulative cash distributions. . . . . . . . . . . . . . (81,884,750) (81,884,750)
-------------- -------------
(213,270,871) (192,486,174)
-------------- -------------
Total partners' capital accounts (deficits). . . . (281,693,038) (265,070,049)
-------------- -------------
$ 733,869,512 825,827,332
============== =============
<FN>
See accompanying notes to combined financial statements.
</TABLE>

<TABLE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . $138,537,668 147,628,786 167,820,507
Interest income . . . . . . . . . . . . . . 985,675 132,713 181,750
------------ ------------ ------------
139,523,343 147,761,499 168,002,257
------------ ------------ ------------
Expenses:
Mortgage and other interest (note 3). . . . 82,954,551 80,871,590 86,030,245
Depreciation. . . . . . . . . . . . . . . . 29,564,205 30,374,278 39,102,045
Property operating expenses . . . . . . . . 56,703,039 62,583,682 66,232,722
Professional services . . . . . . . . . . . 4,404,763 2,491,222 2,314,088
Amortization of deferred expenses . . . . . 2,321,990 2,257,477 2,173,860
Provision for value impairment (note 1) . . -- -- 192,627,560
Provision for doubtful accounts (note 1). . 4,562,708 5,272,274 23,497,333
------------ ------------ ------------

180,511,256 183,850,523 411,977,853
------------ ------------ ------------

Net operating loss . . . . . . . . (40,987,913) (36,089,024) (243,975,596)

Loss on sale of investment property (note 2) (38,214,703) -- --
------------ ------------ ------------
Loss before extraordinary item . . (79,202,616) (36,089,024) (243,975,596)

Extraordinary gain on forgiveness
of indebtedness (note 2) . . . . . . . . . 62,529,627 -- --
------------ ------------ ------------

Net loss . . . . . . . . . . . . . $(16,672,989) (36,089,024) (243,975,596)
============ ============ ============

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

<TABLE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICIT)

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

JMB/MANHATTAN VENTURE
ASSOCIATES, LTD. PARTNERS
---------------- ------------
<S> <C> <C>

Balance at December 31, 1992 . . . . . . . (44,155,219) 63,815,541

Capital contributions. . . . . . . . . . . 5,000 1,116,010
Net loss . . . . . . . . . . . . . . . . . (22,166,989) (221,808,607)
Cash distributions . . . . . . . . . . . . -- (6,257,237)
------------ ------------
Balance at December 31, 1993 . . . . . . . (66,317,208) (163,134,293)

Capital contributions. . . . . . . . . . . -- 470,476
Net loss . . . . . . . . . . . . . . . . . (6,266,667) (29,822,357)
------------ ------------
Balance at December 31, 1994 . . . . . . . (72,583,875) (192,486,174)

Capital contributions. . . . . . . . . . . -- 50,000
Operating loss . . . . . . . . . . . . . . (6,794,224) (34,193,689)
Loss on sale of investment property. . . . (4,676,475) (33,538,228)
Extraordinary gain on forgiveness
of indebtedness. . . . . . . . . . . . . 15,632,407 46,897,220
------------ ------------
Balance at December 31, 1995 . . . . . . . $(68,422,167) (213,270,871)
============ ============

<FN>
See accompanying notes to combined financial statements
</TABLE>

<TABLE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . $(16,672,989) (36,089,024) (243,975,596)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . . 29,564,205 30,374,278 39,102,045
Amortization of deferred expenses. . . . . 2,321,990 2,257,477 2,173,860
Write-off of tenant allowances payable . . -- (1,337,328) --
Provision for value impairment . . . . . . -- -- 192,627,560
Provision for doubtful accounts. . . . . . 4,562,708 5,272,274 23,497,333
Loss on sale of investment property. . . . 38,214,703 -- --
Extraordinary gain on forgiveness of
indebtedness . . . . . . . . . . . . . . (62,529,627) -- --
Changes in:
Rents and other receivables. . . . . . . . 856,239 (3,858,448) (4,583,255)
Prepaid expenses . . . . . . . . . . . . . 12,893,726 (13,461,314) (203,064)
Escrow deposits. . . . . . . . . . . . . . 932,766 82,320 (24,494)
Tenant notes receivable. . . . . . . . . . 108,142 85,196 238,882
Accrued rents receivable . . . . . . . . . (1,615,968) (885,365) (24,448)
Interest payable to the O&Y affiliates . . (1,570,237) (3,000,000) 4,570,237
Accounts payable and other
accrued expenses . . . . . . . . . . . . 1,428,266 1,173,792 (1,296,990)
Accrued interest . . . . . . . . . . . . . (215,423) 172,860 (50,248)
Unearned rent. . . . . . . . . . . . . . . (12,718,177) 31,449,394 97,864
Deferred interest payable. . . . . . . . . 14,954,980 15,248,036 13,431,777
Tenant security deposits . . . . . . . . . (962,037) (162,518) 133,963
------------ ------------ ------------
Net cash provided by
operating activities. . . . . . . . 9,553,267 27,321,630 25,715,426
------------ ------------ ------------
Cash flows from investing activities:
Restricted funds . . . . . . . . . . . . . . 14,573,544 (12,291,341) (11,638,258)
Additions to investment properties,
net of tenant allowances payable . . . . . (21,981,262) (646,124) (1,785,586)
Cash proceeds from sale of investment
property . . . . . . . . . . . . . . . . . 18,175,965 -- --
Payment of deferred expenses . . . . . . . . (8,648,941) (2,859,836) (1,394,358)
------------ ------------ ------------
Net cash provided by (used in)
investing activities. . . . . . . . 2,119,306 (15,797,301) (14,818,202)
------------ ------------ ------------

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED STATEMENTS OF CASH FLOWS - CONTINUED

1995 1994 1993
------------ ------------ ------------
Cash flows from financing activities:
Capital contributions. . . . . . . . . . . . 50,000 470,476 1,121,010
Advances to the O&Y affiliates . . . . . . . (1,808,998) (1,662,503) (1,176,224)
Principal payments on long-term debt . . . . (10,794,931) (9,642,776) (8,613,592)
Distributions to partners. . . . . . . . . . -- -- (6,257,237)
------------ ------------ ------------
Net cash used in
financing activities. . . . . . . . (12,553,929) (10,834,803) (14,926,043)
------------ ------------ ------------
Net increase (decrease)
in cash . . . . . . . . . . . . . . (881,356) 689,526 (4,028,819)
Cash and cash equivalents,
beginning of year . . . . . . . . . 1,529,078 839,552 4,868,371
------------ ------------ ------------
Cash and cash equivalents,
end of year . . . . . . . . . . . . $ 647,722 1,529,078 839,552
============ ============ ============

Supplemental disclosure of cash flow
information:
Cash paid for mortgage and
other interest . . . . . . . . . . . . . $ 69,785,231 68,450,694 68,078,479
============ ============ ============
Non-cash investing and financing
activities:
Retirement of investment property. . . $ -- -- 1,896,898
============ ============ ============

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

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1994 AND 1993

(1) OPERATIONS AND BASIS OF ACCOUNTING

The accompanying combined financial statements have been prepared for
the purpose of complying with Rule 3.09 of Regulation S-X of the Securities
and Exchange Commission. The entities included in the combined financial
statements are as follows:

JMB/NYC Office Building Associates, L.P. ("JMB/NYC") (a)
- 237 Park Avenue Associates, L.L.C.(b)
- 1290 Associates, L.L.C. (b)
- 2 Broadway Associates and
2 Broadway Land Company (b)(c)

(a) The Partnership owns an indirect ownership interest in this
unconsolidated venture through Property Partners, L.P.

(b) The Partnership owns an indirect ownership interest in these joint
ventures through JMB/NYC, an unconsolidated venture.

(c) The property owned by these ventures was sold in September 1995.
Reference is made to Note 2 of the Partnership filed with this annual
report.

JMB/NYC holds (through joint ventures) an equity investment portfolio
of commercial real estate in the city of New York, New York. Business
activities consist of rentals to a variety of commercial companies, and the
ultimate sale or disposition of such real estate.

For purposes of preparing the combined financial statements, the
effect of all transactions between JMB/NYC and the Three Joint Ventures has
been eliminated.

The records of JMB/NYC and the Three Joint Ventures (the "Combined
Ventures") are maintained on the accrual basis of accounting as adjusted
for Federal income tax reporting purposes. The accompanying combined
financial statements have been prepared from such records after making
appropriate adjustments to present the Three Joint Ventures' accounts in
accordance with generally accepted accounting principles. Such adjustments
are not recorded on the records of the Three Joint Ventures.

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

Statement of Financial Accounting Standards No. 95 requires the
Combined Ventures to present a statement which classifies receipts and
payments according to whether they stem from operating, investing or
financing activities. The required information has been segregated and
accumulated according to the classifications specified in the
pronouncement.

In conjunction with the negotiations with representatives of the first
mortgage lender regarding a loan restructure, the Olympia & York affiliates
reached an agreement with the first mortgage lender whereby effective
January 1, 1993, the Olympia & York affiliates are limited to taking
distributions of $250,000 on a monthly basis from the Three Joint Ventures
reserving the remaining excess cash flow in a separate interest-bearing
account to be used exclusively to meet the obligations of the Three Joint
Ventures as approved by the lender. Such reserved amounts, of
approximately $9,356,000 and $23,930,000 in the aggregate at December 31,
1995 and 1994, respectively, are classified as restricted funds in the
accompanying combined balance sheet.

Provisions for value impairment (as discussed more fully in Note 1 of
the Partnership's financial statements filed with this annual report) are
recorded with respect to the investment properties whenever the estimated
future cash flows from a property's operations and projected sale are less
than the property's net carrying value.

As more fully discussed in Note 2 of the Partnership's financial
statements filed with this annual report, due to the agreement for sale of
the 2 Broadway building at a sales price significantly below its original
carrying value, net of depreciation, (the property was sold in September
1995) the 2 Broadway venture made a provision for value impairment on such
investment property of $192,627,560 during 1993. The provision for value
impairment was allocated $136,534,366 and $56,093,194 to the O&Y affiliates
and to JMB/NYC, respectively. Such provision was allocated to the partners
to reflect their respective ownership percentages before the effect of the
non-recourse purchase notes including related accrued interest.

Amounts due from the Olympia & York affiliates aggregated $15,417,785
and $13,608,787, respectively, at December 31, 1995 and 1994. Due to the
financial difficulties of O&Y and its affiliates, as more fully discussed
in Note 2 of the Partnership's financial statements filed with this annual
report, and the resulting uncertainty of collectibility of these amounts
from the Olympia & York affiliates, JMB/NYC has recorded a provision for
doubtful accounts for the full receivable amount, $15,417,785 and
$13,608,787, respectively, at December 31, 1995 and 1994, which is
reflected in the accompanying combined financial statements.

Due to the uncertainty of collectibility of amounts due from certain
tenants at the Three Joint Venture investment properties, a provision for
doubtful accounts of $2,753,710, $3,609,771 and $11,551,049 at December 31,
1995, 1994 and 1993, respectively, is reflected in the accompanying
combined financial statements.

Deferred expenses are comprised of leasing and renting costs which are
amortized using the straight-line method over the terms of the related
leases.

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

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

Although certain leases of the Three Joint Ventures' investment
properties provide for tenant occupancy during periods for which no rent is
due, the ventures accrue prorated rental income for the full period of
occupancy. In addition, although certain leases provide for step increases
in rent during the lease term, the ventures recognize the total rent due on
a straight-line basis over the entire lease. Such amounts are reflected in
accrued rents receivable in the accompanying combined balance sheets.
Straight-line rental income was $1,615,968, $885,365 and $24,448 for the
years ended December 31, 1995, 1994 and 1993, respectively.

Maintenance and repair expenses are charged to operations as incurred.

Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives. An affiliate of the joint venture
partners perform certain maintenance and repair work and construction of
certain tenant improvements at the investment properties.

Statement of Financial Accounting Standards No. 107 ("SFAS 107"),
"Disclosures about Fair Value of Financial Instruments," requires all
entities to disclose the SFAS 107 value of all financial assets and
liabilities for which it is practicable to estimate. Value is defined in
the Statement as the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or
liquidation sale. The Combined Ventures believe the carrying amount of its
financial instruments classified as current assets and liabilities
(excluding current portion of long-term debt) approximates SFAS 107 value
due to the relatively short maturity of these instruments. SFAS 107 states
that quoted market prices are the best evidence of the SFAS 107 value of
financial instruments, even for instruments traded only in thin markets.
The first mortgage loan is evidenced by certain bonds which are traded in
extremely thin markets. As of December 31, 1995 and through the date of
this report, a limited number of bonds have been sold and purchased in
transactions arranged by brokers for amounts ranging from approximately
$.66 to $.68 on the dollar. Assuming a rate of $.66 on the dollar, the
implied SFAS 107 value of the bonds (with an aggregate carrying balance of
$902,603,491 in the accompanying combined financial statements) would be
approximately $596,000,000. Due to the significant discount at which the
bonds are currently trading, the SFAS 107 value of the promissory notes
payable and related deferred interest (aggregating $80,437,137), which are
effectively subordinated to repayment of the bonds, would be at a discount
significantly greater than that at which the bonds are currently traded.
Due to, among other things, the likely inability to obtain comparable
financing under current market conditions and other property specific
competitive conditions, and the unresolved issues with the venture partners
as well as the alleged defaults on the first mortgage loan, the Combined
Ventures would likely be unable to refinance these properties to obtain
such calculated debt amounts reported. (See notes 3 and 5.) The Combined
Ventures have no other significant financial instruments.

(2) VENTURE AGREEMENTS

A description of the venture agreements is contained in Note 2 of the
Partnership's financial statements filed with this annual report. Such
note is incorporated herein by reference.

(3) LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1995 and
1994:

1995 1994
------------------------

First mortgage loan bearing interest
at the short-term U.S. Treasury obligation
note rate plus 1-3/4% with a minimum rate
on the loan of 7% per annum; allocated
among and cross-collaterally secured by
the 237 Park Avenue Building and the
1290 Avenue of the Americas Building;
payments of principal and interest
based upon a 30-year amortization
schedule are due monthly; however,
commencing on a date six months
following the attainment of a
certain level of annualized cash
flow, any interest in excess of 12% per
annum may be accrued, to the extent that
monthly cash flow is insufficient to
pay the full monthly debt service,
by adding such deferred amount to the
outstanding balance of the loan; the
loan is in alleged default at December 31,
1994 and 1995 (Reference is made to
Note 2 of the Partnership's financial
statements filed with this annual report
as to the calculation of interest rate
with reference to this first mortgage
loan); the stated maturity of principal
(of $857,784,000) and accrued interest
is March 1999 . . . . . . . . . . . . $902,603,491913,398,422

Less current portion of long-term debt902,603,491913,398,422
-----------------------

Total long-term debt . . . . $ -- --
=======================

The allocation of the first mortgage loan among the joint ventures
(which is non-recourse to the joint ventures) is as follows:

1995 1994
------------ -----------

237 Park Avenue Associates . . . .$360,961,491 365,278,508
1290 Associates. . . . . . . . . . 541,642,000 548,119,914
------------ -----------
$902,603,491 913,398,422
============ ===========

No amounts have been allocated to 2 Broadway Land Company or 2
Broadway Associates pursuant to the Agreement as more fully discussed in
Note 2 of the Partnership's financial statements filed with this annual
report.

(4) LEASES

At December 31, 1995, the properties in the combined group consisted
of two office buildings. All leases relating to the properties are
properly classified as operating leases; therefore, rental income is
reported when earned and the cost of each of the properties, excluding the
cost of land, is depreciated over the estimated useful lives. Leases with
commercial tenants range in term from one to 17 years and provide for fixed
minimum rent and partial to full reimbursement of operating costs.
Affiliates of the joint venture partners have lease agreements and occupy
approximately 95,000 square feet of space at 237 Park Avenue at rental
rates which approximate market.

During the fourth quarter of 1994, the 1290 Associates venture
negotiated an amendment with a tenant at 1290 Avenue of the Americas,
Deutsche Bank Financial Products Corporation, under which the tenant will
surrender space on the 12th and 13th floors (137,568 square feet or
approximately 7% of the building's leasable space) on or before June 30,
1996. The original lease (as amended) was to terminate on December 31,
2003. The amendment also added space on the 8th and 9th floors (44,360
square feet or approximately 2% of the building's leasable space) which
will expire on or before December 31, 1997. In consideration for this
amendment, the tenant paid an early termination fee of $29,000,000 to the
Joint Venture on December 1, 1994. John Blair & Co. (a tenant at 1290
Avenue of the Americas, which had leased 253,193 square feet or
approximately 13% of the building's leasable space) filed for Chapter 11
bankruptcy protection in 1993. Because much of the John Blair space had
been subleased, the Joint Venture had been collecting approximately 70% of
the monthly rent due from John Blair from the subtenants. Due to the
uncertainty regarding the collection of the balance of the monthly rents
from John Blair, a provision for doubtful accounts related to rents and
other receivables and accrued rents receivable aggregating $7,659,366 was
recorded at December 31, 1993 related to this tenant. During the second
quarter of 1994, a settlement was reached whereby the Joint Venture
received a $7,000,000 lease termination fee which included settlement of
past due amounts. In conjunction with the settlement, effective July 1,
1994, John Blair was released from all future lease obligations and the
Joint Venture now has direct leases with the original John Blair
subtenants. Such subtenants occupy 228,398 square feet or approximately
11% of the building's leasable space. JMB/NYC is amortizing the Deutsche
Bank and John Blair lease termination fees over the remaining terms of the
amended lease and leases with former subtenants, respectively.

Minimum lease payments including amounts representing executory costs
(e.g., taxes, maintenance, insurance), and any related profit in excess of
specific reimbursements, to be received in the future under the above
operating commercial lease agreements, are as follows:

1996. . . . . . .$ 101,790,528
1997. . . . . . . 105,623,514
1998. . . . . . . 101,134,583
1999. . . . . . . 91,277,743
2000. . . . . . . 88,562,774
Thereafter. . . . 562,345,204
--------------
$1,050,734,346
==============

(5) NOTES PAYABLE

Notes payable consist of the following at December 31, 1995 and 1994:

1995 1994
------------- -----------
Promissory notes payable to an affiliate
of the unaffiliated venture partners in
the Three Joint Ventures, bearing interest
at 12.75% per annum; cross-collaterally
secured by JMB/NYC's interests in the
Three Joint Ventures, one of which is
additionally secured by $19,000,000 of
distributable proceeds from two of the
Three Joint Ventures, interest accrues
and is deferred, compounded monthly,
until December 31, 1991; monthly
payments of accrued interest, based
upon the level of distributions
to JMB/NYC, thereafter until maturity;
principal and accrued interest due
March 20, 1999. Accrued deferred
interest of $47,164,545 and $93,853,559
is outstanding at December 31, 1995
and 1994, respectively. . . . . . . $33,272,592 34,158,225
----------- -----------
Less current portion of
notes payable . . . . . . . . -- --
----------- -----------
Long-term notes payable. . $33,272,592 34,158,225
=========== ===========

The allocation of the promissory notes and related deferred interest
among the joint ventures is as follows:

1995 1994
----------- -----------

237 Park Avenue Associates. . . $19,205,193 16,917,580
1290 Associates . . . . . . . . 41,515,672 36,570,561
237 Park Avenue Associates
and 1290 Associates (note 2). 19,716,272 --
2 Broadway Land Company . . . . -- 3,266,254
2 Broadway Associates . . . . . -- 71,257,389
----------- -----------

$80,437,137 128,011,784
=========== ===========

<TABLE> SCHEDULE III

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1995
<CAPTION>
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) ACQUISITION AT CLOSE OF PERIOD (B)
--------------------------------------------------------------------------------
BUILDINGS BUILDINGS BUILDINGS
ENCUMBRANCE AND AND IMPROVE- AND
(C) LAND IMPROVEMENTS MENTS (D) LAND IMPROVEMENTS TOTAL (E)
----------- ----------- -------------------------- ---------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE
BUILDINGS:

New York,
New York
(237 Park
Avenue) . .$360,961,491 79,653,996 226,634,894 1,312,776 79,653,996 227,947,670307,601,666

New York,
New York
(1290 Avenue
of the
Americas) .541,642,000 90,952,993 556,434,718 8,848,434 84,285,719 571,950,426656,236,145
------------ ----------- ----------- ---------- ----------- ----------------------
Total. .$902,603,491170,606,989 783,069,612 10,161,210 163,939,715 799,898,096963,837,811
============ =========== =========== ========== =========== ======================

</TABLE>

<TABLE> SCHEDULE III

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1995
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
DEPRECIATION(F) CONSTRUCTIONACQUIRED IS COMPUTED TAXES
---------------- ------------------------------------------------
<S> <C> <C> <C> <C> <C>
OFFICE
BUILDINGS:

New York,
New York
(237 Park
Avenue) . . . . . . . . . . . $ 86,212,869 1981 8/14/84 5-30 years 9,250,111

New York,
New York
(1290 Avenue
of the
Americas) . . . . . . . . . . 228,017,972 1963 7/27/84 5-30 years 19,058,789
------------ ----------
Total. . . . . . . . . . . $314,230,841 28,308,900
============ ==========
<FN>
- ------------------

Notes:
(A) The initial cost represents the original purchase price of the property, including
amounts incurred subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1995 for Federal income tax
purposes was $1,004,958,700.
(C) Reference is made to Note 5 of Combined Financial Statements for the current outstanding
principal balances and a description of the notes payable secured by JMB/NYC's interests in the
Three Joint Ventures which are not included in the amounts stated above.
(D) Includes provision for value impairment at 1290 Avenue of the Americas of $50,446,010
recorded September 30, 1992.

