ARVIDA JMB PARTNERS L P, SC 14D1, 1996-07-18

ARVIDA JMB PARTNERS L P
SC 14D1, 1996-07-18
OPERATIVE BUILDERS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

-------------------------
SCHEDULE 14D-1

Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
(Amendment No. )*
-------------------------

ARVIDA/JMB PARTNERS, L.P.
(Name of Subject Company [Issuer])

BOREAS PARTNERS, L.P.
(Bidder)

LIMITED PARTNERSHIP UNITS
(Title of Class of Securities)

None
(CUSIP Number of Class of Securities)

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

Copy to:
Bonnie D. Podolsky
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
(212) 626-0800

- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)

Calculation of Filing Fee
- --------------------------------------------------------------------------------
Transaction Amount of
Valuation*: $85,100,000 Filing Fee: $17,020.00
- --------------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated
and state how it was determined.

[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.

Amount Previously Paid: ______________________________________
Form or Registration No.: ______________________________________
Filing Party: __________________________________________________
Dated Filed: __________________________________________________

<PAGE>

SCHEDULE 14D-1

CUSIP No. None

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Boreas Partners, L.P.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /

3 SEC USE ONLY

4 SOURCES OF FUNDS (See Instructions)
WC

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0 Units

8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) / /

9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%

10 TYPE OF REPORTING PERSON (See Instructions)
PN; GM

-2-

<PAGE>

SCHEDULE 14D-1

CUSIP No. None

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bayswater Realty & Capital Corp.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /

3 SEC USE ONLY

4 SOURCES OF FUNDS (See Instructions)
WC;AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0 Units

8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) / /

9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%

10 TYPE OF REPORTING PERSON (See Instructions)
CO; GM

-3-

<PAGE>

SCHEDULE 14D-1

CUSIP No. None

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AREHGP INC.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /

3 SEC USE ONLY

4 SOURCES OF FUNDS (See Instructions)
WC; AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0 Units

8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) / /

9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%

10 TYPE OF REPORTING PERSON (See Instructions)
CO; GM

-4-

<PAGE>

SCHEDULE 14D-1

CUSIP No. None

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Carl C. Icahn

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /

3 SEC USE ONLY

4 SOURCES OF FUNDS (See Instructions)
AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /

6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America

7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5 Units

8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) //

9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
less than 1%

10 TYPE OF REPORTING PERSON (See Instructions)
IN; GM

-5-

<PAGE>

SCHEDULE 14D-1

ITEM 1. SECURITY AND SUBJECT COMPANY.

(a) The name of the subject company is Arvida/JMB Partners, L.P., a
Delaware limited partnership (the "Partnership"), which has its principal
executive offices at 900 N. Michigan Avenue, Chicago, Illinois 60611.

(b) This Schedule relates to the offer by Boreas Partners, L.P., a Delaware
limited partnership (the "Purchaser"), to purchase up to 185,000 outstanding
Limited Partnership and Assignee Interests ("Units") of the Partnership at $460
per Unit, less the amount of any distributions declared or made with respect to
the Units between June 19, 1996 and the date of payment of the Purchase Price by
the Purchaser, net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase (the "Offer to
Purchase") dated July 18, 1996, and the related Letter of Transmittal, copies of
which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. The
number of Units outstanding is set forth in "INTRODUCTION" in the Offer to
Purchase and is incorporated herein by reference.

(c) The information set forth in "THE TENDER OFFER -- Section 13. Purchase
Price Considerations" of the Offer to Purchase is incorporated herein by
reference.

ITEM 2. IDENTITY AND BACKGROUND.

(a)-(d) The persons filing this Statement are Boreas Partners, L.P., a
Delaware limited partnership, Bayswater Realty & Capital Corp., a Delaware
corporation, AREHGP INC., a Delaware Corporation, and Carl C. Icahn, a citizen
of the United States of America (collectively, the "Reporting Persons"). The
information set forth in "INTRODUCTION," "THE TENDER OFFER -- Section 11.
Certain Information Concerning the Purchaser; Past Contacts with the Partnership
and the Competing Offerors" and Schedule I of the Offer to Purchase is
incorporated herein by reference.

(e)-(f) During the last five years, neither the Purchaser nor, to the best
of its knowledge, any of the persons listed in Schedule I or referred to in
Section 11 of the Offer to Purchase (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, Federal or State securities laws or finding any violation of such
laws.

-6-

<PAGE>

(g) The information set forth in Schedule I of the Offer to Purchase is
incorporated herein by reference.

ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT
COMPANY.

(a) None.

(b) The information set forth in "THE TENDER OFFER -- Section 11. Certain
Information Concerning the Purchaser; Past Contacts with the Partnership and the
Competing Offerors" of the Offer to Purchase is incorporated herein by
reference. The information set forth in the Letter Agreement attached hereto as
Exhibit (a)(7) is incorporated herein by reference.

ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

(a) The information set forth in "THE TENDER OFFER -- Section 12. Source of
Funds" of the Offer to Purchase is incorporated herein by reference.

(b) Not applicable.

ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE
BIDDER.

(a)-(c) The information set forth in "THE TENDER OFFER -- Section 8. Future
Plans" of the Offer to Purchase is incorporated herein by reference.

(d)-(e) Not applicable.

(f)-(g) The information set forth in "THE TENDER OFFER -- Section 7.
Effects of the Offer" of the Offer to Purchase is incorporated herein by
reference.

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

(a)-(b) The information set forth in "INTRODUCTION" and "THE TENDER OFFER
- -- Section 11. Certain Information Concerning the Purchaser; Past Contacts with
the Partnership and the Competing Offerors" of the Offer to Purchase is
incorporated herein by reference.

ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.

-7-

<PAGE>

The information set forth in "THE TENDER OFFER -- Section 11. Certain
Information Concerning the Purchaser; Past Contacts with the Partnership and the
Competing Offerors" of the Offer to Purchase is incorporated herein by
reference. The information set forth in the Letter Agreements attached hereto as
Exhibits (c)(1) through (c)(3), respectively, is incorporated herein by
reference.

ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

The information set forth in "THE TENDER OFFER -- Section 16. Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.

ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.

The information set forth in "THE TENDER OFFER -- Certain Information
Concerning the Purchaser; Past Contacts with the Partnership and the Competing
Offerors" of the Offer to Purchase is incorporated herein by reference.

ITEM 10. ADDITIONAL INFORMATION.

(a) None.

(b)-(d) The information set forth in "THE TENDER OFFER -- Section 15.
Certain Legal Matters" of the Offer to Purchase is incorporated herein by
reference.

(e) None.

(f) Reference is hereby made to the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, and which are incorporated herein in their entirety by
reference.

ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.

(a)(1) Offer to Purchase, dated July 18, 1996.

(a)(2) Letter of Transmittal.

(a)(3) Notice of Withdrawal of Previously Tendered Units to Raleigh
Capital Associates, L.P.

(a)(4) Notice of Withdrawal of Previously Tendered Units to Walton Street
Capital Acquisition Co. III, L.L.C.

(a)(5) Press Release, dated July 17, 1996.

-8-

<PAGE>

(a)(6) Tombstone Ad, dated July 18, 1996.

(a)(7) Letter Agreement, dated June 27, 1996, between Longacre Corp. and
Arvida/JMB Partners, L.P.

(b) Not applicable.

(c)(1) Letter Agreement, dated July 12, 1996, among Carl C. Icahn, High
River Limited Partnership, Raleigh Capital Associates L.P. and
Raleigh GP Corp.

(c)(2) Letter Agreement, dated July 15, 1996, among Carl C. Icahn, High
River Limited Partnership, Raleigh Capital Associates L.P. and
Raleigh GP Corp.

(c)(3) Letter Agreement, dated July 15, 1996, among Carl C. Icahn, High
River Limited Partnership, Raleigh Capital Associates L.P. and
Raleigh GP Corp.

(d)-(f) Not applicable.

-9-

<PAGE>

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.

Dated: July 18, 1996

BOREAS PARTNERS, L.P.

By: Bayswater Realty & Capital Corp.,
its General Partner

By: /s/ Carl C. Icahn
-----------------------------
Name: Carl C. Icahn
Title: Chairman of the Board

BAYSWATER REALTY & CAPITAL CORP.

By: /s/ Carl C. Icahn
----------------------------------
Name: Carl C. Icahn
Title: Chairman of the Board

AREHGP INC.

By: /s/ John P. Saldarelli
----------------------------------
Name: John P. Saldarelli
Title: President

/s/ Carl C. Icahn
---------------------------------
Carl C. Icahn

[Signature Page for Arvida/JMB Partners, L.P. Schedule 14D-1]

-10-

<PAGE>

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- -------- -----------

(a)(1) Offer to Purchase, dated July 18, 1996.

(a)(2) Letter of Transmittal.

(a)(3) Notice of Withdrawal of Previously Tendered Units to
Raleigh Capital Associates, L.P.

(a)(4) Notice of Withdrawal of Previously Tendered Units to
Walton Street Capital Associates, L.P.

(a)(5) Press Release, dated July 17, 1996.

(a)(6) Tombstone Ad, dated July 18, 1996.

(a)(7) Letter Agreement, dated June 27, 1996, between Longacre
Corp. and Arvida/JMB Partners, L.P.

(c)(1) Letter Agreement, dated July 12, 1996, among Carl C.
Icahn, High River Limited Partnership, Raleigh Capital
Associates L.P. and Raleigh GP Corp.

(c)(2) Letter Agreement, dated July 15, 1996, among Carl C.
Icahn, High River Limited Partnership, Raleigh Capital
Associates L.P. and Raleigh GP Corp.

(c)(3) Letter Agreement, dated July 15, 1996, among Carl C.
Icahn, High River Limited Partnership, Raleigh Capital
Associates L.P. and Raleigh GP Corp.

-11-

EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH

UP TO 185,000 LIMITED PARTNERSHIP AND ASSIGNEE INTERESTS

ARVIDA/JMB PARTNERS, L.P.

FOR

$460 NET PER UNIT

BOREAS PARTNERS, L.P.
-----------------------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON AUGUST 14, 1996, UNLESS EXTENDED.
-----------------------------------------------------------------------
Boreas Partners, L.P. (the "Purchaser"), a Delaware limited partnership
affiliated with Carl C. Icahn, hereby offers to purchase up to 185,000 of the
outstanding Limited Partnership Interests and Assignee Interests (the "Units")
of Arvida/JMB Partners, L.P., a Delaware limited partnership (the
"Partnership"), at a purchase price (the "Purchase Price") equal to $460 per
Unit, less the amount of any distributions declared or made with respect to the
Units between June 19, 1996 and the date of payment of the Purchase Price by the
Purchaser, net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in this Offer to Purchase (the "Offer to
Purchase"), dated July 18, 1996 (the "Offer Date"), and in the related Letter of
Transmittal, as each may be supplemented or amended from time to time (which
together constitute the "Offer"). As a result of Mr. Icahn's relationship with
the Purchaser, he may be deemed a "co-bidder" with the Purchaser. HOLDERS OF
UNITS ("UNITHOLDERS" OR "HOLDERS") WHO TENDER THEIR UNITS WILL NOT BE OBLIGATED
TO PAY ANY COMMISSIONS OR PARTNERSHIP TRANSFER FEES, WHICH COMMISSIONS AND FEES
WILL BE BORNE BY THE PURCHASER. The 185,000 Units sought pursuant to the Offer
represent approximately 46% of the total Units outstanding as of March 31, 1996.

THE PURCHASER IS NOT AFFILIATED WITH ARVIDA/JMB MANAGERS, INC., THE GENERAL
PARTNER OF THE PARTNERSHIP (the "General Partner").

Before tendering, Unitholders are urged to consider the following factors:

o The book value of each Unit (the "Book Value "), as reflected on the
Partnership's Form 10-Q for the quarter ended March 31, 1996, was $561 per
Unit. The Book Value represents the portion of the excess of the
Partnership's assets over its liabilities, as determined in accordance with
generally accepted accounting principles, which is attributable to each
Unit. Book Value does not necessarily reflect the fair market value of a
Unit, which may be higher or lower than the Book Value depending on several
factors, including liquidity of the Units and external economic and market
factors. Book Value also does not reflect the amount which a Unitholder
would ultimately receive if the Partnership were liquidated. Such amount
would likely be affected by several factors, including the time required to
effect a liquidation of the Partnership's assets and the ability of the
Partnership to realize the full value of its assets as reflected in the
Book Value. Furthermore, Book Value may not take into account liabilities
associated with the resolution of numerous pending litigations against the
Partnership.
(continued on next page)

----------

If you have any questions or need additional information, you may contact
the Information Agent for the Offer at:

BEACON HILL PARTNERS, INC.
(212) 843-8500 (COLLECT)
OR
(800) 253-3814 (TOLL FREE)

July 18, 1996

<PAGE>

(continued from previous page)

o By an offer to purchase dated June 12, 1996 (the "Equity Offer"), Equity
Resources Bay Fund ("Equity ") commenced a tender offer for up to 12,000
Units at a price of $100 per Unit. The Equity Offer was scheduled to expire
on July 12, 1996. By an offer to purchase dated June 19, 1996, as amended
and supplemented to date (as so amended and supplemented, the "Raleigh
Offer "), Raleigh Capital Associates L.P. ("Raleigh") commenced a tender
offer for up to 185,000 Units at a price of $411 per Unit. Raleigh
increased its price to $421 per Unit on June 28, 1996 and to $435 per Unit
on July 10, 1996. By an offer to purchase dated June 28, 1996, as amended
and supplemented to date (as so amended and supplemented, the "Walton
Offer"), Walton Street Capital Acquisition Co. III, L.L.C. ("Walton")
commenced a tender offer for up to 185,840 Units at a price of $420 per
Unit. Equity, Raleigh and Walton are sometimes collectively referred to
herein as the "Competing Offerors" and the Equity Offer, the Raleigh Offer
and the Walton Offer are sometimes collectively referred to as the
"Competing Offers."

o The Purchaser is making the Offer with a view to making a profit.
Accordingly, in establishing the Purchase Price, the Purchaser was
motivated to set the lowest price for the Units which might be acceptable
to Unit holders consistent with the Purchaser's objectives and taking into
account the prices offered by the Competing Offerors. Such objectives and
motivations may conflict with the interest of Unitholders in receiving the
highest price for their Units. No representation is made by the Purchaser
or any affiliate of the Purchaser with respect to fairness of the Purchase
Price. Unitholders should be aware that a Special Committee of the Board of
Directors of the General Partner has determined that the Raleigh Offer and
the Walton Offer are inadequate and not in the best interest of Unitholders
who have no current or anticipated need for liquidity and who expect to
retain the Units through October 2002 (by which time the Partnership has
stated that it anticipates concluding an orderly liquidation of its
assets). The Partnership has recommended that such Unitholders reject the
Raleigh Offer and the Walton Offer. With respect to all other Unitholders,
the Special Committee has expressed no opinion and remains neutral with
respect to the Raleigh Offer and the Walton Offer. According to filings
made by the Partnership with the Securities and Exchange Commission (the
"Commission"), the Special Committee based the foregoing determination, in
part, on an opinion of Lehman Brothers Inc. ("Lehman"), its financial
advisor. Lehman estimated the present discounted value of a Unit (the
"Hypothetical Liquidation Value") to be in a range of $565 to $610 per
Unit, based on the assumption that the Partnership commences a theoretical
orderly liquidation in October 1997 and completes such liquidation by
October 2002. Lehman opined that the consideration offered to the holders
of the Units in the Raleigh Offer and the Walton Offer is inadequate, from
a financial point of view, as compared to the Hypothetical Liquidation
Value. However, Lehman expressed no opinion as to the adequacy, from a
financial point of view, of the consideration offered in the Raleigh Offer
or the Walton Offer to any particular holder of the Units who has an
immediate need or desire for liquidity or any particular holder of the
Units who anticipates a need for liquidity prior to 2002. While neither the
Special Committee nor Lehman has yet considered the adequacy of the
Purchase Price offered by the Purchaser, nor have they made any
recommendation with respect to the Offer, Unitholders should be aware that
the Purchase Price is between 75% of the high end and 81% of the low end of
the range of Lehman's Hypothetical Liquidation Value. (See "THE TENDER
OFFER--Section 13. Purchase Price Considerations").

