CARLYLE REAL ESTATE LTD PARTNERSHIP XVII, 10-K405, 1997-03-28

CARLYLE REAL ESTATE LTD PARTNERSHIP XVII
10-K405, 1997-03-28
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

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

For the fiscal year
ended December 31, 1996 Commission file number 0-17708

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

Illinois 36-3467497
(State of organization) (IRS Employer Identification No.)

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

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

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 INTEREST
AND ASSIGNEE INTERESTS THEREIN
(Title of Class)

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

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

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

Documents incorporated by reference: None

TABLE OF CONTENTS

Page
----
PART I

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

Item 2. Properties. . . . . . . . . . . . . . . . . . . 5

Item 3. Legal Proceedings . . . . . . . . . . . . . . . 7

Item 4. Submission of Matters to a
Vote of Security Holders. . . . . . . . . . . . 7

PART II

Item 5. Market for the Partnership's
Limited Partnership Interests and
Related Security Holder Matters . . . . . . . . 7

Item 6. Selected Financial Data . . . . . . . . . . . . 8

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

Item 8. Financial Statements and
Supplementary Data. . . . . . . . . . . . . . . 17

Item 9. Changes in and Disagreements
with Accountants on Accounting and
Financial Disclosure. . . . . . . . . . . . . . 44

PART III

Item 10. Director and Executive Officers . . . . . . . . 44

Item 11. Executive Compensation. . . . . . . . . . . . . 47

Item 12. Security Ownership of Certain
Beneficial Owners and Management. . . . . . . . 48

Item 13. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . 49

PART IV

Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . 49

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 51

PART I

ITEM 1. BUSINESS

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

The registrant, Carlyle Real Estate Limited Partnership-XVII (the
"Partnership"), is a limited partnership formed October 9, 1986 and
currently governed by the Revised Uniform Limited Partnership Act of the
State of Illinois to invest in income-producing commercial and residential
real property. On February 9, 1988, the Partnership commenced an offering
to the public of $100,000,000 (subject to increase by up to $100,000,000)
of Limited Partnership Interests (and assignee interests therein)
("Interests") pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933 (No. 33-9607). A total of 34,215.16336 Interests
were sold to the public at $1,000 per Interest. Subsequent to admittance
to the Partnership, no Holder of Interest (hereinafter, a "Holder" or
"Holder of Interest(s)") has made any additional capital contribution after
such date. The Holders of Interests of the Partnership share in their
portion of the benefits of ownership of the Partnership's real property
investments according to the number of Interests held.

The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title, leasehold estates and/or through
joint venture partnership interests. The Partnership's real property
investments are located throughout the nation and it has no real estate
investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an understanding
of the Partnership's business taken as a whole. Pursuant to the
Partnership Agreement, the Partnership is required to terminate no later
than December 31, 2037. The Partnership is self-liquidating in nature. At
sale of a particular property, the net proceeds, if any, are generally
distributed or reinvested in existing properties rather than invested in
acquiring additional properties. As discussed further in Item 7, the
Partnership currently expects to conduct an orderly liquidation of its
remaining investment portfolio as quickly as practicable and to wind up its
affairs not later than December 31, 1999, barring any unforeseen economic
developments.

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

SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1996,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (e) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP
- ---------------------- ---------- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Blue Cross Building
office building
Woodland Hills
(Los Angeles),
California. . . . . 421,716 12/18/87 11/2/93 fee ownership of land
sq.ft. and improvements
n.r.a. (through a joint
venture partnership)
2. Palm Desert Town
Center
shopping center
Palm Desert,
California. . . . . 373,000 12/23/88 13% fee ownership of
sq.ft. improvements and
g.l.a. ground leasehold
interest (through joint
venture partnership)
(c)(d)
3. 18 Central
Shopping Center
East Brunswick,
New Jersey . . . . 85,772 7/27/89 20% fee ownership of land
sq.ft. and improvements (b)(f)
g.l.a.
4. Minimax 2
Industrial Property
Houston, Texas . . 91,156 1/21/92 3% fee ownership of land
sq.ft. and improvements
n.r.a. (through a joint
venture partnership)
(b)(c)
5. Minimax 3 Industrial
Property
Houston, Texas . . 128,270 1/21/92 3% fee ownership of land
sq.ft. and improvements
n.r.a. (through a joint
venture partnership)
(b)(c)

6. 1801 West Belt
Industrial Property
Houston, Texas . . 110,621 1/21/92 3% fee ownership of land
sq.ft. and improvements
n.r.a. (through a joint
venture partnership)
(b)(c)
7. Pine Forest #17
Industrial Property
Houston, Texas . . 170,558 1/21/92 5% fee ownership of land
sq.ft. and improvements
n.r.a. (through a joint
venture partnership)
(b)(c)
8. Silber #1 Industrial
Property
Houston, Texas . . 184,500 2/26/93 11% fee ownership of land
sq.ft. and improvements
n.r.a. (through a joint
venture partnership)
(b)(c)

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

(a) The computation of this percentage for properties held at
December 31, 1996 does not include amounts invested from sources other than
the original net proceeds of the public offering as described below and in
Item 7.

(b) Reference is made to the Notes and Schedule III filed with this
annual report for the current outstanding principal balances and a
description of the long-term mortgage indebtedness secured by certain of
the Partnership's real property investments.

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

(d) Reference is made to the Notes for a description of the
leasehold interest, under a ground lease, in the land on which this real
property investment is situated.

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

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

</TABLE>

The Partnership's real property investments are subject to competition
from similar types of properties (including in certain areas properties
owned by affiliates of the General Partners or properties owned by certain
of the joint venture partners) in the respective vicinities in which they
are located. Such competition is generally for the retention of existing
tenants. Additionally, the Partnership is in competition for new tenants
in markets where significant vacancies are present. Reference is made to
Item 7 below for a discussion of competitive conditions and future
renovation and capital improvement plans of the Partnership and certain of
its significant investment properties. Approximate occupancy levels for
the properties are set forth in the table in Item 2 below to which
reference is hereby made. The Partnership maintains the suitability and
competitiveness of its properties in their markets primarily on the basis
of effective rents, tenant allowances and service provided to tenants. In
the opinion of the Corporate General Partner of the Partnership, all of the
investment properties held at December 31, 1996 are adequately insured.
Although there is earthquake insurance coverage for a portion of the value
of the Partnership's investment properties, the Corporate General Partner
does not believe that such coverage for the entire replacement cost of the
investment properties is available on economic terms.

Reference is made to the Notes 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 properties owned by the
Partnership or its consolidated venture as of December 31, 1996.

The Partnership has no employees other than personnel performing on-
site duties at certain of the Partnership's properties, none of whom are
officers or directors of the Corporate General Partner of the Partnership.

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

ITEM 2. PROPERTIES

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

The following is a listing of principal businesses or occupations
carried on in and approximate occupancy levels by quarter during fiscal
years 1996 and 1995 for the Partnership's investment properties owned
during fiscal year 1996:

<TABLE>
<CAPTION>
1995 1996
------------------------- -------------------------
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. Palm Desert Town
Center
Palm Desert,
California . . . . . . . . . Retail 97% 96% 93% 93% 91% 92% 95% 95%

2. 18 Central Shopping
Center
East Brunswick,
New Jersey. . . . . . . . . Retail 91% 82% 82% 91% 92% 92% 92% 92%

3. Minimax 2,
Houston, Texas. . . . . . . Warehouse 100% 100% 100% 100% 100% 100% 100% 100%

4. Minimax 3,
Houston, Texas. . . . . . . Warehouse 100% 100% 100% 100% 100% 100% 100% 100%

5. 1801 West Belt
Houston, Texas. . . . . . . Warehouse 100% 100% 100% 100% 100% 100% 100% 100%

6. Pine Forest #17
Houston, Texas. . . . . . . Warehouse 100% 100% 100% 100% 100% 100% 100% 100%

7. Silber #1
Houston, Texas(a) . . . . . Warehouse 100% 100% 100% 100% 93% 93% 100% 100%

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

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

</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 1995 and 1996.

PART II

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

As of December 31, 1996, there were 8,494 record Holders of the
34,216.7122 Interests outstanding in the Partnership. There is no public
market for Interests and it is not anticipated that a public market for
Interests will develop. Upon request, the Corporate General Partner may
provide information relating to a prospective transfer of Interests to an
investor desiring to transfer his Interests. The price to be paid for the
Interests, as well as any other economic aspects of the transactions, will
be subject to negotiations by the investor. 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, which may be granted or withheld in its
sole and absolute discretion. 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 or have other rights of a Limited Partner. 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 distribu-
tions made to the Holders of Interests. The mortgage loan secured by the
18 Central Shopping Center restricts the use of the cash flow from that
property as more fully discussed in the Notes.

Reference is made to the Notes for a discussion of the provisions of
the Partnership Agreement relating to cash distributions.

<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

DECEMBER 31, 1996, 1995, 1994, 1993 AND 1992
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)

<CAPTION>
1996 1995 1994 1993 1992
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Total income. . . . . . . . $ 4,062,885 4,251,580 4,061,678 3,987,191 3,558,865
============ =========== =========== =========== ===========
Operating earnings (loss) . $ (1,017,215) 250,822 (2,575,727) 102,245 22,815
Partnership's share of
operations of uncon-
solidated ventures . . . . (131,641) (137,178) (61,913) 382,515 (29,847)
Venture partners'
share of ventures'
operations . . . . . . . . (6,080) (6,209) (4,623) (1,979) (2,135)
------------ ----------- ----------- ----------- -----------
Net operating
earnings (loss). . . . . . (1,154,936) 107,435 (2,642,263) 482,781 (9,167)
Partnership's share
of gain on sale of
investment property
of unconsolidated
venture. . . . . . . . . . -- -- -- 261,656 --
------------ ----------- ----------- ----------- -----------
Net earnings (loss) . . . . $ (1,154,936) 107,435 (2,642,263) 744,437 (9,167)
============ =========== =========== =========== ===========
Net earnings (loss)
per Interest (b):
Net operating
earnings (loss). . . . . $ (32.40) 3.01 (74.12) 13.55 (.26)
Partnership's share
of gain on sale of
investment property
of unconsolidated
venture. . . . . . . . . -- -- -- 7.57 --
------------ ----------- ----------- ----------- -----------
$ (32.40) 3.01 (74.12) 21.12 (.26)
============ =========== =========== =========== ===========
Total assets. . . . . . . . $ 26,800,500 28,739,912 30,077,627 38,601,350 38,559,085
Long-term debt. . . . . . . $ 6,916,941 16,895,434 17,219,023 17,509,219 6,679,611
Cash distributions
per Interest (c) . . . . . $ 16.00 20.00 166.00 30.00 30.00
============ =========== =========== =========== ===========

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

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

(b) The net earnings (loss) per Interest is based upon the limited
partnership interests outstanding at the end of each period.