</TABLE>

<TABLE> SCHEDULE III

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES

COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

(E) Reconciliation of real estate owned:

Balance at beginning of period. . . . . . $1,125,372,821 1,122,949,035 1,316,389,393
Additions during period . . . . . . . . . 19,221,555 2,423,786 601,043
Provision for value impairment. . . . . . -- -- (192,144,503)
Sales/retirements during period . . . . . (180,756,565) -- (1,896,898)
-------------- ------------- -------------

Balance at end of period. . . . . . . . . $ 963,837,811 1,125,372,821 1,122,949,035
============== ============= =============

(F) Reconciliation of accumulated depreciation:

Balance at beginning of period. . . . . . $ 406,690,418 376,316,140 339,110,993
Depreciation expense. . . . . . . . . . . 29,564,205 30,374,278 39,102,045
Sales/retirements during period . . . . . (122,023,782) -- (1,896,898)
-------------- ------------- -------------

Balance at end of period. . . . . . . . . $ 314,230,841 406,690,418 376,316,140
============== ============= =============

</TABLE>

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

There were no changes in or disagreements with accountants during 1994
and 1995.

PART III

ITEM 10. DIRECTOR AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

The Corporate General Partner of the Partnership, JMB/Manhattan
Investors, Inc., is a wholly-owned subsidiary of JMB Investment Holdings-I,
Inc., a Delaware corporation, the outstanding shares of stock of which are
owned 25% by Northbrook Corporation, a Delaware corporation, and 75% by JMB
Realty Corporation, a Delaware corporation ("JMB"). Substantially all of
the outstanding shares of Northbrook Corporation are owned by JMB and
certain of its officers, directors, members of their families and
affiliates. Substantially all of the shares of JMB are owned by its
officers, directors, members of their families and affiliates. The
Corporate General Partner has responsibility for all aspects of the
Partnership's operations, subject to the requirement that sales of the
Partnership's real property investments must be approved by an Associate
General Partner of the Partnership, BPA Associates, L.P., an Illinois
limited partnership with JMB/Manhattan Investors, Inc. as the sole general
partner. BPA Associates, L.P. shall be directed by a majority in interest
of its limited partners (who are generally officers, directors and
affiliates of JMB or its affiliates) as to whether to provide its approval
of any sale of real property (or any interest therein) of the Partnership.
BPA Associates, L.P. is also the sole general partner of APB Associates, an
Illinois limited partnership, that is the other Associate General Partner
of the Partnership.

The Partnership is 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 have been and may
in the future be provided to the Partnership or its investment properties
by affiliates of the General Partners. In general, such services are to be
provided on terms no less favorable to the Partnership than could be
obtained from independent third parties and are otherwise subject to
conditions and restrictions contained in the Partnership Agreement. The
Partnership Agreement permits the General Partners and their affiliates to
provide services to, and otherwise deal and do business with, persons who
may be engaged in transactions with the Partnership, and permits 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 be in
competition with the Partnership under certain circumstances, including,
for tenants for properties and/or for the sale of properties. Because the
timing and amount of cash distributions and profits and losses of the
Partnership may be affected by various determinations by the General
Partners under the Partnership Agreement, including whether and when to
sell an investment property, the establishment and maintenance of
reasonable reserves, the timing of expenditures and the allocation of
certain tax items under the Partnership Agreement, the General Partners may
have a conflict of interest with respect to such determinations.

The director and the executive and certain other officers of the
Corporate General Partner are as follows:

NAME OFFICE
- ---- ------

Judd D. Malkin Chairman
Neil G. Bluhm Vice President
Stuart C. Nathan President and Director
Howard Kogen Vice President and Treasurer
Gary Nickele Vice President and General Counsel
H. Rigel Barber Vice President
Gailen J. Hull Vice President

There is no family relationship among any of the foregoing officers or
director. The foregoing directors has been elected to serve a one-year
term until the annual meeting of the Corporate General Partner to be held
on August 13, 1996. All of the foregoing officers have been elected to
serve one-year terms until the first meeting of the Board of Directors held
after the annual meeting of the Corporate General Partner to be held on
August 13, 1996. All of the forgoing officers have served in the
capacities indicated since the date of incorporation of the Corporate
General Partner on December 27, 1984, except for Howard Kogen who became
treasurer on January 1, 1991 and Stuart Nathan, who had been a Vice
President, became President and Director on August 8, 1993. There are no
arrangements or understandings between or among any of said director or
officers and any other person pursuant to which the director or any officer
was elected as such.

The foregoing director and officers are also officers and/or directors
of JMB. JMB is the corporate general partner of Carlyle Real Estate
Limited Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited
Partnership-IX ("Carlyle-IX"), Carlyle Real Estate Limited Partnership-X
("Carlyle-X"), Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"),
Carlyle Real Estate Limited Partnership-XII ("Carlyle-XII"), Carlyle Real
Estate Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate
Limited Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited
Partnership-XV ("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI
("Carlyle-XVI"), Carlyle Real Estate Limited Partnership-XVII ("Carlyle-
XVII"), JMB Mortgage Partners, Ltd. ("Mortgage Partners"), JMB Mortgage
Partners, Ltd.-II ("Mortgage Partners-II"), JMB Mortgage Partners, Ltd.-III
("Mortgage Partners-III"), JMB Mortgage Partners, Ltd.-IV ("Mortgage
Partners-IV"), Carlyle Income Plus, Ltd. ("Carlyle Income Plus") and
Carlyle Income Plus, Ltd.-II ("Carlyle Income Plus-II") and the managing
general partner of JMB Income Properties, Ltd.-IV ("JMB Income-IV"), JMB
Income Properties, Ltd.-V ("JMB Income-V"), JMB Income Properties, Ltd.-VI
("JMB Income-VI"), JMB Income Properties, Ltd.-VII ("JMB Income-VII"), JMB
Income Properties, Ltd.-IX ("JMB Income-IX"), JMB Income Properties Ltd.-X
("JMB Income-X"), JMB Income Properties, Ltd.-XI, ("JMB Income-XI"), JMB
Income Properties, Ltd.-XII ("JMB Income-XII"), and JMB Income Properties,
Ltd.-XIII, ("JMB Income-XIII"). JMB is also the sole general partner of
the associate general partners of most of the foregoing partnerships.

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

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

Judd D. Malkin (age 58) is Chairman of the Board and a director of JMB
and its Chief Financial Officer. He is also an individual general partner
of JMB Income-IV and JMB Income-V. Mr. Malkin has been associated with JMB
since October, 1969. Mr. Malkin is 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.

Neil G. Bluhm (age 58) is President and a director of JMB. He is also
an individual general partner of JMB Income-IV and JMB Income-V. Mr. Bluhm
has been associated with JMB since August, 1970. Mr. Bluhm is 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 member of the Bar of the State of Illinois and a
Certified Public Accountant.

Stuart C. Nathan (age 54) is Executive Vice President and a director
of JMB. He has been associated with JMB since July, 1972. Mr. Nathan is
also a director of Sportmart, Inc., a retailer of sporting goods. He is a
member of the Bar of the State of Illinois.

Howard Kogen (age 60) is Senior Vice President and Treasurer of JMB.
He has been associated with JMB since March, 1973. He is a Certified
Public Accountant.

Gary Nickele (age 43) is Executive Vice President and General Counsel
of JMB. He has been associated with JMB since February, 1984. Mr. Nickele
holds a J.D. degree from the University of Michigan Law School and is a
member of the Bar of the State of Illinois.

H. Rigel Barber (age 47) is Chief Executive Officer of JMB. He has
been associated with JMB since March, 1982. Mr. Barber received a J.D.
degree from the Northwestern Law School. He is a member of the Bar of the
State of Illinois.

Gailen J. Hull (age 47) is Senior Vice President of JMB. Mr. Hull 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.

ITEM 11. EXECUTIVE COMPENSATION

The Partnership has no officers or directors. The General Partners
are entitled to receive a share of cash distributions, when and as cash
distributions are made to the Limited Partners, and a share of profits or
losses. Reference is also made to Notes 3 and 4 for a description of such
transactions, distributions and allocations. In 1995, the General Partners
received their share of Distributable Cash in the amount of $1,666,667
(including $1,041,667 paid as a partnership management fee). In 1994 and
1993, the General Partners received no distributions from the Partnership
(including amounts paid as a partnership management fee). In accordance
with the Partnership Agreement, the General Partners have loaned their
aggregate share of prior distributions ($300,000 at December 31, 1995) of
Distributable Cash, as defined, (including such amounts reflected as a
management fee to the General Partners) to the Partnership. Any amounts
loaned bear interest at a rate not to exceed 10% per annum (currently 10%
per annum). As of December 31, 1995, $216,728 represents interest earned
on such loans, all of which was unpaid.

The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses relating to
the administration of the Partnership and the acquisition and operation of
the Partnership's real property investments. The General Partners or their
affiliates are also entitled to reimbursements for portfolio management,
legal and accounting services. Such costs were $16,393, $15,058 and
$18,393 for 1995, 1994 and 1993, respectively, all of which was paid at
December 31, 1995. Affiliates were also entitled in 1995 to reimbursement
for other administrative charges of $7,466, all of which was unpaid at
December 31, 1995.

In accordance with an agreement between JMB and the Partnership, JMB
has guaranteed that the Partnership will receive a certain minimum return
on its working capital (as defined). In March and December 1995, JMB paid
approximately $2,850,000 and $65,000, respectively, of the amount due under
this agreement to the Partnership. As of December 31, 1995, approximately
$1,689,000 had accrued as owing from JMB under the terms of this agreement.

JMB has agreed to remit amounts due under this agreement from time to time,
as needed, to fund the operations of the Partnership. The balance of JMB's
obligation, if any, will be paid at the discretion of the Corporate General
Partner, but in no event later than the time of dissolution and termination
of the Partnership.

The Partnership has an obligation to fund, on demand, $600,000 and
$600,000 to Carlyle Investors, Inc. and Carlyle Managers, Inc.,
respectively, of additional paid-in capital. As of December 31, 1995,
these obligations bore interest of 5.83% per annum and interest accrued on
these obligations aggregated $171,989.

The Partnership is permitted to engage in various transactions
involving affiliates of the Corporate General Partner of the Partnership.
The relationship of the Corporate General Partner (and its director and
officers) to its affiliates is also set forth above in Item 10.

<TABLE>

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

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

(b) The Corporate General Partner, its officers and directors and the Associate General Partners own the
following Interests of the Partnership.

NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership
Interests Neil G. Bluhm 15 Interests (1) 1.5%
indirectly

Limited Partnership
Interests Judd D. Malkin 19 Interests (1)(2) 1.9%
indirectly

Limited Partnership
Interests Corporate General 19 Interests (1)(2) 1.9%
Partner, its officers indirectly
and directors and
the Associate General
Partners as a group

<FN>

(1) Includes 15 Interests owned by two investment partnerships of which Messrs. Neil Bluhm and Judd Malkin
are the managing general partners and have shared voting and investment power with respect to the Interests so
owned.

(2) Includes 4 Interests owned by an investment partnership of which Mr. Judd Malkin is the managing general
partner and has sole voting and investment power with respect to the Interests so owned.

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

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

</TABLE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There were no significant transactions or business relationships with
the Corporate General Partner, affiliates or their management other than
those described in Items 10, 11 and 12 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
and Supplementary Data filed with this report).

(2) Exhibits.

3. Amended and Restated Agreement of Limited
Partnership is hereby incorporated herein by reference to Exhibit 3 to the
Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-14547)
dated March 30, 1993.

4-A* Long-term debt contract relating to the mortgage
note secured by the 237 Park Avenue Building in New York, New York.

4-B* Long-term debt contract relating to the mortgage
note secured by the 1290 Avenue of the Americas Building in New York, New
York.

4-C* Long-term debt contract relating to the mortgage
note secured by the 2 Broadway Building in New York, New York.

10-A* Agreement relating to the purchase by the
Partnership of an interest in the 237 Park Avenue Building in New York, New
York.

10-B* Agreement relating to the purchase by the
Partnership of an interest in the 1290 Avenue of the Americas Building in
New York, New York.

10-C* Agreement relating to the purchase by the
Partnership of an interest in the 2 Broadway Building in New York, New
York.

10-D* Pledge, Junior Pledge and Security agreements
dated July 1, 1985 between JMB/Manhattan Associates and JMB Realty
Corporation and Chemical Bank relating to guarantees of Limited Partnership
contributions by the Limited Partners.

10-E* Agreement dated August 14, 1984 relating to the
management of the 2 Broadway Building in New York, New York.

10-F* Agreement dated July 27, 1984 relating to the
management of the 1290 Avenue of the Americas Building in New York, New
York.

10-G* Agreement dated August 14, 1984 relating to the
management of the 237 Park Avenue Building in New York, New York.

10-H* Amended and Restated Agreement of General
Partnership of JMB/NYC Office Building Associates dated July 18, 1984.

10-I* Interest Rate Guaranty Agreement dated July 1,
1984 between JMB Realty Corporation and JMB/Manhattan Associates, Ltd.
dated April 30, 1984.

10-J* Loan Agreement between JMB/Manhattan Associates,
JMB/Manhattan Investors, Inc., BPA Associates and APB Associates relating
to the loan back of cash distributions of the Partnership.

10-K* Consent Agreement dated April 30, 1985 between
JMB/NYC Office Building Associates, O&Y Equity Corporation, Olympic and
York, 2 Broadway Limited Partnership and Fame Associates relating to the
rights of mortgage loan participation.

10-L* Mortgage Spreader and Consolidation Agreement
and Trust Indenture dated March 20, 1984 between O&Y Equity Corporation and
affiliates and Manufacturer's Hanover Trust Company relating to the
$970,000,000 first mortgage loan on the 2 Broadway, 1290 Avenue of the
Americas and 237 Park Avenue Buildings.

10-M* First Amendment to and First Amended and
Restated Agreement of General Partnership of
1290 Associates dated April 15, 1985

10-N* $9,758,363 12.75% promissory note, due March 20,
1999 between JMB/NYC Office Building Associates and Olympia and York
Holdings Corporation relating to the 1290 Avenue of Americas Building

10-O* First Amendment to and Agreement of General
Partnership of 237 Park Avenue Associates dated April 15, 1985.

10-P* $4,514,229 12.75% promissory note, due March 20,
1999 between JMB/NYC Office Building and Olympia and York Holdings
Corporation relating to the 237 Park Avenue Building.

10-Q* First Amendment to and First Amended and
Restated Agreement of General Partnership of 2 Broadway Land Company.

10-R* $19,014,777 12.75% promissory note, due March
20, 1999 between JMB/NYC Office Building Associates and Olympia and York
Holdings Corporation relating to the 2 Broadway Building.

10-S* First Amendment to and First Amended and
Restated Agreement of General Partnership of 2 Broadway Associates.

10-T* $871,556 12.75% promissory note, due March 20,
1999 between JMB/NYC Office Building and Olympia and York Broadway Limited
relating to the 2 Broadway Building.

10-U Agreement dated March 25, 1993 between JMB/NYC
and the Olympia & York affiliates regarding JMB/NYC's deficit funding
obligations from January 1, 1992 through June 30, 1993 is hereby
incorporated by reference to exhibit 10-U to the Partnership's Report for
December 31, 1992 on Form 10-K (File No. 0-14547) dated March 30, 1993.

10-V Agreement of Limited Partnership of Property
Partners, L.P. is hereby incorporated by reference to the Partnership's
Report for March 31, 1993 on Form 10-Q (File No. 0-14547) dated May 14,
1993.

10-W Second Amended and Restated Articles of
Partnership of JMB/NYC Office Building Associates is hereby incorporated by
reference to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 0-14547) dated March 28, 1994.

10-X Amended and Restated Certificate of
Incorporation of Carlyle-XIV Managers, Inc., (known as Carlyle Managers,
Inc.) is hereby incorporated by reference to the Partnership's Report for
December 31, 1993 on Form 10-K (File No. 0-14547) dated March 28, 1994.

10-Y Amended and Restated Certificate of
Incorporation of Carlyle-XIII Managers, Inc., (known as Carlyle Investors,
Inc.) is hereby incorporated by reference to the Partnership's Report for
December 31, 1993 on Form 10-K (File No. 0-14547) dated March 28, 1994.

10-Z $600,000 demand note between JMB/Manhattan
Associates, L.P. and Carlyle Managers, Inc., is hereby incorporated by
reference to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 0-14547) dated March 28, 1994.

10-AA $600,000 demand note between JMB/Manhattan
Associates, L.P. and Carlyle Investors, Inc., is hereby incorporated by
reference to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 0-14547) dated March 28, 1994.

10-BB Proposed Restructure of Two Broadway, 1290
Avenue of the Americas and 237 Park Avenue, New York, New York and Summary
of Terms dated October 14, 1994 is hereby incorporated herein by reference
to the Partnership's report for December 31, 1994 on Form 10-K (File No. 0-
14547) dated March 27, 1995.

10-CC Assumption Agreements dated October 14, 1994
made by 237 Park Avenue Associates and by 1290 Associates in favor and for
the benefit of O&Y Equity Company, L.P., O&Y NY Building Corp. and JMB/NYC
Office Building Associates, L.P., is hereby incorporated herein by
reference to the Partnership's report for December 31, 1994 on Form 10-K
(File No. 0-14547) dated March 27, 1995.

10-DD Assumption Agreements dated October 14, 1994
made by O&Y Equity Company, L.P., and by O&Y NY Building Corp. and by
JMB/NYC Office Building Associates, L.P. in favor and for the benefit of 2
Broadway Associates and 2 Broadway Land Company, is hereby incorporated
herein by reference to the Partnership's report for December 31, 1994 on
Form 10-K (File No. 0-14547) dated March 27, 1995.

10-EE Amendment No. 1 to the Second Amended and
Restated Articles of Partnership of JMB/NYC Office Building Associates,
L.P. dated January 1, 1994, by and between Carlyle Managers, Inc., Carlyle-
XIII Associates, L.P., Carlyle-XIV associates, L.P. and Property Partners,
L.P., as the limited partners, is hereby incorporated herein by reference
to the Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-
14547) dated May 11, 1995.

10-FF Amendment No.1 to the Agreement of Limited
Partnership of Property Partners, L.P. dated January 1, 1994 by and between
Carlyle Investors, Inc. a Delaware corporation as general partner, and
JMB/Manhattan Associates, Ltd., a Delaware limited partnership, as limited
partner, is hereby incorporated herein by reference to the Partnership's
Report for March 31, 1995 on Form 10-Q (File No. 0-14547) dated May 11,
1995.

10-GG Amended, Restated and Consolidated Promissory
Note between JMB/NYC Office Building Associates, L.P. and Olympia & York
Massachusetts Financial Company dated May 31, 1995, a copy of which is
filed herewith.

10-HH Amended, Restated and Consolidated Security
Agreement between JMB/NYC Office Building Associates, L.P. and Olympia &
York Massachusetts Financial Company dated May 31, 1995, a copy of which is
filed herewith.

10-II Agreement of Sale between 2 Broadway Associates,
L.P. and 2 Broadway Acquisition Corp. dated August 10, 1995, a copy of
which is filed herewith.

10-JJ Agreement of Conversion of 1290 Associates into
1290 Associates, L.L.C. dated October 10, 1995 among JMB/NYC Office
Building Associates, L.P., an Illinois limited partnership, O&Y Equity
Company, L.P., a Delaware limited partnership and O&Y NY Building Corp., a
Delaware corporation, a copy of which is filed herewith.

10-KK Agreement of Conversion of 237 Park Avenue
Associates into 237 Park Avenue Associates, L.L.C., dated October 10, 1995
among JMB/NYC Office Building Associates, L.P., an Illinois limited
partnership, O&Y Equity Company, L.P., a Delaware limited partnership and
O&Y NY Building Corp., a Delaware corporation, a copy of which is filed
herewith.

21. List of Subsidiaries

27. Financial Data Schedule

--------------------
*Previously filed as Exhibits to the Partnership's
Registration Statement on Form 10 (as amended) of the Securities Exchange
Act of 1934 (File no. 2-88687) filed April 29, 1986 and hereby incorporated
herein by reference.

SIGNATURES

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

JMB/MANHATTAN ASSOCIATES, LTD.

By: JMB/Manhattan Investors, Inc.
Corporate General Partner

GAILEN J. HULL
By: Gailen J. Hull
Vice President
Date: March 25, 1996

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/Manhattan Investors, Inc.
Corporate General Partner

STUART C. NATHAN
By: Stuart C. Nathan, President and Director
Principal Executive Officer
Date: March 25, 1996

JUDD D. MALKIN
By: Judd D. Malkin, Chairman
Principal Financial Officer
Date: March 25, 1996

GAILEN J. HULL
By: Gailen J. Hull, Vice President
Principal Accounting Officer
Date: March 25, 1996

JMB/MANHATTAN ASSOCIATES, LTD.