o Depending upon the number of Units tendered pursuant to the Offer, the
Purchaser could be in a position to significantly influence all Partnership
decisions on which Unitholders may vote, including decisions regarding
removal of the General Partner, merger, sales of assets and liquidation.
(See "THE TENDER OFFER--Section 7. Effects of the Offer"). This means that
(i) non-tendering Unitholders could be prevented from taking action they
desire but that the Purchaser opposes and (ii) the Purchaser may be able to
take action desired by the Purchaser but opposed by the non-tendering
Unitholders. The Purchaser is making the Offer for the purpose of obtaining
an equity interest in the Partnership. The Purchaser may, if successful in
acquiring a substantial number of Units pursuant to the Offer, seek to
acquire or influence control of the business of the Partnership. In this
regard, the Purchaser may seek to remove the General Partner of the
Partnership but, while reserving such right, the Purchaser has not yet
determined whether to do so. Such removal could result in the acceleration
of certain of the Partnership's debt obligations or the termination of the
Partnership's management agreement with the Arvida Company, either of which
could adversely affect the Partnership.
<PAGE>

o Pursuant to the Amended and Restated Agreement of Limited Partnership of
the Partnership (the "Partnership Agreement"), the General Partner is
obligated on or prior to October 31, 1997 to either (i) cause the Units to
be listed on a national exchange or reported by the National Association of
Securities Dealers Automated Quotation System, (ii) purchase, or cause an
affiliate to purchase, all outstanding Units at their then appraised fair
market value, or (iii) commence a liquidation of the Partnership's assets.
Unitholders who tender their Units will be giving up any potential benefits
relating to any such action by the General Partner as well as any other
potential benefits represented by the ownership of such Units, including
the right to receive any future distributions by the Partnership. If the
General Partner elects to pursue the course of action set forth in clause
(i) above, it has the authority to cause the Units to be delisted or
otherwise not listed or quoted if it determines that such listing or
quoting may result in adverse tax consequences to the Partnership or any
Unitholder. The Purchaser is not aware of any determinations that the
General Partner has made in this regard.

o Unitholders could, as an alternative to tendering their Units, propose a
variety of possible actions including liquidation of the Partnership or
removal and replacement of the General Partner.

o The Partnership Agreement restricts transfers of Units (the "Transfer
Restriction") if a transfer would, in the opinion of counsel for the
Partnership, result in the termination of the Partnership for federal
income tax purposes (which would occur when 50% or more of the total
interests in partnership capital and profits are transferred within a
twelve-month period) or would result in the treatment of the Partnership as
an association taxable as a corporation for federal income tax purposes. In
the event the Purchaser and/or one or more of the Competing Offerors were
to purchase Units pursuant to their respective tender offers, the number of
Units that could be purchased by any of the other offerors pursuant to
their offers may, due to the possibility of triggering a termination of the
Partnership for federal income tax purposes, be significantly reduced and
such other offerors (including the Purchaser) might not be able to
consummate their offers or might have to significantly reduce the number of
Units purchased in such offers. (See "Consequences to a Non-Tendering
Unitholder" under "THE TENDER OFFER--Section 6. Federal Income Tax
Considerations"). If such a reduction were to occur in the number of Units
that could be purchased pursuant to the Offer, the proration provisions
discussed in "THE TENDER OFFER--Section 2. Proration; Acceptance for
Payment and Payment for Units" would apply to such reduced amount, as
necessary, in determining the number of Units to accept from tendering
Unitholders. In addition, following the consummation of the Offer and for
so long as the Transfer Restriction applies to Units, Unitholders may
generally be unable to effect transfers of Units, depending in part on the
number of Units acquired by the Purchaser pursuant to the Offer and by the
Competing Offerors pursuant to the Competing Offers.

THIS OFFER REPRESENTS AN INCREASE OF $25 PER UNIT OVER THE $435 PER UNIT
PRICE BEING OFFERED BY RALEIGH PURSUANT TO THE RALEIGH OFFER, WHICH TO DATE, IS
THE HIGHEST OF THE COMPETING OFFERS, AND AN INCREASE OF $40 PER UNIT OVER THE
WALTON OFFER.

FOR THE CONVENIENCE OF UNITHOLDERS DESIRING TO WITHDRAW FROM THE RALEIGH
OFFER AND ACCEPT THE $460 PER UNIT OFFERED HEREBY, A FORM OF "NOTICE OF
WITHDRAWAL" IS ENCLOSED WHICH, IF PROPERLY DELIVERED TO THE HERMAN GROUP, INC.,
DEPOSITARY FOR THE RALEIGH OFFER, WILL ENABLE HOLDERS OF UNITS TO WITHDRAW UNITS
TENDERED PURSUANT TO THE RALEIGH OFFER. SIMILARLY, A FORM OF "NOTICE OF
WITHDRAWAL" IS ENCLOSED WHICH, IF PROPERLY DELIVERED TO TRUST COMPANY OF
AMERICA, DEPOSITARY/INFORMATION AGENT FOR THE WALTON OFFER, WILL ENABLE HOLDERS
OF UNITS TO WITHDRAW UNITS TENDERED PURSUANT TO THE WALTON OFFER. (SEE
"INTRODUCTION").

UNITS TENDERED TO THE HERMAN GROUP, INC., DEPOSITARY FOR THE RALEIGH OFFER,
OR TO TRUST COMPANY OF AMERICA, DEPOSITARY/INFORMATION AGENT FOR THE WALTON
OFFER,

<PAGE>

MUST BE WITHDRAWN IF THE UNITHOLDER DESIRES TO TENDER THEM INTO THIS OFFER. (SEE
"INTRODUCTION"). HOLDERS OF UNITS SEEKING ASSISTANCE IN WITHDRAWING UNITS
TENDERED PURSUANT TO THE RALEIGH OFFER OR THE WALTON OFFER MAY CALL THE
INFORMATION AGENT AT (212) 843-8500 (COLLECT) OR AT (800) 253-3814 (TOLL FREE).

The Offer is not conditioned upon financing or upon any minimum number of
Units being tendered. If more than the number of Units sought pursuant to the
Offer are validly tendered and not withdrawn, the Purchaser will accept for
purchase such total number of Units sought, on a pro rata basis, subject to the
terms and conditions herein.

The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, (i) to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of, and the payment for,
any Units, (ii) to terminate the Offer and not accept for payment any Units not
theretofore accepted for payment or paid for, (iii) upon the occurrence of any
of the conditions specified in Section 14 of this Offer to Purchase, to delay
the acceptance for payment of, or payment for, any Units not theretofore
accepted for payment or paid for, and (iv) to amend the Offer in any respect
(including, without limitation, by increasing the consideration offered,
increasing or decreasing the number of Units being sought, or both). Notice of
any such termination or amendment will promptly be disseminated to Unitholders
in a manner reasonably designed to inform Unitholders of such change in
compliance with Rule 14d-4(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). In the case of an extension of the Offer, such
extension will be followed by a press release or public announcement which will
be issued no later than 9:00 a.m., New York City time, on the next business day
after the scheduled Expiration Date, in accordance with Rule 14e-1(d) under the
Exchange Act.

UNITHOLDERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE ACCOMPANYING
LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.
ANY (i) REGISTERED HOLDER OF UNITS, (ii) BENEFICIAL OWNER, IN THE CASE OF UNITS
OWNED BY INDIVIDUAL RETIREMENT ACCOUNTS OR QUALIFIED RETIREMENT PLANS (A
"BENEFICIAL OWNER"), OR (iii) PERSON WHO HAS PURCHASED UNITS BUT HAS NOT YET
BEEN REFLECTED AS A HOLDER ON THE BOOKS AND RECORDS OF THE PARTNERSHIP (A
"SUBSTITUTED OWNER") DESIRING TO TENDER UNITS SHOULD (A) COMPLETE AND SIGN THE
LETTER OF TRANSMITTAL, HAVE SUCH PERSON'S SIGNATURE GUARANTEED, IF REQUIRED, OR
WITNESSED AND MAIL OR DELIVER THE SIGNED LETTER OF TRANSMITTAL (OR FACSIMILE
THEREOF) TO IBJ SCHRODER BANK & TRUST COMPANY, THE DEPOSITARY FOR THE OFFER (THE
"DEPOSITARY"), AT THE ADDRESS OR FACSIMILE NUMBER SET FORTH BELOW OR (B) REQUEST
HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT
THE TRANSACTION FOR HIM. ANY LETTER OF TRANSMITTAL DELIVERED BY FACSIMILE MUST
BE FOLLOWED BY THE SIGNED ORIGINAL. UNLESS THE CONTEXT OTHERWISE REQUIRES,
REFERENCES TO UNITHOLDERS OR HOLDERS IN THIS OFFER TO PURCHASE SHALL BE DEEMED
TO ALSO REFER TO BENEFICIAL OWNERS AND SUBSTITUTED OWNERS.

BY MAIL: P.O. BOX 84
BOWLING GREEN STATION
NEW YORK, NEW YORK 10274-0084
ATTN: REORGANIZATION OPERATIONS
DEPARTMENT

BY HAND/OVERNIGHT DELIVERY: ONE STATE STREET
NEW YORK, NEW YORK 10004
ATTN: SECURITIES PROCESSING WINDOW
SUBCELLAR ONE (SC-1)

BY FACSIMILE: (212) 858-2611
CONFIRM BY TELEPHONE: (212) 858-2103 (COLLECT)

IF YOU HAVE ANY QUESTIONS OR IF YOU NEED ASSISTANCE IN COMPLETION OF THE
LETTER OF TRANSMITTAL, YOU MAY CONTACT THE INFORMATION AGENT BY CALLING: (212)
843-8500 (COLLECT) OR (800) 253-3814 (TOLL FREE).

<PAGE>

TABLE OF CONTENTS

PAGE

INTRODUCTION ........................................................... 1
THE TENDER OFFER ....................................................... 5

Section 1. Terms of the Offer ................................... 5
Section 2. Proration; Acceptance for Payment and
Payment for Units ................................... 5
Section 3. Procedures for Tendering Units ....................... 6
Section 4. Withdrawal Rights .................................... 8
Section 5. Extension of Tender Period; Termination; Amendment ... 8
Section 6. Certain Federal Income Tax Consequences .............. 9
Section 7. Effects of the Offer ................................. 12
Section 8. Future Plans ......................................... 12
Section 9. Certain Information Concerning the Partnership ....... 12
Section 10. Conflicts of Interest ................................ 18
Section 11. Certain Information Concerning the Purchaser;
Past Contacts with the Partnership
and Competing Offerors .............................. 18
Section 12. Source of Funds ...................................... 24
Section 13. Purchase Price Considerations ........................ 24
Section 14. Conditions of the Offer .............................. 24
Section 15. Certain Legal Matters ................................ 26
Section 16. Fees and Expenses .................................... 26
Section 17. Miscellaneous ........................................ 26

APPENDIX A Glossary

SCHEDULE I--Information with respect to the executive officers and
directors of the general partners of Boreas Partners, L.P.

SCHEDULE II--Notes 7, 8, 11 and 12 to the Audited 1995 Financial
Statements of the Partnership; Management's Discussion and
Analysis of Financial Condition and Results of Operations
(Item 7 to the Partnership's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995).

<PAGE>

TO THE HOLDERS OF LIMITED PARTNERSHIP INTERESTS AND
ASSIGNEE INTERESTS OF ARVIDA/JMB PARTNERS, L.P.

INTRODUCTION

The Purchaser hereby offers to purchase up to 185,000 of the outstanding
Units for $460 per Unit less the amount of any distributions declared or made
with respect to the Units between June 19, 1996 and the date of payment of the
Purchase Price by the Purchaser, net to the seller in cash, without interest,
upon the terms set forth in this Offer to Purchase and in the related Letter of
Transmittal, as each may be supplemented or amended from time to time.
UNITHOLDERS WHO TENDER THEIR UNITS WILL NOT BE OBLIGATED TO PAY ANY COMMISSIONS
OR PARTNERSHIP TRANSFER FEES, WHICH COMMISSIONS AND FEES WILL BE BORNE BY THE
PURCHASER.

THE PURCHASER IS NOT AFFILIATED WITH THE GENERAL PARTNER.

Unitholders are urged to consider carefully all of the information
contained herein before accepting the Offer, including the following factors:

o The Book Value, as reflected on the Partnership's Form 10-Q for the
quarter ended March 31, 1996, was $561 per Unit. The Book Value
represents the portion of the excess of the Partnership's assets over
its liabilities, as determined in accordance with generally accepted
accounting principles, which is attributable to each Unit. Book Value
does not necessarily reflect the fair market value of a Unit, which may
be higher or lower than the Book Value depending on several factors,
including liquidity of the Units and external economic and market
factors. Book Value also does not reflect the amount which a Unitholder
would ultimately receive if the Partnership were liquidated. Such amount
would likely be affected by several factors, including the time required
to effect a liquidation of the Partnership's assets and the ability of
the Partnership to realize the full value of its assets as reflected in
the Book Value. Furthermore, Book Value may not take into account
liabilities associated with the resolution of numerous pending
litigations against the Partnership.

o In addition to the Purchaser's Offer to purchase 185,000 Units at a
Purchase Price of $460 per Unit, there are currently two Competing
Offers to purchase Units: the Raleigh Offer for up to 185,000 Units at
a price of $435 per Unit; and the Walton Offer for up to 185,840 Units
at a price of $420 per Unit.

o The Purchaser is making the Offer with a view to making a profit.
Accordingly, in establishing the Purchase Price, the Purchaser was
motivated to set the lowest price for the Units which might be
acceptable to Unitholders consistent with the Purchaser's objectives and
taking into account the prices offered by the Competing Offerors. Such
objectives and motivations may conflict with the interest of Unitholders
in receiving the highest price for their Units. No representation is
made by the Purchaser or any affiliate of the Purchaser as to the
fairness of the Purchase Price. Unitholders should be aware that a
Special Committee of the Board of Directors of the General Partner has
determined that the Raleigh Offer and the Walton Offer are inadequate
and not in the best interest of Unitholders who have no current or
anticipated need for liquidity and who expect to retain the Units
through October 2002 (by which time the Partnership stated that it
anticipates concluding an orderly liquidation of its assets). The
Partnership has recommended that such Unitholders reject the Raleigh
Offer and the Walton Offer. With respect to all other Unitholders, the
Special Committee has expressed no opinion and remains neutral with
respect to the Raleigh Offer and the Walton Offer. According to filings
made by the Partnership with the Commission, the Special Committee based
the foregoing determination, in part, on an opinion of Lehman Brothers
Inc., its financial advisor. Lehman estimated the Hypothetical
Liquidation Value of a Unit to be in a range of $565 to $610 per Unit,
based on the assumption that the Partnership commences a theoretical
orderly liquidation in October 1997 and completes such liquidation by
October 2002. Lehman opined that the consideration offered to the
Holders of the Units in the Raleigh Offer and the Walton Offer is
inadequate, from a financial point of view, as compared to the
Hypothetical Liquidation Value. However, Lehman expressed no opinion as
to the adequacy, from a financial point of view, of the consideration
offered in the Raleigh Offer or the Walton Offer to any particular
Holder of the Units who has an immediate need or desire for liquidity or
any particular holder of the Units who anticipates a need for liquidity
prior to 2002. While neither the Special Committee nor Lehman has yet
considered the adequacy of the Purchase Price offered by the Purchaser,
nor

<PAGE>

have they made any recommendation with respect to the Offer,
Unitholders should be aware that the Purchase Price is between 75% of
the high end and 81% of the low end of the range of Lehman's
Hypothetical Liquidation Value. (See "THE TENDER OFFER--Section 13.
Purchase Price Considerations").

o Depending upon the number of Units tendered pursuant to the Offer, the
Purchaser could be in a position to significantly influence all
Partnership decisions on which Unitholders may vote, including decisions
regarding removal of the General Partner, merger, sales of assets and
liquidation. (See "THE TENDER OFFER--Section 7. Effects of the Offer ").
This means that (i) non-tendering Unitholders could be prevented from
taking action they desire but that the Purchaser opposes and (ii) the
Purchaser may be able to take action desired by the Purchaser but
opposed by the non-tendering Unitholders. The Purchaser is making the
Offer for the purpose of obtaining an equity interest in the
Partnership. The Purchaser may, if successful in acquiring a substantial
number of Units pursuant to the Offer, seek to acquire or influence
control of the business of the Partnership. In this regard, the
Purchaser may seek to remove the General Partner of the Partnership but,
while reserving such right, the Purchaser has not yet determined whether
to do so. Such removal could result in the acceleration of certain of
the Partnership's debt obligations or the termination of the
Partnership's management agreement with the Arvida Company, either of
which could adversely affect the Partnership.

o Pursuant to the Partnership Agreement, the General Partner is obligated
on or prior to October 31, 1997 to either (i) cause the Units to be
listed on a national exchange or reported by the National Association of
Securities Dealers Automated Quotation System, (ii) purchase, or cause
an affiliate to purchase, all outstanding Units at their then appraised
fair market value, or (iii) commence a liquidation of the Partnership's
assets. Unitholders who tender their Units will be giving up any
potential benefits relating to any such action by the General Partner as
well as any other potential benefits represented by the ownership of
such Units, including the right to receive any future distributions by
the Partnership. If the General Partner elects to pursue the course of
action set forth in clause (i) above, it has the authority to cause the
Units to be delisted or otherwise not listed or quoted if it determines
that such listing or quoting may result in adverse tax consequences to
the Partnership or any Unitholder. The Purchaser is not aware of any
determinations that the General Partner has made in this regard.