(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 Holders of Interests
subsequent to the close of the public offering have not resulted in taxable
income to such Holders of Interests and have therefore represented a return
of capital.

</TABLE>

<TABLE>

SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1996

Property
- --------

18 Central
Shopping Center a) The gross leasable area ("GLA") rate
and average base rent per square foot
as of December 31 for each of the
last five years were as follows:

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

1992 . . . . . 60% 24.19
1993 . . . . . 88% 16.41
1994 . . . . . 91% 16.16
1995 . . . . . 91% 16.23
1996 . . . . . 92% 17.09
<FN>
(1) Average base rent per square foot is based on GLA occupied
as of December 31 of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
The Wiz 14,844 $341,412 July, 1997 N/A
(Electronics Store)

Barnes & Noble 10,000 195,000 May, 1997 N/A
(Book Store)

The Gap 9,504 152,367 January, 2008 N/A
(Clothing Store)

Office Max 32,373 364,196 January, 2003 2/5 year

</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
18 Central Shopping Center:

Annualized Percent of
Number of Approx. Total Base Rent Total 1996
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>

1997 2 24,844 536,412 39.6%
1998 1 2,238 40,284 3.0%
1999 -- -- -- --
2000 1 1,365 27,300 2.0%
2001 -- -- -- --
2002 -- -- -- --
2003 1 32,373 512,534 37.8%
2004 1 4,007 72,727 5.4%
2005 1 4,977 92,074 6.8%
2006 -- -- -- --
<FN>

(1) Excludes leases that expire in 1997 for which
renewal leases or leases with replacement tenants
have been executed as of March 21, 1997.
</TABLE>

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

LIQUIDITY AND CAPITAL RESOURCES

As a result of the public offering as described in Item 1, the
Partnership had approximately $29,696,000 (after deducting selling expenses
and other offering costs) with which to make investments in income-
producing commercial and residential real property, to pay legal fees and
other costs (including acquisition fees) related to such investments and
for working capital reserves. A portion of the proceeds was utilized to
acquire the properties, described in Item 1 above.

During the second quarter of 1996, some of the Holders of Interests in
the Partnership received from an unaffiliated third party an unsolicited
offer to purchase up to 1,576 Interests in the Partnership at $160 per
Interest. The Partnership recommended against acceptance of this offer on
the basis that, among other things, the offer price was inadequate. In
June such offer expired. As of the date of this report, the Partnership is
aware that 490.1892 Interests have been purchased by such unaffiliated
third parties either pursuant to such tender offers or through negotiated
purchases. The Partnership has recently received a request from another
unaffiliated third party for the list of Holders of Interest. It is
possible that other offers for Interests may be made by unaffiliated third
parties in the future, although, there is no assurance that any third party
will commence an offer for Interests, the terms of any such offer or
whether any such offer, if made, will be consummated, amended or withdrawn.

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

At December 31, 1996, the Partnership and its consolidated venture had
cash and cash equivalents of approximately $4,800,000. Such cash and cash
equivalents are available for distributions to partners, capital
improvements and working capital requirements. The Partnership and its
consolidated venture have currently budgeted in 1997 approximately $86,000
for tenant improvements and other capital expenditures. The Partnership's
share of such items (including its share of such items for its
unconsolidated ventures) in 1997 is currently budgeted to be approximately
$138,000. Actual amounts expended in 1997 may vary depending on a number
of factors including the pending contract for sale of the Houston
Industrial properties, actual leasing activity, results of property
operations, liquidity considerations and other market conditions over the
course of the year. The source of capital for such items and for both
short-term and long-term future liquidity and distributions is expected to
be through cash generated by the Partnership's investment properties, and
from the sale and refinancing of the Partnership's remaining investment
properties. In such regard, reference is made to the Partnership's
property specific discussions below and also to the Partnership's
disclosure of certain property lease expirations in Item 6. Pursuant to
the Partnership Agreement, the General Partners deferred over a five-year
period ending December 31, 1994 their share of net cash flow and management
fees of the Partnership to the receipt by Holders of Interest of a
specified return through December 1994. The cumulative amount of such
deferrals was $503,803 and was paid in full in April 1995. Beginning in
1995, the General Partners began receiving partnership management fees and
distributions of net cash generated from operations on a current basis.
Reference is made to the Notes.

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

PALM DESERT TOWN CENTER

The Partnership received (through a joint venture with an affiliate)
its specified cash return relating to Palm Desert Town Center, which was
being funded in part by the unaffiliated venture partner through December
31, 1994 pursuant to the terms of the applicable joint venture agreement.
Since the unaffiliated venture partner's funding obligation expired at the
end of 1994, the Partnership's share of cash is dependent upon the
operations of the property. Occupancy at the portion of the shopping
center in which the Partnership owns an interest increased to 95% at
December 31, 1996, up from 93% at December 31, 1995. Sales at the center
have been negatively impacted during the last several quarters by new
competition in the center's trade area. The increased competition has
resulted in lower effective rents upon re-leasing of space. The center
will continue to be subject to increased competition from new developments
that are expected to be opening in the vicinity in the near future. In
addition, the property's operations have been affected by tenant
bankruptcies during the past year. The property is operating at an
approximately break even level.

The joint venture continues to consider a possible expansion of the
mall and restructuring of the ground lease and mortgage loan. In the event
that the joint venture decides to proceed, the Partnership expects that it
would utilize its available funds to pay for its share of costs.

18 CENTRAL SHOPPING CENTER

Occupancy at the shopping center increased to 92% at December 31,
1996, up from 91% at December 31, 1995. In 1997, tenant leases
representing approximately 25,000 square feet (approximately 29% of the
portion of the center owned by the Partnership) expire. Not all of these
leases are expected to renew. This may result in increased vacancy and/or
significant re-leasing costs for the property with a resulting adverse
effect on property cash flow. Moreover, rents achieved upon renewal or
releasing of the space are expected to be at market rates that are
significantly lower than the current rents received for this space. The
Partnership is actively pursuing replacement tenants for the remaining
vacant space.

In connection with the 1993 loan modification and extension,
commencing in 1994 the Partnership is required to deposit 95% of the "net
cash flow" (as defined) from the property up to $750,000 and 47.5% in
excess of such amount in a collateral account to be used for the payment of
tenant improvement costs, leasing commissions, other capital expenditures
and operating deficits (as of the date of this report, $113,764 has been
deposited and no amounts have been withdrawn from this account). The
lender has a first priority interest in the collateral account. In
addition, the property requires certain capital and major repair projects,
including roof repairs or replacement, to be completed over the next
several years. Certain of these costs are to be paid out of the deposits
in the collateral account noted above.

The first mortgage loan in the principal amount of approximately
$9,883,000 is scheduled to mature in December 1997. The lender has
informed the Partnership that the lender is not willing to modify or extend
the loan. The Partnership believes that the value of the shopping center
is less than the mortgage loan, and the Partnership does not intend to
expend any additional funds of its own on the property. Accordingly, the
Partnership has deferred any capital improvements and major repair projects
for the shopping center. The Partnership expects that the lender will seek
to realize upon its security for the mortgage loan upon its maturity in
December 1997. In such event, the Partnership would no longer have an
ownership interest in the property and would recognize an insignificant
amount of gain for financial reporting purposes and a loss of approximately
$2,000,000 for Federal income tax purposes with no distributable proceeds.
Accordingly, the property has been classified as held for sale or
disposition as of December 31, 1996, and therefore, is not subject to
continued depreciation.

HOUSTON INDUSTRIAL PROPERTIES

At the end of the fourth quarter, the aggregate occupancy of the five
industrial buildings was 100%. The buildings are producing cash flow for
the Partnership. In January 1997, the joint venture has entered into a
contract to sell all five of the properties. Closing of the sale is
subject to the satisfaction of certain conditions, and there can be no
assurance that a sale of the properties will be consummated. The property
is being classified as held for sale as of October 1, 1996, and therefore,
not subject to continued depreciation.

GENERAL

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

As a result of the real estate market conditions, the Partnership
continues to conserve its working capital. All expenditures are carefully
analyzed and certain capital projects are deferred when appropriate. In
1995, in an effort to reduce the Partnership's operating expenses, the
Partnership elected to make semi-annual rather than quarterly distribution
of available operating cash flow in May and November. The Partnership has
also sought a loan modification where appropriate. By conserving working
capital, the Partnership will be in a better position to meet the future
needs of its properties since the availability of satisfactory outside
sources of capital may be limited given the portfolio's current debt
levels, among other factors. Due to existing market conditions, the
Partnership has held its remaining investment properties longer than
originally anticipated in an effort to maximize the return of their
investment to the Holders of Interests. However, after reviewing the
remaining properties and the marketplaces in which they operate, the
General Partners of the Partnership expect to be able to conduct an orderly
liquidation of its remaining investment portfolio as quickly as
practicable. Therefore, the affairs of the Partnership are expected to be
wound up no later than December 31, 1999 (sooner if the properties are sold
in the near term), barring unforeseen economic developments. Although the
Partnership expects to distribute sale proceeds from the disposition of the
Partnership's remaining assets, aggregate distributions of sale and
refinancing proceeds received by the Holders of Interests over the entire
term of the Partnership will be significantly less than their original
investment.

RESULTS OF OPERATIONS

The decrease in interest, rents and other receivables at December 31,
1996 as compared to December 31, 1995 is primarily due to the receipt of
1995 common area maintenance income accrued in 1995 and billed in 1996 at
the industrial properties. The decrease is also due to recording a reserve
for certain accounts receivable at the 18 Central Shopping Center.

The decrease in land and buildings and improvements at December 31,
1996 as compared to December 31, 1995, and the value impairment for the
year ended December 31, 1996 are due to recording a provision of $1,103,533
to reduce the carrying value of the 18 Central Shopping Center at September
30, 1996. The $2,638,820 provision for value impairment for 1994 is due to
the Partnership recording a provision for value impairment at the 18
Central Shopping Center as described more fully in the Notes.

The decrease in investment in unconsolidated venture, at equity at
December 31, 1996 as compared to December 31, 1995 is primarily due to the
Partnership's share of operating losses at the Palm Desert investment
property.

The decrease in deferred expenses at December 31, 1996 as compared to
December 31, 1995 is primarily due to the continuing amortization of loan
costs at the 18 Central Shopping Center.