EXHIBIT INDEX

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

3. Amended and Restated Agreement
of Limited Partnership Yes

4-A. Long-term debt contract relating
to the mortgage note secured
by the 237 Park Avenue Building
in New York, New York. Yes

4-B. Long-term debt contract relating
to the mortgage note secured
by the 1290 Avenue of the
Americas Building in New York,
New York. Yes

4-C. Long-term debt contract relating
to the mortgage note secured by
the 2 Broadway Building in New
York, New York. Yes

10-A. Agreement relating to the purchase
by the Partnership of an interest
in the 237 Park Avenue Building in
New York, New York. Yes

10-B. Agreement relating to the purchase
by the Partnership of an interest
in the 1290 Avenue of the Americas
Building in New York, New York. Yes

10-C. Agreement relating to the purchase
by the Partnership of an interest
in the 2 Broadway Building in New
York, New York. Yes

10-D. Pledge, Junior Pledge and Security
agreements dated July 1, 1985 between
JMB/Manhattan Associates and JMB Realty
Corporation and Chemical Bank relating
to guarantees of Limited Partnership
contributions by the Limited Partners. Yes

10-E. Agreement dated August 14, 1984
relating to the management of the
2 Broadway Building in New York,
New York. Yes

10-F. Agreement dated July 27, 1984
relating to the management of the
1290 Avenue of the Americas Building
in New York, New York. Yes

10-G. Agreement dated August 14, 1984
relating to the management of the
237 Park Avenue Building in New York,
New York. Yes

10-H. Amended and Restated Agreement of
General Partnership of JMB/NYC Office
Building Associates dated July 18,
1984. Yes

10-I. Interest Rate Guaranty Agreement
dated July 1, 1984 between JMB Realty
Corporation and JMB/Manhattan
Associates, Ltd. dated April 30,
1984. Yes

10-J. Loan Agreement between JMB/Manhattan
Associates, JMB/Manhattan Investors,
Inc., BPA Associates and APB Associates
relating to the loan back of cash
distributions of the Partnership. Yes

10-K. Consent Agreement dated April 30,
1985 between JMB/NYC Office Building
Associates, O&Y Equity Corporation,
Olympic and York, 2 Broadway Limited
Partnership and Fame Associates
relating to the rights of mortgage
loan participation. Yes

10-L. Mortgage Spreader and Consolidation
Agreement and Trust Indenture dated
March 20, 1984 between O&Y Equity
Corporation and affiliates and
Manufacturer's Hanover Trust Company
relating to the $970,000,000 first
mortgage loan on the 2 Broadway,
1290 Avenue of the Americas and
237 Park Avenue Buildings. Yes

10-M. First Amendment to and First Amended
and Restated Agreement of General
Partnership of 1290 Associates
dated April 15, 1985 Yes

10-N. $9,758,363 12.75% promissory note,
due March 20, 1999 between JMB/NYC
Office Building Associates and
Olympia and York Holdings Corporation
relating to the 1290 Avenue of Americas
Building Yes

10-O. First Amendment to and Agreement of
General Partnership of 237 Park Avenue
Associates dated April 15, 1985. Yes

10-P. $4,514,229 12.75% promissory note,
due March 20, 1999 between JMB/NYC
Office Building and Olympia and York
Holdings Corporation relating to
the 237 Park Avenue Building. Yes

10-Q. First Amendment to and First
Amended and Restated Agreement of
General Partnership of 2 Broadway
Land Company. Yes

10-R. $19,014,777 12.75% promissory note,
due March 20, 1999 between JMB/NYC
Office Building Associates and
Olympia and York Holdings Corporation
relating to the 2 Broadway Building. Yes

10-S. First Amendment to and First
Amended and Restated Agreement of
General Partnership of 2 Broadway
Associates. Yes

10-T. $871,556 12.75% promissory note,
due March 20, 1999 between JMB/NYC
Office Building and Olympia and
York Broadway Limited relating
to the 2 Broadway Building. Yes

10-U. Agreement dated March 25, 1993
between JMB/NYC and the Olympia &
York affiliates regarding JMB/NYC's
deficit funding obligations from
January 1, 1992 through June 30,
1993. Yes

10-V. Agreement of Limited Partnership
of Property Partners, L.P. Yes

10-W. Second Amended and Restated
Articles of Partnership of
JMB/NYC Office Building Associates Yes

10-X. Amended and Restated Certificate
of Incorporation of Carlyle-XIV
Managers, Inc. (known as Carlyle
Managers, Inc.) Yes

10-Y. Amended and Restated Certificate
of Incorporation of Carlyle-XIII
Managers, Inc. (known as Carlyle
Investors, Inc.) Yes

10-Z. $600,000 demand note between
JMB/Manhattan Associates, Ltd.
and Carlyle Managers, Inc. Yes

10-AA. $600,000 demand note between
JMB/Manhattan Associates, Ltd.
and Carlyle Investors, Inc. Yes

10-BB. Proposed Restructure of Two
Broadway, 1290 Avenue of the
Americas and 237 Park Avenue,
New York, New York and Summary
of Terms dated October 14, 1994 Yes

10-CC. Assumption Agreements dated
October 14, 1994 made by
237 Park Avenue Associates
and by 1290 Associates in favor
and for the benefit of O&Y
Equity Company, L.P., O&Y
NY Building Corp. and JMB/NYC
Office Building Associates, L.P. Yes

10-DD. Assumption Agreements dated
October 14, 1994 made by O&Y
Equity Company, L.P., and by
O&Y NY Building Corp. and by
JMB/NYC Office Building Associates,
L.P. in favor and for the
benefit of 2 Broadway Associates
and 2 Broadway Land Company Yes

10-EE. Amendment No. 1 to JMB/NYC Office
Building Associates Yes

10-FF. Amendment No. 1 to agreement of
limited partnership of Property
Partners, L.P. Yes

10-GG. Amended, Restated and Consolidated
Promissory Note between JMB/NYC
Office Building Associates, L.P. and
Olympia & York Massachusetts
Financial Company No

10-HH. Amended, Restated and Consolidated
Security Agreement between JMB/NYC
Office Building Associates, L.P. and
Olympia & York Massachusetts
Financial Company. No

10-II. Agreement of Sale between 2 Broadway
Associates, L.P. and 2 Broadway
Acquisition Corp., dated August 10,
1995. No

10-JJ. Agreement of Conversion of 1290
Associates into 1290 Associates,
L.L.C. dated October 10, 1995. No

10-KK. Agreement of Conversion of 237
Park Avenue Associates into
237 Park Avenue Associates,
L.L.C. dated October 10, 1995 No

21. List of Subsidiaries No

27. Financial Data Schedule No

JMB/MANHATTAN ASSOCIATES, LTD.
EXHIBIT 10-GG

AMENDED, RESTATED AND CONSOLIDATED PROMISSORY NOTE
--------------------------------------------------

$78,605,779 May 31, 1995

AMENDED, RESTATED AND CONSOLIDATED PROMISSORY NOTE (this "Note"),
dated May 31, 1995, made by JMB/NYC OFFICE BUILDING ASSOCIATES, L.P., an
Illinois limited partnership ("Maker") in favor of OLYMPIA & YORK
MASSACHUSETTS FINANCIAL COMPANY, a Massachusetts general partnership
(Payee").

RECITALS

A. JMB/NYC Office Building Associates ("JMB") made the following
promissory notes to the order of O&Y (Delaware) Finance Corp. ("O&Y
Delaware"): (i) Promissory Note, dated August 14, 1984, reissued July 25,
1985, in the original principal amount of $19,014,077 (the "Bdwy Leasehold
Note"), relating to JMB's acquisition of an interest in 2 Broadway
Associates ("Bdwy Assocs."), which has been the owner of the leasehold
estate of 2 Broadway, New York, New York ("2 Bdwy"); and (ii) Promissory
Note, dated August 14, 1984, reissued July 25, 1985, in the original
principal amount of $871,556 (the "Bdwy Fee Note"); and, together with the
Bdwy Leasehold Note, collectively, the ("Prior Notes"), relating to JMB's
acquisition of an interest in 2 Broadway Land Company ("Bdwy Land Co."),
which has been the owner of the fee estate of 2 Bdwy.

B. The Prior Notes were pledged and delivered to Citibank, N.A.
("Citibank") by O&Y Delaware (the "Citibank Pledge") pursuant to the Pledge
Agreement (the "Pledge Agreement"), dated July 26, 1985, in order to secure
the repayment of a $38,700,000 loan made by Citibank to O&Y Delaware.

C. The Prior Notes were assigned to Payee by O&Y Delaware (subject
to the Citibank Pledge).

D. The Bdwy Leasehold Note is secured by the Security Agreement,
dated August 14, 1984, between JMB and Olympia & York Holdings Corporation
("O&Y Holdings"), which was assigned to O&Y Delaware by O&Y Holdings
pursuant to the Assignment of Security Interests, dated as of July 25,
1985, (the "JMB/O&Y Holdings Security Agreement"), and which created a
security interest in JMB'S interest in Bdwy Assocs. (the "JMB/O&Y Holdings
Security Interest").

E. The Bdwy Fee Note is secured by the Security Agreement, dated
August 14, 1984, between JMB and Olympia & York Broadway Limited ("O&Y Bdwy
Ltd."), which was assigned to O&Y Delaware by O&Y Bdwy Ltd., pursuant to
the Assignment of Security Interest dated as of July 25, 1985 (together
with the JMB/O&Y Holdings Security Agreement, collectively, the ("Security
Agreements"), and which created a security interest in JMB's interest in
Bdwy Land Co. (together with the JMB/O&Y Holdings Security Interest,
collectively, the "Security Interests").

F. The Security Interests and the Security Agreements were
collaterally assigned to Citibank by O&Y Delaware pursuant to the Pledge
Agreement and two Collateral Assignments of Security Interests, each dated
as of July 26, 1985 (the "Citibank Collateral Assignments").

G. The Security Interests and the Security Agreements were
assigned to Payee by O&Y Delaware (subject to the Citibank Pledge and the
Citibank Collateral Assignments).

H. JMB transferred its interests in Bdwy Assoc. and Bdwy Land Co.
(collectively, the "Prior Partnerships"), subject to the Security
Interests, to Maker on March 31, 1993, and Maker was substituted for JMB as
a general partner in each Prior Partnership.

I. As of the date hereof, the outstanding balance (i) under the
Bdwy Leasehold Note is $75,160,599 (the "Bdwy Leasehold Debt"), which
includes accrued and unpaid interest in the amount of $56,146,522 and (ii)
under the Bdwy Fee Note is $3,445,180 (the "Bdwy Fee Debt"), which includes
accrued and unpaid interest in the amount of $2,573,624.

J. O&Y Equity Company, L.P., O&Y NY Building Corp. (collectively,
the "O&Y Partners") and Maker are the partners in the Prior Partnerships.

K. The O&Y Partners and Maker entered into the Agreement of
Limited Partnership of 2 broadway Associates, L.P. (the "Partnership") on
May 30, 1995 (the "Partnership Agreement").

L. Concurrently with the execution and delivery hereof, (i) the
Prior Partnerships are transferring all of their respective assets,
including, without limitation, their interests in 2 Bdwy, to the
Partnership and (ii) Maker and Payee are entering into the Amended,
Restated and Consolidated Security Agreement dated as of the date hereof
(the "Consolidated Security Agreement") which creates a security interest
in Maker's interest in the Partnership and amends and restates the terms of
the Security Agreements; and in connection therewith, the parties hereto
desire to (a) consolidate the indebtedness evidenced by

the Prior Notes into a single debt and (b) amend and restate the terms of
Prior Notes, by entering into this Note.

M. Citibank has consented to the modification and extension of the
Prior Notes on the terms set forth herein.

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

A. The accrued and unpaid interest outstanding under the Prior
Notes is hereby added to, and shall hereafter be part of, the principal
indebtedness evidenced thereby.

B. The indebtedness evidenced by the Prior Notes is hereby
consolidated into a single debt in the aggregate amount of SEVENTY-EIGHT
MILLION SIX HUNDRED FIVE THOUSAND SEVEN HUNDRED SEVENTY-NINE DOLLARS
($78,605,779), together with interest accruing thereon from and after the
date hereof pursuant to the terms hereinafter set forth.

C. The Prior Notes are hereby amended and restated in their
entireties to read as a single note, evidencing such consolidated
indebtedness, and follows (all capitalized terms, unless otherwise
hereinafter defined, shall have the respective meanings set forth in the
foregoing Recitals):

FOR VALUE RECEIVED, JMB/NYC OFFICE BUILDING ASSOCIATES, L.P., an
Illinois limited partnership ("Maker"), hereby promises to pay to the order
of OLYMPIA & YORK MASSACHUSETTS FINANCIAL COMPANY ("Payee"), c/o Olympia &
York Companies (U.S.A.) as 237 Park Avenue, New York, New York 10017 , or
as such other place as Payee or any holder of this Note may from time to
time designate, the principal sum of SEVENTY-EIGHT MILLION SIX HUNDRED FIVE
THOUSAND SEVEN HUNDRED SEVENTY-NINE DOLLARS ($78,605,779) (the "Principal
Amount"), in lawful money of the United States, together with interest
thereon as the rate of 12.75% per annum ("Interest"), compounded monthly,
from the date of this Note to and including the Maturity Date (as
hereinafter defined), as follows:

(i) accrued and unpaid Interest on the unpaid Principal
Amount, and the unpaid Principal Amount, shall be due and payable as, when,
and to the extent cash is distributed or paid to Maker in respect of, or on
account of, the Collateral (as defined in the Consolidated Security
Agreement), including, without limitation, all amounts distributed to Maker
under (A) Section 3.1B of the Partnership Agreement or (B) ANY PARTNERSHIP
AGREEMENT OF ANY OTHER PARTNERSHIP in which Maker's interest constitutes
Collateral; and

(ii) accrued Interest on the unpaid Principal Amount,
remaining unpaid, shall be due and payable on the date (the "Maturity
Date") that is the earlier of January 1, 2004 or the date on which the Debt
(as hereinafter defined) shall become due and payable in full (by
acceleration or otherwise) pursuant to the terms hereof or of the
Consolidated Security Agreement.

Interest shall be computed on the basis of a 365- or 366-day year, as
the case may be.

This Note is secured by the Consolidated Security Agreement.

If 2 Bdwy is sold by the Partnership to a third party, then (i) the
net proceeds of such sale, if any, that are distributable to maker pursuant
to Section 3.1B of the Partnership Agreement (the "Bdwy Proceeds") shall be
disbursed to Payee and applied against the Principal Amount and (ii) as of
the date of such sale, irrespective of the amount of the Bdwy Proceeds (and
even if there are none), (A) the Bdwy Principal (as defined below), and all
Interest accrued and unpaid hereunder (on the entire Principal Amount)
shall be deemed canceled (the "Cancelled Debt"), and (B) immediately
following such cancellation, the Principal Amount shall be deemed to be
equal to $19,000,000 minus the amount (if any) by which the Bdwy Proceeds
exceed the Cancelled Debt. The "Bdwy Principal" shall mean $59,605,779 of
the Principal Amount, which represents the Bdwy Leasehold Debt plus the
Bdwy Fee Debt, minus $19,000,000. The portion of the Principal Amount
other than the Bdwy Principal is $19,000,000 and is referred to herein as
the "Special Principal".

This Note may be prepaid, in whole or in part, without premium, at
the option of Maker. Maker shall be required to prepay the Special
Principal, and the accrued and unpaid Interest thereon, to the extent
required under Section 3.2B of that certain Second Amended and Restated
Agreement of General Partnership of 1290 Associates, dated as of July 27,
1984, as amended (the "1290 Partnership Agreement"), and under Section 3.2B
of that certain First Amended and Restated Agreement of General Partnership
of 237 Park Avenue Associates, dated as of August 14, 1984, as amended
(together with the 1290 Partnership Agreement, collectively, the "1290/237
Partnership Agreements"). Maker and Payee agree that the term "2 Broadway
Notes" in "Exhibit D" of each of the 1290/237 Partnership Agreements shall
mean and refer to this Note.

Maker's prepayment of this Note in its entirety must equal all of the
amounts then due and owing to Payee under this Note and Consolidated
Security Agreement (the "Debt"), including without limitation, the unpaid
Principal Amount, all

accrued and unpaid Interest, all accrued and unpaid Default Interest (as
hereinafter defined), and all other unpaid amounts payable to Payee under
this Note or the Consolidated Security Agreement. Any required payment or
optional prepayment of less than the full amount of the Debt, other than
the required prepayment referenced in the immediately preceding paragraph,
shall be applied in the following order of priority: (i) to the payment of
all unpaid amounts payable to Payee under this Note or the Consolidated
Security Agreement other than accrued and unpaid Interest, accrued and
unpaid Principal Amount; (ii) to the payment of accrued and unpaid Interest
on the Bdwy Principal; (iii) to the payment of accrued and unpaid Default
interest; (iv) to the payment of the unpaid Bdwy Principal; (v) to the
payment of accrued and unpaid Interest on the Special Principal; and (vi)
to the payment of the unpaid Special Principal. Notwithstanding the
foregoing, during the occurrence of an Event of Default (as hereinafter
defined), Payee may apply any payment thereafter received under this Note
in such order of priority as Payee shall determine in its sole discretion.

Payee may, at its option, declare the Debt to be immediately due and
payable upon the occurrence of either of the following events ("Events of
Default"):

(i) Failure by Maker to pay any Interest or any portion of the
Principal Amount within 10 days after any such payment shall be due
hereunder;

(ii) If maker is in default for more than 10 days after notice of
such default is given to Maker under either (a) that certain Promissory
Note, dated July 27, 1984, reissued July 25, 1985, made by JMB to O&Y
Delaware in the original principal amount of $9,758,363 (the "1290 Note")
or (b) that certain Promissory Note, dated August 14, 1984, reissued July
25, 1985, made by JMB to O&Y Delaware in the original principal amount of
$4,514,229 (together with the "1290 Note", collectively, the "1290/237
Notes"); or

(iii)Any Default (as defined in the Consolidated Security
Agreement).

Maker and Payee agree that the promissory notes listed as "3." and
"4." in "Exhibit B" of each of the 1290/237 Promissory Notes shall mean and
refer to this Note.

If the Debt is not paid in full on the Maturity Date, the unpaid
Principal Amount and all accrued and unpaid Interest hereunder (to the
extent permitted by law) shall thereafter bear interest ("Default
Interest") as an annual rate equal to the lesser of (i) the greater of (a)
12.75%, compounded monthly, or (b) a rate 2% above the Prime Rate (as
hereinafter defined), or

(ii) the maximum rate permitted by the laws of the State of New York, until
the Debt is paid in full. Default Interest shall be computed on the basis
of a 365- or 366-day year, as the case may be. The "Prime Rate" shall mean
an annual interest rate equal to the rate of interest announced Publicly by
Citibank or its successor, in New York, New York from time to time as its
"prime" or "base" rate, as such rate changes from time to time during such
period.

No remedy of Payee is exclusive of any other remedy provided herein
or at law, and all remedies available to Payee shall be cumulative.

Maker hereby waives diligence, demand, presentment, protest and
notice of any kind, and assents to extensions of the time of payment,
release, surrender or substitution of security, or forbearance or other
indulgence, without notice.

This Note may not be changed, modified or terminated orally, but only
by an agreement in writing signed by the party to be charged.

Whenever any payment under this Note shall become and payable on a
day other than a day on which banks are required or authorized to be open
for normal banking business in the State of New York, such payment may be
made on the next succeeding business day and such extension of time shall
in such case be included in computing interest on the amount of such
payment.

Notwithstanding any provision in this Note or the Consolidated
Security Agreement, neither Maker nor any present or future partner in
Maker or of any partnership which is now or hereafter a partner of Maker,
shall have any personal liability under this note or the Consolidated
Security Agreement, and without limiting the generality of the foregoing
the liability and obligations of Maker and the partners in Maker to pay the
indebtedness evidenced by this Note and to perform its or their obligations
contained herein and in the Consolidated Security Agreement shall not be
enforced by any action or proceeding which seeks damages or any money
judgement against Maker or any of the partners in Maker, provided, however,
that the foregoing shall not limit or impair any rights of Payee (i) to
realize upon the collateral, (ii) to seek and enforce other equitable
relief against Maker under the Consolidated Security Agreement, or (iii) to
initiate proceedings at law or in equity for the purpose of determining any
rights of Payee hereunder, so long as, in each such case, the same cannot
result in personal liability of Maker, any present of future partner of
Maker or any Partnership which is now or hereafter a partner of Maker. Any
judgement of any such action or proceeding shall be enforceable against
Maker and the partners in Maker only to the extent of its or their interest
in the Collateral and not enforceable against any other asset of

Maker. Payee irrevocably waives any and all right to sue for, seek, or
demand any deficiency judgement or other judgment or other judgment for the
payment of money or damages against Maker or any of its partners in any
such action or proceeding.

Any notice, demand or request which is or may be given by either
Maker or Payee shall be in writing, and shall be given by registered or
certified mail, return receipt requested, addressed as follows:

(1) If to Maker:

JMB/NYC Office Building Associates, L.P.
900 North Michigan Avenue
Suite 1900
Chicago, Illinois 60611

Attention: Mr. Stuart C. Nathan

With a copy in the same manner to:

Citibank, N.A.
599 Lexington Avenue
New York, New York 10022

Attention: Marcus Giancaterino

-and-

Pircher, Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, California 90067

Attention: Leo J. Pircher, Esq.

(2) If to Payee:

Olympia & York Massachusetts Financial Company
237 Park Avenue
New York, New York 10017

Attention: Managing Attorney

With a copy in the same manner to:

Citibank, N.A.
599 Lexington Avenue
New York, New York 10043

Attention: Annette Kuligowski

or to such other address as either party may designate to the other party
by notice as provided herein. Any notice given hereunder shall be deemed
delivered three business days after mailing, except that any notice of
change of address shall be deemed given when actually received by the
addressee.

Maker hereby consents to the jurisdiction of the New York State
Supreme Court, County of New York, and the United States District Court for
the Southern District of New York in connection with any action or
proceeding relating to this Note. Maker's agent for the purpose of
receiving service of process is Corporation Trust, 1633 Broadway, New York,
New York, Attention: 23rd Floor. Maker may replace such agent from time
to time, with or without cause, and promptly shall replace any such agent
who resigns or is no longer resident in New York, New York. Such successor
agent shall be resident in New York, New York, and Maker shall promptly
give notice of such replacement to Payee.

This Note shall be governed by and construed in accordance with the
laws of the State of New York. This Note shall be binding upon Maker, its
successors and assigns, and shall inure to the benefit of Payee, a
successor and assigns. If any term or provision of this Note shall be held
invalid, illegal or unenforceable, the validity and enforceability of all
terms and provisions hereof shall not be affected thereby.

This Note is given in substitution for the Prior Notes, but not in
cancellation, discharge or extinguishment of the indebtedness formerly
evidenced by the Prior Notes and now evidenced by this Note. If this Note
is amended and restated in its entirety by an instrument given in
substitution for this note, then the indebtedness evidenced by this Note
will thereafter be evidenced by such instrument.

IN WITNESS THEREOF, the parties hereto have caused this Note to be
executed by their respective duly authorized representatives as of the day
and year first above written.