o Unitholders could, as an alternative to tendering their Units, propose a
variety of possible actions including liquidation of the Partnership or
removal and replacement of the General Partner.

o A Unitholder may recognize gain or loss on the sale of Units pursuant to
the Offer depending on the specific circumstances of the Unitholder.
(See "THE TENDER OFFER--Section 6. Federal Income Tax Considerations").
The Offer may be attractive to Unitholders who wish in the future to
avoid the expenses, delays and complications in filing complex income
tax returns and who wish to avoid the potential for recognition of
income in excess of cash distributions, both of which could result from
an ownership of Units. In addition, a Unitholder who sells 100% of his
Units pursuant to the Offer, may no longer be subject to the passive
activity loss limitation with respect to suspended losses attributable
to those Units, if any, and, therefore, may be able to utilize fully any
such losses. However, if more than the maximum number of Units which the
Purchaser has offered to purchase pursuant to the Offer are validly
tendered and not withdrawn or, as discussed in the following paragraph,
if the Transfer Restriction applies, a Unitholder may be unable to sell
100% of his Units pursuant to the Offer or for a period thereafter.

o As a result of the Transfer Restriction, in the event the Purchaser
and/or one or more of the Competing Offerors were to purchase Units
pursuant to their respective tender offers, the number of Units that
could be purchased by any of the other offerors pursuant to their offers
may, due to the possibility of triggering a termination of the
Partnership for federal income tax purposes, be significantly reduced
and such other offerors (including the Purchaser) might not be able to
consummate their offers or might have to significantly reduce the number
of Units purchased in such offers. (See "Consequences to a Non-Tendering
Unitholder" under "THE TENDER OFFER--Section 6. Federal Income Tax
Considerations"). If such a reduction were to occur in the number of
Units that could be purchased pursuant to the Offer, the proration
provisions discussed in "THE TENDER OFFER--Section 2. Proration;
Acceptance for Payment and Payment for Units" would apply to such
reduced amount, as necessary, in determining the number of Units to
accept from tendering Unitholders. In addition, following the

<PAGE>

consummation of the Offer and for so long as the Transfer Restriction
applies to Units, Unitholders may generally be unable to effect
transfers of Units, depending in part on the number of Units acquired by
the Purchaser pursuant to the Offer and the number of Units acquired by
the Competing Offerors pursuant to the Competing Offers.

The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more persons, the right to purchase Units
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer or prejudice the rights
of tendering Unitholders to receive payment for Units validly tendered and
accepted for payment pursuant to the Offer.

Unitholders who desire liquidity may wish to consider the Offer. However,
each Unitholder must make his own decision based upon such Unitholder's
particular circumstances, including the Unitholder's own financial needs, other
investment opportunities and tax position. Each Unitholder should consult with
his own advisors, tax, financial or otherwise, in evaluating the terms of and
whether to tender Units pursuant to the Offer.

Withdrawal of Units Tendered Pursuant to Competing Offers. If a Holder of
Units who has tendered such Units pursuant to the Raleigh Offer or the Walton
Offer wishes to tender some or all of such Units to the Purchaser pursuant to
this Offer, such Holder must withdraw such Units by following the procedures set
forth below. Units that have been tendered pursuant to the Raleigh Offer must be
withdrawn prior to the expiration of the Raleigh Offer, pursuant to the
applicable procedures set forth in Section 4 of the Raleigh Offer and the
related Letter of Transmittal. Similarly, Units that have been tendered pursuant
to the Walton Offer must be withdrawn prior to the expiration of the Walton
Offer, pursuant to the applicable procedures set forth in Section 4 of the
Walton Offer and the related Letter of Acceptance. Holders of the Units who
desire assistance in withdrawing the Units tendered pursuant to the Raleigh
Offer or the Walton Offer may call the Information Agent at (212) 843-8500
(Collect) or at (800) 253-3814 (Toll Free). With respect to withdrawal of Units,
Section 4 of the Raleigh Offer provides, in relevant part:

"For withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by
the Depositary at the address set forth on the back cover of
[the Raleigh Offer]. Any such notice of withdrawal must
specify the name of the person who tendered the Units to be
withdrawn and must be signed by the person(s) who signed the
Letter of Transmittal in the same manner as the Letter of
Transmittal was signed."

Similarly,Section 4 of the Walton Offer provides in relevant part:

"For a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by
the Information Agent/Depositary at its address set forth on
the back cover of [the Walton Offer]. Any such notice of
withdrawal must specify the names(s) of the person(s) who
tendered the Interests [Units] to be withdrawn, the number of
Interests to be withdrawn and the names(s) of the registered
holder(s) of the Interests, if different from that of the
person(s) who tendered such Interests. Such notice of
withdrawal must also be signed by the same person(s) who
signed the Letter of Acceptance in the same manner as the
Letter of Acceptance was signed (including any signature
guarantees, if applicable). If the Interests are held in the
name of two or more persons, all such persons must sign the
notice of withdrawal."

In connection with this Offer, for the convenience of Holders of Units, the
Purchaser has provided (a) a form of "Notice of Withdrawal" which, if properly
completed and timely delivered to The Herman Group, Inc., the depositary for the
Raleigh Offer, will enable a Holder of Units to withdraw Units tendered pursuant
to the Raleigh Offer and (b) a form of "Notice of Withdrawal" which, if properly
completed and timely delivered to Trust Company of America, the
depositary/information agent for the Walton Offer, will enable a Holder of Units
to withdraw Units tendered pursuant to the Walton Offer. The appropriate form of
"Notice of Withdrawal," or any other proper Notice of Withdrawal which complies
with the withdrawal requirements of Section 4 of the Raleigh Offer or the Walton
Offer, as the case may be, should be sent to The Herman Group, Inc. (in the case
of Unitholders withdrawing Units from the Raleigh Offer) or Trust Company of
America (in the case of Unitholders withdrawing Units from the Walton Offer), in
accordance with the Raleigh Offer or the Walton Offer, respectively. ANY
UNITHOLDER TENDERING UNITS TO THE PURCHASER FOLLOWING THE WITHDRAWAL OF SUCH
UNITS FROM THE OFFER OF A COMPETING OFFEROR(S) SHOULD FURNISH THE DEPOSITARY OF
THIS OFFER WITH COPIES OF THE NOTICE(S) OF WITHDRAWAL SENT BY SUCH UNITHOLDER TO
THE COMPETING OFFEROR(S).

<PAGE>

The Offer will provide Unitholders with an opportunity to liquidate
their investment without the usual transaction costs associated with market
sales. Unitholders may no longer wish to continue with their investment in the
Partnership for a number of reasons, including:

o Although not necessarily an indication of value, the $460 purchase price
is 88% higher than the $245 weighted average selling price for Units
reported for the limited secondary market during the four month period
ended March 31, 1996. In addition, the weighted price does not reflect
commissions and transaction costs paid by selling Unitholders which
reduces the amount received from the sale of Units.

o The Offer will provide Unitholders with an immediate opportunity to
liquidate their investment in the Partnership without the usual
transaction costs associated with market sales or partnership transfer
fees.

o For 1993, 1994 and 1995, Unitholders have been required to report
taxable income significantly in excess of cash distributions received on
account of their investment in the Units, which income may have given
rise to tax liability depending on the Unitholder's individual
circumstances. The Purchaser is unable to predict the relationship
between taxable income recognized and cash distributions received for
1996 and subsequent years.

o Certain Unitholders may receive a tax benefit from the sale of their
Units in 1996, subject to the rules and limitations described under the
heading "Consequences to a Tendering Unitholder" in "THE TENDER
OFFER--Section 6. Certain Federal Income Tax Considerations."

o There is no formal trading market for the Units.

o Unitholders may be generally disenchanted with real estate investments,
particularly long-term investments in limited partnerships.

o By selling their Units in the Offer, Unitholders avoid the continuing
administrative costs (such as accounting, tax reporting, limited partner
reporting and public company reporting requirements) and resultant
indirect negative financial impact on the value of the Units of a
publicly registered limited partnership and eliminate the delays and
complications in preparing and filing personal income tax returns which
may result from an investment in the Units.

According to the Partnership's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, as of such date, there were 404,000 Units issued
and outstanding held by 24,908 Unitholders. The Purchaser and its affiliates own
five Units in the aggregate, constituting less than 1% of the Units outstanding.

The Partnership is subject to the information and reporting requirements of
the Exchange Act, and in accordance therewith is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Such reports and other information may be examined
and copies may be obtained from the offices of the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C 20549, and at the regional offices of the
Commission located in the Northwestern Atrium Center, 500 Madison Street, Suite
1400, Chicago, Illinois 60661, and 7 World Trade Center, New York, New York
10048. Copies of such material should be available by mail upon payment of the
Commission's customary charges by writing to the Commission's principal offices
at 450 Fifth Street, N.W., Washington, D.C. 20549.

EXCEPT AS OTHERWISE SPECIFICALLY NOTED, ALL OF THE INFORMATION WITH RESPECT
TO THE PARTNERSHIP CONTAINED IN THE OFFER TO PURCHASE HAS BEEN DERIVED FROM
DOCUMENTS AND REPORTS PUBLICLY FILED BY THE PARTNERSHIP. ALTHOUGH THE PURCHASER
HAS NO INFORMATION THAT ANY STATEMENTS CONTAINED HEREIN BASED UPON SUCH
DOCUMENTS AND REPORTS ARE UNTRUE, THE PURCHASER CANNOT TAKE RESPONSIBILITY FOR
THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONCERNING THE PARTNERSHIP
CONTAINED IN SUCH DOCUMENTS AND REPORTS OR FOR ANY FAILURE BY THE PARTNERSHIP TO
DISCLOSE EVENTS WHICH MAY HAVE OCCURRED AND MAY AFFECT THE SIGNIFICANCE OR
ACCURACY OF SUCH INFORMATION BUT WHICH ARE UNKNOWN TO THE PURCHASER.

UNITHOLDERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE ACCOMPANYING
LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.

IF YOU HAVE ANY QUESTIONS OR IF YOU NEED ASSISTANCE IN COMPLETION OF THE
LETTER OF TRANSMITTAL, YOU MAY CONTACT THE INFORMATION AGENT BY CALLING (212)
843-8500 (COLLECT) OR (800) 253-3814 (TOLL FREE).

<PAGE>

THE TENDER OFFER

SECTION 1 TERMS OF THE OFFER. Upon the terms and subject to the conditions
of the Offer, the Purchaser will pay for Units validly tendered on or prior to
the Expiration Date and not withdrawn in accordance with Section 4 of this Offer
to Purchase. The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on August 14, 1996, unless the Purchaser extends the period of time during
which the Offer is open. In the event the Offer is extended, the term
"Expiration Date" shall mean the latest time and date on which the Offer, as
extended by the Purchaser, shall expire.

IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE PURCHASE
PRICE OFFERED TO UNITHOLDERS, SUCH INCREASED PURCHASE PRICE SHALL BE PAID FOR
ALL UNITS ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER, WHETHER OR NOT SUCH UNITS
WERE TENDERED PRIOR TO SUCH INCREASE.

The Offer is not conditioned upon financing or upon a minimum number of
Units being tendered, but is conditioned upon the satisfaction of certain other
conditions. (See Section 14. Conditions of the Offer"). The Purchaser reserves
the right (but shall not be obligated), in its sole discretion, to waive any or
all of such conditions. If, on or prior to the Expiration Date, any or all of
such conditions have not been satisfied or waived, the Purchaser may (i) decline
to purchase any of the Units tendered, terminate the Offer and return all
tendered Units to tendering Unitholders, (ii) waive all the unsatisfied
conditions and, subject to complying with applicable rules and regulations of
the Securities and Exchange Commission (the "Commission"), purchase all Units
validly tendered, (iii) extend the Offer and, subject to the right of
Unitholders to withdraw Units until the Expiration Date, cause the Depositary to
retain the Units that have been tendered during the period or periods for which
the Offer is extended, or (iv) amend the Offer, including, by increasing the
Purchase Price.

The Partnership has provided the Purchaser with a list of the Unitholders,
and this Offer to Purchase, the Letter of Transmittal and, if required, any
other relevant materials are being mailed to the Unitholders to the extent their
names and addresses are on such list.

SECTION 2 PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS. If the
number of Units validly tendered prior to the Expiration Date and not properly
withdrawn prior to the Expiration Date in accordance with the procedures
specified in Section 3 of the Offer to Purchase exceeds the maximum number of
Units that may, taking into account the Transfer Restriction, be transferred to
the Purchaser, the Purchaser will, upon the terms and subject to the conditions
of the Offer, accept for payment and pay for such maximum number of Units, pro
rata according to the number of Units validly tendered by each Unitholder and
not properly withdrawn on or prior to the Expiration Date, with appropriate
adjustments to avoid (i) purchases of fractional Units and (ii) purchases that
would violate Article 7 of the Partnership Agreement ("Transfers of Limited
Partners' Interests"). If the number of Units validly tendered and not properly
withdrawn on or prior to the Expiration Date is less than or equal to such
maximum number, the Purchaser will purchase all Units so tendered and not
withdrawn, upon the terms and subject to the conditions ofthe Offer.

If proration of tendered Units is required, because of the difficulty of
determining the number of Units validly tendered and not withdrawn, the
Purchaser may not be able to announce the final results of such proration until
at least approximately seven business days after the Expiration Date. Subject to
the Purchaser's obligation under Rule 14e-1(c) under the Exchange Act to pay
Unitholders the Purchase Price in respect of Units tendered or return those
Units promptly after the termination or withdrawal of the Offer, the Purchaser
does not intend to pay for any Units accepted for payment pursuant to the Offer
until the final proration results are known. Notwithstanding any such delay in
payment, no interest will be paid on the Purchase Price.

Upon the terms and subject to the conditions of the Offer, the Purchaser
will pay for Units validly tendered and not withdrawn in accordance with Section
4 of the Offer to Purchaser as promptly as practicable following the Expiration
Date. In all cases, the Purchase Price will be paid only after timely receipt by
the Depositary of a properly completed and duly executed Letter of Transmittal,
and any other documents required by the Letter of Transmittal. (See "Section 3.
Procedures for Tendering Units").

For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment tendered Units when, as and if the Purchaser gives oral or written
notice to the Depositary of the Purchaser's acceptance for payment of such Units
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Units tendered and accepted for payment will in all cases be
made by deposit of the Purchase Price with the Depositary, which will act as

<PAGE>

agent for the tendering Unitholders for the purpose of receiving payment from
the Purchaser and transmitting payment to tendering Unitholders. Under no
circumstances will interest be paid on the Purchase Price by reason of any delay
in making such payment.

If any tendered Units are not purchased for any reason, the Letter of
Transmittal with respect to such Units will be destroyed by the Purchaser. If
for any reason acceptance for payment of, or payment for, any Units tendered
pursuant to the Offer is delayed or the Purchaser is unable to accept for
payment, purchase or pay for Units tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights under Section 14, the Purchaser may cause
the Depositary to retain tendered Units and such Units may not be withdrawn
except to the extent that the tendering Unitholders are entitled to withdrawal
rights as described in Section 4; provided, however, that the Purchaser is
required, pursuant to Rule 14e-1(c) under the Exchange Act, to pay Unitholders
the Purchase Price in respect of Units tendered or return such Units promptly
after termination or withdrawal of the Offer.

The Purchaser reserves the right to transfer or assign, in whole or
from time to time in part, to one or more persons, the right to purchase Units
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer or prejudice the
rights of tendering Unitholders to receive payment for Units validly tendered
and accepted for payment pursuant to the Offer.

SECTION 3. PROCEDURES FOR TENDERING UNITS.

Valid Tender. To validly tender Units, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with required
signature of a witness or signature guarantees, if applicable, and any other
documents required by the Letter of Transmittal, must be received by the
Purchaser on or prior to the Expiration Date. In order to comply with certain
restrictions on transfer in the Partnership Agreement, a tender which would
result in the tendering Unitholder owning less than five Units will not be
effective (unless all Units owned by such Unitholder are tendered). No
alternative, conditional or contingent tenders will be accepted.