The increase in current portion of long-term debt and the
corresponding decrease in long-term debt, less current portion at December
31, 1996 as compared to December 31, 1995 are primarily due to the
classification of the mortgage note secured by the 18 Central Shopping
Center as a current liability at December 31, 1996 as a result of the
scheduled maturity on December 1, 1997.

The increase in accounts payable at December 31, 1996 as compared to
December 31, 1995 is primarily due to the timing of payment of certain
annual recurring professional services of the Partnership and an accrual of
certain tenant reimbursable expenses at the Houston property.

The decrease in interest income for the year ended December 31, 1996
as compared to the year ended December 31, 1995 is primarily due to a lower
average cash balance invested by the Partnership in 1996. The increase in
interest income for the year ended December 31, 1995 as compared to the
year ended December 31, 1994 is primarily due to an increase in 1995 in the
average daily balance of U.S. Government obligations and an increase in
1995 in the average interest rate earned on funds invested.

The decrease in depreciation expense for the years ended December 31,
1996 and 1995 as compared to the year ended December 31, 1994 is primarily
due to the provisions for value impairment recorded in 1996 and 1994 which
reduced the net carrying value of the 18 Central Shopping Center.

The increase in property operating expenses for the year ended
December 31, 1996 as compared to the year ended December 31, 1995 is
primarily due to recording a reserve for certain tenant accounts receivable
at the 18 Central Shopping Center and an increase in snow removal costs
resulting from severe winter weather experienced at the 18 Central Shopping
Center property, a portion of which was recorded as a special snow removal
assessment which was billed and collected from the tenants in 1996.

The decrease in general and administrative expenses for the year ended
December 31, 1996 as compared to the year ended December 31, 1995 and the
increase in general and administrative expenses for the year ended December
31, 1995 as compared to the year ended December 31, 1994 is attributable
primarily to an increase in reimbursable costs to affiliates of the General
Partners in 1995 and the recognition in 1995 of certain additional prior
year reimbursable costs to such affiliates.

The decrease in Partnership's share of operations of unconsolidated
venture for the year ended December 31, 1995 as compared to the year ended
December 31, 1994 is primarily due to the Partnership's venture partner at
Palm Desert Shopping Center completing its obligation to fund deficits,
resulting in a change in the profit and loss allocations commencing in
1995. Reference is made to the Notes.

INFLATION

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

Inflation is not expected to significantly impact future operations
due to the expected liquidation of the Partnership by 1999. However, 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 commercial properties have escalation clauses covering
increases in the cost of operating and maintaining the properties as well
as real estate taxes. Therefore, there should be little effect on
operating earnings if the properties remain substantially occupied. In
addition, substantially all of the leases at the Partnership's shopping
center investments contain provisions which entitle the Partnership to
participate in gross receipts of tenants above fixed minimum amounts.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

INDEX

Independent Auditors' Report

Consolidated Balance Sheets, December 31, 1996 and 1995

Consolidated Statements of Operations, Years ended December 31,
1996, 1995 and 1994

Consolidated Statements of Partners' Capital Accounts (Deficits),
Years ended December 31, 1996, 1995 and 1994

Consolidated Statements of Cash Flows, Years ended December 31,
1996, 1995 and 1994

Notes to Consolidated Financial Statements

SCHEDULE
--------
Consolidated 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 financial statements or related notes.

INDEPENDENT AUDITORS' REPORT

The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII:

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

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Carlyle Real Estate Limited Partnership - XVII and consolidated venture at
December 31, 1996 and 1995, and the results of their operations and their
cash flows for each of the years in the three-year period ended December
31, 1996, in conformity with generally accepted accounting principles.
Also, in our opinion, the financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth
therein.

As discussed in the Notes to the consolidated financial statements, in
1996, the Partnership and its consolidated venture changed their method of
accounting for long-lived assets and long-lived assets to be disposed of to
conform with Statement of Financial Accounting Standards No. 121.

KPMG PEAT MARWICK LLP

Chicago, Illinois
March 21, 1997

<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1996 AND 1995

ASSETS
------
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . $ 4,841,921 4,856,276
Interest, rents and other receivables . . . . . . . . . . . . . . . . . 86,183 204,518
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,867 14,867
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182,529 163,011
------------ -----------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 5,125,500 5,238,672
------------ -----------

Investment properties, at cost - Schedule III:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 4,835,602
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . . . -- 21,397,235
------------ -----------
-- 26,232,837
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . -- (4,076,379)
------------ -----------

Total properties held for investment,
net of accumulated depreciation . . . . . . . . . . . . . . . -- 22,156,458

Properties held for sale or disposition . . . . . . . . . . . . . . . . 20,565,034 --
------------ -----------
Total investment properties . . . . . . . . . . . . . . . . . . 20,565,034 22,156,458
------------ -----------
Investment in unconsolidated venture, at equity . . . . . . . . . . . . . 278,653 410,294
Note receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,764 128,914
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421,992 488,710
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . . 333,557 316,864
------------ -----------

$ 26,800,500 28,739,912
============ ===========

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

CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1996 1995
------------ -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . $ 9,985,385 323,589
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,709 9,243
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 278,965 277,297
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 351,841 348,998
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . . . 10,713,900 959,127
------------ -----------
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302,500 302,500
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . . 63,395 59,951
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . . 6,916,941 16,895,434
------------ -----------
Commitments and contingencies

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 17,996,736 18,217,012

Venture partner's subordinated equity in venture. . . . . . . . . . . . . 81,293 75,213
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (235,934) (213,122)
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . . . (322,607) (276,410)
------------ -----------
(538,541) (469,532)
------------ -----------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . . 29,696,495 29,696,495
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (12,889,180) (12,341,712)
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . . . (7,546,303) (6,437,564)
------------ -----------
9,261,012 10,917,219
------------ -----------
Total partners' capital accounts. . . . . . . . . . . . . . . . 8,722,471 10,447,687
------------ -----------
$ 26,800,500 28,739,912
============ ===========

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

<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . . $ 3,825,139 3,966,280 3,851,921
Interest income . . . . . . . . . . . . . . . . . . 237,746 285,300 209,757
------------ ------------ ------------
4,062,885 4,251,580 4,061,678
------------ ------------ ------------
Expenses:
Mortgage and other interest . . . . . . . . . . . . 1,469,328 1,496,025 1,520,481
Depreciation. . . . . . . . . . . . . . . . . . . . 630,743 710,637 791,426
Property operating expenses . . . . . . . . . . . . 1,372,999 1,142,665 1,234,976
Professional services . . . . . . . . . . . . . . . 100,147 158,633 90,692
Amortization of deferred expenses . . . . . . . . . 178,881 176,124 174,345
Management fees to corporate general
partner . . . . . . . . . . . . . . . . . . . . . 38,019 47,525 38,022
General and administrative. . . . . . . . . . . . . 186,450 269,149 148,643
Provision for value impairment. . . . . . . . . . . 1,103,533 -- 2,638,820
------------ ------------ ------------
5,080,100 4,000,758 6,637,405
------------ ------------ ------------
Operating earnings (loss) . . . . . . . . . (1,017,215) 250,822 (2,575,727)

Partnership's share of operations of uncon-
solidated venture. . . . . . . . . . . . . . . . . . (131,641) (137,178) (61,913)
Venture partner's share of venture's
operations . . . . . . . . . . . . . . . . . . . . . (6,080) (6,209) (4,623)
------------ ------------ ------------

Net earnings (loss) . . . . . . . . . . . . $ (1,154,936) 107,435 (2,642,263)
============ ============ ============
Net earnings (loss) per limited
partnership interest . . . . . . . . . . . . . . $ (32.40) 3.01 (74.12)
============ ============ ============

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

<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficit)
December 31,
1993 . . . . . .20,000 (175,016) -- (155,016) 29,696,495 (4,004,130) (5,976,833) 19,715,532

Net earnings
(loss) . . . . . -- (105,691) -- (105,691) -- (2,536,572) -- (2,536,572)
Cash distri-
butions
($166.00 per
limited
partnership
interest). . . . -- -- (1,382) (1,382) -- -- (5,680,526) (5,680,526)
------ -------- -------- ---------- ---------- ---------- ----------- ----------
Balance
(deficit)
December 31,
1994 . . . . . .20,000 (280,707) (1,382) (262,089) 29,696,495 (6,540,702) (11,657,359) 11,498,434

Net earnings
(loss) . . . . . -- 4,297 -- 4,297 -- 103,138 -- 103,138
Cash distri-
butions
($20.00 per
limited
partnership
interest). . . . -- -- (211,740) (211,740) -- -- (684,353) (684,353)
------ -------- -------- ---------- ---------- ---------- ----------- ----------

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

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED

GENERAL PARTNERS LIMITED PARTNERS
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
Balance
(deficit)
December 31,
1995 . . . . . .20,000 (276,410) (213,122) (469,532) 29,696,495 (6,437,564) (12,341,712) 10,917,219

Net earnings
(loss) . . . . . -- (46,197) -- (46,197) -- (1,108,739) -- (1,108,739)
Cash distri-
butions
($16.00 per
limited
partnership
interest). . . . -- -- (22,812) (22,812) -- -- (547,468) (547,468)
------- -------- -------- ---------- ---------- ---------- ----------- ----------
Balance
(deficit)
December 31,
1996 . . . . . .$20,000 (322,607) (235,934) (538,541) 29,696,495 (7,546,303) (12,889,180) 9,261,012
======= ======== ======== ========== ========== ========== =========== ==========

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

<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . $(1,154,936) 107,435 (2,642,263)
Items not requiring (providing) cash or
cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . 630,743 710,637 791,426
Amortization of deferred expenses . . . . . . . . . 178,881 176,124 174,345
Provision for value impairment. . . . . . . . . . . 1,103,533 -- 2,638,820
Partnership's share of operations of
unconsolidated ventures . . . . . . . . . . . . . 131,641 137,178 61,913
Venture partner's share of venture's
operations. . . . . . . . . . . . . . . . . . . . 6,080 6,209 4,623
Changes in:
Interest, rents and other receivables . . . . . . . 118,335 (22,307) 80,789
Prepaid expenses. . . . . . . . . . . . . . . . . . -- -- 7,798
Escrow deposits . . . . . . . . . . . . . . . . . . (19,518) (90,608) (23,946)
Notes receivable . . . . . . . . . . . . . . . . . 53,150 47,998 43,388
Accrued rents receivable. . . . . . . . . . . . . . (46,839) 2,165 36,961
Accounts payable. . . . . . . . . . . . . . . . . . 88,466 (346,061) 18,727
Accrued interest. . . . . . . . . . . . . . . . . . 1,668 43,573 45,420
Accrued real estate taxes . . . . . . . . . . . . . 2,843 37,418 (23,524)
Security deposits . . . . . . . . . . . . . . . . . 3,444 -- 14,475
----------- ----------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . . . 1,097,491 809,761 1,228,952
----------- ----------- -----------