JMB/NYC BUILDING ASSOCIATES, L.P.

By: Carlyle Managers, Inc., General Partner

By: STUART C. NATHAN
Name:Stuart C. Nathan
Title: President

OLYMPIA & MASSACHUSETTS FINANCIAL COMPANY

By: O&Y (U.S.) Financial Company, General Partner

By: O&Y (U.S.) Development Company, L.P., General
Partner

By: O&Y (U.S.) Development General Partner
Corp.,
General Partner

By: JOEL M. SIMON
Name:Joel M. Simon
Title: Executive Vice President

Pay to the order of Citibank, N.A. without any representation or
warranty, and without recourse to Olympia & York Massachusetts Financial
Company.

OLYMPIA & YORK MASSACHUSETTS FINANCIAL COMPANY

By: O&Y (U.S.) Financial Company, General Partner

By: O&Y (U.S.) Development Company, L.P.,
General Partner

By: O&Y (U.S.) Development General
Partner Corp., General Partner

By: JOEL M. SIMON
Name:Joel M. Simon
Title: Executive Vice President

JMB/MANHATTAN ASSOCIATES, LTD.
EXHIBIT 10-HH

AMENDED, RESTATED AND CONSOLIDATED SECURITY AGREEMENT
-----------------------------------------------------

AMENDED, RESTATED AND CONSOLIDATED SECURITY AGREEMENT (this
"Consolidated Security Agreement"), dated May 31, 1995, between JMB/NYC
OFFICE BUILDING ASSOCIATES, L.P., and Illinois limited partnership
("Debtor"), and OLYMPIA & YORK MASSACHUSETTS FINANCIAL COMPANY, a
Massachusetts general partnership ("Secured Party").

RECITALS

A. JMB/NYC Office Building Associates ("JMB") made the
following promissory notes to the order of O&Y (Delaware) Finance Corp.
("O&Y Delaware"): (i) Promissory Note, dated August 14, 1984, reissued
July 25, 1985, in the original principal amount of $19,014,077 (the "Bdwy
Leasehold Note"), relating to JMB's acquisition of an interest in 2
Broadway Associates ("Bdwy Assocs."), which is the owner of the leasehold
estate of 2 Broadway, New York, New York ("2 Bdwy"); and (ii) Promissory
Note, dated August 14, 1984, reissued July 25, 1985, in the original
principal amount of $871, 556 (the "Bdwy Fee Note"; and , together with the
Bdwy Leasehold Note, collectively, the "Prior Notes"), relating to JMB's
acquisition of an interest in 2 Broadway Land Company ("Bdwy Land Co."),
which is the owner of the fee estate of 2 Bdwy.

B. The Prior Notes were pledged and delivered to Citibank,
N.A. ("Citibank") by O&Y Delaware (the "Citibank Pledge"), pursuant to the
Pledge Agreement (the "Pledge Agreement") dated July 26, 1985 in order to
secure the repayment of a $38,700,000 loan made by Citibank to O&Y
Delaware.

C. The Prior Notes were assigned to Secured Party by O&Y
Delaware (subject to the Citibank Pledge).

D. The Bdwy Leasehold Note is secured by the Security
Agreement, dated August 14, 1984, between JMB and Olympia & York Holdings
Corporation ("O&Y Holding"), which was assigned to O&Y Delaware by O&Y
Holdings pursuant to the Assignment of Security Interests, dated as of July
25, 1985 (the "JMB/O&Y Holdings Security Agreement"), and which created a
security interest in JMB's interest in Bdwy Assoc. (the "JMB/O&Y Holdings
Security Interest").

Agreements"), and which created a security interest in JMB's interest in
Bdwy Land Co. (together with the JMB/O&Y Holdings Security Interest,
collectively, the "Security Interests").

G. The Security Interests and the Security Agreements were
assigned to Secured Party by O&Y Delaware (subject to the Citibank Pledge
and the Citibank Collateral Assignment).

H. JMB transferred its interests in Bdwy Assocs. and Bdwy
Land Co. (collectively, the "Prior Partnerships"), subject to the Security
Interests, to Debtor on March 31, 1993, and Debtor was substituted for JMB
as a general partner in each Prior Partnership.

I. O&Y Equity Company, L.P., O&Y NY Building Corp.
(collectively, the "O&Y Partners") and Debtor are the partners in the Prior
Partnerships.

J. The O&Y Partners and Debtor entered into the Agreement of
Limited Partnership of 2 Broadway Associates, L.P. (the "Partnership") on
May 30, 1995 (the "Partnership Agreement").

K. Concurrently with the execution and delivery hereof, (i)
the Prior Partnerships are transferring all of their respective assets,
including, without limitation, their interests in 2 Bdwy, to the
Partnership and (ii) Debtor and Secured Party are entering into the
Amended, Restated and Consolidated Promissory Note, dated as of the date
hereof, in the principal amount of $78,605,779 (the "Note"), which
consolidates the indebtedness evidenced by the Prior Notes into a single
debt and amends and restates the terms of the Prior Notes; and in
connection therewith, the parties hereto desire to (a) create a security
interest in the Collateral (as hereinafter defined) and (b) amend and
restate the terms of the Security Agreements, by entering into this
Consolidated Security Agreement.

L. Citibank has consented to the modification and extension
of the Prior Notes on the terms set forth in the Note, and Citibank's
consent is not required for the execution and delivery of this Consolidated
Security Agreement.

NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree to create a security interest in the Collateral and to amend
and restate the Security Agreements in

their entireties to read as a single security agreement, as follows (all
capitalized terms, unless otherwise hereinafter defined, shall have the
respective meanings set forth in the foregoing Recitals):

1. Debtor hereby grants to Secured Party a security interest
in and a continuing lien upon, and Debtor hereby hypothecates and assigns
as collateral to Secured Party, the collateral described in paragraph 2
(the "Collateral"), to secure the payment, performance and observance of
all indebtedness, obligations, and liabilities of any kind of Debtor to
Secured Party, now existing or hereafter arising out of or in connection
with the Note or this Consolidated Security Agreement (collectively, the
"Obligations").

2. The Collateral consists of:

(a) all right, title and interest of Debtor in and to,
and all present and future payments, proceeds, compensation, property,
assets, interests and rights, and all monies due or to become due and
payable to Debtor in connection with, any interest Debtor may now or
hereafter have as a partner in the Partnership and the Future Partnerships
(as hereinafter defined) including, without limitation, all of Debtors
rights under the Partnership Agreement or the Future Partnership Agreements
(as hereinafter defined); and

(b) all proceeds of and distributions from the
foregoing (including but not limited to all proceeds of dissolution or
liquidation), together with any and all monies, securities, drafts, notes,
items and other property and the proceeds thereof, constituting any such
proceeds or distributions.

"Future Partnership" shall mean any partnership (other than the
Partnership), in which Debtor becomes a partner and which obtains all or
substantially all of the assets of the Partnership other than by purchase
or exchange. "Future Partnership Agreement" shall mean the partnership
agreement of a Future Partnership, as the same may from time to time be
modified, amended or restated.

3. Debtor warrants, represents and covenants that:

(a) The principal office of Debtor and Debtor's books
and records relating to the Collateral are located at 900 North Michigan
Avenue, Suite 1900, Chicago, Illinois 60611, and Debtor will not change
such address or its name, without prior written notice to Secured Party.

(b) Debtor has, and will have at all times so long as
any Obligations remain outstanding, good title to the Collateral, free and
clear of all claims, security interests, liens and encumbrances of every
nature whatsoever.

(c) The security interest granted herein in the
Collateral is, and at all times so long as any Obligations remain
outstanding shall be, a first, perfected security interest in the
Collateral, subject only to the filing of financing statements pursuant to
the Uniform Commercial Code (the "UCC").

(d) Debtor is, and will continue to be, a limited
partnership duly organized, validly existing and in good standing under the
laws of the State of Illinois. Debtor has full power and authority to
enter into and perform this Consolidated Security Agreement and the Note.
Neither the execution and delivery by Debtor of this Consolidated Security
Agreement, the Note or of any of the instruments or documents to be
delivered pursuant hereto, nor the consummation by Debtor of the
transactions herein contemplated, or compliance by Debtor with the
provisions hereof or thereof, will violate any law or regulation, or any
order or decree of any court or governmental instrumentality, or will
conflict with, result in the breach of, constitute a default under, or
require consent pursuant to, any agreement or instrument to which Debtor is
a party or by which it may be bound, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property of
Debtor except in favor of Secured Party, or require any action of, or
filing with (other than the filing of financing statements pursuant to the
UCC), any governmental or public body or authority to authorize same.

(e) Except as otherwise provided in the Partnership
Agreement or a Future Partnership Agreement, Debtor will not assign, sell,
mortgage, transfer, pledge, grant a security interest in or lien upon,
encumber, or otherwise dispose of, any part or all of the Collateral.

(f) Debtor will at any time and from time to time, at
its expense, perform all acts and execute all documents reasonably
requested by Secured Party at any time to evidence, perfect, maintain and
enforce Secured Party's security interest in the Collateral or otherwise in
furtherance of the provisions of this Consolidated Security Agreement.

(g) Upon request of Secured Party, Debtor will at any
time and from time to time, at its expense, execute and deliver to Secured
Party one or more financing statements

pursuant to the UCC in connection with this Consolidated Security
Agreement, and Debtor hereby authorizes Secured Party to execute and file
at any time or times, one or more financing statements with respect to all
or any part of the collateral, signed only by Secured Party.

(h) Secured Party may, in its discretion, for the
account and expense of Debtor pay any amount or do any act required of
Debtor hereunder or reasonably requested by Secured Party to preserve,
protect or maintain the Collateral or the security interest granted herein,
or enforce the Obligations, and which Debtor fails to do or pay, and any
such payment shall be deemed an advance by Secured Party to Debtor and
shall be payable on demand.

(i) Debtor will promptly pay Secured Party for any and
all sums, costs, and expenses which Secured Party may pay or incur
pursuant to the provisions of this Consolidated Security Agreement or in
defending, protecting or enforcing the security interest granted herein or
otherwise in connection with the provisions hereof, including, but not
limited to all court costs and reasonable attorneys' fees and
disbursements, and any such amount shall be deemed an advance by Secured
Party to Debtor and shall be payable on demand.

(j) Under no circumstances whatsoever does Secured
Party, by reason of this Consolidated Security Agreement, assume any
responsibility for, or obligation with respect to, any of the obligations
or liabilities of Debtor under, or with respect to, the Partnership
Agreement, any Future Partnership Agreement or the Obligation, and Debtor
shall hold Secured Party harmless with respect to any and all claims
arising therefrom or relating thereto.

(k) Debtor will perform and observe all of the
covenants and conditions to be performed and observed by Debtor pursuant to
the provisions of the Partnership Agreement and any Future Partnership
Agreement.

4. The occurrence of any one or more of the following events
for any reason whatsoever (and whether such occurrence shall be voluntary
or involuntary or come about or be effected by operation of law or pursuant
to or in compliance with any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body) shall
constitute a default (herein, a "Default") under this Consolidated Security
Agreement:

(a) if any Event of Default described in paragraph (i)
or (ii) on page 5 of the Note shall occur;

(b) if any lien (except as permitted hereby), levy, or
execution on, or seizure, attachment or garnishment of, any of the
Collateral shall be made or filed and the same is not discharged or
released within 10 days;

(c) if Debtor shall violate the provisions of paragraph
3(e) (other than a violation of the kind covered by paragraph 4 (b));

(d) if a default shall occur in the performance or
observance of any covenant, agreement or provision contained in this
Consolidated Security Agreement, other than defaults covered by paragraphs
4 (a) through 4 (c), and such default shall continue for a period of more
than ten (10) days after notice thereof is given by Secured Party to
Debtor; except that if such default is not reasonably susceptible of being
cured within such 10-day period, no Default shall exist under this
paragraph (d) on account of such default so long as Debtor shall have
commenced to cure such default within such default within such 10-day
period and shall thereafter diligently proceed to complete such cure, and
shall, in any event, complete such cure within 90 days after such 10-day
period;

(e) if any representation or warranty or any other
statement of fact herein shall be false or misleading when made in any
material respect; or

(f) if the bankruptcy (as defined in the Partnership
Agreement or any Future Partnership Agreement, as the case may be) of
Debtor shall occur.

5. (a) Upon the occurrence of a Default, the Obligations
shall, at the option of Secured Party, become immediately due and payable,
without notice or demand.

(b) A portion of the Obligations shall become
immediately due and payable, without notice or demand, as, when and to the
extent cash is distributed or paid in respect of, or on account of, the
Collateral, including, without limitation, all amounts distributed to
Debtor under (i) Section 3.1B of the Partnership Agreement or (ii) any
Future Partnership Agreement. Such payment of a portion of the Obligations
shall be applied in the following order of priority: (A) to the payment of
all unpaid amounts payable to Secured Party under the Note or this
Consolidated Security Agreement other than accrued and unpaid Interest,
accrued and unpaid Default Interest and the unpaid Principal Amount (as
such terms are defined in the Note), (B) to the payment of accrued and
unpaid Interest on the Bdwy Principal (as such term is defined in the
Note), (C) to the payment of accrued and unpaid Default Interest, (D) to
the payment of

the unpaid Bdwy Principal, (E) to the payment of the accrued and
unpaid Interest on the Special Principal (as such term is defined in the
Note) and (F) to the payment of the unpaid Special Principal.

(c) Debtor shall be required to repay the Special
Principal, and the accrued and unpaid interest thereon, to the extent
required under Section 3.2B of that certain Second Amended and Restated
Agreement of General Partnership of 1290 Associates, dated as of July 27,
1984, as amended, and under Section 3.2B of that certain First Amended and
Restated Agreement of General Partnership of 237 Park Avenue Associates,
dated as of August 14, 1984, as amended.

6. (a) All payments, proceeds, monies, compensation,
property, assets, instruments or rights paid, issued or distributed in
respect of the Collateral and any other proceeds of the Collateral shall be
paid or delivered to Secured Party, to be applied by it as herein set
forth, whether or not a Default has occurred.

(b) Secured Party may, in its sole discretion, at any
time and from time to time, in its name or the name of Debtor, or
otherwise, notify Debtor, the Partnership, a Future Partnership or any
obligor on, or other person interested in, any of the Collateral, (i) of
this Consolidated Security Agreement and (ii) to make payment or delivery
to Secured Party of the Collateral, and, Secured Party may, in its sole
discretion and at any time, demand, sue for, collect or receive any money,
rights or property at for any time payable or receivable on account of or
in exchange of any of the Collateral. During the continuance of a Default,
Secured Party may also, in its sole discretion, at any time and from time
to time, in its name or in the name of Debtor, or otherwise, extend the
time of payment, or otherwise modify the terms of, or release, any of the
Collateral, all without notice to or consent by Debtor and without
otherwise discharging or affecting the Obligations, the Collateral or the
security interest granted herein.

(c) If any payments, proceeds, monies, compensation,
property, assets, instruments or rights paid, issued or distributed with
respect to Debtor's interests in proceeds of the Collateral are received by
Debtor in spit of the requirement that the same be paid or delivered to
Secured Party under paragraph 6 (a) or 6 (b) hereof, then the same shall
not be commingled with other property of Debtor but shall be segregated,
held by Debtor in trust as the exclusive property of Secured Party, and
debtor will immediately pay or deliver the same to Secured Party duly

endorsed, transferred or assigned in blank where appropriate to
effectuate the provisions hereof; and the same, together with any other
cash or property received by Secured Party hereunder, shall be applied by
Secured Party to the payment of the Obligations and in (i) the order set
forth in paragraph 5 (b), if no Default exists, or (ii) any order Secured
Party may elect, if a Default exists.

7. Upon the occurrence of any Default and at any time
thereafter, in addition to the rights described in paragraph 6 hereof,
Secured Party shall have the following rights and remedies (to the extent
permitted by applicable law) in addition to all rights and remedies of a
secured party under the UCC, or of Secured Party under the Obligations, all
such rights and remedies being cumulative, not exclusive and enforceable
alternatively, successively or concurrently: Secured Party may at any time
and from time to time sell, resell, assign and deliver, grant options for
or otherwise dispose of any or all or the Collateral at public or private
sale or by legal proceedings or otherwise, by one or more contracts, in one
or more parts, at the same or different times, for cash and/or credit, and
upon any terms, at such places and times and to such persons or entities as
Secured Party deems best, all without demand for performance or any notice
or advertisement whatsoever except as required by the UCC or other
applicable law, and where an applicable statute requires reasonable notice
of sale or other disposition, Debtor agrees that the sending of ten days'
notice of the place and time any public sale, or of the time after which
any private sale or other disposition, is to be made, shall be deemed
reasonable notice thereof. If any of the Collateral is sold by Secured
Party upon credit or for future delivery, Secured Party shall not be liable
for the failure of the purchaser to pay for the same, and in such event
Secured Party may resell such Collateral. Secured Party may apply the cash
proceeds actually received from any sale or other disposition to the
reasonable expenses of holding or selling the Collateral, to reasonable
attorneys' fees, disbursements and all other expenses which may be incurred
by Secured Party in attempting to collect the Obligations or enforce this
Consolidated Security Agreement or in the prosecution or defense of any
action or proceeding related to the subject matter of this Consolidated
Security Agreement, and then to the Obligations in such order and as to
principal or interest as Secured Party may desire, with any surplus after
payment in full of all Obligations to be paid to Debtor as its interest may
appear, subject to any duty of Secured Party imposed by law to the holder
of any subordinate security interest in the Collateral known to Secured
Party.

8. To effectuate the terms and provisions hereof, Debtor
hereby designates and appoints Secured Party and its designees or agents as
attorney-in-fact of Debtor, irrevocably and with power of substitution, at
any time and from time to

time, with authority to endorse the name of Debtor an any notes,
acceptances, checks, drafts, money orders or instruments which constitute
evidences of payment or proceeds of Collateral to which Secured Party is
then entitled hereunder that may come into Secured Party's possession or
control; to sign the name of Debtor on any drafts against and notices to
obligors with respect to Collateral to which Secured Party is then entitled
hereunder; to execute proofs of claim and loss with respect to Collateral
to which Secured Party is then entitled hereunder; to execute releases with
respect to Collateral to which Secured Party is then entitled hereunder.
All acts of said attorney-in-fact or designee hereinabove authorized are
hereby ratified and approved and said attorney-in-fact or designee shall
not be liable for any acts of commission or omission (except for actions
constituting wilful misconduct), nor for any error of judgment or mistake
of fact or law. This power of attorney, being coupled with an interest, is
irrevocable while any of the Obligations shall remain outstanding.

9. Debtor shall not assert, as a defense to or deduction
from any of the Obligations, any right of offset with respect to
obligations owing by Secured Party or its Affiliates (as defined in the
Partnership Agreement or a Future Partnership Agreement, as the case may
be) to Debtor or its Affiliates.

10. Any notice, demand or request which is or maybe given
either Secured Party or Debtor shall be in writing, and shall be given by
registered or certified mail, return receipt requested, addressed as
follows:

(1) If to Debtor:

JMB/NYC Office Building Associates, L.P.
900 North Michigan Avenue
Suite 1900
Chicago, Illinois 60611
Attention: Mr. Stuart C. Nathan

With a copy in the same manner to:

Citibank, N.A.
599 Lexington Avenue
New York, New York 10022
Attention: Marcus Giancaterino

- and -

Pircher, Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, California 90067
Attention: Leo J. Pircher, Esq.

(2) If to Secured Party:

Olympia & York Massachusetts Financial Company
237 Park Avenue
New York, New York 10017
Attention: Managing Attorney

With a copy in the same manner to:

Citibank, N.A.
599 Lexington Avenue
New York, New York 10043
Attention: Annette Kuligowski

or to such other address as either party may designate to the other party
by notice as provided herein. Any notice given hereunder shall be deemed
delivered three business days after mailing, except that any notice of
change of address shall by deemed given when actually received by the
addressee.

11. Notwithstanding any provision in the Note or this
Consolidated Security Agreement, neither Debtor nor any present or future
partner in Debtor, or of any partnership which is now or hereafter a
partner of Debtor, shall have any personal liability under this
Consolidated Security Agreement or the Note, and without limiting the
generality of the foregoing, the liability and Obligations of Debtor and
the partners in Debtor to pay and perform the Obligations shall not be
enforced by any action or proceeding which seeks damages or any money
judgment against Debtor or any of the partners in Debtor, provided,
however, that the foregoing shall not limit or impair any rights of Secured
Party (i) to realize upon the Collateral, (ii) to seek and enforce other
equitable relief against Debtor, or (iii) to initiate proceedings at law or
in equity for the purpose of determining any rights of Secured Party
hereunder, so long as, in each such case, the same cannot result in
personal liability of Debtor, any present or future partner of Debtor or
any partnership which is now or hereafter a partner of Debtor. Any
judgment in any such action or proceeding shall be enforceable against
Debtor and the partners in Debtor only to the extent of its or their
interest in the Collateral and not enforceable against any other asset of
Debtor. Secured Party irrevocably waives any and all right to sue for,
seek or demand any deficiency judgment or other judgment for the payment of
money or damages against Debtor or any of its partners in any such action
or proceeding.

12. Debtor hereby consents to the jurisdiction of the New
York State Supreme Court, County of New York, and the United States
District Court for the Southern District of New York in connection with any
action or proceeding relating to this

Consolidated Security Agreement. Debtor's agent for the purpose of
receiving service of process is Corporation Trust, 1633 Broadway, New York,
New York 10019, Attention 23rd Floor. Debtor may replace such agent from
time to time, with or without cause, and promptly shall replace any such
agent who resigns or is no longer a resident in New York, New York. Such
successor agent shall be a resident in New York, New York, and Debtor shall
promptly give notice of such replacement to Secured Party.