Signature Requirements. If the Letter of Transmittal is signed by the
registered holder of the Units and payment is to be made directly to that
holder, then the signature of the registered holder on the Letter of Transmittal
must be witnessed but no signature guarantee is required. However, if the Units
are registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made or delivered to a person other than the
registered holder at its address appearing of the Letter of Transmittal, then
the signature on the Letter of Transmittal must be guaranteed by a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. (the "NASD") or a commercial bank,
savings bank, credit union, savings and loan association or trust company having
an office, branch or agency in the United States (each, an "Eligible
Institution"), as provided in the Letter of Transmittal. Similarly, if the Units
are tendered for the account of an Eligible Institution, the signature on the
Letter of Transmittal must be witnessed no signature guarantee is required.
HOWEVER, IN ALL OTHER CASES, ALL SIGNATURES ON THE LETTER OF TRANSMITTAL MUST BE
GUARANTEED BY AN ELIGIBLE INSTITUTION.

IN ORDER FOR A TENDERING UNITHOLDER TO PARTICIPATE IN THE OFFER, UNITS MUST
BE VALIDLY TENDERED AND NOT WITHDRAWN ON OR PRIOR TO THE EXPIRATION DATE, WHICH
IS 12:00 MIDNIGHT, NEW YORK CITY TIME, ON AUGUST 14, 1996, UNLESS EXTENDED.

THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING UNITHOLDER AND DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IN ALL
CASES,SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.

Backup Federal Income Tax Withholding. To prevent the possible application
of backup federal income tax withholding with respect to payment of the Purchase
Price, a tendering Unitholder must provide the Depositary with such Unitholder's
correct taxpayer identification number and certify that such Holder is not
subject to back-up federal income tax withholding by completing the Substitute
Form W-9 included in the Letter of Transmittal. (See the Instructions to the
Letter of Transmittal and "Section 6. Certain Federal Income Tax Consequences").

Firpta Withholding. To prevent the withholding of federal income tax in an
amount equal to 10% of the sum of the Purchase Price plus the amount of
Partnership liabilities allocable to each Unit purchased, each Unitholder must
complete the FIRPTA Affidavit included in the Letter of Transmittal certifying
such Unitholder's taxpayer identification number and address and that the
Unitholder is not a foreign person. (See the Instructions to the Letter of
Transmittal and "Section 6. Certain Federal Income Tax Consequences").

<PAGE>

Other Requirements. By executing a Letter of Transmittal, a tendering
Unitholder irrevocably appoints the Purchaser and any designees of the Purchaser
as such Unitholder's proxies, in the manner set forth in the Letter of
Transmittal, each with full power of substitution, to the full extent of such
Unitholder's rights with respect to the Units tendered by such Unitholder and
accepted for payment by the Purchaser (and with respect to any and all other
Units or other securities issued or issuable in respect of such Units on or
after the date hereof). All such proxies shall be considered irrevocable and
coupled with an interest in the tendered Units. Such appointment will be
effective when, and only to the extent that, the Purchaser accepts such Units
for payment. Upon such acceptance for payment, all prior proxies given by such
Unitholder with respect to such Units (and such other Units and securities)
will, without further action, be revoked, and no subsequent proxies may be given
nor any subsequent written consent executed (and, if given or executed, will not
be effective). The Purchaser and any designees of the Purchaser will, as to such
Units (and such other Units and securities), be empowered to exercise all voting
and other rights of such Unitholder as they in their sole discretion may deem
proper at any meeting of Unitholders, or any adjournment or postponement
thereof, by written consent or otherwise. The Purchaser reserves the right to
require that, in order for Units to be deemed validly tendered, immediately upon
the Purchaser's acceptance for payment of such Units, the Purchaser must be able
to exercise full voting rights with respect to such Units, including voting at
any meeting of Unitholders then scheduled. By executing the Letter of
Transmittal, a tendering Holder of Units agrees to execute all such documents
and take all such other actions as shall be reasonably required to enable the
Units tendered to be voted in accordance with the directions of the Purchaser.

In addition, by executing and delivering the Letter of Transmittal, a
tendering Unitholder irrevocably assigns to the Purchaser all of the right,
title and interest of such Unitholder with respect to the Units tendered and
purchased pursuant to the Offer, including, without limitation, such
Unitholder's right, title and interest in and to any and all distributions made
by the Partnership in respect of such Units, other than those distributions
declared or made between June 19, 1996 and the date of payment of the Purchase
Price by the Purchaser.

By executing and delivering the Letter of Transmittal, a tendering Holder
also irrevocably constitutes and appoints the Purchaser and any designees as the
Holder's attorney-in-fact, each with full power of substitution to the full
extent of the Holder's rights with respect to the Units tendered by the Holder
and accepted for payment by the Purchaser. Such appointment will be effective
when, and only to the extent that, the Purchaser accepts the tendered Units for
payment. Upon such acceptance for payment, all prior powers of attorney granted
by the Holder with respect to such Units will, without further action, be
revoked, and no subsequent powers of attorney may be granted (and if granted
will not be effective). Pursuant to such appointment as attorney-in-fact, the
Purchaser and its designees each will have the power, among other things, (i) to
seek to transfer ownership of such Units on the Partnership books maintained by
the transfer agent and registrar for the Partnership (and execute and deliver
any accompanying evidences of transfer and authenticity any of them may deem
necessary or appropriate in connection therewith including, without limitation,
a Transferor's (Seller's) Application for Transfer created by the NASD, if
required, (ii) upon receipt by the Depositary (as the tendering Holder's agent)
of the Purchase Price, to become a Substitute Owner, to receive any and all
distributions to which the Purchaser is entitled, and to receive all benefits
and otherwise exercise all rights of beneficial ownership of such Units, in
accordance with the terms of the Offer, (iii) to execute and deliver to the
General Partner a change of address form instructing the General Partner to send
any and all future distributions to which the Purchaser is entitled pursuant to
the terms of the Offer in respect of tendered Units to the address specified in
such form, and (iv) to endorse any check payable to or upon the order of such
Holder representing a distribution to which the Purchaser is entitled pursuant
to the terms of the Offer, in each case on behalf of the tendering Holder.

Substitute Owner Status. Substituted Owners must provide documentation to
the Depositary which demonstrates, to the satisfaction of the Purchaser, such
person's status as a person who has purchased Units but not yet been reflected
as a Holder on the books and records of the Partnership.

Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Units pursuant to the procedures described above will be determined by the
Purchaser, in its sole discretion, which determination shall be final and
binding on all parties. The Purchaser reserves the absolute right to reject any
or all tenders if not in proper form or if the acceptance of, or payment for,
the Units tendered may, in the opinion of the Purchaser's counsel, be unlawful.
The Purchaser also reserves the absolute right to waive or amend any of the
conditions of the Offer that it is legally permitted to waive as to the tender
of any particular Units and to waive any defect or irregularity in any tender
with respect to any particular Units of any particular Unitholder. The
Purchaser's interpreta-

<PAGE>

tion of the terms and conditions of the Offer (including the Letter of
Transmittal and the Instructions thereto) will be final and binding on all
parties. Neither the Purchaser, the Depositary nor any other person will be
under any duty to give notification of any defects or irregularities in the
tender of any Units or will incur any liability for failure to give any such
notification.

A tender of Units pursuant to any of the procedures described above will
constitute a binding agreement between the tendering Unitholder and the
Purchaser on the terms set forth in the Offer.

SECTION 4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section
4, all tenders of Units pursuant to the Offer are irrevocable, provided that
Units tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless already accepted for payment as provided in this
Offer to Purchase, may also be withdrawn at any time after September 16, 1996.

For withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at the address set forth
on the back cover of this Offer to Purchase. Any such notice of withdrawal must
specify the name of the person who tendered the Units to be withdrawn and must
be signed by the person(s) who signed the Letter of Transmittal in the same
manner as the Letter of Transmittal was signed.

If purchase of, or payment for, Units is delayed for any reason or if the
Purchaser is unable to purchase or pay for Units for any reason, then, without
prejudice to the Purchaser's rights under the Offer, the Purchaser may cause the
Depositary to retain tendered Units and such Units may not be withdrawn, except
to the extent that tenderingUnitholders are entitled to withdrawal rights as set
forth in this Section 4; provided, however, that the Purchaser is required,
pursuant to Rule 14e-1(c) under the Exchange Act, to pay Unitholders the
Purchase Price in respect of Units tendered or return such Units promptly after
termination or withdrawal of the Offer.

Any Units properly withdrawn will be deemed not to be validly tendered for
purposes of the Offer. Withdrawn Units may be re-tendered, however, by following
any of the procedures described in Section 3 at any time prior to the Expiration
Date.

SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The
Purchaser expressly reserves the right, in its sole discretion, at any time and
from time to time, (i) to extend the period of time during which the Offer is
open and thereby delay acceptance for payment of, and the payment for, any
Units, by giving oral notice of such extension to the Depositary prior to the
Expiration Date (followed by written notice), (ii) to terminate the Offer and
not accept for payment any Units not already accepted for payment or paid for,
(iii) upon the occurrence of any of the conditions specified in Section 14, to
delay the acceptance for payment of, or payment for, any Units not already
accepted for payment or paid for, and (iv) to amend the Offer in any respect
(including, without limitation, by increasing the consideration offered,
increasing or decreasing the number of Units being sought, or both). Notice of
any such termination or amendment will promptly be disseminated to Unitholders
in a manner reasonably designed to inform Unitholders of such change in
compliance with Rule 14d-4(c) under the Exchange Act. In the case of an
extension of the Offer, such extension will be followed by a press release or
public announcement which will be issued no later than 9:00 a.m., New York City
time, on the next business day after the scheduled Expiration Date, in
accordance with Rule 14e-1(d) under the Exchange Act.

If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance of Units for payment) is delayed in its payment for Units
or is unable to pay for Units pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Purchaser may
cause the Depositary to retain tendered Units and such Units may not be
withdrawn except to the extent tendering Unitholders are entitled to withdrawal
rights as described in Section 4; provided, however, that the Purchaser is
required, pursuant to Rule 14e-1(c) under the Exchange Act, to pay Unitholders
the Purchase Price in respect of Units tendered or return such Units promptly
after termination or withdrawal of the Offer.

If the Purchaser makes a material change in the terms of the Offer, or if
it waives a material condition of the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during
which an offer must remain open following a material change in the terms of the
offer, other than a change in price or a change in percentage of securities
sought or a change in any dealer's soliciting fee, will depend upon the facts
and circumstances, including the materiality of the change. With respect to a
change in price or, subject to certain limitations, a change in the percentage
of securities sought or a change in any dealer's soliciting fee, a minimum of
ten business days from the date of such change is generally required to allow
for adequate dissemination to Holders of Units. Accordingly, if prior to the
Expiration Date, the Purchaser increases (other than increases of not more than
two percent of the outstanding Units)

<PAGE>

or decreases the number of Units being sought, or increases or decreases the
consideration offered pursuant to the Offer, and if the Offer is scheduled to
expire at any time earlier than the tenth business day from the date that
notice of such increase or decrease is first published, sent or given to Holders
of Units, the Offer will be extended at least until the expiration of such ten
business days. As used in this Offer to Purchase, "business day" means any day
other than a Saturday, Sunday or a federal holiday, and consists of the time
period from 12:01 a.m. through 12:00 Midnight, New York City time.

SECTION 6. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following summary
is a general discussion of certain federal income tax considerations relevant to
a sale of Units pursuant to the Offer or retention of the Units. This summary is
based on the Internal Revenue Code of 1986, as amended (the "Code"), final and
proposed regulations promulgated thereunder ("Treasury Regulations"), court
decisions and Internal Revenue Service ("IRS") rulings and positions as of the
date of the Offer. All of the foregoing are subject to change, and any such
change could affect the continuing accuracy of this summary. The following
discussion assumes that the Partnership is treated as a partnership for federal
income tax purposes and is not treated as a publicly traded partnership within
the meaning of Section 7704 of the Code, and that the Units constitute
partnership interests for federal income tax purposes. This summary does not
discuss all aspects of federal income taxation that may be relevant to a
particular Unitholder in light of such Unitholder's specific circumstances or to
certain types of Unitholders subject to special treatment under the federal
income tax laws (for example, foreign persons, dealers in securities, banks,
insurance companies and tax-exempt organizations), nor does it discuss any
aspect of state, local, foreign or other tax laws. Sales of Units pursuant to
the Offer will be taxable transactions for federal income tax purposes, and may
also be taxable transactions under applicable state, local, foreign and other
tax laws. EACH UNITHOLDER SHOULD CONSULT HIS OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO SUCH UNITHOLDER OF SELLING OR NOT SELLING UNITS
PURSUANT TO THE OFFER.

Consequences to A Tendering Unitholder. A Unitholder will recognize gain or
loss on the sale of a Unit equal to the difference between the amount realized
on the sale and the Unitholder's adjusted tax basis in the Unit. The amount
realized by a Unitholder with respect to the sale of a Unit generally will be
equal to the Purchase Price received by the Unitholder pursuant to the Offer
plus the amount of the Partnership's liabilities allocable to the Unit (as
determined under Code Section 752). The amount of a Unitholder's adjusted tax
basis in Units sold pursuant to the Offer will vary depending on the
Unitholder's particular circumstances. Such adjusted tax basis will take into
account the Partnership's liabilities allocable to the Units sold (as determined
under Code Section 752), will be reduced by the amount of distributions received
by the selling Unitholder and will be increased or decreased by the selling
Unitholder's allocable share of the Partnership's taxable income and loss,
respectively (including the selling Unitholder's allocable share of income and
loss for the taxable year of sale as determined under the Partnership
Agreement). As discussed more fully below, passive income recognized by a
Unitholder with respect to the sale of Units may be offset by suspended passive
activity losses (e.g., post-1986 suspended net taxable losses in excess of
statutorily provided phase-in amounts), if any, from the Partnership or from
other passive activities. In the event the Unitholder realizes a loss on the
sale, such loss may be deductible only to the extent permitted under the passive
activity loss rules and other applicable limitations. If the Unitholder sells
all of his Units (and such Units have not been aggregated for purposes of the
passive loss rules, as described more fully below, with certain activities not
currently being sold), any passive activity loss recognized on the sale and any
suspended passive activity losses from the Partnership will no longer be subject
to the passive activity loss limitation, and therefore should be deductible by
such Unitholder from his other income, subject to any other applicable
limitations (including capital loss limitations, as described below). If more
than the maximum number of Units which the Purchaser has offered to purchase
pursuant to the Offer are validly tendered and not withdrawn or if the Transfer
Restriction applies, tendering Unitholders may not be able to sell all of their
Units pursuant to the Offer because of proration of the number of Units to be
purchased by the Purchaser. (See "Section 2. Proration; Acceptance for Payment
and Payment for Units").

Except as set forth herein, gain or loss recognized by a Unitholder on a
sale of Units pursuant to the Offer generally will be treated as capital gain or
loss if such Units were held by the Unitholder as a capital asset. Such capital
gain or loss will be treated as long-term capital gain or loss if the tendering
Unitholder's holding period for the Units exceeds one year at the time of sale.
Under current law (which is subject to change), long-term capital gains of
individuals and other non-corporate taxpayers are taxed at a maximum marginal
federal income tax rate of 28%, whereas the maximum marginal federal income tax
rate for ordinary income of such persons is 39.6%. Capital losses are deductible
only to the extent of capital gains, except that non-corporate taxpayers may
deduct up to $3,000 of capital losses in excess of the amount of their capital
gains against ordinary income. Excess capital losses generally

<PAGE>

can be carried forward to succeeding years (a corporation's carry forward
period is five years and a non-corporate taxpayer can carry forward such losses
indefinitely). In addition, corporations are allowed to carry back excess
capital losses to the three preceding taxable years.

A portion of the amount realized by a Unitholder and a portion of the
adjusted tax basis of the Unitholder in the Units sold may be attributable to
unrealized receivables (which include depreciation recapture) or substantially
appreciated inventory items, each as defined in Code Section 751. The difference
between the portion of a Unitholder's amount realized allocable to unrealized
receivables and substantially appreciated inventory items and the portion of the
Unitholder's adjusted tax basis in the Units sold which is allocable to such
items will be treated as ordinary income or loss and the difference between the
Unitholder's remaining amount realized and remaining adjusted tax basis in the
Units sold will be treated as capital gain or loss (assuming the Units sold were
held as capital assets). It is possible that the basis allocation rules of Code
Section 751 could result in a Unitholder recognizing ordinary income with
respect to the portion of a Unit attributable to substantially appreciated
inventory and unrealized receivables while recognizing a capital loss with
respect to the remainder of the Unit, even though such Unitholder recognizes an
overall net loss on the sale.