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1996 1995 1994
----------- ----------- -----------
Cash flows from investing activities:
Net sales and maturities (purchases)
of short-term investments . . . . . . . . . . . . . -- 396,561 8,153,443
Additions to investment properties. . . . . . . . . . (96,097) (21,304) (195,120)
Purchase price adjustments. . . . . . . . . . . . . . -- -- 33,210
Partnership's distributions from
unconsolidated ventures including
amounts relating to sale of
investment property . . . . . . . . . . . . . . . . -- 23,368 1,171,642
Partnership's contributions to
unconsolidated ventures . . . . . . . . . . . . . . -- (995) --
Payment of deferred expenses. . . . . . . . . . . . . (128,772) (108,544) (90,362)
----------- ----------- -----------
Net cash provided by (used in)
investing activities. . . . . . . . . . . . (224,869) 289,086 9,072,813
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . (316,697) (290,196) (265,917)
Venture partner contributions to venture. . . . . . . -- -- 6,644
Distributions to limited partners . . . . . . . . . . (547,468) (684,353) (5,680,526)
Distributions to general partners . . . . . . . . . . (22,812) (211,740) (1,382)
----------- ----------- -----------
Net cash provided by (used in)
financing activities. . . . . . . . . . . . (886,977) (1,186,289) (5,941,181)
----------- ----------- -----------
Net increase (decrease) in
cash and equivalents. . . . . . . . . . . . (14,355) (87,442) 4,360,584
Cash and cash equivalents,
beginning of the year . . . . . . . . . . . 4,856,276 4,943,718 583,134
----------- ----------- -----------
Cash and cash equivalents,
end of the year . . . . . . . . . . . . . . $ 4,841,921 4,856,276 4,943,718
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . $ 1,467,660 1,452,452 1,475,061
=========== =========== ===========
Non-cash investing and financing activities . . . . . $ -- -- --
=========== =========== ===========

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1996, 1995 AND 1994

OPERATIONS AND BASIS OF ACCOUNTING

GENERAL

The Partnership holds (either directly or through joint ventures) an
equity investment portfolio of United States real estate. Business
activities consist of rentals to a wide variety of commercial and retail
companies, and the ultimate sale or disposition of such real estate. The
Partnership currently expects to conduct an orderly liquidation of its
remaining investment portfolio and wind up its affairs not later than
December 31, 1999.

The accompanying consolidated financial statements include the
accounts of the Partnership and its majority-owned venture, JMB/Warehouse
Associates Limited Partnership ("JMB/Warehouse"). The effect of all
transactions between the Partnership and the consolidated venture have been
eliminated. The equity method of accounting has been applied in the
accompanying financial statements with respect to the Partnership's
interest in JMB/Hahn PDTC Associates ("Palm Desert").

The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the venture as described above.

Such GAAP and consolidation adjustments are not recorded on the records of
the Partnership. The net effect of these items for the years ended
December 31, 1996 and 1995 is summarized as follows:

<TABLE>
<CAPTION>
1996 1995
-------------------------------------------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
------------ ----------- ------------ ----------
<S> <C> <C> <C> <C>
Total assets. . . . . . . . . . . . . $26,800,500 34,810,947 28,739,912 35,655,687
Partners' capital accounts
(deficits):
General partners . . . . . . . . . (538,541) (1,076,248) (469,532) (1,050,915)
Limited partners . . . . . . . . . 9,261,012 18,058,260 10,917,219 18,666,266
Net earnings (loss):
General partners . . . . . . . . . (46,197) (2,522) 4,297 (7,511)
Limited partners . . . . . . . . . (1,108,739) (60,536) 103,138 (180,256)
Net earnings (loss) per
limited partnership
interest. . . . . . . . . . . . . . (32.40) (1.77) 3.01 (5.27)
============ =========== =========== ===========

</TABLE>

The earnings (loss) per limited partnership interest for the years
ended December 31, 1996 and 1995 is based upon the limited partnership
interests outstanding at the end of each period (34,216.7122). Deficit
capital accounts will result, through the duration of the Partnership, in
net gain for financial reporting and Federal income tax purposes.

Deferred organization costs were being amortized over a 60-month
period. Deferred loan costs are being amortized over the term of the
related loan. Deferred leasing fees are amortized using the straight-line
method over the terms stipulated in the related agreements.

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. In addition, 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 (approximately $4,114,000 and $4,792,000 at December 31, 1996 and
1995, respectively) as cash equivalents, which includes investments in an
institutional mutual fund which holds U.S. Government obligations, with any
remaining amounts (generally with original maturities of one year or less)
reflected as short-term investments being held to maturity.

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

Certain amounts in the 1994 and 1995 consolidated financial statements
have been reclassified to conform to the 1996 presentation.

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

The Partnership has acquired, either directly or through joint
ventures, two shopping centers, an office building and five industrial
properties. During 1993, the Partnership through JMB/Warner sold its
interest in the Blue Cross Building. All of the properties owned at
December 31, 1996 were in operation. All of the properties except Palm
Desert were held for sale at December 31, 1996.

Depreciation on the investment property has been provided over an
estimated useful life of 5-40 years using the straight-line method.

Maintenance and repair expenses are charged to operations as incurred.

Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives.

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

Under the prior accounting policy, provisions for value impairment
were recorded with respect to investment properties whenever the estimated
future cash flows from a property's operations and projected sale were less
than the property's carrying value. The amount of any such impairment loss
recognized by the Partnership was limited to the excess, if any, of the
property's carrying value over the outstanding balance of the property's
non-recourse indebtedness. An impairment loss under SFAS 121 is 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 the long-term debt for which an impairment loss has been
recognized under SFAS 121, the Partnership would recognize, at a minimum, a
net gain for financial reporting purposes (comprised of gain on
extinguishment of debt and gain or loss on the 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.

In addition, upon the disposition of any impaired property, the
Partnership will generally recognize more net gain for financial reporting
purposes under SFAS 121 than it would have under the Partnership's prior
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 accounting statement could significantly impact the
Partnership's reported earnings, there would be no impact on cash flows.
Further, any such impairment loss is not recognized for Federal income tax
purposes.

The results of operations for consolidated properties classified as
held for sale or disposition as of December 31, 1996 or disposed of during
the past three years were ($808,860), $419,872 and ($2,472,033),
respectively, for the years ended December 31, 1996, 1995 and 1994.

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

VENTURE AGREEMENTS - GENERAL

The Partnership at December 31, 1996 is party to one joint venture
agreement (Palm Desert) with Carlyle Real Estate Limited Partnership-XVI, a
partnership sponsored by the Corporate General Partner ("Carlyle - XVI")
and an unaffiliated venture partner and one joint venture agreement with an
unaffiliated venture partner. In addition, the Partnership was a party to
a joint venture agreement with Carlyle-XVI for JMB/Warner, which sold its
interest in its property in November 1993 and was terminated. The terms of
the affiliated partnerships provide, in general, that the benefits and
obligations of ownership, including tax effects, net cash receipts and sale
and refinancing proceeds and capital contribution obligations are allocated
or distributed, as the case may be, between the Partnership and Carlyle-XVI
in proportion to their respective capital contributions to the affiliated
venture. Pursuant to such agreements, the Partnership made capital
contributions aggregating $22,222,483 through December 31, 1996. Under
certain circumstances, either pursuant to the venture agreements or due to
the Partnership's obligations as general partner, the Partnership may be
required to make additional cash contributions to the ventures.

The Partnership acquired, through the above ventures, one office
building, one regional shopping mall and five industrial properties which
are described below. In 1993 the Partnership, through JMB/Warner, sold its
interest in the Blue Cross Building. The venture properties have been
financed under various long-term debt arrangements.

INVESTMENT PROPERTIES

18 CENTRAL SHOPPING CENTER

In July 1989, the Partnership acquired an existing shopping center in
East Brunswick, New Jersey known as 18 Central Shopping Center. The
shopping center contains approximately 105,800 square feet of gross
leasable area, of which the Partnership acquired approximately 85,800
square feet. The remaining approximately 20,000 square feet of gross
leasable area is occupied by a retailer who owns its own store and a
portion of the parking lot.

The Partnership acquired the shopping center for a purchase price of
$14,750,000, including the assumption of a first mortgage loan of
$10,500,000. The total cash investment of the Partnership (exclusive of
acquisition fees and expenses) was $4,355,000 including a transfer fee paid
to the mortgage lender and the holdback of $750,000, which is described
more fully below.

In March 1993, the Partnership modified and extended to December 1,
1997 the mortgage note secured by the 18 Central Shopping Center to reduce
the accrual rate on the loan which had matured December 1992. In addition,
the modification also provides the lender with additional interest equal to
50% of the "net sales proceeds" or "net appraised proceeds" (each as
defined) of the property, subject to a minimum amount of $250,000 (or, if
less, 100% of the "net sales proceeds" or "net appraised proceeds") and a
maximum amount of $450,000 of additional interest, $250,000 of which has
been reflected as other liabilities in the accompanying Consolidated
Financial Statements. The Partnership will also be required to pay a loan
extension fee of $52,500, payable at maturity or prepayment of the loan
which has also been reflected as other liabilities in the accompanying
Consolidated Financial Statements. Prepayment of the loan is currently
subject to a prepayment charge generally equal to the greater of 1% of the

loan amount prepaid or the amount that equals the discounted value of the
difference between the yield that would be provided to maturity based upon
the existing interest rate of the mortgage loan, and the yield that would
be provided to maturity based upon the interest rate of U.S. Treasury
obligations (as of the date of prepayment) having the same maturity date as
the mortgage loan. In connection with the loan modification and extension,
commencing in 1994 the Partnership is required to deposit 95% of the "net
cash flow" (as defined) from the property up to $750,000 and 47.5% in
excess of such amount to a collateral account. All amounts deposited, plus
accrued interest and subject to lender approval, are to be used for the
payment of tenant improvement costs, leasing commissions, other capital
expenditures and operating deficits (as of the date of this report,
$113,764 was deposited and no amounts have been withdrawn from this
account). The lender has a first priority interest in the collateral
account.