13. No act, failure or delay by Secured Party shall
constitute a waiver of its rights and remedies hereunder or otherwise. No
single or partial waiver by Secured Party of any Default right or remedy
which it may have shall operate as a waiver of any other Default, right or
remedy or of the same Default, right or remedy on a future occasion.
Debtor hereby waives diligence, presentment, notice of dishonor and protest
of all instruments included in or evidencing any of the Obligations or the
Collateral, and any and all other notices and demands whatsoever (except as
expressly provided herein). In the event of any litigation with respect to
any matter connected with this Consolidated Security Agreement, the
Obligations or the Collateral, Debtor hereby waives the right to a trial by
jury. All amounts payable by Debtor hereunder shall bear Default Interest.

All terms herein shall have the meanings as defined in the UCC, unless the
context otherwise requires. No provision hereof shall be modifies, altered
or limited except by a written instrument expressly referring to this
Consolidated Security Agreement and to such provision, and executed by the
party to be charged. This Consolidated Security Agreement shall be binding
upon the successors and assigns of Debtor, and shall, together with the
rights and remedies of Secured Party hereunder, inure to the benefit of
Secured Party, its successors, endorsees and assigns. This Consolidated
Security Agreement and the Obligations shall be governed in all respects by
the laws of the State of New York and shall be interpreted without regard
to any presumption or rule requiring construction against the party causing
this Consolidated Security Agreement to be drafted. If any term of this
Consolidated Security Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby. Debtor acknowledges receipt of a copy of this
Consolidated Security Agreement.

14. If this Consolidated Security Agreement is amended and
restated in its entirety, then Secured Party's rights and Debtor's
obligations with respect to the Collateral shall thereafter be governed by
such amendment and restatement.

IN WITNESS WHEREOF, the parties hereto have caused this
consolidated Security Agreement to be executed by their respective duly
authorized representatives as of the day and year first above written.

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.

By: Carlyle Managers, Inc., General Partner

By: STUART C. NATHAN
Name: Stuart C. Nathan
Title: President

OLYMPIA & YORK MASSACHUSETTS FINANCIAL COMPANY

By: O&Y (U.S.) Financial Company,
General Partner

By: O&Y (U.S.) Development
Company, L.P., General
Partner

By: O&Y (U.S.) Development
General Partner Corp.,
General Partner

By: JOEL M. SIMON
Name: Joel M. Simon
Title: Executive Vice President

The undersigned hereby consents to the execution and delivery
of the foregoing Amended, Restated and Consolidated Security Agreement.

O&Y NY BUILDING CORP.

By: JOEL SIMON
Name: Joel Simon
Title: Executive Vice President

AGREEMENT OF SALE

BETWEEN

2 BROADWAY ASSOCIATES, L.P.

AS SELLER,

AND

2 BROADWAY ACQUISITION, CORP.

AS PURCHASER

TABLE OF CONTENTS

PAGE

ARTICLE I: Sale of the Property . . . . . . . . . . . 1

ARTICLE II: Deposit, Purchase Price and Apportionments 2

2.1 Deposit . . . . . . . . . . . . . . . . . . . . 2

2.2 Purchase Price. . . . . . . . . . . . . . . . . 2

2.3 Prorations. . . . . . . . . . . . . . . . . . . 2

2.4 Tax Reduction Proceedings . . . . . . . . . . . 5

2.5 Closing Expenses. . . . . . . . . . . . . . . . 5

ARTICLE III: Title and Survey . . . . . . . . . . . . 7

3.1 Permitted Exceptions. . . . . . . . . . . . . . 7

3.2 Other Title Matters . . . . . . . . . . . . . . 8

ARTICLE IV: Covenants; Assumption of Brokerage Agreements;
Representations. . . . . . . . . . . . . . . . . . . . 9

4.1 Seller's Covenants. . . . . . . . . . . . . . . 9

4.2 Purchaser's Covenants . . . . . . . . . . . . . 11

4.3 Assumption of Brokerage Obligations . . . . . . 12

4.4 Representations . . . . . . . . . . . . . . . . 13

ARTICLE V: The Closing. . . . . . . . . . . . . . . . 13

5.1 Time and Place of Closing . . . . . . . . . . . 13

5.2 Acts to be Performed by Seller. . . . . . . . . 13

5.3 Acts to be Performed by Purchaser . . . . . . . 14

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ARTICLE VI: Conditions Precedent to Purchaser's
and Seller's Obligations to close. . . . . . . . . . . 15

6.1 Conditions to Purchaser's Obligations . . . . . 15

6.2 Conditions to Seller's Obligations. . . . . . . 15

6.3 Termination . . . . . . . . . . . . . . . . . . 16

ARTICLE VII: Termination, Default and Remedies. . . . 16

7.1 Permitted Termination . . . . . . . . . . . . . 16

7.2 Default by Seller . . . . . . . . . . . . . . . 16

7.3 Default by Purchaser. . . . . . . . . . . . . . 17

ARTICLE VIII: Miscellaneous . . . . . . . . . . . . . 17

8.1 Casualty and Condemnation . . . . . . . . . . . 17

8.2 Brokerage . . . . . . . . . . . . . . . . . . . 18

8.3 Notices . . . . . . . . . . . . . . . . . . . . 18

8.4 Governing Law . . . . . . . . . . . . . . . . . 20

8.5 Integration; Modification; Waiver . . . . . . . 20

8.6 Counterpart Execution . . . . . . . . . . . . . 20

8.7 Headings; Construction. . . . . . . . . . . . . 21

8.8 Binding Effect; Assignment. . . . . . . . . . . 21

8.9 Exhibits. . . . . . . . . . . . . . . . . . . . 21

8.10 Recordation . . . . . . . . . . . . . . . . . . 21

8.11 Approval. . . . . . . . . . . . . . . . . . . . 22

8.12 Survival. . . . . . . . . . . . . . . . . . . . 22

8.13 Severability. . . . . . . . . . . . . . . . . . 22

8.14 Non-recourse. . . . . . . . . . . . . . . . . . 22

8.15 Seller's Access to Books and Records. . . . . . 22

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8.16 No Consequential Damages. . . . . . . . . . . . 23

8.17 Employee Arrangements . . . . . . . . . . . . . 24

8.18 Indemnification . . . . . . . . . . . . . . . . 24

8.19 Third Party Beneficiary . . . . . . . . . . . . 24

Exhibits
A. The land
B. Title Exceptions
C. (Intentionally Omitted)
D. (Intentionally Omitted)
E. Form of Assumption of Brokerage Agreements
F. Schedule of Leases
G. Schedule of Contracts
H. Form of Deed
I. Form of Assignment and Assumption of Ground Lease Agreement
J. Form of Assignment of Leases and Contracts
K. Form of Bill of Sale
L. Form of FIRPTA Affidavit
M. Schedule of Employees
N. Form of Letter Regarding Assumption of Collective
Bargaining Agreements
O. Schedule of Collective Bargaining Agreements

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AGREEMENT OF SALE

THIS AGREEMENT OF SALE (this "AGREEMENT") is made and entered into as
of August 10, 1995 between 2 broadway Associates, L.P., as seller
("SELLER"), and 2 BROADWAY ACQUISITION, CORP., a NY CORP., as purchaser
("Purchaser"). In consideration of the agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Seller and Purchaser agree as Follows:

ARTICLE I: SALE OF PROPERTY

Subject to the terms and provisions of the Agreement, Seller agrees
to sell to Purchaser, and Purchaser agrees to purchase from Seller, all of
the following described property (collectively, the "PROPERTY"):

(a) all of Seller's right, title and interest in and to the
fee title in that certain parcel of land (the "LAND") located in New York,
New York, being described on EXHIBIT A hereto, and the building and other
improvements constructed on the Land (the "IMPROVEMENTS") commonly known as
2 Broadway, New York, New York;

(b) all of Seller's interest as lessor and all of Seller's
interest as lessee, under that certain Lease Agreement dated as of May 28,
1956 between New York Produce Exchange, as landlord, and Frederick A.
Pfister and Joseph A. Marone, as tenants, as amended by amendments dated
December 30, 1957 and July 31, 1959 or otherwise (the "GROUND LEASE");

(c) all right, title and interest of Seller under all leases
and other agreements providing for the occupancy of space in the
Improvements (each, a "LEASE"), and all prepaid rentals (to the extent
applicable to a period after the Closing Date (as defined in Section 5.1
below) and the security deposits under the Leases (to the extent not
applied prior to the Closing Date);

(d) subject to the provisions of Sections 2.3 (d), 4.1 (b)
and 8.17, to the extent assignable, all right, title and interest of Seller
(x) under all agreements relating to the operation or maintenance of the
Property including, without limitation, service and maintenance agreements,
but excluding any such agreements with affiliates of the Seller or its
partners (the "CONTRACTS") and (y) the Collective Bargaining Agreements (as
defined in Section 8.17 (c));

(e) all machinery, equipment, fixtures and building supplies,
owned by Seller, located in or on the Land or the Improvements, and used in
connection with the operation of the Improvements (the "PERSONAL
PROPERTY");

(f) subject to the provisions of Section 8.1 below, all
right, title and interest, if any, of Seller in and to any land lying in
the bed of any highway, street, road or avenue, opened or proposed, in
front of or adjoining all or any part of the Land, to the center line
thereof, and to any award made, or to be made, in lieu thereof, and in and
to any unpaid award for damage to the Land by reason of change of grade of
any such highway, street, road or avenue; and
(g) all right, title and interest of Seller in and to any
easements, rights-of-way, privileges, rights and appurtenances of any kind
relating to and for the benefit of the Land and the Improvements,
including, without limitation, all development rights, air rights, zoning
rights and any adjacent vaults, alleys, strips or gores of land, sidewalks,
driveways and parking areas and benefits thereunto belonging and pertaining
to the Land and Improvements existing as of the date hereof and at any time
hereafter.

(h) The parties hereto acknowledge and agree that the value
of the Personal Property is DE MINIMIS and no part of the Purchase Price
(as hereinafter defined) is applicable thereto.

ARTICLE II: DEPOSIT, PURCHASE PRICE AND APPORTIONMENTS

2.1 DEPOSIT. Prior to the execution of this Agreement, Purchaser
has deposited the sum of $1,500,000.00 (the "DEPOSIT") with the Title
Company (as defined in Section 3.1 below) pursuant to the "Offer for the
Purchase of Property known as 2 Broadway, New York, New York" (the "Offer
Letter"). The Deposit is being held by the Title Company in an interest
bearing account and otherwise in accordance with that certain escrow
agreement referred to in the Offer Letter, among the Title Company,
Purchaser and Seller as security for the performance by Purchaser of its
obligations hereunder.

2.2 PURCHASE PRICE.The purchase price for the Property (the
"PURCHASE PRICE") shall be TWENTY MILLION FIVE HUNDRED THOUSAND DOLLARS
($20,500,000.00), which shall be paid as Closing (as defined in Section 5.1
below), plus or minus any net prorations due to Seller or Purchaser, as the
case may be, as described in Section 2.4 below, by wire transfer to Seller
and/or such other payees as Seller may designate in writing, upon notice
given as least two business days prior to the Closing Date (as hereinafter
defined). The net Purchase Price shall be paid by (a) the Title Company
delivering the amount of the Deposit to Seller and (b) the Purchaser
delivering the balance to Seller.

2.3 PRORATIONS.

(a) The items described below with respect to the Property
shall apportioned between seller and Purchaser and shall be prorated on a
per diem basis as of 11:59 p.m. of the day before the Closing Date:

(i) annual rents and other fixed charges under the
Leases ("FIXED RENT"), as, when and to the extent collected

(ii) unfixed charges payable under the Leases
(including, without limitation, on account of percentage rental, taxes,
porter's wage, operating expenses and electricity) ("UNFIXED RENT"), as
when and to the extent collected;

(iii)real estate taxes, vault taxes, water charges and
sewer rents, if any, n the basis of the fiscal year for which assessed;

(iv) assessments, if any;

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(v) amounts payable under the Contracts assigned to
Purchaser.

(vi) employees' wages, vacation pay, welfare benefits
and payroll taxes;

(vii)interest on tenant security deposits if applicable;

(viii) building supplies contained in unopened
cartons or packages located at the Property (based upon Seller's cost, as
set forth in invoices or other proof reasonably satisfactory to Purchaser);
and

(ix) fees payable in connection with licenses and
permits covering the Property or any structures or equipment located
thereon.

(b) If the closing Date shall occur before the real estate
tax rate or assessment is fixed for the tax year in which the Closing date
occurs, the apportionment of taxes shall be upon the basis of the tax rate
or assessment for the next preceding year applied to the latest assessed
valuation and Seller and Purchaser shall readjust real estate taxes
promptly upon the fixing of the tax rate or assessment for the tax year in
which the closing Date occurs.

(c) If there is a water meter(s) on the Property, Seller
shall furnish a reading to a date not more than thirty (30) days prior to
the Closing Date, and the unfixed meter charge and the unfixed sewer rent,
if any, based thereon for the intervening time shall be apportioned on the
basis of such last reading.

(d) Seller will close all of its accounts relating to the
Property with any and all utility companies, and none of the deposits held
by such utility companies, whether or not such deposits are assignable
shall be assigned to purchaser but shall be the property of, and shall be
retained by, Seller. Purchaser shall be responsible for making its own
arrangements to open new accounts relating to the Property with any and all
utility companies. Seller will cancel all of its insurance covering the
Property as of the Closing Date, and Purchaser shall be responsible for
obtaining its own insurance coverage. Seller will cancel all its
arrangements with its affiliates which provide elevator maintenance and
other repair and maintenance services to the Property.

(e) Seller and Purchaser shall prepare an agreement (the
"PRORATION AGREEMENT") setting forth in reasonable detail the prorations
described above and stating the net amount owed to Seller or Purchaser, as
the case may be, on account thereof. Seller and Purchaser shall execute
and deliver the Proration Agreement as provided in Sections 5.2 and 5.3
below.

(f) If a net amount is owed by Seller to Purchaser as set
forth in the Proration Agreement, such amount shall be credited against the
payment to be made by Purchaser pursuant to Section 2.2 above. If a net
amount is owed by Purchaser to Seller as set forth in the Proration
Agreement, such amount shall be added to the payments to made by Purchaser
pursuant to Section 2.2 above. If the net amount owed by Seller or
Purchaser as the case may be, is not determined at least two business days
prior to Closing, so as to be included in the Seller's wire instructions
contemplated by Section 2.2, such amount shall be paid by certified check
payable to the other party or its designee.

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(g) If any of the items described above cannot be apportioned
at the Closing because of the unavailability of information as to the
amounts which are to be apportioned or otherwise, or are incorrectly
apportioned at Closing or subsequent thereto, such items shall be
apportioned or reapportioned, as the case may be, as soon as practicable
after the Closing Date or the date such error is discovered, as applicable;
provided that, with the exception of any item required to be apportioned
pursuant to paragraph (h) below neither party shall have the right to
request apportionment or reapportionment of any such item after the first
anniversary of the Closing Date.

(h) The apportionment of Fixed and Unfixed Rent
(collectively, "RENT") and the collection of Rent arrearage shall be
subject to the following:

(i) If, on the Closing Date, there is any past due Rent
owing by any tenant or other party under a Lease (each, a "TENANT") for any
period prior to the Closing Date, any Rent received by Purchaser from such
Tenant shall be adjusted between Seller and Purchaser as follows: (1)
first, to Rent due by such Tenant for the month in which the Closing Date
occurs and which shall apportioned in accordance with Section 2.3(a) above,
(2) second, to Rent then due and payable by such Tenant for any period
after the Closing Date and (3( then, the excess, if any, to past due Rent
for the period prior to the Closing Date. Purchaser shall use reasonable
efforts to collect such sums. Purchaser grants Seller the right to sue at
law on behalf of the landlord) but not to bring any summary dispossess
proceeding) to collect past due Rent owed by Tenants as of Closing Date.
Any sums received by Purchaser to which Seller is entitled shall be held in
trust for Seller on account of said past due Rent payable to Seller, and
Purchaser shall remit to Seller any such sums received by Purchaser to
which Seller is entitled within five (5) days after receipt thereof. If
Seller receives any amounts after the Closing Date which attributable, in
whole or in part, to any period from and after the Closing Date, Seller
shall remit to Purchaser that portion of the moneys so received by Seller
to Purchaser is entitled within five (5) days after receipt thereof.

(ii) Unfixed Rents shall be apportioned for the fiscal
year for which such Rent is calculated under respective Lease in proportion
to the number of days in such fiscal year occurring prior to the Closing
Date and the number of days in such fiscal year from and after the Closing
Date. If any Unfixed Rent payable under any Lease has not been billed or
has not been determined in accordance with the provisions of the respective
Lease as of the Closing Date, Purchaser shall bill the same when billable
and each party shall cooperate with the other to determine the correct
amount of such charges. Seller shall be entitled to all Unfixed Rent (i)
relating to fiscal year occurring in its entirety prior to the Closing Date
and (ii) relating to a charge or expense incurred prior to the Closing Date
but which is not being apportioned pursuant to this Agreement (e.g.,
overtime HVAC, recoveries of legal fees in Tenant disputes).

(iii)All prepaid rentals made under any Lease in respect
of periods on or after the Closing Date and security deposits (to the
extent required to be returned to the respective Tenant at the expiration
of its Lease) shall be delivered to Purchaser at the Closing. Seller shall
reasonably cooperate with Purchaser to change the beneficiary on all
security deposits that are letters of credit or certificates of deposit to
Purchaser.

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(iv) For the avoidance of doubt, the parties confirm
that all amounts due and payable in respect of Leases which have expired or
otherwise terminated prior to the Closing Date shall be the sole property
of Seller and, notwithstanding anything to the contrary contained herein,
Seller may take such actions as it desires to collect such amounts.

2.4 TAX REDUCTION PROCEEDINGS.

Seller is hereby authorized to continue any proceeding
now pending for the reduction of the assessed valuation of the Property
("TAX PROCEEDINGS") and to initiate any such Tax Proceedings, through the
Closing Date. All such proceeding shall be prosecuted by counsel of
Seller's choice. Seller shall have the right to withdraw, settle or
otherwise compromise any protest or reduction proceeding affecting real
estate taxes assessed against the Property (i) for the fiscal period ending
June 30, 1995 or any prior fiscal period without the prior consent of
Purchaser and (ii) for the fiscal year ending June 30,1996 provided
Purchaser shall have consented with respect thereto, which consent shall
not be unreasonably withheld or delayed. The amount of any tax refunds
(net of attorneys' fees and other costs of obtaining such tax refunds
whether incurred prior to or after the day hereof or the Closing Date and
net of amounts required to be refunded to tenants (including former
tenants)) with respect to any portion of the Property for a tax period in
which the Closing Date occurs shall be apportioned between Seller and
Purchaser as of the Closing Date. All refunds for prior tax years belong
solely to Seller and, upon receipt of Purchaser or its successors or
assigns, same shall be immediately paid to Seller. Purchaser shall not
make any filings or take any other actions which would prevent Seller from
prosecuting Tax Proceedings brought by Seller.

2.5 CLOSING EXPENSES.

(a) TITLE AND SURVEY. Purchaser shall bear all costs of
obtaining the Title Report and of the premium for an ALTA owner's title
policy (1992 form) (the "TITLE POLICY") and survey costs (including costs
of updating the Survey (as defined in Section 3.1 below).

(b) REAL ESTATE TRANSFER TAX. Seller and Purchaser agree to
comply timely with the requirements of Article 31 of the New York Tax Law
and the regulations applicable thereto, as the same may be amended from
time to time. Seller and Purchaser shall swear to and deliver the return
require by said statute and the regulations issued pursuant to the
authority thereof (the "RET RETURN"), it being acknowledged by the parties
that Seller intends to file an RET Return stating that, pursuant to the
provisions of Section 1146(c) of the United States Bankruptcy Code and the
Bankruptcy Court's order confirming the Seller's Plan of Reorganization the
transfer of the Property pursuant to this Agreement shall be exempt from
the Real Estate Transfer Tax imposed by said Article 31. Any Real Estate
Transfer Tax which may nevertheless be imposed by said Article 31 shall be
paid by Seller.

(c) REAL PROPERTY TRANSFER TAX. Seller and Purchaser agree
to comply timely with the requirements of Chapter 21 of Title 11 of the
Administrative Code of the City of New York and the regulations applicable
thereto, as the same may be amended from time to time. Seller and
Purchaser shall swear to and deliver the return required by said statute
and the regulations issued pursuant to the authority thereof (the "RPT
RETURN"), it being acknowledged

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by the parties that Seller intends to file an RPT Return stating that,
pursuant to the provisions of Section 1146(c) of the Bankruptcy Code and
the Bankruptcy Court's order confirming the Seller's Plan of
Reorganization, the transfer of the Property pursuant to this Agreement
shall be exempt from the Real Estate Transfer Tax imposed by said Chapter
21. Any Real Estate Transfer Tax which may nevertheless be imposed by said
Chapter 21 shall be paid by Seller.

(d) GAINS TAX.

(i) Seller and Purchaser agree to comply timely with
the requirements of Article 31-B of the Tax Law of the State of New York
and the regulations applicable thereto, as the same from time to time may
be amended (collectively, the"GAINS TAX LAW") in good faith and in such
manner as to avoid any postponement of the Closing; Purchaser agrees to
deliver to Seller simultaneously with the execution of this Agreement a
duly executed and acknowledged Transferee Questionnaire prepared by Seller.

At the Closing, Seller shall deliver or cause to be delivered to the Title
Company either (A) an official Statement of No Tax Due, or (B) an official
Tentative Assessment and Return (in the case of either (A) or (B), the
"GAINS TAX DOCUMENT") accompanied by a bank check payable to the order of
the State Tax Commission in the amount of the tax shown to be due thereon.
In the event that on the anticipated Closing Date Seller has not obtained
the Gains Tax Document, Seller shall be entitled, by notice to Purchaser,
to adjourn the closing one or more times for an aggregate period not to
exceed sixty (60) days and Purchaser's obligations hereunder shall remain
in full force and effect in the meantime.