Section 6050K of the Code requires each person who transfers an interest in
a partnership possessing unrealized receivables or substantially appreciated
inventory items (within the meaning of Code Section 751) to report such transfer
to the partnership. If so notified, the partnership must report the identity of
the transferor and transferee to the IRS, together with other information
required under applicable Treasury Regulations. Failure by a Unitholder to
report a transfer covered by this provision may result in a penalty of $50 per
occurrence. Further, under Treasury Regulation Section 1.751-1(a)(3), a partner
selling any interest in a partnership having substantially appreciated inventory
items or unrealized receivables at the time of sale must file an information
statement with his federal income tax return for the year of sale providing the
information specified in such Treasury Regulation. Unitholders are advised to
consult with their own tax advisors regarding the application of Section 751 of
the Code and the reporting requirements under Section 6050K of the Code and
Treasury Regulation Section 1.751.1(a)(3) to a sale of Units pursuant to the
Offer.

Under Code Section 469, a non-corporate taxpayer or personal service
corporation can deduct passive activity losses in any year only to the extent of
such person's passive activity income for such year (which does not include
portfolio income, as described below), and closely held corporations may not
offset such losses against portfolio income. Portfolio income includes interest,
dividends, annuities and royalties, unless such income is derived in the
ordinary course of a trade or business, less (a) expenses (other than interest)
clearly and directly allocable to such income and (b) interest expenses properly
allocable to such income. For this purpose, portfolio income also includes any
gain or loss from the disposition of property that produces portfolio income or
that is held for investment. To the extent that a taxpayer subject to Code
Section 469 holds a partnership interest in a limited partnership engaged in one
or more activities that produce passive activity income and one or more
activities that produce portfolio income, upon a sale or other disposition of
such taxpayer's partnership interest, a portion of any gain or loss from such
sale or other disposition shall be treated as gain or loss from the sale or
disposition of an interest in each passive activity or portfolio income activity
in which such limited partnership holds an interest. Such allocation is made in
accordance with applicable Treasury Regulations. Accordingly, to the extent that
the Partnership holds mortgage notes (or other assets) producing portfolio
income, a portion of any gain (or loss) from the sale of a Unit may be
considered as arising from a portfolio income activity, and to the extent that
portfolio gain arises therefrom, such portfolio gain cannot be offset by current
or suspended passive activity losses (except to the extent such passive activity
losses arise from the complete disposition of a passive activity as described
below).

Under the passive loss rules, a loss attributable to a passive activity
that is recognized by a Unitholder upon a sale of a Unit pursuant to the Offer
can be currently deducted (subject to other applicable limitations, including
the limitations described above, on offsetting ordinary income with capital
losses) to the extent of such Unitholder's taxable income from the Partnership
for that year (except to the extent such income arises from a portfolio income
activity). Gain recognized by a Unitholder upon such sale (except to the extent
attributable to a portfolio income activity) can be offset by such Unitholder's
passive activity losses (if any) from the Partnership or other passive
activities (subject to applicable limitations). If a Unitholder disposes of all
of his Units pursuant to the Offer, current and suspended passive activity
losses from the Partnership and any passive activity loss recognized on the sale
of the Units will no longer be subject to the passive loss limitations. If,
under income tax regulations providing for the aggregation of activities under
certain circumstances, a Unitholder has aggregated his investment in Units with

<PAGE>

certain other passive investments in real estate, and such Unitholder disposes
of less than all of such aggregated real estate activities, passive activity
losses attributable to such Units will remain subject to the passive loss
limitations until all of such aggregated real estate activities are disposed of.

A Unitholder (other than corporations and certain foreign individuals) who
tenders Units may be subject to 31% backup withholding unless the Unitholder
provides its taxpayer identification number (TIN) and certifies that the TIN is
correct or properly certifies that such Unitholder is awaiting a TIN. A
Unitholder may avoid backup withholding by properly completing and signing the
Substitute Form W-9 included as part of the Letter of Transmittal. If a
Unitholder who is subject to backup withholding does not properly complete and
sign the Substitute Form W-9, the Purchaser will withhold 31% from payments to
such Unitholder. (See Letter of Transmittal--Box B).

Gain realized by a foreign Unitholder on a sale of a Unit pursuant to the
Offer will be subject to federal income tax. Under Section 1445 of the Code, the
transferee of a partnership interest held by a foreign person is generally
required to deduct and withhold a tax equal to 10% of the amount realized on the
disposition. The Depositary will withhold 10% of the amount realized by a
tendering Unitholder unless the Unitholder properly completes and signs the
FIRPTA Affidavit included as part of the Letter of Transmittal certifying the
Unitholder's TIN, that such Unitholder is not a foreign person and the
Unitholder's address. Amounts withheld would be creditable against a
Unitholder's federal income tax liability and, if in excess thereof, a refund
may be obtained from the IRS by filing a U.S. income tax return. Alternatively,
if the amount withheld is less than the Unitholder's U.S. tax liability, the
Unitholder may be required to make an additional tax payment. (See Letter of
Transmittal--Box C).

Consequences to a Non-tendering Unitholder. The Purchaser does not
anticipate that a Unitholder who does not tender his Units will realize any
material tax consequences solely as a result of the decision not to tender.
However, as a partner in a partnership, a Unitholder is subject to current
income taxation on his allocable share of Partnership taxable income
irrespective of the amount of cash distributed by the Partnership to him. For
the 1993, 1994, and 1995 taxable years the taxable income allocable to a
Unitholder on account of his investment in Units significantly exceeded the cash
distribution received by such Unitholder from the Partnership. Such taxable
income may have given rise to tax liability depending on the Unitholder's
individual circumstances (including, possibly, the availability of suspended
passive losses). A Unitholder who decides not to sell his Units pursuant to the
Offer may continue to recognize taxable income on account of owning Units in
excess of the current cash distributions made to such Unitholder, as the
Partnership's credit facility imposes restrictions on the amount of cash that
can be distributed to Unitholders. However, the Purchaser is unable to predict
the relationship between taxable income recognized and cash distributions
received by Unitholders for 1996 or future years.

The Partnership Agreement restricts transfers of Units if a transfer would,
in the opinion of counsel for the Partnership, result in the termination of the
Partnership for federal income tax purposes (which result will occur when 50% or
more of the total interests in partnership capital and profits are transferred
within a twelve-month period) or the treatment of the Partnership as an
association taxable as a corporation for federal income tax purposes. If as a
result of the Offer there is a sale or exchange of 50% or more of the total
interests in the capital and profits of the Partnership within a 12 month
period, a termination of the Partnership for federal income tax purposes would
occur, and the taxable year of the Partnership would close. In the case of such
a sale or exchange, under current Treasury Regulations, the assets (subject to
related debt) of the Partnership would be treated as distributed to the partners
of the Partnership, and following such deemed distribution, such assets (subject
to such related debt) would be deemed to be contributed to a new partnership.
Proposed Treasury Regulations would modify this treatment. Under current
Treasury Regulations, the consequences of a termination of the Partnership could
include changes in the methods of depreciation available to the Partnership for
tax purposes, changes in the tax basis of the Partnership's assets, and possible
recognition of taxable gain by Unitholders resulting from any deemed cash
distribution in excess of the non-tendering Unitholder's adjusted tax basis in
his Units. Other tax consequences are possible, the extent of which cannot be
determined by the Purchaser without access to the books and records of the
Partnership. In addition, under current Treasury Regulations, a termination of
the Partnership could cause the Partnership or its assets to become subject to
unfavorable statutory or regulatory changes enacted or issued prior to the
termination but previously not applicable to the Partnership or its assets
because of protective transitional rules. The Purchaser has reserved the right
not to purchase Units to the extent such purchase would cause a termination of
the Partnership for federal income tax purposes.

<PAGE>

SECTION 7. EFFECTS OF THE OFFER.

Limitation On Resales. Pursuant to the Partnership Agreement, transfers of
Units, including Units tendered pursuant to the Offer, which would, in the
opinion of counsel to the Partnership, result in the termination of the
Partnership for federal income tax purposes will not be effective. Depending
upon the number of Units tendered pursuant to the Offer and the Competing
Offers, sales of Units on the secondary market for the twelve-month period
following completion of the Offer may be limited. (See "Consequences to
Non-Tendering Unitholders" under "Section 6. Certain Federal Income Tax
Considerations").

Effect on Trading Market. There is no established public trading market for
the Units and, therefore, a reduction in the number of Unitholders should not
materially further restrict the Unitholders' ability to find purchasers for
their Units.

Control of All Unitholder Voting Decisions By Purchaser. The Purchaser will
have the right to vote each Unit purchased pursuant to the Offer. Depending on
the number of Units purchased pursuant to the Offer, the Purchaser could be in a
position to significantly influence all voting decisions with respect to the
Partnership. Accordingly, the Purchaser could (i) prevent non-tendering
Unitholders from taking action they desire but that the Purchaser opposes and
(ii) take action desired by the Purchaser but opposed by non-tendering
Unitholders. Under the Partnership Agreement, Unitholders holding a majority of
the Units are entitled to take action with respect to a variety of matters,
including: removal of the General Partner; dissolution of the Partnership; the
sale of all or substantially all of the Partnership's properties; material
changes in the investment objectives and policies of the Partnership; and most
types of amendments to the Partnership Agreement. When voting on such matters,
the Purchaser will vote Units owned and acquired by it in its interest. (See
"Section 8. Future Plans").

The Units are registered under the Exchange Act, which requires, among
other things, that the Partnership furnish certain information to its
Unitholders and to the Commission and comply with the Commission's proxy rules
in connection with meetings of, and the solicitation of consents from,
Unitholders. The Purchaser does not believe that the purchase of Units pursuant
to the Offer will result in the Units becoming eligible for deregistration under
Section 12(g) of the Exchange Act.

SECTION 8. FUTURE PLANS. The Purchaser is making the Offer for the purpose
of obtaining an equity interest in the Partnership. The Purchaser may, if
successful in acquiring a substantial number of Units pursuant to the Offer,
seek to acquire or influence control of the business of the Partnership. In this
regard, the Purchaser may seek to remove the General Partner of the Partnership
but, while reserving such right, the Purchaser has not yet determined whether to
do so. Except as set forth above, the Purchaser does not have any present plans
or intentions with respect to a merger, reorganization or liquidation of the
Partnership, a sale of assets or refinancing of any of the Partnership's
properties or a change in the management, capitalization or distribution policy
of the Partnership. However, the Purchaser reserves the right at an appropriate
time, to exercise its rights as a limited partner to vote on matters subject to
a limited partner vote, including a vote to remove the General Partner or cause
the sale of the Partnership's properties and the liquidation and dissolution of
the Partnership. Subject to the limitation on resales discussed in Section 7,
the Purchaser may acquire additional Units following the completion of the
Offer. Any such acquisition may be made through private purchases or by any
other means deemed advisable. Any such acquisition may be at a price higher or
lower than the price to be paid for the Units purchased pursuant to the Offer.

SECTION 9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP. Except as
specifically indicated, information included herein concerning the Partnership
is derived from the Partnership's publicly-filed reports. Although the Purchaser
has no information that any statements contained in this Section 9 are untrue,
the Purchaser cannot take responsibility for the accuracy or completeness of any
information contained in this Section 9 or for any failure by the Partnership to
disclose events which may have occurred and may affect the significance or
accuracy of any such information but which are unknown to the Purchaser.

Assets and Business. The Partnership was organized in 1987 under the laws
of the State of Delaware. Its principal executive offices are located at 900 N.
Michigan Avenue, Chicago, Illinois 60611. Its telephone number is (312)
440-4800.

The assets of the Partnership consist principally of interests in land
which is in the process of being developed into master-planned residential
communities (the "Communities") and, to a lesser extent, commercial and
industrial

<PAGE>

properties; mortgage notes and accounts receivable; construction, brokerage
and other support businesses; real estate assets held for investment; certain
club and recreational facilities; and a cable television business serving one of
its Communities. The Partnership is principally engaged in the development of
comprehensively planned resort and primary home Communities containing a
diversified product mix designed for the middle and upper income segments of the
various markets in which the Partnership operates.

The Partnership sells individual residential lots and parcels of partially
developed and undeveloped land. The third-party builders and developers to whom
the Partnership sells homesites and land parcels are generally smaller local
builders who require project specific financing for their developments and whose
operations are more susceptible to fluctuations in the availability and terms of
financing. In addition, within the Communities, the Partnership constructs, or
causes to be constructed, a variety of products, including single-family homes,
townhouses and condominiums to be developed for sale, as well as related
commercial and recreational facilities. The Communities are located primarily
throughout the State of Florida, with Communities also located near Atlanta,
Georgia and Highlands, North Carolina. Additional undeveloped properties owned
by the Partnership in or near its Communities are being considered for
development as commercial, office and industrial properties. The Partnership
also owns or manages certain club and recreational facilities within certain of
its Communities. Certain assets located in Florida were acquired by the
Partnership from the seller by purchasing a 99.9% interest in a joint venture
partnership in which the General Partner acquired the remaining joint venture
partnership interest. In addition, other assets are owned by various
partnerships, the interests of which are held by certain indirect subsidiaries
of the Partnership and by the Partnership.

The business of the Partnership is cyclical in nature and certain aspects
of the development of Community projects are to some degree seasonal. The
Communities are in various stages of development. The remaining estimated
build-out time for the Communities ranges from one to nine years.

The principal assets being developed or managed by the Partnership are
described below. The acreage amounts set forth herein are approximations of the
gross acreage of the Communities or other properties referred to or described
and are not necessarily indicative of the net developable acreage currently
owned by the Partnership or its joint ventures. All of the Partnership's
properties are subject to mortgages to secure the repayment of the Partnership's
indebtedness as discussed in detail in Note 8 to the consolidated balance sheets
of ARVIDA/JMB Partners, L.P. and Consolidated Ventures as of December 31, 1995
and 1994 and the related consolidated statements of operations, changes in
partners capital accounts and cash flows for each of the three years in the
period ended December 31, 1995 (the "Audited 1995 Financial Statements"). FOR
CONVENIENCE, THE NOTES TO THE AUDITED 1995 FINANCIAL STATEMENTS REFERRED TO IN
THIS SECTION 9, AS WELL AS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (ITEM 7 TO THE PARTNERSHIP'S ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995), ARE REPRODUCED IN
SCHEDULE II TO THIS OFFER TO PURCHASE.

(a) Palm Beach County, Florida

The Partnership owns property in Broken Sound, a 970-acre Community located
in Boca Raton. The Community offered a wide range of residential products built
by the Partnership or third-party builders, all of which were sold and closed as
of December 31, 1995.

(b) Broward County, Florida

The Partnership owns property in Weston, a 7,500-acre Community in its mid
state of development. The Community offers a complete range of housing products
built by the Partnership or third-party builders, as well as tennis, swim and
fitness facilities, two 18-hole golf courses and an equestrian center. In
addition, the Partnership owns commercial land, most of which is currently
undeveloped, located in the Weston Community. Reference is made to Note 12 to
the Audited 1995 Financial Statements for a discussion of the Partnership's use
of certain tax-exempt financing in connection with the development of the Weston
Community.

In addition, during December 1995, the District issued an additional
$13,340,000 of fixed rate bonds. The bonds bear interest at 6.875% and mature in
April 2010; however, mandatory principal redemptions commence in 1998 and
continue through maturity.

<PAGE>

The Partnership owns property on Longboat Key which is a barrier island on
Florida's west coast, approximately four miles from downtown Sarasota and seven
miles from Sarasota/Bradenton airport. The property is in its mid state of
development. The Partnership also owns property in a Community in the Tampa area
known as River Hills Country Club which is a 1,200-acre Community in its mid
stage of development. The Partnership owned an interest in The Oaks Community in
Sarasota, Florida which was sold during 1993. Reference is made to Note 8 to the
Audited 1995 Financial Statements for a discussion of the sale of the
Partnership's interest in The Oaks property and the repayment of the mortgage
loan secured by such property.

(d) Jacksonville, Florida

The Partnership owns property in two Communities in Ponte Vedra Beach,
Florida, twenty-five miles from downtown Jacksonville, known as Sawgrass Country
Club and The Players Club at Sawgrass. These Communities are in their final
stages of development and were virtually sold out at December 31, 1995. The
Partnership also owns property in a 730-acre Community known as the Jacksonville
Golf and Country Club which is in its mid to late state of development.

(e) Atlanta, Georgia

The Partnership owns property in the Atlanta, Georgia area known as Water's
Edge and Dockside, which are in their mid and final stages of development,
respectively.

(f) Highlands, North Carolina

The Partnership owns a 600-acre Community near Highlands, North Carolina
known as The Cullasaja Club. The Community is in its mid stage of development.

(g) Other

As of December 31, 1995, the Partnership also owned a 20% joint venture
interest in a 4,000-acre Community, known as Coto de Caza, located in Southern
Orange County, California. The Community is in its mid stage of development.
During March 1996, the Partnership sold its interest in the Community to
unaffiliated third parties for approximately $12 million. Reference is made to
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations and Note 7 to the Audited 1995 Financial Statements for further
discussion of this joint venture.