The first mortgage loan in the principal amount of approximately
$9,883,000 is scheduled to mature in December 1997. The lender has
informed the Partnership that the lender is not willing to modify or extend
the loan. The Partnership believes that the value of the shopping center
is less than the mortgage loan, and the Partnership does not intend to
expend any additional funds of its own on the property. Accordingly, the
Partnership has deferred any capital improvements and major repair projects
for the shopping center. The Partnership expects that the lender will seek
to realize upon its security for the mortgage loan upon its maturity in
December 1997. In such event, the Partnership would no longer have an
ownership interest in the property and would recognize an insignificant
gain for financial reporting purposes and a loss of approximately
$2,000,000 for Federal income tax purposes with no distributable proceeds.

Due to the uncertainty of the Partnership's ability to recover the net
carrying value of the 18 Central Shopping Center through future operations
or sale, the Partnership made a provision for value impairment on such
investment property of $2,638,820. Such provision at December 31, 1994 was
recorded to reduce the carrying value of the investment property to the
then outstanding balance of the non-recourse debt. Occupancy at the
shopping center increased to 92% at December 31, 1996, up from 91% at
December 31, 1995. In 1997, tenant leases representing approximately
25,000 square feet (approximately 29% of the portion of the center owned by
the Partnership) expire. Not all of these leases are expected to renew.
This may result in increased vacancy and/or significant re-leasing costs
for the property with a resulting adverse effect on property cash flow.
Moreover, rents achieved upon renewal or releasing of the space is expected
to be at market rates that are significantly lower than the current rents
received for this space. The Partnership is actively pursuing replacement
tenants for the remaining vacant space.

Based on such market conditions, the Partnership recorded an
additional provision for value impairment of $1,103,533 as of September 30,
1996 to reflect the then estimated fair value of the property based upon
the use of an appropriate capitalization rate on the property's net
operating income.

An affiliate of the General Partners manages the property for a fee
equal to 4% of base and percentage rents from the property.

As the Partnership has committed to a plan to sell the property due to
the December 1997 maturity of the loan, the property has been classified as
held for sale or disposition as of December 31, 1996, and therefore, is not
subject to continued depreciation.

PALM DESERT

In December 1988, the Partnership, Carlyle - XVI, and an affiliate of
the seller acquired through Palm Desert an interest in an existing,
enclosed regional shopping center known as Palm Desert Town Center in Palm
Desert, California and a leasehold interest in the underlying land.

The Partnership and Carlyle - XVI acquired their interests in Palm
Desert, subject to a first mortgage loan with an outstanding principal
balance of approximately $43,500,000 (as described below), for an initial
aggregate contribution of approximately $17,400,000, all of which was paid
in cash at closing, of which the Partnership's share was $2,475,000. The
Partnership and the Carlyle - XVI's initial aggregate contribution was used
to make the distribution to the joint venture partner as described below
and to pay a portion of the closing costs. Except for amounts to be
contributed to Palm Desert to pay certain closing costs, the joint venture
partner was not required to make any capital contributions to Palm Desert
at closing. However, in consideration of a distribution from Palm Desert
at closing, the joint venture partner was obligated to make contributions
to Palm Desert to pay the $13,752,746 purchase price obligation of Palm
Desert to the seller of the shopping center, of which the final $4,826,906
was paid in January 1993. In addition, the joint venture partner made
contributions to Palm Desert through December 1994 to pay any operating
deficits and to pay a portion of the returns to the Partnership and
Carlyle-XVI as described below. Amounts required to pay the cost of tenant
improvements and allowances (the "Tenant Improvement Costs") and other
capital expenditures, as well as any operating deficits of Palm Desert
after December 1994, have been and are expected to be contributed to Palm
Desert 25% by the joint venture partner and 75% by the Partnership and
Carlyle - XVI in the aggregate.

The terms of the Palm Desert venture agreement provide that the
Partnership and Carlyle - XVI are entitled to receive out of net cash flow
a current preferred return and a cumulative preferred return, each based on
a negotiated rate of return on their respective initial capital
contributions (other than those used to pay closing costs). Such current
preferred return which the Partnership was entitled to receive through
December 31, 1994 (as defined) was received. The Partnership, Carlyle -
XVI and the joint venture partner are entitled to a cumulative preferred
return, based on a negotiated rate of return on their respective
contributions to pay the Tenant Improvement Costs through December 1994
(the "Tenant Improvement Cost Contributions"). All cumulative preferred
returns are distributable on an equal priority level; however they are
subordinate to the receipt by the Partnership and Carlyle - XVI of their
respective current year preferred return. Any remaining annual cash flow
will be distributable 75% to the Partnership and Carlyle - XVI and 25% to
the joint venture partner until the Partnership and Carlyle - XVI have
received an amount equal to their initial capital contributions (other than
those used to pay closing costs) plus a negotiated annual internal rate of
return thereon and an amount equal to their Tenant Improvement Cost
Contributions, and thereafter any remaining annual cash flow shall be
distributable 50% to the Partnership and Carlyle - XVI and 50% to the joint
venture partner.

The Palm Desert venture agreement also provides that upon sale or
refinancing of the property, net sale or refinancing proceeds will be
distributable first to the Partnership, Carlyle - XVI and the joint venture
partner to the extent of any deficiencies in the receipt of their
respective cumulative preferred returns; second, to the Partnership and
Carlyle - XVI in an amount equal to their initial capital contributions
(other than those used to pay closing costs) and their Tenant Improvement
Cost Contributions and, as an equal priority, to the joint venture partner
in an amount equal to its Tenant Improvement Cost Contributions; third, to
the joint venture partner in an amount equal to the amount contributed by
it to pay operating deficits through December 1994 and to provide a portion
of the Partnership's and Carlyle - XVI's current and cumulative preferred
returns described above (not to exceed $1,700,000); fourth, 75% to the
Partnership and Carlyle - XVI and 25% to the joint venture partner until
the Partnership and Carlyle - XVI have received a negotiated annual
internal rate of return on their respective initial capital contributions
(other than those used to pay closing costs), and any remaining proceeds
will be distributable 50% to the Partnership and Carlyle - XVI and 50% to
the joint venture partner.

The portion of the shopping center owned by Palm Desert is currently
subject to a first mortgage loan from an institutional lender with an
outstanding principal balance of approximately $41,485,000 and $41,845,000
at December 31, 1996 and 1995, respectively. The loan provides for fixed
interest at the rate of 12% per annum and monthly payments of principal and
interest of $446,842 until January 1, 2019, when the loan will have been
fully amortized.

The land underlying the shopping center is owned by the lender under
the first mortgage loan. Palm Desert leases the land by assignment of an
existing ground lease which has a term through December 2038 and provides
for minimum annual rental payments of $900,000, as well as for additional
rental payments for each calendar year equal to 50% of the amount by which
certain of the ground lessee's gross receipts from the shopping center
exceed $6,738,256. Total ground rent expense for the years ended December
31, 1996, 1995 and 1994 was $1,293,112, $1,261,322 and $1,347,204,
respectively. The ground lease provides for two 10-year extensions at the
option of the lessee. The ground lease does not provide for any option on
the part of Palm Desert to purchase the land.

Operating profits and losses, in general, are allocable in proportion
to the amount of net cash flow distributed to the partners of Palm Desert,
or if there are no distributions of net cash flow, generally 75% to the
Partnership and Carlyle - XVI and 25% to the joint venture partner, except
that the deductions allocable with respect to certain expenses are
allocable to the partner whose contributions are used to pay such expenses.

For 1996 and 1995, losses were allocated 75% to the Partnership and Carlyle
- - XVI and 25% to the joint venture partner as there were no distributions
made to the partners for 1996 and 1995. For 1994, in accordance with the
Palm Desert venture agreement, losses were allocated to the joint venture
partner to the extent that it had cumulatively contributed capital to fund
the Partnership's and Carlyle - XVI's preferred return less any losses
previously allocated to the joint venture partner as discussed above. The
remainder of the loss was allocated 75% to the Partnership and Carlyle -
XVI and 25% to the joint venture partner.

The Palm Desert agreement also provides that the annual cash flow, net
sale or refinancing proceeds and tax items distributed or allocated
collectively to the Partnership and Carlyle - XVI generally are
distributable or allocable between them based upon their respective
capital contributions. Such capital contributions are generally in the
percentages of approximately 14.2% for the Partnership and approximately
85.8% for Carlyle - XVI.

The shopping center is being managed pursuant to a long-term agreement
with an affiliate of the joint venture partner. The manager is paid a fee
equal to 3% of the base and percentage rents collected under tenant leases,
increasing to 4% of the base and percentage rents for those years that the
Partnership and Carlyle - XVI have received their current cash return and
all of their cumulative preferred return for current and previous periods.
In addition, under the terms of the management agreement, the manager or an
affiliate will be entitled to receive compensation for leasing services.

HOUSTON INDUSTRIAL PROPERTIES

On January 21, 1992, the Partnership and an unaffiliated entity formed
JMB/Warehouse to acquire and operate certain industrial properties located
in Houston, Texas. The Partnership, as sole general partner, has a 99%
interest in JMB/Warehouse. The unaffiliated venture partner ("Warehouse"),
as a limited partner, has a 1% interest in JMB/Warehouse. The
JMB/Warehouse venture agreement provides that items of profit and loss and
distributions of net cash flow and net sale or refinancing proceeds are, in
general, to be allocated among the partners in accordance with their
respective ownership percentages.

On January 21, 1992, JMB/Warehouse purchased Minimax #2, Minimax #3,
1801 West Belt and Pine Forest #17 (the "Houston Properties") for an
aggregate purchase price, excluding closing costs, of $9,182,830, of which
$2,394,728 was paid, in cash, at closing. In February 1993, JMB/Warehouse
purchased Silber #1, for a purchase price, excluding closing costs, of
$3,000,000 of which $2,000,000 was paid, in cash, at closing. In addition,
JMB/Warehouse expected to spend up to $874,000, in the aggregate, for
certain physical improvements and other capital costs relating to the
Houston Properties and Silber #1 which were identified at the time of
purchase. As of December 31, 1996, approximately $797,000 of such amounts
have been spent. Consequently, JMB/Warehouse's aggregate cash investment
in the Houston Properties is expected to be approximately $3,475,000,
excluding certain acquisition and closing costs, of which the Partnership's
share is approximately $3,440,000. JMB/Warehouse's aggregate cash
investment in Silber #1 is approximately $2,190,000 of which the
Partnership's share is approximately $2,168,000. The balance of the
purchase price for the Houston Properties was represented in part by three
JMB/Warehouse non-recourse purchase money notes that are secured,
individually, by Minimax #2, Minimax #3 and 1801 West Belt in the aggregate
amount of $4,400,057. JMB/Warehouse also assumed the existing mortgage
secured by Pine Forest #17, which had an outstanding loan balance of
$2,388,045 at closing. A portion of Silber #1's purchase price was funded
by a $1,000,000 first mortgage note bearing interest at a rate of 8.75% per
annum. In July 1993, JMB/Warehouse prepaid principal of $101,736, $141,321
and $152,802 on the Minimax #2, Minimax #3 and 1801 West Belt purchase
money notes, respectively.