(ii) Without limiting the provisions of Section 8.8
below, if the Purchaser assigns this Agreement to the extent permitted
pursuant to said Section 8.8, no assignment of any rights hereunder shall
be effective unless Purchaser and each assignee comply timely with the
requirements of the Gains Tax Law applicable to the assignment transaction
and unless Purchaser and each assignee delivers to Seller and/or the Title
Company on or before the Closing Date the applicable items referred to in
clauses (A) or (B) of the preceding paragraph (i), all as may be required
as a prerequisite to the recording of the Deed (as defined in Section
5.2(a)). Purchaser shall not be entitled to any delay of the Closing Date
by reason of Purchaser's obligation to comply timely with the requirements
of the Gains Tax Law in the event of any such assignment.

(iii)In addition to making the payment and delivering
the instruments and documents referred to above in this Section 2.5(d),
Seller, Purchaser and any assignee of Purchaser shall timely (A) make any
other payments (except that Purchaser shall have no obligation to make any
payments other than in its capacity, if any as assignor hereunder) and (B)
execute, acknowledge and deliver such further documents and instruments, as
may be necessary to comply with the Gains Tax Law.

(e) TAX PAYMENTS. Upon Seller's request, made not less than
two (2) business days prior to the Closing, Purchaser shall bring to the
Closing separate certified or bank check(s) in the amount(s) of the taxes,
if any, due with respect to the Real Estate Transfer Taxes as referred to
in (b) and (c) above and the Gains Tax Law, if any. The entire amount of
taxes due under the Gains Tax Law (excluding any amounts required to be
paid as a result of an

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assignment of this Contract and the entire amount of taxes due with respect
to such Real Estate Transfer Taxes shall be credited against the Purchase
Price payable at Closing.

(f) PROFESSIONAL FEES AND EXPENSES. Seller and Purchaser
shall each pay their respective legal, consulting and other professional
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby.

(g) RECORDING CHARGES. Purchaser shall pay all recording
charges, if any, payable in connection with the recording of the Deed and
the Ground Lease Assignment. Each party shall pay all other charges, if
any, payable in connection with the recording of any documents delivered by
or on behalf of such party.

ARTICLE III: TITLE AND SURVEY

3.1 PERMITTED EXCEPTIONS.

(a) Purchaser has been furnished with a preliminary title
report no. NY941074M (the "TITLE REPORT") with respect to the Property,
dated July 12, 1994 and further redated February 3,1995 issued by
Commonwealth Land Title Insurance Company (the "TITLE COMPANY"). Seller
has caused to be furnished to Purchaser a survey of the Land prepared by
Earl B. Lovell-S.P. Belcher, Inc., dated June 5,1959, last redated March
28,1995 (the "SURVEY").

(b) The Property is to be sold and conveyed subject to the
following (the "PERMITTED EXCEPTIONS"):

(i) the matters set forth on EXHIBIT B hereto and the
standard exclusions set forth in Purchaser's title insurance policy;

(ii) the state of facts shown on the Survey, and any
additional state of facts that an accurate update of the Survey might show
provided that such additional facts do not materially and adversely affect
the use of the Improvements as an office building;

(iii)all laws, ordinances, rules and regulations of the
United States, the State of New York, the City of New York or any agency,
department, commission, bureau or instrumentality of any of the foregoing
having jurisdiction (each, a "GOVERNMENTAL AUTHORITY") affecting the
Property, as the same may now exist or may be hereafter modified
supplemented or promulgated;

(iv) unpaid federal or state inheritance and estate
taxes, or unpaid state and local franchise, general corporation and/or
income taxes or other monetary liens, provided that, based upon a deposit
with the Title Company, an indemnity to the Title Company, the order of a
bankruptcy court having jurisdiction, or other assurances by Seller to the
Title Company, Seller is able to induce the Title Company to omit such lien
or encumbrance as an objection to title or to insure against its collection
out of the Property;

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(v) right, lack of right or restricted right of any
owner of the Property to construct and or maintain (and the right of any
Governmental Authority to require the removal of) any vault or vaulted
area, in or under the streets, sidewalks or other areas abutting the
Property and any applicable licensing statute, ordinance and regulation,
the terms of any license pertaining thereto and the lien of street,
sidewalk or other area vault taxes;

(vi) all presently existing and future liens of (A) real
estate taxes and (B) water rates, water meter charges, water frontage and
sewer taxes, rents ad charges provided that the items set forth in (A) and
(B) are apportioned as provided in this Agreement;

(vii)all violations of laws, ordinances, orders,
requirements or regulations of any Governmental Authority, applicable to
the Property whether or not noted in the records of or issued by, any
Governmental Authority, existing on the Closing Date;

(viii) such matters as the Title Company shall be
willing, without special premium, to omit as exceptions to coverage or to
except with insurance against collection out of or enforcement against the
Property;

(ix) any utility company rights, easements and
franchises, provided same do not materially and adversely affect the use of
the Improvements as on office building; and

(x) financing statements covering fixtures, equipment
or personal property of existing or past Tenants.

3.2 OTHER TITLE MATTERS.

(a) In the event that on the anticipated Closing Date title
to the Property shall be subject to liens, encumbrances or other matters
which are not Permitted Exceptions, and if Purchaser shall be unwilling to
waive the same and to close the transaction contemplated by this Agreement
without abatement or reduction of the Purchase Price or credit or allowance
of any kind, Seller shall have the right, at Seller's sole election, either
(i) to take such action as Seller shall deem advisable to remove, remedy or
comply with such liens, encumbrances or objections or (ii) to cancel this
Agreement. Seller shall be deemed to have remedied such liens,
encumbrances or objections for all purposes of this Agreement and Purchaser
shall be obligated to close title hereunder if the Title Company or another
title company licensed to do business in New York and selected by Seller
will insure Purchaser's title to the Land and Improvements in the amount of
the Purchase Price under an ALTA owner's standard form policy (1992 form)
subject only to the Permitted Exceptions, and in such case Purchaser shall
accept such title insurance and pay the premiums therefor. In the event of
Seller' election to take action to remove, remedy or comply with such
liens, encumbrances or other objections or if Seller shall have failed to
satisfy any other conditio to Closing contained in this Agreement or if
Seller for any other reason elects not to close on the scheduled Closing
Date, then, in any such instance, Seller shall be entitled, by notice to
Purchaser, to adjourn the Closing one or more times for an aggregate period
not to exceed ninety (90) days, and Purchaser's obligations hereunder shall
remain in full force and effect in the meantime. If for any reason
whatsoever (except for Seller's

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default under paragraph (b) below) Seller shall not have succeeded in
removing, remedying or complying with such liens, encumbrances or other
objections at the expiration of any such adjournment or if for any reason
whatsoever (except as set forth in Section 7.2 below) Seller shall have
failed to satisfy any other condition to Closing contained in this
Agreement at the expiration of any such adjournment, and, in either case,
shall not elect or shall not be entitled to further adjourn the Closing,
and if Purchaser shall still be unwilling to waive the same and to
consummate the Closing without abatement or reduction of the Purchase Price
or credit or allowance of any kind, this Agreement shall be, and be deemed
to be, canceled, the Deposit shall be promptly returned to Purchaser, and
the parties shall have no further obligations under this Agreement except
those which are expressly stated to survive the termination thereof.

(b) The acceptance of the Deed (as hereinafter defined) by
Purchaser shall be deemed to be a full performance and discharge of every
obligation on the part of Seller to be performed under this Agreement,
except those, if any, which are specifically stated herein to survive the
Closing. If on the closing Date there are any liens or encumbrances
affecting the Property subject to which Purchaser is not obligated to
accept title, Seller may use any portion of the Purchase Price payable
pursuant to Section 2.2 above to satisfy same, provided Seller shall have
delivered instruments in recordable form sufficient to release of record
any such liens or encumbrances which constitute recorded instruments,
together with the cost of recording or filing said instruments, and the
Title Company shall agree to omit such lien or encumbrance as an objection
to title. Seller shall use good faith efforts to obtain an order from the
bankruptcy court having jurisdiction that would enable Seller to transfer
title to the Property to Purchaser free and clear of all liens,
encumbrances and other matters that are not Permitted Exceptions. During
the period between the date hereof and the Closing Date, Seller shall not
grant any additional liens to secure debt (other than any mortgage liens it
may grant or confirm in connection with the mortgage financing currently
encumbering the Property); provided, however, that the creation of
involuntary liens against the Property shall not constitute a breach of
Seller's obligations under this sentence.

(c) Any title insurance Purchaser may obtain with respect to
the purchase of the Property shall be obtained from the Title Company,
provided the Title Company is willing to issue the same in accordance with
the terms hereof.

ARTICLE IV: COVENANTS; ASSUMPTION OF BROKERAGE AGREEMENTS;
REPRESENTATIONS

4.1 SELLER'S COVENANTS. Seller covenants that during the period
between the date hereof and the Closing Date:

(a) The Improvements will be maintained in their present
condition, subject, however, to normal wear and tear, damage by fire or
other casualty; provided, however, in no event will seller be obligate to
expend more than $25,000 in the aggregate to make any repairs or
replacements to the Improvements. Nothing herein shall be deemed to limit
the installation or alteration of tenant improvements.

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(b) Without the prior written consent of Purchaser (which
shall not be unreasonably withheld), Seller shall not enter into any
agreement with respect to the use, occupancy, operation or maintenance of
the Property and which would be binding on Purchaser, including, without
limitation, Leases and employment, management, service, maintenance and
union agreements, or amend, renew or extend any such agreement presently in
effect in any material respect, (i) unless such new agreement or amendment
can be cancelled on not more than thirty (30) days' notice, (ii) except for
agreement or amendments required by law or required to perform emergency
repairs or improvements, and (iii) except for union agreements.

(c) Subject to Section 4.2 (d) and the further provisions of
this Section 4.1 (c), Purchaser and its authorized representatives will be
given reasonable access to the Property during ordinary business hours,
provided that, any such person given access shall be accompanied by a
representative of Seller. Purchaser hereby agrees to indemnify and hold
Seller harmless from and against any and all claims, liabilities, losses
and expenses, including reasonable attorneys' fees, court costs and
disbursements, for physical damage to the Property or any other property or
personal injury to any person arising out of or incurred in connection with
the performance of any such inspection or any other entry onto the Property
by Purchaser or its representatives which indemnification shall survive (i)
the termination or cancellation of this Agreement for any reason and (ii)
the Closing. Purchaser shall maintain or cause to be maintained, at
Purchaser's expense, a policy of commercial general liability insurance,
with contractual liability covering Purchaser's indemnification obligations
contained in this paragraph, and with a combined single limit of not less
than $1,000,000 commercial general liability with a $2,000,000 aggregate
and $10,000,000 umbrella liability, insuring Purchaser and Seller and
Seller's Affiliates, as additional insured, against any injuries or damages
to persons or property that may result from or are related to (a)
Purchaser's and/or Purchaser's Representatives' entry to the Property, (b)
any investigations or other activities conducted thereon, and (c) any and
all other activities undertaken by Purchaser and/or Purchaser's
Representatives, in such forms and with an insurance company licensed in
the State of New York and rated by Best's Insurance Reports and having a
rating of not less than A-VII, and deliver a certificate of insurance
representing such coverage to Seller prior to the first entry on the
Property. As used in this Agreement, the term, the term "SELLER'S
AFFILIATES" shall mean any disclosed or undisclosed officer, director,
employee, trustee, shareholder, partner, principal, parent, subsidiary or
other affiliate of Seller. The term "PURCHASER'S REPRESENTATIVES" shall
mean any of Purchaser's directors, officers, employees, affiliates,
partners, brokers, agents or other representatives, including, without
limitation, attorneys, accountants, contractors, engineers and financial
advisors.

(d) Seller shall maintain in full force and effect Seller's
existing insurance coverage with respect to the Property or substantially
similar coverage.

(e) Seller shall perform its obligations under the last two
sentences of Section 3.2 (b) above.

Whenever in this Agreement Seller is required to obtain
Purchaser's approval or consent, Purchaser shall, within five (5) business
days after request therefore, notify Seller of its

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approval or disapproval. If Purchaser fails to respond within said five
(5) business day period Purchaser shall be deemed to have granted approval
or consent.

4.2 PURCHASER'S COVENANTS

(a) Purchaser covenants and agrees that Purchaser (i) knows,
and has examined, inspected and investigated to the full satisfaction of
Purchaser the physical nature and condition of the Property, (ii) has
independently investigated, analyzed and appraised the value and
profitability of the Property and (iii) has reviewed the Title Report, the
Survey and such other documents and materials as Purchaser has deemed
advisable. Purchaser acknowledges that, except as specifically set forth
in this Agreement neither Seller nor any real estate broker, agent,
employee, servant, consultant or representative of Seller has made any
representations whatsoever regarding the subject matter of this Agreement
or the transaction contemplated hereby, including without limitation,
representations as to the physical nature or condition of the Property,
zoning laws, building codes, laws and regulations, environmental matters,
the violation of any laws, ordinances, rules, regulations or orders of any
Governmental Authority, water, sewer or other utilities, rents or other
income, expenses applicable to the Property, capital expenditures, leases,
existing or future operations of the Property or any other matter or thing
affecting or related to the Property or the operation thereof, except as
herein specifically set forth, and Purchaser further agrees to accept the
Property in its "as is" condition and "with all faults" on the date hereof
subject to reasonable wear and tear and, subject to the provisions of
Section 8.1 below, loss by casualty or condemnation. In executing,
delivering and/or performing this Agreement Purchaser has not relied upon
and does not rely upon, and Seller shall not be liable or bound in any
manner by, express or implied warranties, guaranties, promises, statements,
representations or information pertaining to any of the matters set forth
above in this paragraph made or furnished by Seller or by any real estate
broker, agent, employee, servant or any other person representing or
purporting to represent Seller to whomever made or given, directly or
indirectly, verbally or in writing, unless such warranties, guaranties,
promises, statements, representations or information are expressly and
specifically set forth herein.

(b) Purchaser covenants and agrees that neither Purchaser nor
Purchaser's Representatives shall make any oral or written contact with any
of Seller's tenants, occupants, vendors, employees, consultants or
contractors, or any other entity or person affiliated with the Property in
any manner concerning the Property prior to the Closing Date without
obtaining Seller's prior written consent in each instance.

(c) Purchaser expressly acknowledges that, except as
expressly set forth in this Agreement, neither Seller, nor any person
acting on behalf of Seller, nor any person or entity which prepared or
provided any of the "Evaluation Materials" (as such term is defined in the
Solicitation of Offers Package pursuant to which this Agreement is being
executed), nor any direct or indirect officer, director, partner,
shareholder, employee, agent, representative, accountant, advisor,
attorney, principal, affiliate, consultant, contractor, successor or assign
of any of the foregoing parties (Seller and all of the other parties
described in the preceding portions of this sentence (other than Purchaser)
shall be referred to herein collectively as the EXCULPATED PARTIES) has
made any oral or written representations or warranties, whether expressed
or implied, by operation of law or otherwise, with respect to the Property,
the zoning and other laws,

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regulations rules applicable thereto or the compliance by the Property
therewith, the revenues and expenses generated by or associated the
Property, or any Evaluation Materials. Purchaser further acknowledges that
all Evaluation Materials relating to the Property which have been provided
by any of the Exculpated Parties have been provided without any warranty or
representation, expressed or implied as to their content, suitability for
any purpose, accuracy, truthfulness or completeness and Purchaser shall not
have any recourse against Seller or any of the other Exculpated Parties in
the event of any errors therein or omissions therefrom. Purchaser is
acquiring the Property based solely on its own independent investigation
and inspection of the Property and not in reliance on any information
provided by Seller or any of the other Exculpated Parties, including,
without limitation, any information contained in the Evaluation Materials.

(d) Purchaser acknowledges that any access it is given to the
Property (whether pursuant to Section 4.1 (c) above or otherwise) shall be
solely for the purpose of connection with the ownership of the Property
after acquisition of same by Purchaser and shall neither be a basis for
evaluating the purchase and sale herein agreed to by Purchaser, nor shall
it be a contingency or condition to the performance of Purchaser's
obligations hereunder. The results of any such access (whether evidencing
latent or patent defects in the Property, the existence or nonexistence of
any hazardous materials or substances, the tenants of the Property or the
leases affecting the Property, economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
air quality, topography, drainage, soil, subsoil of the Property, the
utilities serving the Property, any zoning, environmental or building laws,
rules or regulations affecting the Property, or otherwise disclosing any
condition which is undesirable or in violation of any law or governmental
rule, regulation, ordinance or order) shall not be grounds for any release
of Purchaser's obligations hereunder or the time for the performance of
same, any amendment or modification of this Agreement or any abatement in
the Purchase Price. Purchaser agrees to indemnify, defend and hold
harmless Seller for any and all loss, cost, liability or expense
(including, without limitation, attorneys' fees, court costs and
disbursements) arising out of any acts or omissions or Purchaser or its
agents, contractors or representatives in connection with its access to the
Property provided for in this Section.

(e) Seller shall not be obligated to pay any sums or perform
any work to any portion of the Property including, but not limited to any
work which may now or hereafter be required to cause the Property to be in
compliance with the requirements of the Americans with Disabilities Act or
any other laws.

4.3 ASSUMPTION OF BROKERAGE OBLIGATIONS. At Closing, Purchaser
shall assume all of Seller's obligations under paragraph 11 of the
brokerage agreement dated December 14, 1990 between O&Y Management Corp. as
agent for 2 Broadway Associates and Peter Berkley & Company, Inc. (relating
to space leased by Corporate Solutions, Inc.); under paragraph 10 of the
brokerage agreement between O&Y Management Corp. as agent for 2 Broadway
Associates and Edward S. Gordon Company, Inc. (relating to space leased by
RAS Securities) and under paragraph 3 of the brokerage agreement dated as
of January 16, 1995 between O&Y Management Corp. as agent for 2 Broadway
Associates and Edward S. Gordon Company, Inc.

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(relating to space leased by Prentice-Hall, Inc.) copies of which brokerage
agreements have been furnished to Purchaser. Such assumptions shall be
pursuant to an instrument substantially in the form annexed hereto as
EXHIBIT E.

4.4 REPRESENTATIONS.

(a) Seller represents that the schedule of leases for the
Improvements attached as EXHIBIT F hereto is true and correct in all
material respects as of the date hereof, provided that to the extent any
information set forth thereon conflicts with the provisions of any Lease or
other documentation delivered to Purchaser, the rent roll shall be deemed
modified to reflect the correct information.

(b) Seller represents that the schedule of Contracts set
forth as EXHIBIT G hereto is true and correct in all material respects,
provided that to the extent any information set forth thereon conflicts
with the provisions of any Contract or other documentation delivered to
Purchaser, the schedule shall be deemed modified to reflect such correct
information.

ARTICLE V: THE CLOSING

5.1 TIME AND PLACE OF CLOSING. Subject to the other terms and
conditions of this Agreement, including any adjournment rights provided for
herein, the (the "CLOSING") of the transactions contemplated hereby shall
be held on the fifteenth day after the date hereof (the "CLOSING DATE "),
or if such day is not a business day, then on the next succeeding business
day. The Closing shall take place at the offices of Fried, Frank, Harris,
Shriver & Jacobson, One New York Plaza, New York, New York, or at such
other location in New York, New York as seller may designate upon not less
than two (2) business days notice.

5.2 ACTS TO BE PERFORMED BY SELLER. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser the following items:

(a) a recordable bargain and sale deed without covenants
against grantor's acts in New York statutory form (the "DEED"), executed
and acknowledged by Seller, in the form attached as EXHIBIT H hereto,
conveying to Purchaser the Land and Improvements subject to the Permitted
Exceptions and such other liens, encumbrances and other matters as
Purchaser may be willing to waive or Seller shall be deemed to have
remedied, as described in Section 3.2(a) above;

(b) a recordable assignment (the "GROUND LEASE ASSIGNMENT"),
without recourse or warranty, in New York statutory form, of Seller's
interest as lessor and lessee under the Ground Lease, in the form attached
as EXHIBIT I hereto, which shall include Purchaser's assumption of Seller's
obligations thereunder accruing from and after the Closing Date and a
general release by Purchaser of any claims it may have relating to the
Ground Lease against Seller (and its predecessors-in-interest) thereunder;

(c) an assignment (the "ASSIGNMENT OF LEASES AND CONTRACTS")
of all right, title and interest of Seller under the Leases and Contracts
(to the extent assignable) which are in

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effect on the Closing Date without, recourse or warranty, in the form
attached as EXHIBIT J hereto, which shall include Purchaser's assumption of
Seller's obligations under the Leases and Contracts accruing from and after
the Closing Date;

(d) a bill of Sale ("BILL OF SALE") in the form attached as
EXHIBIT K hereto, conveying Seller's right title and interest in and to the
Personal Property;

(e) a nonforeign affidavit in the form of EXHIBIT L hereto,
executed by Seller;

(f) the Proration Agreement, executed by Seller;

(g) all existing surveys, blueprints, drawings, plans and
specifications for or with respect to the Property or any part thereof, to
the extent in Seller's possession;

(h) keys to the Improvements in Seller's possession;

(i) the RET Return, the RPT Return and the Gains Tax
Document, executed and acknowledged by Seller, together with the payment,
if any, required by Section 2.5 above;

(j) any instruments required to be executed by Seller under
Section 4.3 of this Agreement;

(k) such further instruments as may be necessary to record
the Deed and the Ground Lease Assignment;

(l) a copy of the order of the bankruptcy court having
jurisdiction approving the sale of the Property to Purchaser;

(m) a letter to Tenants, advising them of the sale to
Purchaser and directing them to make all payments to Purchaser or its
designee; and

(n) an instrument from Seller releasing Purchaser from any
claims under the Ground Lease for the period prior to the Closing.