Litigation. The Partnership is a party to numerous litigations. In its
Annual Report on Form 10-K for the fiscal year ended December 31, 1995, the
Partnership disclosed the status of "... a number of homeowner lawsuits, certain
of which purported to be class actions, that allegedly in part arose out of or
related to Hurricane Andrew ..."; two subrogation actions, one of which
"...plaintiffs seek to recover damages and pre- and post-judgment interest in
connection with $10,873,000 [an insurance carrier] has allegedly paid, plus
amounts it may have to pay in the future ..."; and a lawsuit filed in October
1995 as a class action in which "... the multi-count complaint alleges that
defendants engaged in various acts of misconduct in, among other things, the
establishment, operation, management and marketing of the Broken Sound golf
course and recreational facilities ..." and in which "plaintiffs seek ...
damages in excess of $45 million, the appointment of receivers for the Broken
Sound Club and Country Club Maintenance Association, Inc., other unspecified
compensatory damages, the right to seek punitive damages, treble damages,
prejudgment interest, attorneys' fees and costs." In such report, the
Partnership also referred to certain other pending lawsuits and claims against
the Partnership.

Selected Financial Data. Set forth below is a summary of certain financial
data for the Partnership which has been excerpted from the Partnership's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995, and the
Partnership's Quarterly Report on Form 10-Q for the three months ended March 31,
1996. More comprehensive financial and other information is included in such
reports and other documents filed by the Partnership with the Commission, and
the following summary is qualified in its entirety by reference to such reports
and other documents and all the financial information and related notes
contained therein.

14
<PAGE>

ARVIDA /JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)

AND CONSOLIDATED VENTURES

AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996
<TABLE>

<S> <C>
Total revenue ............................................................ $ 80,602,472
=============
Net operating income (loss) .............................................. $ 6,631,485
=============
Equity in earnings (losses) of unconsolidated ventures ................... $ (33,813)
=============
Income before cumulative due to change in accounting for long-lived assets $ 6,061,026
=============
Net income (loss) ........................................................ $ 6,061,026
=============
Net income (loss) per Limited Partnership Interest (a) ................... $ 13.68
=============
Total assets (b) ......................................................... $ 353,476,688
=============
Total liabilities (b) .................................................... $ 125,774,030
=============
Cash distributions per Interest (c) ...................................... $ 25.85
=============
</TABLE>
(See Notes on next page)

15
<PAGE>

<TABLE>

ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
AS OF AND FOR THE FISCAL YEAR ENDED DECEMBER 31,
<CAPTION>

1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total revenue ..................... 382,267,482 315,058,058 247,651,192 174,710,779 155,699,871
=========== =========== =========== =========== ===========
Net operating income (loss) ....... 45,181,165 52,676,462 30,689,914 (23,337,245) (11,777,093)
=========== =========== =========== =========== ===========
Equity in earnings (losses) of
unconsolidated ventures .......... 1,050,994 524,520 1,134,947 (2,225,531) (769,300)
=========== =========== =========== =========== ===========

Net income (loss) ................. 41,836,686 47,197,532 29,292,058 (43,974,366) (30,667,969)
=========== =========== =========== =========== ===========
Net income (loss) per Limited
Partnership Interest (a) .......... 101.91 115.37 71.78 (160.42) (74.39)
=========== =========== =========== =========== ===========
Total assets (b) .................. 366,439,241 376,371,712 348,094,995 350,807,538 420,289,287
=========== =========== =========== =========== ===========

Total liabilities (b) ............. 133,773,954 179,791,958 196,004,818 228,010,419 253,517,802
=========== =========== =========== =========== ===========
Cash distributions per Interest (c) 13.49 6.35 -- -- --
=========== =========== =========== =========== ===========

</TABLE>
- ----------
(a) The net income (loss) per Limited Partnership Interest is based upon the
average number of Limited Partnership Interests outstanding during each
period.

(b) The Partnership does not present a classified balance sheet as a matter of
industry practice and, as such, does not distinguish between current and
non-current assets and liabilities.

(c) Cash distributions from the Partnership are generally not equivalent to
Partnership income as determined for federal income tax purposes or as
determined under generally accepted accounting principles. Cash
distributions to a Unitholder not in excess of the adjusted basis in such
Unitholder's partnership interest represent a return of capital for federal
income tax purposes. During February 1995, the Partnership made a
distribution for 1994 of $5,421,680 to its Unitholders ($13.42 per
Interest). In addition, during the first quarter of 1995, the Partnership
remitted each Unitholder's share of a North Carolina non-resident
withholding tax on behalf of each of the Unitholders. Each payment, which
totalled $26,704 ($.07 per Interest), was deemed a distribution to the
Unitholders. During February 1994, the Partnership made a distribution for
1993 of $2,565,433 to Unitholders ($6.35 per Interest). There were no cash
distributions in 1991, 1992 and 1993.

Partnership Projections. Section 12 of the Walton Offer contains certain
draft projections (the "June 16 Draft Projections") prepared by the Partnership
and delivered to Walton and Whitehall Street Real Estate Limited Partnership
VII ("Whitehall"), an affiliate of The Goldman Sachs Group, L.P. that is
participating in the financing of the Walton Offer. The June 16 Draft
Projections have not been publicly filed by the Partnership pursuant to the
Exchange Act. Inasmuch as the information contained in the June 16 Draft
Projections may be of interest to Unitholders in deciding whether to tender
their Units, the Purchaser has reproduced such projections, and certain related
disclosures, below in the form in which they appear in the Walton Offer,
although to avoid confusion, certain defined terms used in the Walton Offer
have been changed to conform to the corresponding definitions in this Offer to
Purchase. The Purchaser assumes no responsibility for the accuracy of the June
16 Draft Projections or related disclosures set forth below.

"A summary of the June 16 Draft Projections is set forth in the table
below. None of the projected results of operations prepared by the
Partnership set forth below is to be regarded as fact and such projections
should not be

16
<PAGE>

relied upon as accurate representations of future results. In addition,
because the estimates and assumptions underlying the June 16 Draft
Projections, as to future results, are based upon events and circumstances
that have not taken place and are inherently subject to significant
financial, market, economic and competitive uncertainties and contingencies
which are difficult or impossible to predict accurately and are beyond the
Purchaser's and the Partnership's control, they are inherently imprecise
and there can be no assurance that the projected results of operations can
be realized. Therefore, there are likely to be differences between the
actual and projected results and the actual results may be materially
higher or lower than those projected.

The inclusion of the June 16 Draft Projections set forth below should
not be regarded as a representation by Walton, the Partnership, or any
transferee or assignee of Walton, including Whitehall, or any of their
respective affiliates or representatives, that the projected results will
be achieved or that the actual distributions made by the Partnership will
be equal to the Cash Flow from Operations after Net Incremental Financing.

The June 16 Draft Projections are forward-looking but were not
prepared with a view towards public disclosure or compliance with published
guidelines of the Commission or guidelines established by the American
Institute of Certified Public Accountants relating to projections.
Projected results of operations for a particular year may differ
significantly in certain respects from the audited operating results for
such year. Therefore, the consolidated projections presented below should
not necessarily be considered as indicative of what the audited operating
results for such periods will be. None of Walton, Whitehall or the
Partnership, or any of their respective affiliates, representatives,
financial advisors, independent auditors or directors or officers, assumes
any responsibility for the accuracy of the June 16 Draft Projections set
forth below. The June 16 Draft Projections have not been examined, reviewed
or compiled by the Partnership's independent auditors, and accordingly they
have not expressed an opinion or given any other assurance on such
projections.
<TABLE>

ARVIDA/JMB PARTNERS, L.P.
DRAFT CASH FLOW STATEMENT--JUNE 16, 1996(1)
-------------------------------------------
DOLLARS IN 000'S
<CAPTION>

1996 1997 1998 1999 2000 2001 2002 TOTAL
---- ---- ---- ---- ---- ---- ---- -----
RECEIPTS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Housing Receipts ................ $ 244,275 189,900 214,916 254,753 229,693 208,850 367,697 1,710,084

Total Homesites Receipts .............. $ 21,036 20,300 23,368 22,377 21,248 17,102 26,840 152,271
Total Land & Properties ............... $ 25,251 40,413 38,111 11,582 6,111 68,929 54,147 244,544
Total Receipts ........................ $ 290,562 250,613 276,395 288,712 257,052 294,881 448,684 2,106,899
Total Other Income .................... $ 62,416 61,718 52,371 48,756 49,689 38,231 18,990 332,150
--------- -------- -------- -------- -------- -------- -------- ----------

Total Income .......................... $ 352,978 312,331 328,766 337,467 306,721 333,112 457,674 2,439,049

DISBURSEMENTS

Total Project Expenses ................ ($227,761) (197,845) (208,535) (199,471) (185,013) (164,887) (227,656) (1,411,168)

Total Other Expenses .................. ($ 66,230) (57,900) (62,050) (61,901) (46,071) (29,964) (13,546) (337,662)
--------- -------- -------- -------- -------- -------- -------- ----------

Total Disbursements ................... ($293,991) (255,745) (270,585) (261,372) (231,084) (194,851) (241,202) (1,748,830)
Cash Flow From Opertations .............. $ 58,987 56,586 58,181 76,095 75,637 138,261 226,472 690,219
========= ======== ======== ======== ======== ======== ======== ==========
Net Incremental Financing (2) ......... ($ 35,094) 13,388 23,841 (3,648) 2,336 (37,583) (71,833) (108,593)
Cash Flow from Operations
after Net Incremental
Financing .............................. $ 23,893 69,974 82,022 72,447 77,973 100,678 154,639 581,626
========= ======== ======== ======== ======== ======== ======== ==========

</TABLE>
- ----------
(1) The June 16 Draft Projections do not take into consideration the costs
of Support Services (which represent the administrative and overhead costs
of operating the Projects and the Partnership), reserves for contingencies
in the ordinary course of business and expenses estimated by the Purchaser
to be incurred in connection with the current tender offers and
distributions of cash flow to which the General Partner and Associate
Limited Partners are entitled.

The June 16 Draft Projections were prepared by the Partnership on a
calendar year basis. The Partnership's current distribution policy is to
make distributions in the first quarter of the year based upon cash flow
generated by the operations of the Partnership for the prior calendar year.

17
<PAGE>

(2) The General Partner assumed the availability of financing which, on an
annual basis, includes drawdowns of existing and/or anticipated lines of
credit, annual interest on the average daily balance on such financing and
annual repayments of existing and/or anticipated lines of credit.

The cash flows of the Partnership shown above are based upon various
assumptions related to, among other factors, continued land development and
home construction and other operations of the Partnership in the ordinary
course of business, interest rates, absorption rates, tourism, population
and employment growth, demand for primary and secondary homes, costs of
material and labor, operating expenses, rental rates, occupancy levels, and
timing, pricing and quantity of home sales, all of which are subject to
various risks and contingencies. The June 16 Draft Projections assume a
general inflation rate of between 2% and 3% per year. In addition, the June
16 Draft Projections include assumptions concerning the development,
construction, leasing and sale of certain commercial Projects. The June 16
Draft Projections also make certain assumptions concerning the financing
the Partnership believes it can secure to implement its projections. The
realization of the cash flows contained in the June 16 Draft Projections
are dependent upon market conditions and responses to market conditions
that are subject to uncertainties due to possible changes in, among other
things, the actual level of sales of properties or changes in the costs of
development or construction, adverse changes in national or local economic
conditions or employment rates, such as increased costs of, or shortages
in, labor, materials and production, limited availability of financing, or
a decline in the popularity of the secondary home market, the need for
unanticipated improvements or expenditures in connection with environmental
matters, changes in real estate or income tax rates and other operating
expenditures, delays in obtaining permits or approvals for construction or
development and adverse changes in laws, governmental rules and fiscal
policies, and other factors beyond the control of the General Partner and
the Partnership."

SECTION 10. CONFLICTS OF INTEREST.

Voting by the Purchaser. As a result of the Offer, the Purchaser may be in
a position to significantly influence all Partnership decisions on which
Unitholders may vote. This means that (i) non-tendering Unitholders could be
prevented from taking action they desire but that the Purchaser opposes and (ii)
the Purchaser may be able to take action desired by the Purchaser but opposed by
the non-tendering Unitholders. (See "Section 7. Effects of the Offer").

SECTION 11. CERTAIN INFORMATION CONCERNING THE PURCHASER AND CERTAIN
AFFILIATES OF THE PURCHASER; PAST CONTACTS WITH THE PARTNERSHIP AND COMPETING
OFFERORS.

The Purchaser is a Delaware limited partnership. The general partners of
the Purchaser are Bayswater Realty & Capital Corp. ("Bayswater") and AREHGP INC.
("AREHGP"). Carl C. Icahn is the sole stockholder of Bayswater. American Real
Estate Holdings Limited Partnership ("AREH"), an affiliate of Mr. Icahn, is the
sole stockholder of AREHGP. AREH is also the sole limited partner of the
Purchaser.

The business address of Mr. Icahn is c/o Icahn Associates Corp., 114 W.
47th Street, New York, New York 10036. The address of the principal offices of
the Purchaser, Bayswater and AREHGP is 100 South Bedford Road, Mount Kisco, New
York 10549.

The Purchaser was formed in June 1991 but has not engaged in any business
prior to making the Offer. Bayswater is primarily engaged in the business of
buying and developing land and building homes for sale. AREHGP was formed in
July 1996 for the purpose of acting as a general partner of the Purchaser. Mr.
Icahn's present principal occupation or employment is set forth on Schedule I
attached hereto and is incorporated herein by reference.

The name, position, citizenship, business address, present principal
occupation or employment, material occupations, positions or employments during
the past five years and the principal business address of any business
corporation or other organization in which such occupation, position or
employment was carried on, of each executive officer and director of Bayswater
and AREHGP are set forth on Schedule I attached hereto and are incorporated
herein by reference.

Neither the Purchaser, Bayswater, AREHGP, Mr. Icahn, nor any executive
officer or director of Bayswater or AREHGP has, during the past five years, (a)
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (b) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or a finding of any violation ofsuch laws.

18
<PAGE>

Except as set forth below, neither the Purchaser, Bayswater, AREHGP, Mr.
Icahn nor, to the best of Purchaser's knowledge, any of the Persons listed on
Schedule I, nor any affiliate of the foregoing, (i) beneficially owns or has a
right to acquire any Units, (ii) has effected any transaction in the Units in
the past 60 days, or (iii) has any contract, arrangement, understanding or
relationship with any other persons with respect to any securities of the
Partnership, including, but not limited to, contracts, arrangements,
understandings or relationships concerning the transfer or voting thereof, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies.

An affiliate of the Purchaser currently owns five Units which it acquired
in December 1995. On June 21, 1996, in anticipation of the commencement of the
Offer, such affiliate contacted the Partnership to request that the Partnership
furnish it with a list of the names, addresses and telephone numbers of, and the
number of Units owned by, Unitholders. In connection with furnishing such list,
the Purchaser's affiliate and the General Partner entered into an agreement
pursuant to which such affiliate agreed that such list would be used solely for
the purpose of making a tender offer for the Units in compliance with the
requirements of the Exchange Act (the "Specified Purpose") and would not be
furnished to any person other than affiliates and representatives of such
affiliate for use solely for the Specified Purpose. Representatives of the
Purchaser have also discussed procedures for transferring tendered Units and
related matters with counsel to the Partnership and its transfer agent.

From time to time, affiliates of the Purchaser, including High River
Limited Partnership ("High River"), have had discussions with representatives of
Raleigh regarding the admission of High River or another affiliate of the
Purchaser as a partner of Raleigh. From July 10 through 15, 1996, affiliates of
the Purchaser met and had telephone discussions with representatives of Raleigh
and others, including representatives of Walton, regarding the admission of High
River or another affiliate of Purchaser as a limited partner of Raleigh, either
alone or in various other possible scenarios, including a scenario under which
the principals of Walton would also be admitted as partners of Raleigh. On July
12, 1996, High River and Raleigh entered into an agreement (the "Raleigh
Agreement") providing that if either party gave notice (the "Notice")
terminating the discussions that were taking place between them, then Raleigh
would immediately extend the expiration date of the Raleigh Offer to no earlier
than the tenth business day from the date on which the Notice was given,
computed in accordance with Rule 14e-1 under the Exchange Act. On July 15, 1996,
Raleigh gave the Notice. On July 16, 1996, Raleigh extended the expiration date
of the Raleigh Offer to July 26, 1996, as required under the Raleigh Agreement.
Notwithstanding the termination Notice, representatives of High River and
Raleigh have continued their discussions, but no agreements, arrangements or
understandings have been reached among them.