The seller of Minimax #2, Minimax #3, 1801 West Belt and Silber #1 had
provided JMB/Warehouse with a rent guarantee for five tenant spaces with an
aggregate building area of approximately 146,318 square feet. Under the
rent guarantee, the seller remitted monthly rent guarantee payments, as
defined, to JMB/Warehouse for vacant space covered by the rent guarantee
through the earlier of (i) January 21, 1995; or (ii) the date at which rent
commences for a lease for such space. As of February 1994, the Partnership
has leased all of the space related to the rent guarantee. Therefore,
JMB/Warehouse was not entitled to rent guarantee payments for any
subsequent period. Rent guarantee payments received ($141,070 through
December 31, 1993 and an additional $33,210 received in 1994) have been
used to reduce the original purchase price on these properties.

In January 1997, the joint venture entered into a contact for sale to
sell all five of the properties to an unaffiliated buyer. There is no
assurance that a sale of the properties pursuant to the contract will be
consummated. If the sale is consummated in the proposed terms, the
Partnership would recognize in 1997 a gain for financial reporting and
Federal income tax purposes.

As the Partnership and its venture partner have committed to a plan to
sell or dispose of the Houston properties, the Houston properties were
classified as held for sale as of October 1, 1996, and therefore, are not
subject to continued depreciation. There can be no assurance, however,
that a sale of the Houston properties will be consummated in the near term.

The properties are managed under an agreement pursuant to which the
manager manages the properties, collects all receipts from operations and,
to the extent available from such receipts, pays all expenses of the
properties for a 3% fee based upon a percentage of gross receipts from the
properties.

<TABLE>

LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1996 and 1995:

<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
8.5% mortgage note; secured by the 18 Central Shopping
Center; balance payable in monthly installments of
$89,485 (including interest and principal); (interest
only payments of $74,375 were due monthly from
January 1, 1993 through December 1, 1993); remaining
balance of interest and principal due December 1, 1997. . . . . . . . . $ 9,882,863 10,106,224

Promissory note, due February 1, 1999, secured by
Minimax #2 in Houston, Texas; payable interest only;
payments of $6,607 (7%) are due monthly through
February 1, 1994; payments of $6,843 (7.25%) are
due monthly from March 1, 1994 through February 1,
1996; payments of $8,023 (8.5%) are due monthly
from March 1, 1996 through February 1, 1997;
payments of $8,966 (9.5%) are due monthly from
March 1, 1997 through February 1, 1998; payments
of $10,571 (11.2%) are due monthly from March 1,
1998 through February 1, 1999 when the principal
is due. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,030,856 1,030,856

Promissory note, due February 1, 1999, secured by
Minimax #3 in Houston, Texas; payable interest only;
payments of $9,162 (7%) are due monthly through
February 1, 1994; payments of $9,489 (7.25%)
are due monthly from March 1, 1994 through
February 1, 1996; payments of $11,125 (8.5%)
are due monthly from March 1, 1996 through
February 1, 1997; payments of $12,434 (9.5%)
are due monthly from March 1, 1997 through
February 1, 1998; payments of $14,659 (11.2%)
are due monthly from March 1, 1998 through
February 1, 1999 when the principal is due. . . . . . . . . . . . . . . 1,429,336 1,429,336

1996 1995
----------- -----------
7% per annum promissory note, due February 1, 1999,
secured by 1801 West Belt in Houston, Texas;
payable interest only; payments of $9,898 (7%)
are due monthly through February 1, 1994;
payments of $10,252 (7.25%) are due monthly
from March 1, 1994 through February 1, 1996;
payments of $12,019 (8.5%) are due monthly
from March 1, 1996 through February 1, 1997;
payments of $13,433 (9.5%) are due monthly
from March 1, 1997 through February 1, 1998;
payments of $15,837 (11.2%) are due monthly
from March 1, 1998 through February 1, 1999
when the principal is due . . . . . . . . . . . . . . . . . . . . . . . 1,544,006 1,544,006

9.55% per annum promissory note, secured by Pine
Forest #17 in Houston, Texas; balance payable in
monthly installments of $23,322 (including interest
and principal) through November 1, 1999 when the
remaining balance of interest and principal is due. . . . . . . . . . . 2,064,575 2,143,148

8.75% mortgage note, secured by Silber #1 in Houston,
Texas; balance payable in monthly installments of
$8,221 (including principal and interest) through
March 1, 2000 when the remaining balance of interest
and principal is due. . . . . . . . . . . . . . . . . . . . . . . . . . 950,690 965,453
------------ -----------
Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . 16,902,326 17,219,023
Less current portion of long-term debt. . . . . . . . . . . . . 9,985,385 323,589
------------ -----------
Total long-term debt. . . . . . . . . . . . . . . . . . . . . . $ 6,916,941 16,895,434
============ ===========

</TABLE>

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

1997. . . . . . . . $ 9,985,385
1998. . . . . . . . 113,369
1999. . . . . . . . 4,004,198
2000. . . . . . . . 897,831
2001. . . . . . . . --
===========

PARTNERSHIP AGREEMENT

Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Holders
of Interests and 4% to the General Partners. Profits from the sale or
other disposition of investment properties will be allocated first to the
General Partners in an amount equal to the greater of the General Partners'
share of cash distributions of the proceeds of any such sale or other
disposition (as described below) or 1% of the total profits from any such
sales or other dispositions, plus an amount which will reduce the General
Partners' capital accounts deficits (if any) to a level consistent with the
gain anticipated to be realized from the sale of investment properties.
Losses from the sale or other disposition of investment properties will
generally be allocated 4% to the General Partners. The remaining sale or
other disposition profits and losses will be allocated to the Holders of
Interests.

The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon dissolution
and termination of the Partnership. "Net cash receipts" from operations of
the Partnership will be allocated 90% to the Holders of Interests and 10%
to the General Partners (of which 6.25% constitutes a management fee to the
Corporate General Partner for services in managing the Partnership).
Additionally, pursuant to the terms of the Partnership Agreement, the
General Partners deferred their share of net cash flow of the Partnership
due to them over a five-year period ending December 1994, to the receipt by
the Holders of Interests of a 5% per annum cumulative non-compounded return
on their Current Capital Accounts (as defined) through such five-year
period. These deferred amounts consisted of the Corporate General
Partner's management fees and the General Partners' distributive share of
net cash flow. In April 1995, the Partnership paid the cumulative combined
amount of such deferred distributions and management fees which aggregated
$188,928 and $314,875, respectively, to the General Partners. All amounts
deferred did not bear interest and were paid in full.

The Partnership Agreement provides that subject to certain conditions
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 up to 3% of the selling price, and that
the remaining proceeds be distributed 85% to the Holders of Interests and
15% to the General Partners. However, prior to such distributions being
made, the Holders of Interests are entitled to receive 99% and the General
Partners 1% of net sale or refinancing proceeds until the Holders of
Interests (i) have received cash distributions of "sale proceeds" or
"refinancing proceeds" in an amount equal to the Holders' aggregate initial
capital investment in the Partnership and (ii) have received cumulative
cash distributions from the Partnership's operations which, when combined
with "sale proceeds" or "refinancing proceeds" previously distributed,
equal a 6% annual return on the Holders' average capital investment for
each year (their initial capital investment as reduced by "sale proceeds"
or "refinancing proceeds" previously distributed) commencing with the first
fiscal quarter of 1990. The Holders of Interests are not expected to
receive the return levels in (i) and (ii) above.

LEASES

At December 31, 1996, the Partnership and its consolidated venture's
principal assets are one shopping center and five industrial warehouses.
The Partnership has determined that all leases are properly classified as
operating leases; therefore, rental income is reported when earned and the
cost of the properties, excluding the cost of the land, is depreciated over
the estimated useful lives. Leases with tenants range in term from five to
twenty years and provide for fixed minimum rent and partial reimbursement
of operating costs. In addition, leases with shopping center tenants
provide for additional rent based upon percentages of tenants' sales
volume. With respect to the Partnership's shopping center investments, a
substantial portion of the ability of retail tenants to honor their leases
is dependent upon the retail economic sector.

Cost and accumulated depreciation of the leased assets are summarized
as follows at December 31, 1996:

Shopping Center:
Cost. . . . . . . . . . . . . $11,769,156
Accumulated depreciation. . . (3,245,842)
-----------
8,523,314
-----------
Industrial Warehouses:
Cost. . . . . . . . . . . . . 13,503,000
Accumulated depreciation. . . (1,461,280)
-----------
12,041,720
-----------
$20,565,034
===========

Minimum lease payments including amounts representing executory costs
(e.g., taxes, maintenance, insurance) to be received in the future under
the operating leases are as follows:

1997. . . . . . . . $ 3,054,928
1998. . . . . . . . 2,361,907
1999. . . . . . . . 1,820,264
2000. . . . . . . . 1,737,873
2001. . . . . . . . 1,402,737
Thereafter. . . . . 2,166,893
-----------
$12,544,602
===========

TRANSACTIONS WITH AFFILIATES

Pursuant to the terms of the Partnership Agreement, the General
Partners deferred their share of net cash flow of the Partnership due to
them over a five-year period ending December 1994, to the receipt by the
Holders of Interests of a 5% per annum cumulative non-compounded return on
their Current Capital Accounts (as defined) through such five-year period.
These deferred amounts consisted of the Corporate General Partners'
management fees and the remainder represented the General Partners'
distributive share of net cash flow. The cumulative amount of such
deferred distributions and management fees aggregated $488,595 at December
31, 1994. Additionally, in the first quarter of 1995, distributions and
management fees of $15,208 relating to 1994 were deferred. All amounts
deferred did not bear interest and were paid in 1995. In addition, the
General Partners received operating distributions of $22,811 and $22,812
for 1996 and 1995, respectively.

Certain of the Partnership's properties are managed by affiliates of
the General Partners or their assignees for fees computed as a percentage
of certain rents received by the properties. In December 1994, one of the
affiliated property managers sold substantially all of its assets and
assigned its interest in its management contracts to an unaffiliated third
party. In addition, certain of the management personnel of the property
manager became management personnel of the purchaser and its affiliates.
The successor to the affiliated property manager's assets is acting as the
property manager of the Houston Properties after the sale on the same terms
that existed prior to the sale.