5.3 ACTS TO BE PERFORMED BY PURCHASER. At the Closing, Purchaser
shall deliver or cause to be delivered to Seller (or to the Title Company,
as so specified):

(a) the payment of the Purchase Price to be made in
accordance with Section 2.2 above;

(b) the Ground Lease Assignment, executed by Purchaser;

(d) the Proration Agreement, executed by Purchaser;

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(e) the RET Return, the RPT Return and the Gains Tax Document
executed and acknowledged by Purchaser, together with the payments, if any,
require by Section 2.5 above;

(f) any instruments required to be executed by Purchaser
under Sections 2.4, 4.3 and 8.17 of this Agreement.

ARTICLE VI: CONDITIONS PRECEDENT TO PURCHASER'S AND
SELLER'S OBLIGATIONS TO CLOSE

6.1 CONDITIONS TO PURCHASER'S OBLIGATIONS. Purchaser's obligation
to consummate the transactions contemplated hereunder is conditioned upon
satisfaction of each of the following conditions at or prior to the Closing
(or such earlier date as is specified with respect to a particular
condition):

(a) Seller shall have made the deliveries required pursuant
to Section 5.2 above;

(b) Seller shall not have failed to perform or comply in any
material respect with any of its agreements, conditions, covenants or
obligations in the manner and within the time periods provided under this
Agreement, and all of Seller's representations and warranties shall gave
been true and correct in all material respects as of the date when made;
and

(c) the Title Company (or, as Seller's election, another
title company licensed to do business in New York) shall gave delivered to
Purchaser a commitment to issue the Title Policy, in an amount at least
equal to the Purchase Price, insuring Purchaser's fee title to the Land and
the Improvements subject only to the Permitted Exceptions and any of the
matters waived by Purchaser.

6.2 CONDITIONS TO SELLER'S OBLIGATIONS. Seller's obligation to
consummate the transactions contemplated hereunder is conditioned upon the
satisfaction of each of the following conditions at or prior to the Closing
(or such earlier date as is specified with respect to a particular
condition):

(a) Purchaser shall have made the deliveries required
pursuant to Section 5.3 above; and

(b) Purchaser shall not have failed to perform or comply in
any material respect with any of its agreements, conditions or obligations
in the manner and by the dates and within the time periods provided under
this Agreement and all of Purchaser's representations and warranties shall
have been true and correct in all material respects as of the date when
made.

6.3 TERMINATION. In the event that any of the above conditions are
not satisfied by the party to this Agreement (or a third party, as
applicable) specified to satisfy such condition at or

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prior to the Closing (or such earlier date as is specified with respect to
a particular condition), then the party to this Agreement whose obligations
are conditioned upon the satisfaction of such condition may terminate this
Agreement by notice delivered to the other party at or prior to the
Closing; provided, however, if the failure to satisfy such condition is due
to the default of the party required to satisfy the same, the other party
may pursue its remedies under Article VII. In the event of any termination
of this Agreement, the lien of the Purchaser against the Property shall
wholly cease and, in addition to any other obligations of the parties which
are expressly stated herein to survive such termination, the parties'
respective obligations to instruct the Title Company to return the Deposit,
shall survive.

ARTICLE VII: TERMINATION, DEFAULT AND REMEDIES

7.1 PERMITTED TERMINATION. Subject to the provisions of Section
3.2, if this Agreement is terminated (or deemed terminated) by either party
pursuant to a right expressly given it to do so hereunder, but not by
reason of the default of the other party, then this Agreement shall be
deemed, and be, canceled, the Deposit shall be promptly returned to the
Purchaser, and the parties shall have no further obligations under this
Agreement, except for those which are expressly stated to survive the
termination thereof.

7.2 DEFAULT BY SELLER

(a) Seller shall be in default hereunder if Seller shall fail
to comply with or perform within the time limits and in the manner required
in this Agreement in any material respect any covenant, agreement or
obligation on its part to be complied with or performed and any condition
to the performance by Seller of such obligations have been satisfied.

(b) Except as hereinafter specifically provided to the
contrary, if Seller shall be in default hereunder, Purchaser (in lieu of
prosecuting an action for damages or proceeding with any other legal course
of conduct, the right to bring such actions or proceedings being
expressly and voluntarily waived by Purchaser, to the extent legally
permissible, following and upon advice of its counsel) shall have the right
(i) to seek to obtain specific performance of Seller's obligations
hereunder, provided that any action for specific performance shall be
commenced within sixty (60) days after such default, or (ii) to promptly
receive a return of the Deposit. If Purchaser fails to commence an action
for specific performance within sixty (60) days after such default,
Purchaser's sole remedy shall be to receive a return of the Deposit. Upon
such return and delivery, this Agreement shall terminate and neither party
hereto shall have any further obligations under this Agreement other than
those which ar expressly stated to survive the termination thereof.

7.3 DEFAULT BY PURCHASER.

(a) Purchaser shall be in default hereunder if Purchaser
shall fail to comply with or perform within the time limits and in the
manner required in this Agreement in any material respect any covenant,
agreement or obligation on its part to be complied with or performed and
any conditions to the performance by Purchaser of its obligations hereunder
have been satisfied. In the event of a default by Purchaser hereunder,
Seller may terminate this

-16-
Agreement by notice to Purchaser at or prior to the Closing, in which event
Seller shall be entitled to receive the Deposit as liquidated damages in
full satisfaction of any claims against Purchaser hereunder; provided,
however, that the foregoing shall not limit any claims that Seller may have
against Purchaser based on Purchaser's failure to comply with any post-
Closing obligation or any instrument delivered at Closing.

(b) As an inducement to Seller to enter into this Agreement,
Purchaser agrees that notwithstanding anything to the contrary expressly or
by implication provided in this Agreement, (i) time shall be of the essence
with respect to the performance by Purchaser of its obligations under this
Agreement by the dates and within the time periods set forth in this
Agreement, (ii) the failure of Purchaser to perform its obligations under
this Agreement by the dates and within the time periods set forth in this
Agreement shall be a material default under this Agreement, and (iii)
Purchaser shall not be entitled to any adjournment(s) of the times or dates
by which Purchaser is required to perform its obligations under this
Agreement; except that Purchaser may request one or more adjournments of
the Closing Date, provided that the aggregate period of time the Closing
may be adjourned by reason thereof shall not exceed five (5) business days.

ARTICLE VIII: MISCELLANEOUS

8.1 CASUALTY AND CONDEMNATION. Seller and Purchaser each waive the
provisions of all applicable laws, ordinances, rules and regulations of any
Governmental Authority relating to the occurrence of a casualty or taking
by condemnation or right of eminent domain between the date hereof and the
Closing including, without limitation, Section 5-1311 of the New York
General Obligations Law, and Seller and Purchaser each agree that the
provisions of this Section 8.1 shall control in lieu thereof. Seller
agrees to give Purchaser prompt notice of any fire or other casualty
affecting the Land or the Improvements between the date hereof and the date
hereof and the Closing or of any taking by condemnation or right of eminent
domain of all or any portion of the Land or the Improvements. If prior to
the Closing there shall occur:

(a) material damage to the Property caused by fire or other
casualty, which for purposes hereof shall be deemed damage which would cost
in excess of $5,000,000 to repair and restore to as good a condition as
that existing on the day prior to such fire or other casualty, as
reasonably estimated by Seller's independent architect or contractor having
an office in New York County; or

(b) the taking by condemnation or right of eminent domain of
more than ten percent (10%) of the rentable area of the Improvements or of
such portion of the sidewalk abutting the Property that materially and
permanently interferes with access to the Improvements or the use and
operation thereof;

then in any such event, either party may, at its option, terminate this
Agreement by notice to the other given within twenty (20) days after
Purchaser has received the notice referred to above (including, in the case
of fire or casualty, a written estimate from Seller's architect or engineer
reasonably itemizing the amount of damages) but no later than one day
before the Closing Date

-17-
in which event the provisions of Section 7.1 shall be applicable. If such
damage or taking is not material or, if material, neither party elects to
terminate this Agreement, then the Closing shall take place as provided
herein without abatement of the Purchase Price, and there shall be assigned
to Purchaser at the Closing all interest of Seller in and to any insurance
proceeds or condemnation awards which may be payable and/or Seller shall
pay to Purchaser all amount thereof that have been paid to Seller on
account of any such occurrence (minus any amounts theretofore expended by
Seller towards the cost of repair and restoration or for making the
Property safe and secure pending such repair and restoration), plus the
amount of any "deductible" provided in Seller's casualty insurance policy.

8.2 BROKERAGE. Purchaser and Seller each represents to the other
that it has not dealt with any broker or finder in connection with this
Agreement or the transactions contemplated hereby other than Cushman &
Wakefield Inc. and NO OTHER BROKER, the party identified as Offeror's
Cooperating Broker in paragraph 4 of the Offer Letter. Each party shall
indemnify the other and hold the other harmless from any claim, loss,
liability, damage, cost or expense (including, without limitation,
reasonable attorneys' fees, disbursements and court costs) paid or incurred
by such party by reason of any claim to any broker's, finder's or other fee
in connection with this Agreement or the transaction contemplated hereby if
such claim is based on dealing with the indemnifying party. Seller agrees
to pay to the brokers(s) specified in this section such compensation,
commissions or charges to which they are entitled pursuant to separate
agreements between such parties. The parties' obligations under this
Section 8.2 shall survive the termination of this Agreement.

8.3 NOTICES. Any notice or other communication that is required
or permitted to be given under the terms of this Agreement (each, a
"NOTICE"), shall be in writing and shall be deemed to have been duly given
when (a) deposited in the United States mail, postage prepaid for certified
or registered mail, with return receipt requested, (b) by overnight courier
service, with return receipt requested, or (c) when personally delivered,
in each case to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by (10) days'
prior Notice given and received in the manner provided in this Section 8.3
to the other parties described in this Section 8.3.

If to Seller:

c/o Olympia & York Companies (U.S.A.)
237 Park Avenue
New York, New York 10017
Attn: Managing Attorney

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Joshua Mermelstein, Esq.

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and to :

Weil, Gotshal & Manges
767 5th Avenue
New York, New York 10153
Attention: Edward Sutherland, Esq.

If to Purchaser:

2 BROADWAY ACQUISITION CORP.
354 5TH AVE.
N.Y N.Y 10018
ATTN: JACK BASCH/RANDY SHAPIRO

A Notice shall be deemed to have been duly received (and the time
period in which a response thereto is required shall commence), (x) if sent
by registered or certified mail or by overnight courier, on the date set
forth on the return receipt, or (y) if personally delivered, on the date of
such delivery. The inability to make delivery because of changed address
of which no Notice was given, or rejection or refusal to accept any Notice
offered for delivery, shall be deemed to be receipt of the Notice as of the
date of such inability to deliver or rejection or refusal to accept. Any
Notice may be given by counsel for the party giving same.

8.4 GOVERNING LAW. The laws of the State of New York (without
giving effect to any principles of conflicts of laws) shall govern the
validity, enforcement and interpretation of this Agreement.

8.5 INTEGRATION: MODIFICATION: WAIVER. This Agreement
constitutes the complete and final expression of the agreement of the
parties relating to the Property and the transactions contemplated hereby,
and supersedes all previous contracts, agreements and understandings of the
parties, either oral or written, relating to the Property or the
transactions contemplated hereby. This Agreement cannot be modified, or
any of the terms hereof waived, except by an instrument in writing executed
by the party against whom enforcement of the modification or waiver is
sought. Any other documents delivered to Seller in connection with
Purchaser's submission of an offer for the purchase of the Property (I.E.,
confidentiality agreement, request shall remain in full force and effect,
and shall survive the termination of this Agreement. In the event any of
the provisions of this Agreement conflict with any of the provisions of the
[Purchaser Offer], which specifically relate to the terms of this
Agreement, then the provisions of this Agreement shall control.

8.6 COUNTERPART EXECUTION. This Agreement may be executed in
several counterparts, each of which shall be fully effective as an original
and all of which together shall constitute one and the same instrument.

8.7 HEADING: CONSTRUCTION. The headings which have been used
throughout this Agreement have been inserted for convenience of reference
only and should not be construed in

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interpreting this Agreement. Words of any gender used in this Agreement
shall include any other gender and words in the singular shall include the
plural, and vice versa, unless the context requires otherwise. The words
"herein", "hereof", "hereunder" and other similar compounds of the words
"here" when used in this Agreement shall refer to the entire Agreement and
not to any particular provision or section. As used in this Agreement, the
term "BUSINESS DAY" means every day other than (i) Saturdays and Sundays,
(ii) all days observed by the Federal or New York State governments as
legal holidays, (iii) all days on which commercial banks in New York State
are required by law to be closed and (iv) the following Jewish holidays:
Rosh Hashanah (first day) and Yom Kippur.

8.8 BINDING EFFECT: ASSIGNMENT.

(a) The delivery of this Agreement shall not be deemed an
offer. This Agreement shall be binding upon and inure to the benefit of
Seller and Purchaser, and their respective heirs, personal representatives,
successors and permitted assigns upon, and only upon, the execution and
exchange of this Agreement by and between Seller and Purchaser.

(b) Purchaser may not assign or otherwise transfer this
Agreement or any rights hereunder, without first obtaining Seller's written
consent thereto which consent Seller may grant or withhold in its sole and
absolute discretion. An assignment or transfer of this Agreement shall not
relieve the Purchaser named herein of any of its obligations hereunder.
Notwithstanding the foregoing, Purchaser shall have the right to assign or
otherwise transfer (directly, by transfer of stock or in any other indirect
manner) all (but not a portion) of its interest in this Agreement without
the prior consent of Seller to an affiliate of Purchaser. As used herein
the term "affiliate" means an entity controlled by, or which controls or
which is under common control with, Purchaser. Any transfer in violation
of the foregoing shall be void and shall be deemed a material breach by
Purchaser of its obligations under this Agreement.

(c) No assignment by Purchaser of this Agreement pursuant to
paragraph (b) above shall be effective unless Purchaser simultaneously
notifies Seller of such transfer, the assignee assumes all of the
obligations of Purchaser hereunder pursuant to a written instrument in form
and substance reasonably satisfactory to the Seller, and Purchaser complies
with the requirements of Section 2.5(d)(ii) above.

8.9 EXHIBITS. All references to Exhibits contained herein are
references to Exhibits attached hereto, all of which are made a part hereof
for all purposes the same as if set forth herein verbatim, it being
expressly understood that if any Exhibit attached hereto which is to be
executed and delivered at Closing contains blanks, the same shall be
completed correctly and in accordance with the terms and provisions
contained herein and as contemplated herein prior to or at the time of
execution and delivery thereof.

8.10 RECORDATION.

Purchaser shall not file or record this Agreement or any copy
or memorandum thereof in any recording or register's offices. Any such
filing or recording shall constitute a material default hereunder by
Purchaser.

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8.11 APPROVAL. Whenever a party is required no to unreasonably
withhold its consent, and if no specific period of time is set forth in
which a response shall be given, such party shall also not unreasonably
delay the same.

8.12 SURVIVAL.

(a) Except as specifically provided below, none of the
provisions of this Agreement shall survive the Closing.

(b) The provisions of Section 2.3(g) shall survive the
Closing for a period of one year.

(d) The provisions of the following Sections of this
Agreement shall survive the Closing for the period of time set forth in the
applicable statute of limitations: 2.4, 2.5, 4.1(c), 4.2, and Article VIII
(except that the provisions of Section 8.2 shall not survive the Closing).

8.13 SEVERABILITY. If any provision of this Agreement or the
application thereof shall be invalid or unenforceable to any extent, then
the other provisions of this Agreement shall not be affected thereby and
shall be enforced to the greatest extent of the law.

8.14 NON-RECOURSE. Notwithstanding anything herein to the contrary,
without limiting any other limitation hereunder with respect to Seller's
liability (including those set forth in Article VII), Purchaser agrees that
its recourse for the payment and performance of all the obligations and
liabilities of the Seller under this Agreement and any instrument executed
or delivered in connection therewith shall be limited to the assets of
Seller, and no recourse shall be had or suit or claim brought against any
direct or indirect partner or shareholder of Seller, or any officer,
director, beneficiary, trustee, employee, advisor or consultant of such
other party or any such partner or shareholder.

8.15 SELLER'S ACCESS TO BOOKS AND RECORDS. For a period of two (2)
years after the Closing, Purchaser shall give Seller and its
representatives access, during normal business hours and upon reasonable
prior notice to Purchaser, to such books, accounts, records and Leases
relating to the Property (including the right, at Seller's expense, to make
photostatic copies of same) as are reasonably necessary to enable Seller to
verify the rights and obligations of Seller and Purchaser pursuant to
Sections 2.3 and 2.4 and to enable Seller to respond to any tax inquiries
or audits, including with respect to the Gains Tax Law or to comply with
any other obligations to Governmental Authorities.

8.16 NO CONSEQUENTIAL DAMAGES. Notwithstanding anything to the
contrary contained herein, neither party to this Agreement shall be liable
for any consequential damages incurred by the other party.

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8.17 EMPLOYEE ARRANGEMENTS.

(a) EMPLOYMENT BY AND BENEFITS OF PURCHASER. Purchaser
agrees to offer to employ as of the Closing each employee of the Seller at
the Property as of the date hereof listed on EXHIBIT M or any successor to
any such employee hired, or transferred to the Property, by Seller prior to
the Closing (the "EMPLOYEES") at the wages, hours and working conditions
and other terms and benefits as they existed immediately prior to the
Closing.

(b) PURCHASER TO JOIN REALTY ADVISORY BOARD ON LABOR
RELATIONS, INC. As of the Closing , the Purchaser agrees to join the
Realty Advisory Board on Labor on Labor Relations, Inc. and to give written
notice thereof as required under the Collective Bargaining Agreements (as
hereinafter defined).

(c) HOURLY EMPLOYEES: COLLECTIVE BARGAINING AGREEMENTS. As
of the Closing, Purchaser, as the successor employer to Seller with respect
to the Property, will assume and continue all terms and conditions of the
collective bargaining agreements listed on EXHIBIT O (the "Collective
Bargaining Agreements") applicable to each Employee upon the consummation
of the transactions contemplated by this Agreement, will recognize the
seniority and vacation status of each of the Employees, will take all
required actions with respect to such Collective Bargaining Agreements as
may be required by any laws, ordinances, rules and regulations of any
Governmental Authority or such Collective Bargaining Agreements and shall
assume, pay and perform when due any and all liabilities and obligations of
Seller under such Collective Bargaining Agreements to be performed from and
after the Closing. Consistent with the foregoing, Purchaser agrees to
execute and deliver to Seller a letter, substantially in the form annexed
hereto as EXHIBIT N, agreeing to take all steps necessary to effectuate the
assumption of the Collective Bargaining Agreements.

8.18 INDEMNIFICATION. Without limiting any of the indemnifications
elsewhere set forth in this Agreement or in any of the documents or
instruments to be delivered pursuant hereto or in connection herewith,
Purchaser shall indemnify and hold seller and its direct and indirect
partners and shareholders and its and their officers, directors,
beneficiaries, trustees, employees, advisors and consultants from and
against all claims, losses, damages, liabilities, costs, expenses
(including reasonable attorneys' fees) which any of the foregoing persons
or entities may suffer or incur as a result of which arise (directly or
indirectly) out of (i) any existing violations of law at the Property or
(ii) the ownership or operation of the Property after the Closing Date.

8.19 THIRD PARTY BENEFICIARY. This Agreement is an agreement solely
for the benefit of Seller and Purchaser (and their permitted successors
and/or assigns) and the parties acknowledge and agree that no other person,
party or entity shall have any rights hereunder nor shall any other person,
party or entity be entitled to rely upon the terms, covenants and
provisions contained herein.

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IN WITNESS WHEREOF. Seller and purchaser have executed this Agreement as
of the date first written above.

SELLER:

2 BROADWAY ASSOCIATES, L.P.

By: O&Y Building Corp.,
a general partner

By: JOHN A. MOORE
Name: John A. Moore
Title: Senior Vice President-Finance

PURCHASER:

2 BROADWAY ACQUISITION CORP.

By: JACK BASCID
Name: Jack Bascid
Title: Vice President

-23-

AGREEMENT OF CONVERSION

1290 ASSOCIATES

INTO

1290 ASSOCIATES, L.L.C.

AGREEMENT, dated as of October 10, 1995, among JMB/NYC Office Building
Associates, L.P., an Illinois limited partnership ("INVESTOR"), O&Y Equity
Company, L.P., a Delaware limited partnership ("EQUITY"), and O&Y NY
Building Corp., a Delaware corporation ("BUILDING").

W I T N E S S E T H:

WHEREAS, JMB/NYC Office Building Associates, O & Y Equity Corp., FAME
Associates and Olympia & York Holdings Corporation entered into a Second
Amended and Restated Agreement of General Partnership of 1290 Associates, a
New York general partnership (the "PARTNERSHIP"), dated as of July 27, 1984
(the "ORIGINAL AGREEMENT"), as amended by (i) a First Amendment to Second
Amended and Restated Agreement of General Partnership, dated as of December
29, 1986, (ii) a letter agreement dated as of January 1, 1992, (iii) a
Second Amendment to Second Amended and Restated Agreement of General
Partnership, dated as of January 1, 1994 and (iv) a letter agreement dated
October 14, 1994 (the "OCTOBER 1994 LETTER") (as so amended, the
"PARTNERSHIP AGREEMENT");

WHEREAS, as of the date hereof, Investor, Equity and Building are the
partners of the Partnership; and

WHEREAS, the partners of the Partnership desire to convert the
Partnership into a New York limited liability company as provided herein.

NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto agree as follows:

1. The Partnership is hereby converted into, and shall hereafter be,
a limited liability company (the "LLC") formed under the laws of the State
of New York, pursuant to the New York Limited Liability Company Law. The
name of the LLC hall be "1290 ASSOCIATES, L.L.C.". The parties hereto
shall be the members of the LLC, and their interests in the Partnership are
hereby converted into membership interests in the LLC

2. The respective interests of the parties hereto as members in the
LLC shall be the same as were their respective interests as partners in the
Partnership, and their respective rights and obligations as members of the
LLC (including, without limitation, their respective Capital Accounts and
their respective obligations under Section 8.8 of the Original Agreement)
shall be the same were their respective rights and obligations as partners
in the Partnership, except, in each case, as provided in Paragraph 3
hereof.