Set forth below is financial information with respect to Bayswater and High
River (which has guaranteed to the Purchaser the obligations of Bayswater to
make capital contributions to the Purchaser). (See "Section 12. Source of
Funds"). Neither Bayswater nor High River is subject to periodic reporting
requirements under the Exchange Act. The financial information set forth below
with respect to Bayswater and High River is unaudited. Bayswater and High River
do not prepare audited financial statements in the ordinary course of their
business and, accordingly, such audited financial statements are not available
or obtainable without unreasonable cost or expense. Also set forth below are
consolidated summary financial data for American Real Estate Partners, L.P.
("AREP"), a Delaware limited partnership that owns a 99% interest in, and is the
sole limited partner of, AREH. AREH does not prepare separate audited financial
statements, but rather is consolidated with AREP for financial reporting
purposes. AREP does not engage in any business other than the ownership of its
limited partnership interest in AREH. Accordingly, the consolidated financial
statements of AREP do not differ in any material respect from the separate
financial statements of AREH. The consolidated summary financial data for AREP
set forth below have been excerpted from its Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 and its Quarterly Report on Form 10-Q for
the three months ended March 31, 1996. More comprehensive financial and other
information is included in such reports and other documents filed by AREP with
the Commission, and the following summary is qualified in its entirety by
reference to such reports and other documents and all the financial information
and related notes contained therein. Such reports and other documents are
available at the offices of the Commission referred to in the Introduction to
this Offer to Purchase.

19
<PAGE>

BAYSWATER REALTY & CAPITAL CORP.

BALANCE SHEET
MAY 31, 1996
(UNAUDITED)
(IN 000'S)

ASSETS:
Cash ............................ $ 1,490
Receivable & Other Assets ....... 384
Mortgage Loans .................. 135
Land & Construction In Progress . 68,057
-------
Total Assets .................. $70,066
=======

LIABILITIES:
Due to Affiliates ............... $12,189
Mortgage Payable ................ 14,705
Sales Deposits & Accounts Payable 1,718
-------
Total Liabilities ............. $28,612
Total Equity .................. 41,454
-------
TOTAL LIABILITIES AND EQUITY ........ $70,066
=======

BAYSWATER REALTY & CAPITAL CORP.

INCOME STATEMENT
FIVE MONTHS ENDED MAY 31, 1996
(UNAUDITED)
(IN 000'S)

INCOME:
Land and House Sales ..................... $12,276
Architectural & Building Service Income .. 197
Interest Income .......................... 9
Other Income ............................. 3
-------
Total Income ........................... $12,485
=======
EXPENSES:
Cost of Land and House Sales ............. $ 8,697
Payroll .................................. 394
Payroll Taxes and Employee Benefits ...... 107
Rent ..................................... 20
Rent--Office Equipment ................... 21
Interest Expense ......................... 229
Other Expense ............................ 54
-------
Total Expenses ......................... $ 9,522
-------
NET INCOME ................................... $ 2,963
=======

20
<PAGE>

AMERICAN REAL ESTATE PARTNERS, L.P.
AND CONSOLIDATED SUBSIDIARY

(DOLLARS IN THOUSANDS
EXCEPT PER UNIT AMOUNTS)
------------------------

FOR THE THREE MONTH PERIOD ENDED MARCH 31: 1996 1995
-------- --------
Total revenues ....................................... $ 20,592 $ 16,199
======== ========
Earnings before gain (loss) on property
transactions ........................................ $ 10,949 $ 6,154
Gain (loss) on sales and disposition of real estate .. 52 4,321
Provision for loss on real estate .................... -- --
-------- --------
Net earnings ......................................... $ 11,001 $ 10,476
======== ========
Net earnings per limited partnership unit ............ $ .39 $ .49
======== ========
Distributions to partners ............................ $ -- $ --

AT MARCH 31, 1996 AND DECEMBER 31, 1995:
Real estate leased to others ......................... $412,010 $412,075
Hotel operating properties ........................... $ 13,190 $ 13,362
Mortgages and note receivable ........................ $ 14,881 $ 15,056
Total assets ......................................... $629,735 $620,880
Senior indebtedness .................................. $ 33,923 $ 33,923
Mortgages payable .................................... $159,391 $163,968
Partners' equity ..................................... $415,190 $404,189

<PAGE>

AMERICAN REAL ESTATE PARTNERS, L.P.
AND CONSOLIDATED SUBSIDIARY

YEAR ENDED DECEMBER 31,

(DOLLARS IN THOUSANDS
EXCEPT PER UNIT AMOUNTS)
------------------------

1995 1994
-------- --------
Total revenues ....................................... $ 69,920 $ 61,551
======== ========
Earnings before gain (loss) on property transactions . $ 30,833 $ 19,577
Gain (loss) on sales and disposition of real estate .. 5,092 4,174
Provision for loss on real estate .................... (769) (582)
-------- --------
Net earnings ......................................... $ 35,156 $ 23,169
======== ========
Net earnings per limited partnership unit ............ $ 1.33 $ 1.64
======== ========
Distributions to partners ............................ $ -- $ --

AT YEAR END:
Real estate leased to others ......................... $412,075 $437,699
Hotel operating properties ........................... $ 13,362 $ 13,654
Mortgages and note receivable ........................ $ 15,056 $ 8,301
Total assets ......................................... $620,880 $492,868
Senior indebtedness .................................. $ 33,923 $ 45,231
Mortgages payable .................................... $163,968 $174,096
Partners' equity ..................................... $404,189 $259,237

22
<PAGE>

HIGH RIVER LIMITED PARTNERSHIP

BALANCE SHEET

APRIL 30, 1996
(UNAUDITED)
(IN 000'S)

ASSETS

Cash and Cash Equivalents ............................................ $ 2,427
Marketable Securities ................................................ 387,264
Investment in Other Securities ....................................... 6,276
Investment in Partnerships-Real Estate L.P. .......................... 17,185
Investment in Partnership--Other ..................................... 469
--------
Total Assets ....................................................... $413,621
========

LIABILITIES

Due to Brokers ....................................................... $151,738
Securities Sold Not Yet Purchased @ Market Value ..................... 3,184
--------
Total Liabilities .................................................. $154,922
PARTNERS' CAPITAL .................................................... 258,699
--------
TOTAL LIABILITIES AND PARTNERS' CAPITAL .............................. $413,621
========

23
<PAGE>
HIGH RIVER LIMITED PARTNERSHIP

STATEMENT OF LOSS
FOUR MONTHS ENDED APRIL 30, 1996
(UNAUDITED)
(IN 000'S)

INCOME:
Interest ................................................ $ 63
Capital Gains ........................................... 2,396
Dividends ............................................... 7,532
Unrealized Loss on Securities ........................... (24,516)
--------
($14,525)

EXPENSE:
Interest ................................................ $ 2,301
Other ................................................... 13
--------
$ 2,314
========
NET LOSS ................................................ ($16,839)
========

SECTION 12. SOURCE OF FUNDS. The Purchaser expects that $85,100,000 will be
required to purchase 185,000 Units, if tendered (exclusive of related fees and
expenses). The Purchaser will obtain all of such funds from capital
contributions from its partners. AREHGP will obtain the funds necessary to make
its capital contribution to the Purchaser from a capital contribution from AREH.
The obligation of Bayswater to make capital contributions to the Purchaser has
been guaranteed by High River.

SECTION 13. PURCHASE PRICE CONSIDERATIONS. The Purchaser has set the
Purchase Price at $460 net per Unit. In establishing the Purchase Price the
Purchaser primarily reviewed and considered the matters set forth in the Raleigh
Offer and the Walton Offer as the bases for the prices set by Raleigh and
Walton, respectively, and established a price deemed by the Purchaser to be
sufficiently in excess of the prices established in the Raleigh Offer and the
Walton Offer to induce Unitholders to tender to the Purchaser and to withdraw
any prior tenders pursuant to the Raleigh or Walton Offers.

The Purchase Price represents the price at which the Purchaser is willing
to purchase Units. No independent person has been retained by the Purchaser or
its affiliates to evaluate or render any opinion with respect to the fairness of
the Purchase Price and no representation is made by the Purchaser or any
affiliate of the Purchaser as to such fairness. The Purchaser did not attempt to
obtain current independent valuations or appraisals of the underlying assets
owned by the Partnership. Other measures of the value of the Units may be
relevant to Unitholders. Unitholders are urged to consider carefully all of the
information contained herein and consult with their own advisors, tax, financial
or otherwise, in evaluating the terms of the Offer before deciding whether to
tender Units.

SECTION 14. CONDITIONS OF THE OFFER. Notwithstanding any other term of the
Offer, the Purchaser shall not be required to accept for payment or to pay for
any Units tendered if all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, necessary for the consummation of the
transactions contemplated by the Offer shall not have been filed, occurred or
been obtained. Furthermore, notwithstanding any other term of the Offer, the
Purchaser shall not be required to accept for payment or pay for any Units not
theretofore accepted for payment or paid for and may terminate or amend the
Offer as to such Units if, at any time on or after the date of the Offer and
before the acceptance of such Units for payment or the payment therefor, or the
later thereof, as applicable and as determined by the Purchaser, any of the
following conditions exists:

a. A preliminary or permanent injunction or other order of any federal
or state court, government or governmental authority or agency shall have
been issued and shall remain in effect which (1) makes illegal, delays or
otherwise directly or indirectly restrains or prohibits the making of the
Offer or the acceptance for payment of or payment for any Units by the
Purchaser, (2) imposes or confirms limitations on the ability of the
Purchaser effectively to exercise full rights of ownership of any Units,
including, without limitation, the right to

24
<PAGE>

vote any Units acquired by the Purchaser pursuant to the Offer or otherwise
on all matters properly presented to the Partnership's Unitholders, (3)
requires divestiture by the Purchaser of any Units, (4) causes any material
diminution of the benefits to be derived by the Purchaser as a result of
the transactions contemplated by the Offer, or (5) might materially
adversely affect the business, properties, assets, liabilities, financial
condition, operations, results of operations or prospects of the Purchaser
or the Partnership;

b. There shall be any action taken, or any statute, rule, regulation
or order proposed, enacted, enforced, promulgated, issued or deemed
applicable to the Offer by any federal or state court, government or
governmental authority or agency, which might, directly or indirectly,
result in any of the consequences referred to in clauses (1) through (5) of
paragraph a. above;

c. Any change or development shall have occurred or been threatened
since the date hereof, in the business, properties, assets, liabilities,
financial condition, operations, results of operations or prospects of the
Partnership, which, in the reasonable judgment of the Purchaser, is or may
be materially adverse to the Partnership, or the Purchaser shall have
become aware of any fact that, in the reasonable judgment of the Purchaser,
does or may have a material adverse effect on the value of the Units;

d. There shall have occurred (1) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (2) a declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States, (3) any limitation by any governmental authority on,
or other event which might affect, the extension of credit by lending
institutions or result in any imposition of currency controls in the United
States, (4) a commencement of a war or armed hostilities or other national
or international calamity directly or indirectly involving the United
States, (5) a material change in United States or other currency exchange
rates or a suspension of a limitation on the markets thereof, or (6) in the
case of any of the foregoing existing at the time of the commencement of
the Offer, a material acceleration or worsening thereof;

e. There shall have been threatened or instituted or shall be pending
any action or proceeding before any court or government agency or other
regulatory or administrative agency or commission or by any other person
challenging the acquisition of any Units pursuant to the Offer, or
otherwise directly or indirectly relating to the Offer, or otherwise, in
the reasonable judgment of the Purchaser, adversely affecting the Purchaser
or the Partnership;

f. The Partnership shall have (1) issued, or authorized or proposed
the issuance of, any partnership interests of any class, or any securities
convertible into, or rights, warrants or options to acquire, any such
interests or other convertible securities, (2) issued or authorized or
proposed the issuance of any other securities in respect of, in lieu of, or
in substitution for, all or any of the presently outstanding Units, (3)
refinanced any of the Partnership's properties, other than in the ordinary
course of the Partnership's business and consistent with the past practice,
or (4) declared or paid any distribution, other than in cash and consistent
with past practice, on any of its partnership interests. The Partnership or
the General Partner shall have authorized, proposed or announced its
intention to propose any merger, consolidation or business combination
transaction, acquisition of assets, disposition of assets or material
change in its capitalization, or any comparable event not in the ordinary
course of business and consistent with past practice;

g. The General Partner shall not have recognized to the Purchaser's
reasonable satisfaction, or agreed to recognize, the effectiveness of the
transfer to the Purchaser of the Units tendered pursuant to the Offer;

h. The General Partner shall not have consented to, or shall not have
taken all other action that the Purchaser in its reasonable discretion
deems necessary for, the admission of the Purchaser to the Partnership,
simultaneously with or promptly after consummation of the Offer, as a
substitute limited partner in the Partnership;

i. The Purchaser shall not be reasonably satisfied that the purchase
by it of Units pursuant to the Offer will not result in a termination of
the Partnership for federal income tax purposes; or

m. The Partnership or any of its subsidiaries shall have amended or
proposed or authorized any amendment to its Partnership Agreement or
similar organizational documents or the Purchaser shall have

25
<PAGE>

learned that the Partnership has recommended any such amendment which
has not previously been publicly disclosed by the Partnership in
filings with the Commission.

The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser regardless of the circumstances giving rise to such
conditions or may be waived by the Purchaser in whole or in part at any time and
from time to time in its sole discretion. The failure by the Purchaser at any
time to assert the foregoing conditions will not be deemed a waiver of its right
to do so, which will be deemed to be ongoing and may be asserted at any time and
from time to time. Any determination by the Purchaser concerning the events
described above will be final and binding upon all parties.

SECTION 15. CERTAIN LEGAL MATTERS.

General. Except as set forth in this Section 15, the Purchaser is not aware
of any filings, approvals or other actions by any domestic or foreign
governmental or administrative agency that would be required prior to the
acquisition of Units by the Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is the Purchaser's present intention
that such additional approval or action would be sought. While there is no
present intent to delay the purchase of Units tendered pursuant to the Offer
pending receipt of any such additional approval or the taking of any such
action, there can be no assurance that any such additional approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Partnership's business, or that certain
parts of the Partnership's business might not have to be disposed of or held
separate or other substantial conditions complied with in order to obtain such
approval or action, any of which could cause the Purchaser to elect to terminate
the Offer without purchasing Units thereunder. The Purchaser's obligation to
purchase and pay for Units is subject to certain conditions, including
conditions related to the legal matters discussed in this Section 15.

Antitrust. The Purchaser does not believe that the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition
of Units contemplated by the Offer.

Margin Requirements. The Units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, such regulations are not applicable to the Offer.

State Takeover Laws. A number of states have adopted anti-takeover laws
which purport, to varying degrees, to be applicable to attempts to acquire
securities of corporations which are incorporated in such states or which have
substantial assets, securityholders, principal executive offices or principal
places of business therein. Although the Purchaser has not attempted to comply
with any state anti-takeover statutes in connection with the Offer, the
Purchaser reserves the right to challenge the validity or applicability of any
state law allegedly applicable to the Offer and nothing in this Offer to
Purchase nor any action taken in connection herewith is intended as a waiver of
such right. If any state anti-takeover statute is applicable to the Offer, the
Purchaser might be unable to accept for payment or purchase Units tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer. In
such case, the Purchaser may not be obligated to accept for purchase or pay for
any Units tendered.

SECTION 16. FEES AND EXPENSES. Except as set forth in this Section 16, the
Purchaser will not pay any fees or commissions to any broker, dealer or other
person for soliciting tenders of Units pursuant to the Offer. The Purchaser has
retained Beacon Hill Partners, Inc. to act as Information Agent and IBJ Schroder
Bank & Trust Company to act as Depositary in connection with the Offer. The
Purchaser will pay the Information Agent and the Depositary reasonable and
customary compensation for their respective services in connection with the
Offer, plus reimbursement for out-of-pocket expenses. The Purchaser will also
pay all costs and expenses of printing and mailing the Offer and its legal fees
and expenses.

SECTION 17. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction
in which the making of the Offer is not in compliance with applicable law. If
the Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, the Purchaser will make a good
faith effort to comply with any such law. If, after such good faith effort, the
Purchaser cannot comply with any such law, the Offer will not be made to (nor
will tenders be accepted from or on behalf of) the holders of Units residing in
such jurisdiction.

No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained herein or in the Letter
of Transmittal and, if given or made, such information or representation must
not be relied upon as having been authorized.

26
<PAGE>

The Purchaser has filed with the Commission a Schedule 14D-1, pursuant to
Rule 14d-3 under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. The Schedule 14D-1
and any amendments thereto, including exhibits, may be inspected and copies may
be obtained at the same places and in the same manner as set forth in the
Introduction to this Offer to Purchase (except that they will not be available
at the regional offices of the Commission).