The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of December 31, 1996, 1995 and 1994 are as follows:

UNPAID AT
DECEMBER 31,
1996 1995 1994 1996
-------- -------- -------- ------------

Property management
and leasing fees . . . . . $ 70,312 74,469 137,185 --
Management fees to
Corporate General
Partners . . . . . . . . . 38,019 38,020 38,022 --
Insurance commissions . . . 2,911 2,959 2,959 --
Reimbursement (at cost)
for accounting services. . 4,221 58,883 75,477 988
Reimbursement (at cost)
for portfolio manage-
ment services. . . . . . . 17,403 19,595 13,870 3,946
Reimbursement (at cost)
for legal services. . . . 2,650 2,137 8,624 1,449
Reimbursement (at cost)
for administrative
charges and other
out-of-pocket expenses. . -- 69,830 3,157 --
-------- ------- -------- ------
$135,516 265,893 279,294 6,383
======== ======= ======== ======

INVESTMENT IN UNCONSOLIDATED VENTURE

Summary combined financial information for Palm Desert as of and for
the years ended December 31, 1996 and 1995 is as follows:

1996 1995
------------ -----------

Current assets. . . . . . . . . . $ 1,369,711 841,267
Current liabilities . . . . . . . (1,608,701) (1,251,074)
------------ -----------
Working capital. . . . . . . (238,990) (409,807)
------------ -----------

Other assets. . . . . . . . . . . 3,274,898 2,883,324
Ventures partners' equity . . . . (4,415,266) (5,547,276)
Investment property, net. . . . . 44,072,193 46,076,367
Other liabilities . . . . . . . . (1,334,509) (1,106,951)
Long-term debt. . . . . . . . . . (41,079,673) (41,485,363)
------------ -----------
Partnership's capital. . . . $ 278,653 410,294
============ ===========

1996 1995
------------ -----------
Represented by:
Invested capital. . . . . . . . $ 2,683,814 2,683,814
Cumulative cash distributions . (616,253) (616,253)
Cumulative earnings . . . . . . (1,788,908) (1,657,267)
------------ -----------
$ 278,653 410,294
============ ===========
Total income. . . . . . . . . . . $ 11,050,605 10,864,706
Expenses applicable to
operating loss. . . . . . . . . 12,314,256 12,312,635
------------ -----------
Net operating loss. . . . . . . . (1,263,651) (1,447,929)
------------ -----------
Net earnings (loss) . . . . . . . $ (1,263,651) (1,447,929)
============ ===========
Partnership's share
of income (loss). . . . . . . . $ (131,640) (137,177)
============ ===========

Additionally, for the year ended December 31, 1994, total income was
$10,786,976, expenses applicable to operating loss were $12,116,582 and net
loss was $1,329,606 for the Palm Desert venture.

<TABLE>

SCHEDULE III

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

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1996

COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) TO ACQUISITION AT CLOSE OF PERIOD (B) (C)
------------------------- -------------- ------------------------------------
LAND,
BUILDINGS BUILDINGS BUILDINGS
AND AND AND
ENCUMBRANCE LAND IMPROVEMENTS IMPROVEMENTS LAND IMPROVEMENTS TOTAL (C)
----------- ----------- ------------ --------------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
18 Central
Shopping (C)
Center . . . . .$ 9,882,863 1,614,000 13,136,000 (2,980,844) 1,239,094 10,530,062 11,769,156

JMB/WAREHOUSE

Minimax #2. . . . 1,030,856 549,532 1,032,176 150,079 549,532 1,182,255 1,731,787
Minimax #3. . . . 1,429,336 770,123 1,487,867 166,488 770,123 1,654,355 2,424,478
Pine Forest . . . 2,064,575 688,076 2,484,240 433,496 688,076 2,917,736 3,605,812
1801 West
Belt . . . . . . 1,544,006 941,154 1,487,762 108,220 941,154 1,595,982 2,537,136
Silber #1 . . . . 950,690 495,692 2,477,864 230,231 495,692 2,708,095 3,203,787
----------- ---------- ---------- ----------- --------- ---------- ----------
Total. . . . .$16,902,326 5,058,577 22,105,909 (1,892,330) 4,683,671 20,588,485 25,272,156
=========== ========== ========== =========== ========= ========== ==========

</TABLE>

<TABLE>
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1996
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
DEPRECIATION(E) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
18 Central Shopping
Center. . . . . . . . . . . . . . . $3,245,842 5/1/87 7/27/89 5-30 years $260,285

JMB/WAREHOUSE

Minimax #2. . . . . . . . . . . . . . 184,009 1968 1/22/92 5-30 years 41,150
Minimax #3. . . . . . . . . . . . . . 245,577 1968 1/22/92 5-30 years 55,653
Pine Forest . . . . . . . . . . . . . 429,159 1979 1/22/92 5-30 years 84,552
1801 West Belt. . . . . . . . . . . . 241,426 1982 1/22/92 5-30 years 72,262
Silber #1 . . . . . . . . . . . . . . 361,109 1973 2/26/93 5-30 years 98,224
---------- --------
Total. . . . . . . . . . . . . . . $4,707,122 $612,126
========== ========
<FN>
- ----------
Notes:
(A) The initial cost to Partnership represents the original purchase price of the property.
(B) The aggregate cost of real estate owned at December 31, 1996 for Federal income tax purposes was
approximately $29,001,634.
(C) The Partnership recorded provisions for value impairment of $1,103,533 and $2,638,820 in 1996 and 1994,
respectively, which was recorded as a reduction to land and buildings and improvements.

</TABLE>

<TABLE>
SCHEDULE III - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE

CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

(D) Reconciliation of real estate owned at December 31, 1996, 1995 and 1994:

Balance at beginning of period. . . . . $26,232,837 26,211,533 28,688,443
Additions during period . . . . . . . . 96,097 21,304 195,120
Purchase price and basis adjustment . . -- -- (33,210)
Provision for value impairment. . . . . (1,056,778) -- (2,638,820)
----------- ---------- -----------
Balance at end of period. . . . . . . . $25,272,156 26,232,837 26,211,533
=========== ========== ===========
(E) Reconciliation of accumulated depreciation:

Balance at beginning of period. . . . . $ 4,076,379 3,365,742 2,574,316
Depreciation expense. . . . . . . . . . 630,743 710,637 791,426
----------- ---------- -----------
Balance at end of period. . . . . . . . $ 4,707,122 4,076,379 3,365,742
=========== ========== ===========

</TABLE>

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

There were no changes of or disagreements with accountants during
fiscal years 1995 and 1996.

PART III

ITEM 10. DIRECTOR AND EXECUTIVE OFFICERS

JMB Realty Corporation, a Delaware Corporation ("JMB") is the
Corporate General Partner and succeeded to all of the rights and
responsibilities of the prior Corporate General Partner. Substantially all
of the outstanding shares of JMB are owned, directly or indirectly, by
certain of its officers, directors, members of their families and their
affiliates. The Corporate General Partner has responsibility for all
aspects of the Partnership's operations, subject to the requirement that
sales of real property must be approved by the Associate General Partner of
the Partnership, ABPP Associates, L.P., an Illinois limited partnership,
with JMB as its sole general partner. ABPP 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.

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, including property management
services and insurance brokerage services. 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, in
certain geographical markets, 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 or refinance a 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 names, positions held and length of service therein of each
director and the executive and certain other officers of the Corporate
General Partner are as follows:

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

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

There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the Corporate General Partner to be held
on June 7, 1997. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Corporate General Partner to be held on June 7,
1997. There are no arrangements or understandings between or among any of
said directors or officers and any other person pursuant to which any
director or officer was elected as such.

JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), 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"), 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.-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 partner of most of the foregoing partnerships. Most of
the foregoing directors and officers are also officers and/or directors of
various affiliated companies of JMB including Arvida/JMB Managers, Inc.
(the general partner of Arvida/JMB Partners, L.P. ("Arvida")), Arvida/JMB
Managers-II, Inc. (the general partner of Arvida/JMB Partners, L.P.-II
("Arvida-II")) and Income Growth Managers, Inc. (the corporate general
partner of IDS/JMB Balanced Income Growth, Ltd. ("IDS/BIG")). Most of such
directors and officers are also partners, directly or indirectly, of
certain partnerships which are associate general partners in the following
real estate limited partnerships: the Partnership, Carlyle-VII, Carlyle-
IX, Carlyle-XI, Carlyle-XII, Carlyle-XIII, Carlyle-XIV, Carlyle-XV,
Carlyle-XVI, JMB Income-VI, JMB Income-VII, JMB Income-X, JMB Income-XI,
JMB Income-XII, JMB Income-XIII, 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 59) is 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.
("USC, 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 59) is 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 USC, Inc. He is a member of the
Bar of the State of Illinois and a Certified Public Accountant.

Burton E. Glazov (age 58) has been associated with JMB since June,
1971 and served as an Executive Vice President of JMB until December 1990.
He is a member of the Bar of the State of Illinois and a Certified Public
Accountant.

Stuart C. Nathan (age 55) 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.

A. Lee Sacks (age 63) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.

John G. Schreiber (age 50) has been associated with JMB since
December, 1970 and served as an Executive Vice President of JMB until
December 1990. Mr. Schreiber is President of Schreiber Investments, Inc.,
a company which is engaged in the real estate investing business. He is
also a senior advisor and partner of Blackstone Real Estate Partners, an
affiliate of the Blackstone Group, L.P. He is also a director of USC, Inc.
as well as a director of a number of investment companies advised or
managed by T. Rowe Price Associates and its affiliates. Since 1994, Mr.
Schreiber has also served as a Trustee of Amli Residential Property Trust,
a publicly-traded real estate investment trust that invests in multi-family
properties. He holds a Masters degree in Business Administration from
Harvard University Graduate School of Business.

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

Glenn E. Emig (age 49) has been associated with JMB since December,
1979. Prior to becoming Executive Vice President of JMB in 1993, Mr. Emig
was Executive Vice President and Treasurer of JMB Institutional Realty
Corporation. He holds a Masters degree in Business Administration from the
Harvard University Graduate School of Business and is a Certified Public
Accountant.

Gary Nickele (age 44) has been associated with JMB since February,
1984. He holds a J.D. degree from the University of Michigan Law School
and is a member of the Bar of the State of Illinois.

Gailen J. Hull (age 48) has been associated with JMB since March,
1982. He holds a Masters degree in Business Administration from Northern
Illinois University and is a Certified Public Accountant.