3. The operating agreement of the LLC (the OPERATING AGREEMENT")
shall be the Partnership Agreement, modified as follows:

(a) The terms "PARTNERSHIP" and "PARTNER" (whether or not
capitalized, in the singular and plural forms, and whether used alone or as
part of other defined terms) shall be read, respectively, as "LLC" or
"MEMBER".

(b) The term "CO-PARTNER" shall refer to Equity and Building,
collectively.

(d) Building and Investor shall be the managers of the LLC
(the "MANAGERS") so long as they are Members, and when either ceases to be
a Member, its successor-in-interest shall be a Manager; provided that their
respective rights, duties, powers and authority with respect to the
management and operation of the LLC and its property shall be as set forth
in the Partnership Agreement, as modified by the other subparagraphs of
this Paragraph 3.

(e) All right, power and authority of Co-Partner (and of O&Y
Equity), pursuant to the Partnership Agreement (including, without
limitation, the October 1994 Letter) and/or applicable law, to make
decisions and elections, to exercise options, to give or withhold consents
or approvals, and to propose, take or veto any other actions, shall be
vested in and exercised by Building alone. Equity shall have no such
right, power or authority, and the joinder or consent by Equity shall not
be required for any decision of or action by the LLC (or for any decision
of or action by Building, or Building and Investor together, on behalf of
the LLC). The foregoing provisions of this subparagraph (e) shall not
affect the rights, powers or authority of Investor.

(f) The bankruptcy (as such term is defined in the Original
Agreement) of a Manager shall cause a dissolution of the LLC. However,
notwithstanding anything to the contrary that may be required by law in the
absence of this subparagraph (f), the

bankruptcy of Equity (including, without limitation, the filing by Equity
of a voluntary petition under Chapter 11 of Title 11 of the U.S.Code) (i)
shall not be a "Dissolution Event" (and is hereby excluded from the events
listed in Section 8.1A of the Partnership Agreement), (ii) shall not cause
a dissolution of the LLC and (iii) shall not give rise to any rights or
options in favor of Investor (and, without limitation, shall not give
Investor any of the rights or options described in Section 8.2 of the
Original Agreement); and the LLC and its business (and each member's rights
and obligations with respect thereto) shall continue, upon the terms of the
Operating Agreement, despite such filing.

(g) Section 4.2C of the Partnership Agreement shall be
deleted in its entirety and replaced by the following:

"Section 4.2C. MEMBERS' INTERESTS IN LLC PROFITS FOR
PURPOSES OF SECTION 752 OF THE INTERNAL REVENUE CODE. The Members hereby
agree that the following shall determine their respective shares of the
liabilities of the LLC for purposes of Section 752 of the Internal Revenue
Code of 1986, as amended (the "CODE").

(1) CURRENTLY. As of January 1, 1994 and until there
shall have occurred a "Material Modification" (as defined in Section 2
hereof) of a liability of the LLC, the Members' respective shares of the
liabilities of the LLC pursuant to Section 752 of the Code shall be as
follows:

(a) As to that portion of the liabilities of the
LLC that was reflected on the books of the predecessor to the LLC (such
predecessor is herein called the "PARTNERSHIP") immediately prior to the
effective date of the Assumption Agreement dated as of October 14, 1994 by
the Partnership in favor of Equity, Building and Investor (individually)
(the "PARTNERSHIP ASSUMPTION AGREEMENT"):

Co-Partner 53.5%

Investor 46.5%

(b) As to that portion of the liabilities of the
LLC that was reflected on the books of the Partnership solely as a result
of the Partnership Assumption Agreement, the amount of the liabilities
assumed by each Partner in accordance with the terms of the Partnership
Assumption Agreement

(2) MATERIAL MODIFICATION OF LLC LIABILITIES. The Members
agree that, if at any time following the date of this Agreement, there
shall occur with respect to a liability of the LLC a "Material
Modification" (as hereinafter defined), as of the date of such Material
Modification: (x) the provisions of Section 4.2C(1) hereof shall continue
to apply to all liabilities of the LLC as to which a Material Modification
shall not theretofore have occurred; and (y) with respect to each liability
of the LLC as to which a Material Modification shall have occurred (a
"MODIFIED LIABILITY"):

(a) The Members' respective shares of each such Modified
Liability pursuant to Section 1.752-3 (a) (1) and Section 1.752-3(a) (2) of
the Regulations shall be computed in accordance with such provisions of the
Regulations (as determined by the agreement of Building and Investor);

(b) The Members' respective shares of the portion of
each such Modified Liability that constitutes an "excess nonrecourse
liability" pursuant to Section 1.752-3(a)(3) of the Regulations (as
determined by the agreement of Building and Investor) shall be as follows:

(i) As to that portion of such Modified Liability that
was reflected on the books of the LLC immediately prior to the effective
date of the Assumption Agreement:

Co-Partner 53.5%

Investor 46.5%

(ii) As to that portion of such Modified Liability that
was reflected on the books of the Partnership solely as a result of the
Partnership Assumption Agreement, the amount of such Modified Liability
assumed by each Partner in accordance with the terms of the Partnership
Assumption Agreement.

For purposes of this Section 2, a "MATERIAL MODIFICATION" to a
liability shall have occurred if the liability shall have been modified and
the terms of the new debt instrument differ 'materially either in kind or
in extent' (within the meaning of section 1.1001-1(a) of the

Regulations) from the terms of the old debt instrument, as
determined by the agreement of Building and Investor."

(h) Notwithstanding any contrary provisions of the
Partnership Agreement, including, but not limited to, Section 3.2 thereof,
before any other distributions of Net Financing Proceeds or Net Sale
Proceeds shall be distributed to any Member, all Net Sale Proceeds and Net
Financing Proceeds shall be distributed to Investor and Co-Partner in the
ratio of their respective Distributive Percentages until the aggregate
distributions pursuant to this subparagraph (h) shall amount to $300,000.
Any Net Financing Proceeds or Net Sale Proceeds remaining after the
foregoing distributions under this subparagraph (h), shall be distributed
as provided in the Partnership Agreement. In connection with the
foregoing, the parties hereby agree as follows:

(1) The Partnership is indebted to Investor in the
amount of $89,575 on account of certain legal fees and expenses incurred by
Investor prior to September 1, 1994. As consideration for the benefits to
Investor under the foregoing provisions of the subparagraph (h), Investor
hereby waives its claim for payment of such legal fees and expenses. The
foregoing shall not constitute a waiver of or limitation on any other
rights or claims of Investor, including, but not limited to, its right to
payment for legal fees and expenses incurred subsequent to August 31, 1994.

The parties hereto agree that the waiver of such claim by Investor is full
and fair consideration for, and has at least equivalent value to, the
rights and benefits received by Investor under this subparagraph (h).
However, in the event that by non-appealable adjudication of a count of
competent jurisdiction, any or all of the rights of Investor as hereinabove
set forth in this subparagraph (h) shall be set aside or declared invalid,
then Investor's aforesaid waiver of its right to payment for legal fees and
expenses shall be automatically cancelled and Investor's right to payment
for the same shall be reinstated.

(2) Not withstanding any contrary provisions of
the Partnership Agreement, including, but not limited to, paragraph 6 of
the Summary of Terms attached to the October 1994 Letter, the distributions
to Investor pursuant to this subparagraph (h) will not be applied to
payment of the "JMB Notes" (as defined in said paragraph 6 of the October
1994 Letter), but instead shall be paid directly to Investor.

4. Except as specifically set forth in this Agreement or in any
other written agreement executed by the parties hereto (including, without
limitation, the October 1994 Letter), each of the parties hereto reserves
all rights and claims with respect to

the LLC and each other party hereto arising prior to the date hereof under
the Partnership Agreement, and nothing contained in this Agreement shall be
deemed to be or to effect a waiver of any such rights or claims.

5. References to the Partnership in the October 1994 Letter
(including the Summary of Terms annexed thereto) shall be deemed to refer
to the LLC where relevant to the period after the date hereof (and
references therein to the Partners and partnership agreement of the
Partnership shall, as applied to the LLC, be deemed to refer to the Members
and Operating Agreement of the LLC). In addition, with respect to the
Summary of Terms, the provisions of paragraphs 3(g) and 3(h) hereof shall
apply to, and be included in, any partnership agreement or operating
agreement or amendment to an existing partnership agreement or operating
agreement for any Partnership, "Conversion Partnership", "New Partnership"
or LLC which may be entered into as contemplated by the Summary of Terms
(the provisions of said paragraph 3(g) being in lieu of the first sentence
of paragraph 2 of Exhibit "A: of the Summary of Terms). Accordingly, and
without limitation on the foregoing, the distributions provided in said
paragraph 3(h) shall be made prior to any distributions of Net Financing
Proceeds or Net Sale Proceeds with respect to the "Preference Amounts" or
"New Preference Amounts" or interest thereon. The quoted terms in this
Paragraph 5 have the meanings specified in the Summary of Terms. Nothing
herein, however, shall affect the terms of the next-to-last paragraph of
the October 1994 Letter.

6. This Agreement may be executed in one or more counterparts, each
of which shall constitute an original and all of which taken together shall
constitute one agreement.

7. No modification or waiver of any of the provisions of this
Agreement shall be effective unless the same shall be in writing signed by
all of the parties hereto.

8. This Agreement shall be governed by the laws of the State of New
York.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.

By: Carlyle Managers, Inc.
General Partner

By:
Name:
Title:

O&Y EQUITY COMPANY, L.P.

By: O&Y Equity General Partner Corp.,
General Partner

By:
Name:
Title:

O&Y NY BUILDING CORP.

By:
Name:
Title:

AGREEMENT OF CONVERSION

237 PARK AVENUE ASSOCIATES

INTO

237 PARK AVENUE ASSOCIATES, L.L.C.

AGREEMENT, dated as of October 10, 1995, among JMB/NYC Office
Building Associates, L.P., an Illinois limited partnership ("INVESTOR"),
O&Y Equity Company, L.P., a Delaware limited partnership ("EQUITY"), and
O&Y NY Building Corp., a Delaware corporation ("BUILDING").

WITNESSETH:

WHEREAS, JMB/NYC Office Building Associates, O&Y Equity Corp., FAME
Associates and Olympia & York Holdings Corporation entered into a First
Amended and Restated Agreement of General Partnership of 237 Park Avenue
Associates, a New York general partnership (the "PARTNERSHIP"), dated as of
August 14, 1984 (the "ORIGINAL AGREEMENT"), as amended by (i) a First
Amendment to First Amended and Restated Agreement of General Partnership,
dated as of December 29, 1986, (ii) a letter agreement dated as of January
1, 1992, (iii) a Second Amendment to First Amended and Restated Agreement
of General Partnership, dated as of January 1, 1994 and (iv) a letter
agreement dated October 14, 1994 (the "OCTOBER 1994 LETTER") (as so
amended, the "PARTNERSHIP AGREEMENT");

WHEREAS, as of the date hereof, Investor, Equity and Building are the
partners of the Partnership; and

WHEREAS, the partners of the Partnership desire to convert the
Partnership into a New York limited liability company as provided herein.

NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto agree as follows:

1. The Partnership is hereby converted into, and shall hereafter
be, a limited liability company (the "LLC") formed under the laws of the
State of New York, pursuant to the New York Limited Liability Company Law.
The name of the LLC shall be "237 PARK AVENUE ASSOCIATES, L.L.C.". The
parties hereto shall be the members of the LLC, and their interests in the
Partnership are hereby converted into membership interest in the LLC.

2. The respective interest of the parties hereto as members in the
LLC shall be the same as were their respective interests as partners in the
Partnership, and their respective rights and obligations as members of the
LLC (including, without limitation, their respective Capital Accounts and
their respective obligations under Section 8.8 of the Original Agreement)
shall be the same as were their respective rights and obligations as
partners in the Partnership, except, in each case, as provided in Paragraph
3 hereof.

3. The operating agreement of the LLC (the "OPERATING AGREEMENT")
shall be the Partnership Agreement, modified as follows:

(b) The term "CO-PARTNER" shall refer to Equity and Building,
collectively.

(e) All right, power and authority of Co-Partner ( and of O&Y
Equity), pursuant to the Partnership Agreement (including, without
limitation, the October 1994 Letter) and/or applicable law, to make
decisions and elections, to exercise options, to give or withhold consents
or approvals, and to propose, take or veto any other actions, shall be
vested in the exercised by Building alone. Equity shall have no such
right, power or authority, and the joinder or consent by Equity shall not
be required for any decision of or action by the LLC (or for any decision
of or action by Building, or Building and Investor together, on behalf of
the LLC). The foregoing provisions of this subparagraph (e) shall not
affect the rights, powers or authority of Investor.

bankruptcy of Equity (including, without limitation, the filing by Equity
of a voluntary petition under Chapter 11 of Title 11 of the U.S. Code) (i)
shall not be a "Dissolution Event" (and is hereby excluded from the events
listed in Section 8.1A of the Partnership Agreement), (ii) shall not cause
a dissolution of the LLC and (iii) shall not give rise to any rights or
options in favor of Investor (and, without limitation, shall not give
Investor any of the rights or options described in Section 8.2 of the
Original Agreement); and the LLC and its business (and each member's rights
and obligations with respect thereto) shall continue, upon the terms of the
Operating Agreement, despite such filing.

(g) Section 4.2C of the Partnership Agreement shall be
deleted in its entirety and replaced by the following:

Section 4.2C MEMBERS' INTERESTS IN LLC PROFITS FOR
PURPOSES OF SECTION 752 OF THE INTERNAL REVENUE CODE. The Members hereby
agree that the following shall determine their respective shares of the
liabilities of the LLC for purposes of Section 752 of the Internal Revenue
Code of 1986, as amended (the "CODE").

(1) CURRENTLY. As of January 1, 1994 and until there
shall have occurred a Material Modification" (as defined in Section 2
hereof) of a liability of the LLC, the Members's respective shares of the
liabilities of the LLC pursuant to Section 752 of the Code shall be as
follows:

(a) As to the portion of the liabilities of
the LLC that was reflected on the books of the predecessor the LLC (such
predecessor is herein called the "PARTNERSHIP") immediately prior to the
effective date of the Assumption Agreement dated as of October 14, 1994 by
the Partnership in favor of Equity, Building and Investor (individually)
The "PARTNERSHIP ASSUMPTION AGREEMENT"):

Co-Partner 53.5%

Investor 46.5%

(b) As to that portion of the liabilities
of the LLC that was reflected on the books of the Partnership solely as a
result of the Partnership Assumption Agreement, the amount of the
liabilities assumed by each Partner in accordance with the terms of the
Partnership Assumption Agreement.

(a) The Members' respective shares of each such
Modified Liability pursuant to Section 1.752-3 (a)(1) and Section 1.752-
3(a) (2) of the Regulations shall be computed in accordance with such
provisions of the Regulations (as determined by the agreement of the
Building and Investor);

(b) The Members' respective shares of the portion
of each such Modified Liability that constitutes an "excess nonrecourse
liability" pursuant to Section 1.752-3 (a) (3) of the Regulations (as
determined by the agreement of Building and Investor) shall be as follows:

(i) As to that portion of such Modified Liability
that was reflected on the books of the LLC immediately prior to the
effective date of the Assumption Agreement:

Co-Partner 53.5%

Investor 46.5%

(ii) As to that portion of such Modified Liability
that was reflected on the books of the Partnership solely as a result of
the Partnership Assumption Agreement, the amount of such Modified Liability
assumed by each Partner in accordance with the terms of the Partnership
Assumption Agreement.

For purposes of this Section 2, a "MATERIAL MODIFICATION"
to a liability shall have occurred in the liability shall have been
modified and the terms of the new debt instrument differ 'materially either
in kind or in extent' (within the meaning of Section 1.1001-1(a) of the

Regulations) from the terms of the old debt instrument,
as determined by the agreement of Building and Investor."

(h) Notwithstanding any contrary provisions of the
Partnership Agreement, including, but not limited to, Section 3.2 thereof,
before any other distributions of Net Financing Process or Net Sale
Proceeds shall be distributed to any Member, all Net Sale Proceeds and Net
Financing Process shall be distributed to Investor and Co-Partner in the
ratio of their respective Distributive Percentages until the aggregate
distributions pursuant to this subparagraph (h) shall amount to $200,000.
Any Net Financing Process or Net Sale Proceeds remaining after the
foregoing distributions under this subparagraph (h), shall be distributed
as provided in the Partnership Agreement. In connection with the
foregoing, the parties hereby agree as follows:

(1) The Partnership is indebted to Investor in
the amount of $59,716 on account of certain legal fees and expenses
incurred by Investor prior to September 1, 1994. As consideration for the
benefits to Investor under the foregoing provisions of this subparagraph
(h), Investor hereby waives its claim for payment of such legal fees and
expenses. The foregoing shall not constitute waiver of or limitation on
any other rights or claims of Investor, including, but not limited to, its
right to payment for legal fees and expenses incurred subsequent to August
31, 1994. The parties hereto agree that the waiver of such claim by
Investor is full and fair consideration for, and has at least equivalent
value to, the rights and benefits received by Investor under this
subparagraph (h). However, in the event that by non-appealable
adjudication of a court of competent jurisdiction, any or all of the rights
of Investor as hereinabove set forth in this subparagraph (h) shall be set
aside or declared invalid, then Investor's aforesaid waiver of its right to
payment for legal fees and expenses shall be automatically cancelled and
Investor's right to payment for the same shall be reinstated.

(2) Notwithstanding any contrary provision of the
Partnership Agreement, including, but not limited to, paragraph 6 of the
Summary of Terms attached to the October 1994 Letter, the distributions to
Investor pursuant to this subparagraph (h) will not be applied to payment
of the "JMB Notes" (as defined in said paragraph 6 of the October 1994
Letter), but instead shall be paid directly to Investor.

the LLC and each other party hereto arising prior to the date hereof under
the Partnership Agreement, and nothing contained in this Agreement shall be
deemed to be or effect a waiver of any such rights or claims.

5. Reference to the Partnership in the October 1994 Letter
(including the Summary of Terms annexed thereto) shall be deemed to refer
to the LLC where relevant to the period after the date hereof (and
references therein to the partners and partnership agreement of the
Partnership shall, as applied to the LLC, be deemed to refer to the Members
and Operating Agreement of the LLC). In addition, with respect to the
Summary of Terms, the provisions of paragraphs 3 (g) and 3 (h) hereof shall
apply to, and be included in, any partnership agreement or operating
agreement or amendment to an existing partnership agreement or operating
agreement for any Partnership, "Conversion Partnership", "New Partnership"
or LLC which may be entered into as contemplated by the Summary of Terms
(the provisions of said paragraph 3(g) being in lieu of the first sentence
of paragraph 2 of Exhibit "A" of the Summary of Terms). Accordingly, and
without limitation on the foregoing, the distributions provided in said
paragraph 3(h) shall be made prior to any distributions of Net Financing
Proceeds or Net Sale Proceeds with respect to the "Preference Amounts" or
"New Preference Amounts" or interest thereon. The quoted terms in this
Paragraph 5 have the meanings specified in the Summary of Terms. Nothing
herein, however, shall affect the terms of the next-to-last paragraph of
the October 1994 Letter.

6. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original and all of which taken together
shall constitute one agreement.

7. No modification or waiver of any of the provisions of this
Agreement shall be effective unless the same shall be in writing signed by
all of the parties hereto.

8. This Agreement shall be governed by the laws of the State of
New York.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.

JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.

BY: Carlyle Managers, Inc.
General Partner

By:
Name: Stuart Chatman
Title: President

O&Y EQUITY COMPANY, L.P.

By: O&Y Equity General Partner Corp.,
General Partner

By:
Name: John A. Moore
Title: Senior Vice President -
Finance

O&Y NY BUILDING CORP.

By:
Name: John A. Moore
Title: Senior Vice President -
Finance

EXHIBIT 21

LIST OF SUBSIDIARIES

The Partnership is a partner of Property Partners, L.P. which is a
partner of JMB/NYC Office Building Associates, L.P., a limited partnership,
which is a member or partner in (i) 237 Park Avenue Associates, L.L.C., a
New York limited liability company, (formerly 237 Park Avenue Associates, a
New York general partnership) which holds title to the 237 Park Avenue
Building, (ii) 1290 Associates, L.L.C., a New York limited liability
company, (formerly 1290 Associates, a New York general partnership) which
holds title to the 1290 Avenue of the Americas Building, (iii) 2 Broadway
Associates, a New York general partnership, which formerly held title to
the 2 Broadway Building and (iv) 2 Broadway Land Company, a New York
general partnership, which formerly held title to the land underlying the 2
Broadway Building (all of these office buildings are in New York, New
York). The affiliates of the seller of the property are partners in the
joint ventures. The partners in the JMB/NYC Office Building Associates,
L.P. are affiliates of the General Partners of the Partnership. Reference
is made to Note 2 for a description of the terms of such joint venture
partnerships. The Partnership is a 20% shareholder in Carlyle Managers,
Inc. and a 20% shareholder in Carlyle Investors, Inc., both of which are
Illinois corporations.

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<CIK> 0000771210
<NAME> JMB/MANHATTAN ASSOCIATES, LTD.

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995

<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 354,082
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 354,082
<PP&E> 0
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0
0
<OTHER-SE> (77,699,257)
<TOTAL-LIABILITY-AND-EQUITY> 1,688,536
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<TOTAL-REVENUES> 405,719
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<OTHER-EXPENSES> 1,281,372
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<INTEREST-EXPENSE> 131,272
<INCOME-PRETAX> (1,006,925)
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<INCOME-CONTINUING> (7,801,149)
<DISCONTINUED> (14,789,529)
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</TABLE>