Howard Kogen (age 61) has been associated with JMB since March, 1973.
He is a Certified Public Accountant.

ITEM 11. EXECUTIVE COMPENSATION

Officers and the directors of the Corporate General Partner receive no
direct remuneration in such capacities from the Partnership. The
Partnership is required to pay a management fee to the Corporate General
Partner and the General Partners are entitled to receive a share of cash
distributions, and a share of profits or losses. Reference is made to the
Notes for a description of such transactions, distributions and
allocations. In 1996, the General Partners received $22,811 of
distributions and the Corporate General Partner earned management fees of
$38,019. The General Partners received a share of Partnership loss for tax
purposes aggregating $2,522 in 1996. Such loss for tax purposes may
benefit the General Partners (or the partners thereof) to the extent such
loss may be used to offset taxable income from the Partnership or other
sources.

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

JMB Insurance Agency, Inc., an affiliate of the Corporate General
Partner, earned and received insurance brokerage commissions in 1996
aggregating $2,911 in connection with the provision of insurance coverage
for a real property investment of the Partnership. Such commissions are at
rates set by insurance companies for the classes of coverage provided.

An affiliate of the Corporate General Partner provided property
management services in 1996 for the 18 Central Street Building in East
Brunswick, New Jersey. In 1996, such affiliate earned property management
fees of $70,312 for such services, of which all were paid as of December
31, 1996.

The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses, salaries,
administrative, legal and accounting services relating to the
administration of the Partnership and the acquisition and operation of the
Partnership's real property investments. Such costs for 1996 were $24,274
for these services, of which $6,383 were unpaid as of December 31, 1996.

<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 Partner 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 JMB Realty Corporation 14.11023 Interests (1) Less than 1%
Interests (and Assignee
Interests therein)

Limited Partnership Corporate General 14.50836 Interests (1)(2) Less than 1%
Interests (and Assignee Partner, its officers
Interests therein) and directors, and
the Associate General
Partner as a group
<FN>
- ----------

(1) Includes 9.11023 Interests owned directly and 5 Interests owned by the Initial Limited Partner for which
JMB Realty Corporation, as its indirect majority shareholder, is deemed to have sole voting and investment power.

(2) Includes .39813 Interests owned by officers or their relatives for which an officer has sole investment
and voting power as to such Interests so owned.

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

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, its affiliates or their management other
than those described in Items 10 and 11 above.

PART IV

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

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

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

(2) Exhibits.

3.A. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, is hereby
incorporated by reference to Exhibit 3 to the Partnership's Report on Form
10-K for December 31, 1992 (File No. 0-17708) dated March 19, 1993.

3.B. Acknowledgement of rights and duties of the
General Partners of the Partnership between ABPP Associates, L.P. (a
successor Associated General Partner of the Partnership) and JMB Realty
Corporation as of December 31, 1995 are hereby incorporated by reference to
Exhibit 3-B to the Partnership's Report for September 30, 1996 on Form 10-Q
(File No. 0-17708) dated November 8, 1996.

4-A. Assignment Agreement set forth as Exhibit B to
the Prospectus, a copy of which is hereby incorporated by reference to
Exhibit 4-A to the Partnership's Report on Form 10-K for December 31, 1992
(File No. 0-17708) dated March 19, 1993.

4-B. through
4-D. Copies of documents relating to certain purchase
money notes secured by Minimax #2, Minimax #3 and 1801 West Belt are hereby
incorporated by reference to Exhibits 4-B through 4-D to the Partnership's
Form 10-K for December 31, 1992 (File No. 0-17708) dated March 19, 1993.

4-E. Copy of documents relating to the mortgage loan
secured by Pine Forest #17 are hereby incorporated by reference to Exhibit
4-E to the Partnership's Form 10-K for December 31, 1992 (File No. 0-17708)
dated March 19, 1993.

4-F. Copy of document relating to the conditional
consent letter agreement secured by the 18 Central Shopping Center are
hereby incorporated by reference to Exhibit 4-G to the Partnership's Form
10-K for December 31, 1992 (File No. 0-17708) dated March 19, 1993.

4-G. Copy of document relating to mortgage loan
secured by Silber #1 is hereby incorporated by reference to Exhibit 4-H to
the Partnership's Form 10-K for December 31, 1993 (File No. 0-17708) dated
March 25, 1994.

4-H. Copy of document relating to the modification of
the mortgage loan secured by 18 Central Shopping Center is hereby
incorporated by reference to Exhibit 4-I to the Partnership's Form 10-K for
December 31, 1993 (File No. 0-17708) dated March 25, 1994.

10-A. Copy of Agreement together with certain documents
relating to purchase of an interest in Palm Desert Town Center, Palm
Desert, California is hereby incorporated herein by reference to Post-
Effective Amendment No. 4 to the Partnership's Registration Statement on
Form S-11 (File No. 33-9607) dated February 28, 1989.

10-B. Copy of Agreement together with certain documents
relating to the purchase of the 18 Central Shopping Center, East Brunswick,
New Jersey is hereby incorporated herein by reference to Post-Effective
Amendment No. 7 to the Partnership's Registration Statement on Form S-11
(File No. 33-9607) dated July 31, 1989.

10-C. Copy of Purchase and Sale Agreement together with
the Lease Guarantee Agreement for Minimax #2, Minimax #3 and 1801 West Belt
are hereby incorporated by reference to Exhibit 10-E to the Partnership's
Form 10-K for December 31, 1992 (File No. 0-17708) dated March 19, 1993.

10-D. Copy of Purchase and Sale Agreement for the
acquisition of Pine Forest #17 is hereby incorporated by reference to
Exhibit 10-F to the Partnership's Form 10-K for December 31, 1992 (File No.
0-17708) dated March 19, 1993.

10-E. Copies of Limited Partnership Agreement and
Formation of Partnership Agreement relating to JMB/Warehouse Associates are
hereby incorporated by reference to Exhibit 10-G to the Partnership's Form
10-K for December 31, 1992 (File No. 0-17708) dated March 19, 1993.

10-F. Copy of Purchase and Sale Agreement for the
acquisition of Silber #1 is hereby incorporated by reference to Exhibit 10-
G to the Partnership's report for December 31, 1993 on Form 10-K (File No.
0-17708) dated March 25, 1994.

21. List of Subsidiaries.

24. Powers of Attorney.

27. Financial Data Schedule.

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

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

None.

No annual report for the fiscal year 1996 or proxy material has been
sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing.

SIGNATURES

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

CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XVII

By: JMB Realty Corporation
Corporate General Partner

GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 21, 1997

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

By: JMB Realty Corporation
Corporate General Partner

JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and
Chief Financial Officer
Date: March 21, 1997

NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 21, 1997

H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 21, 1997

GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 21, 1997

GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 21, 1997

A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 21, 1997

STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 21, 1997

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

GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 21, 1997

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVII

EXHIBIT INDEX

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

3.A. Amended and Restated Agreement
of Limited Partnership set forth
as Exhibit A to the Prospectus. Yes

3.B. Acknowledgement of rights and
duties of the General Partners
of the Partnership between
ABPP Associates, L.P. and
JMB Realty Corporation Yes

4-A. Assignment Agreement, set forth
as Exhibit B to the Prospectus. Yes

4.B. through
4.D. Copies of documents relating to
the purchase money notes secured,
individually, by Minimax #2,
Minimax #3 and 1801 West Belt. Yes

4.E. Copies of documents relating to
the mortgage loan secured by
Pine Forest #17. Yes

4-F. Copy of document relating to the
conditional consent letter
agreement secured by the
18 Central Shopping Center Yes

4-G. Copy of document relating
to the mortgage loan secured
by Silber #1 Yes

4-H. Copy of document relating
to modification of the
mortgage loan secured by
18 Central Shopping Center. Yes

10-A. Copy of Agreement together
with certain documents relating
to purchase of an interest
in Palm Desert Town Center. Yes

10-B. Copy of Agreement together
with certain documents relating
to the purchase of the
18 Central Shopping Center. Yes

10-C. Copy of Purchase and Sale
Agreement together with
the Lease Guarantee Agreement
for Minimax #2, Minimax #3
and 1801 West Belt. Yes

10-D. Copy of Purchase and Sale
Agreement for the acquisition
of Pine Forest #17 Yes

10-E. Copies of Limited Partnership
Agreement and Formation of
Partnership Agreement relating
to JMB/Warehouse Associates. Yes

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

10-F. Copy of Purchase and Sale
Agreement and related documents
relating to the purchase of
Silber #1 Yes

21. List of Subsidiaries. No

24. Powers of Attorney. No

27. Financial Data Schedule No

EXHIBIT 21

LIST OF SUBSIDIARIES

The Partnership is a partner in the following joint ventures:
JMB/Hahn PDTC Associates, L.P., a Limited Partnership, which holds title to
Palm Desert Town Center located in Palm Desert, California; JMB/Warehouse,
a general partnership which holds title to Minimax 2, Minimax 3, 1801 West
Belt and Pine Forest #17 in Houston, Texas. The Partnership also owns a
50% interest in Carlyle/Palm Desert, Inc., a corporation that is a partner
in JMB/Hahn PDTC Associates, L.P.. Reference is made to the Notes for a
summary description of the terms of such venture partnerships.

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the corporate general partner of CARLYLE REAL ESTATE
LIMITED PARTNERSHIP - XVII, do hereby nominate, constitute and appoint GARY
NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officers a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1996, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 22nd day of January, 1997.

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

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

The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1996,
and any and all amendments thereto, the 22nd day of January, 1997.

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

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

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

EXHIBIT 24

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 22nd day of January, 1997.

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

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

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

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

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

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

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

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996

<CASH> 4,841,921
<SECURITIES> 0
<RECEIVABLES> 283,579
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,125,500
<PP&E> 20,565,034
<DEPRECIATION> 0
<TOTAL-ASSETS> 26,800,500
<CURRENT-LIABILITIES> 10,713,900
<BONDS> 6,916,941
<COMMON> 0
0
0
<OTHER-SE> 8,722,471
<TOTAL-LIABILITY-AND-EQUITY> 26,800,500
<SALES> 3,825,139
<TOTAL-REVENUES> 4,062,885
<CGS> 0
<TOTAL-COSTS> 2,182,623
<OTHER-EXPENSES> 324,616
<LOSS-PROVISION> 1,103,533
<INTEREST-EXPENSE> 1,469,328
<INCOME-PRETAX> (1,017,215)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,154,936)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,154,936)
<EPS-PRIMARY> (32.40)
<EPS-DILUTED> (32.40)

</TABLE>