BOREAS PARTNERS, L.P.

July 18, 1996

27
<PAGE>

APPENDIX A

GLOSSARY

Business Day: Any day other than Saturday, Sunday or a federal holiday, and
consists of the time period from 12:01 a.m. through 12:00 Midnight, New York
City time

Code: The Internal Revenue Code of 1986, as amended

Commission: The Securities and Exchange Commission

Depositary: IBJ Schroder Bank & Trust Company

Information Agent: Beacon Hill Partners, Inc.

Eligible Institution: A member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank, savings bank, credit union, savings and loan association or
trust company having an office, branch or agency in the United States

Exchange Act: Securities Exchange Act of 1934, as amended

Expiration Date: 12:00 Midnight, New York City time, on August 14, 1996, unless
and as extended

General Partner: The general partner of the Partnership

Offer: This offer of the Purchaser set forth in this Offer to Purchase and the
related Letter of Transmittal, as each may be supplemented or amended from
time to time

Offer To Purchase: This Offer of the Purchaser

Partnership: Arvida/JMB Partners, L.P.

Purchase Price: The amount of cash paid to each Unitholder for each Unit
tendered upon consummationof the Offer

Purchaser: Boreas Partners, L.P.

Tin: Taxpayer identification number

Unitholders: Holders of Units

Units: Limited partnership and assignee interests in the Partnership

<PAGE>

SCHEDULE I

The name and position of the executive officers and directors of Bayswater
Realty & Capital Corp. ("Bayswater") are set forth below. The business address
of each executive officer and director of Bayswater is 100 South Bedford Road,
Mount Kisco, N.Y. 10549. Each such executive officer and director is a citizen
of the United States of America.

NAME POSITION
- ---- --------
Carl C. Icahn ..................... Director; and Chairman of the Board
Albo Antonucci .................... Vice President; and Chief Operating Officer

John Saldarelli is the President, Treasurer and Secretary of AREHGP INC. as
well as its sole director. His business address is 100 South Bedford Road, Mount
Kisco, N.Y. 10549. He is a citizen of the United States of America.

The following sets forth the (a) name, (b) present principal occupation or
employment and the name, principal business and address of any corporation or
other organization in which such employment or occupation is conducted and (c)
material occupations, positions, offices or employments during the last five
years, giving the starting and ending dates of each and the name, principal
business and address of any business corporation or other organization in which
such occupation, position, office or employment was carried on, of each
executive officer and director of Bayswater and AREHGP INC.

NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
- ---- ---------------------------------------------
CARL C. ICAHN ............. Mr. Icahn's present principal occupation is acting
as President and a Director of Starfire Holding
Corporation, a Delaware corporation ( "SHC "), and
Chairman of the Board and a Director of various of
SHC's subsidiaries, including ACF Industries,
Incorporated, a New Jersey corporation ( "ACF ").
SHC is primarily engaged in the business of
holding, either directly or through subsidiaries,
a majority of the common stock of ACF and its
address is 100 South Bedford Road, Mount Kisco,
N.Y. 10549. ACF is primarily engaged in the
business of leasing, selling and manufacturing
railroad freight and tank cars and its address is
3301 Rider Trail South, Earth City, Missouri
63045. Mr. Icahn has been President and a Director
of SHC since August 1982 and has been a director
of ACF since June 1984 and Chairman of the Board
of ACF since October 1984. Mr. Icahn also
maintains similar positions with various of ACF's
affiliates. Since November 1990, Mr. Icahn has
been Chairman of the Board and a Director of
American Property Investors, Inc., a Delaware
corporation ( "API "), which is primarily engaged
in the business of acting as general partner of
American Real Estate Partners, L.P., and whose
address is 100 South Bedford Road, Mount Kisco,
N.Y. 10549. From 1986 until January 1993, when he
resigned, Mr. Icahn was a Director and Chairman of
the Board of Trans World Airlines, Inc., whose
address is One City Centre, 515 N. Sixth Street,
St. Louis, Missouri 63101. Mr. Icahn also serves
as a Director of Samsonite Corporation, a
manufacturer and distributor of luggage, Culligan
Water Technologies, Inc., a manufacturer of water
purification and treatment equipment and Cadus
Pharmaceutical Corporation, which is engaged in
the discovery and development of proprietary drug
discovery technologies.

I-1
<PAGE>

NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
- ---- ---------------------------------------------
ALBO ANTONUCCI ............ Mr. Antonucci's principal occupation is acting as
Vice President and Chief Operating Officer of
Bayswater. He has been an executive officer of
Bayswater since June 1989. Bayswater is primarily
engaged in the business of buying and developing
land and building homes for sale. Mr. Antonucci is
responsible for all of Bayswater's current real
estate portfolio including land acquisitions, site
plan design and governmental approvals,
development, marketing and sales. Additionally, he
is responsible for all phases of construction
including general contracting, construction
management, building rehabilitations and tenant
improvements.

JOHN P. SALDARELLI ........ Mr. Saldarelli is Director, President, Treasurer
and Secretary of AREHGP INC., a Delaware
corporation whose address is 100 South Bedford
Road, Mount Kisco, N.Y. 10549. He has also served
as Vice President, Secretary and Treasurer of API
since March 1991. Mr. Saldarelli was President of
Bayswater Realty Brokerage Corp. from June 1987
until November 1993 and Vice President of
Bayswater from September 1979 until April 1993.

I-2
<PAGE>

SCHEDULE II

Reproduced below are Notes 7, 8, 11 and 12 of the Partnership's Audited
1995 Financial Statements as well as Management's Discussion and Analysis of
Financial Condition and Results of Operations (Item 7 to the Partnership's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996). These
notes and Management's Discussion and Analysis are referred to in the
description of the Partnership's business included under the heading "Assets and
Business" in Section 9 of the Offer to Purchase. The Purchaser disclaims any
responsibility for the information included below.

(NOTE 7) INVESTMENTS IN AND ADVANCES TO JOINT VENTURES, NET

The Partnership has numerous investments in real estate joint ventures with
ownership interests ranging from approximately 33% to 50%. The Partnership's
joint venture interests accounted for under the equity method are as follows:

LOCATION OF % OF
NAME OF VENTURE PROPERTY OWNERSHIP
- --------------- ---------- ---------

Arvida Boose Joint Venture ................... Florida 50
Arvida Corporate Park Associates ............. Florida 50
Arvida Pompano Associates Joint Venture ...... Florida 50
H.A.E. Joint Venture ......................... Florida 331/3
Mizner Court Associates Joint Venture ........ Florida 50
Mizner Tower Associates Joint Venture ........ Florida 50
Ocala 202 Joint Venture ...................... Florida 50
Tampa 301 Associates Joint Venture ........... Florida 50
Windmill Lake Estates Associates Joint Venture Florida 50
Arvida/RBJ I Joint Venture ................... Florida 40
Arvida/RBG II Joint Venture .................. Florida 40

The following is combined summary information of joint ventures accounted
for under the equity method.

ASSETS
<TABLE>
<CAPTION>

DECEMBER 31, DECEMBER 31,
1995 1994
----------- -----------
<S> <C> <C>
Real estate inventories .................................... $10,221,791 $11,776,133
Other assets ............................................... 2,118,027 3,324,472
----------- -----------
Total assets ............................................. $12,339,998 $15,100,605
=========== ===========

LIABILITIES AND PARTNERS' CAPITAL

Accounts payable, deposits and other liabilities ........... $ 426,049 $ 664,459
Notes and mortgages payable ................................ 4,122,947 4,067,506
----------- -----------
Total liabilities ........................................ 4,548,996 4,731,965
Venture partners' capital .................................. 3,097,200 4,853,916
Partnership's capital ...................................... 4,693,802 5,514,724
----------- -----------
Total liabilities and partners' capital .................. $12,339,998 $15,100,605
=========== ===========
</TABLE>

II-1
<PAGE>

COMBINED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>

DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Revenues .................................................. $ 3,079,514 $ 1,102,242 $32,846,925
=========== =========== ===========
Net income (loss) ......................................... $ 1,763,264 $ (210,087) $ 2,409,483
=========== =========== ===========
Partnership's proportionate share of net income (loss) .... $ 908,994 $ (126,207) $ 953,165
=========== =========== ===========
Partnership's equity in earnings of unconsolidated
ventures ................................................. $ 1,050,994 $ 524,520 $ 1,134,947
=========== =========== ===========
</TABLE>

The following is a reconciliation of the Partnership's Capital accounts
within the joint ventures to its investments in and advances to joint ventures
as reflected on the accompanying Consolidated Balance Sheets:
<TABLE>
<CAPTION>

DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Partnership's Capital equity method ........................ $ 4,693,802 $ 5,514,724 $ 7,263,586
Partnership's Capital, cost method ......................... $ 5,836,000 $ 5,836,000 $ 5,836,000
Basis difference ........................................... (752,135) 7,711,036 7,294,843
----------- ----------- -----------
Investments in joint ventures .............................. 9,777,667 19,061,760 20,394,429
Advances to joint ventures, net ............................ 4,177,426 4,117,191 4,337,423
----------- ----------- -----------
Investments in and advances to joint ventures, net ......... $13,955,093 $23,178,951 $23,731,852
=========== =========== ===========
</TABLE>

The Partnership's share of net income (loss) is based upon its ownership
interest in numerous investments in joint ventures which are accounted for in
accordance with the equity method of accounting. Equity in earnings (losses) of
unconsolidated ventures represents the Partnership's share of each venture's net
income (loss), and may reflect a component of purchase price adjustments
included in the Partnership's basis. Such adjustments are generally amortized to
income in relation to the cost of revenue of the underlying real estate assets.
These factors contribute to the differential in the Partnership's proportionate
share of the net income (loss) of the joint ventures and its equity in earnings
(losses) of unconsolidated ventures as well as to the basis differential between
the Partnership's investments in joint ventures and its equity in underlying net
assets, as shown above.

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. In addition, under certain circumstances, either pursuant to
the joint venture agreements or due to the Partnership's obligations as a
general partner, the Partnership may be required to make additional cash
advances or contributions to certain of the ventures.

During September 1995, the Partnership recorded an approximate $8.5 million
writedown to the carrying value of its investment in the Coto de Caza Joint
Venture. The Partnership had been evaluating its plans for its interest in this
joint venture and was considering a shorter holding period than originally
anticipated. Therefore, the Partnership recorded this writedown to reflect the
fair value of this investment under market conditions at that time. This
writedown is the primary cause for the decrease in Investments in and Advances
to Joint Ventures on the accompanying consolidated balance sheets at December
31, 1995 as compared to December 31, 1994. During March 1996, the Partnership
closed on the sale of its 20% joint venture interest in Coto de Caza, including
the related promissory note for advances previously made to the joint venture,
to unaffiliated third parties for a cash sales price of $12.0 million. The
Partnership used $2.0 (SIC) of the sale proceeds to pay down its term loan. The
General Partner believes that this sale was in the best interest of the
Partnership given current market conditions in Orange County, California. As a
result of this transaction, the Partnership has no future obligations with
respect to Coto de Caza. This transaction will result in a gain, to be
recognized in 1996, for financial reporting and Federal income tax purposes.

II-2
<PAGE>

During April 1995, the Partnership received a distribution of approximately
82 acres of undeveloped land near Sarasota, Florida from the Arvida Corporate
Park Associates Joint Venture. This transaction is reflected as a non-cash
investing and financing activity for the year ended December 31, 1995 on the
accompanying consolidated statements of cash flows. The Partnership subsequently
sold this land parcel to an unaffiliated third party during April 1995.

During 1992, the Partnership sold 60% of its interest in two land parcels
located in its Weston Community to unaffiliated third-party purchasers.
Subsequent to these transactions, the Partnership and the purchasers each
contributed their interests in these land parcels to joint ventures established
for the purpose of developing housing products within Weston. The Partnership
entered into development management agreements with these joint ventures.
Pursuant to the terms of these agreements, the Partnership agreed to fund all
development and construction costs, as well as certain overheads, incurred on
behalf of the joint venture projects. Amounts funded are reimbursed by the joint
ventures from sales revenues generated by each joint venture. Amounts advanced
by the Partnership to each respective joint venture earned interest at 8.5% for
the first year and prime plus 2% per annum thereafter. During 1993, one of the
joint ventures obtained third-party, project specific financing to fund its
development and construction activities. In accordance with the provisions of
this financing agreement, the Partnership had been reimbursed the majority of
amounts previously advanced to the joint venture as of December 31, 1993 and the
remaining amounts were reimbursed during 1994. Due to significant sales
activity, amounts previously advanced to the Partnership's other joint venture
were reimbursed in full during 1993. All of the homes built by these joint
ventures have been completed and closed as of December 31, 1994.

During the first quarter of 1993, the Partnership reached a settlement
agreement with AOK Group, its joint venture partner in a property located in
Ocala, Florida, whereby in exchange for its joint venture partner's 50% interest
in the venture, the Partnership agreed to dismiss a lawsuit previously filed
against its joint venture partner for failure to perform in accordance with the
terms of a $1,600,000 note which had been issued to the Partnership by the joint
venture. This agreement was pursued as a more favorable remedy to other
alternatives available to the Partnership. As a result of this transaction, the
Partnership changed from the equity method of accounting to the consolidated
method of accounting for the joint venture effective March 1, 1993. This
transaction resulted in an increase in the Partnership's total assets of
approximately $324,000. This transaction is reflected as a non-cash investing
and financing activity for the year ended December 31, 1993 on the accompanying
consolidated statements of cash flows.

The Partnership incurs certain general and administrative expenses which
are paid by the Partnership on behalf of the joint ventures in which it holds
interests. The Partnership receives reimbursements from the joint ventures for
such costs. For the years ended December 31, 1995 and 1994, the Partnership was
entitled to receive approximately $251,900 and $378,000, respectively, from
certain of the joint ventures in which it holds interests. At December 31, 1995,
approximately $88,900 was owed to the Partnership, of which approximately
$78,600 was received as of March 15, 1996.

(NOTE 8) NOTES AND MORTGAGES PAYABLE

Notes and mortgages payable at December 31, 1995 and 1994 are summarized as
follows:
<TABLE>
<CAPTION>

1995 1994
---- ----
<S> <C> <C>
Term loan credit facility of $85,252,250 bearing interest at approximately
8.4% and 8.7% per annum at December 31,
1995 and 1994, respectively (A) ............................................ $32,531,048 $ 73,452,970

Income property term loan of $18,233,326 bearing interest
at approximately 8.5% and 8.6% per annum at December 31, 1995
and 1994, respectively (A) ................................................. 12,766,746 17,933,326

Revolving line of credit of $20,000,000 at December 31, 1995
and 1994, respectively (A) -- --

Other notes and mortgages payable (B) ....................................... 25,040,570 23,761,229
----------- ------------
Total $70,338,364 $115,147,525
=========== ============
</TABLE>

II-3
<PAGE>

(A) At December 31, 1995, the Partnership's credit facility consists of a
term loan in the original amount of $85,252,520, a revolving line of credit
facility up to $20 million, an income property term loan in the original amount
of $18,233,326 and a $15 million letter of credit facility. The term loan, the
revolving line of credit and the letter of credit facility are secured by
recorded mortgages on all otherwise unencumbered real property assets of the
Partnership, as well an assignment of all mortgages receivable, equity
memberships, certain joint venture interests or joint venture proceeds and cash
balances (with the exception of deposits held in escrow). The income property
term loan is secured by the recorded first mortgage on a mixed-use center in
Boca Raton, Florida. Another office building known as Mizner Place, also located
in Boca Raton, which served as additional collateral for the income property
loan, was sold in May 1995, and the net sale proceeds of approximately $ 4
million were applied to reduce the outstanding principal amount of the loan. All
of the notes under the facility are cross-collateralized and cross-defaulted. At
December 31, 1995, the term loan, the revolving line of credit and the income
property term loan bear interest based, at the Partnership's option, on one of
the lenders' prime rate plus 1.25% per annum or the relevant London Inter-Bank
Offering Rate (LIBOR) plus 2.50% per annum. For the year ended December 31,
1995, the effective interest rate for the combined term loan, income property
term loan and revolving line of credit facility was approximately 9.6% per
annum.

Under the term loan agreement, the Partnership made scheduled principal
payments of $10 million in March 1994, February 1995 and February 1996 and a $5
million principal payment in July 1995. In addition, the term loan agreement
provides for additional principal repayments based upon a specified percentage
of available cash flow and upon the sale of certain assets. During the year
ended December 31, 1995, the Partnership made such additional term loan payments
totalling approximately $25.9 million. A principal repayment of $5 million on
the term loan is due in July 1996. The remaining balance outstanding is due in
July 1997. Under the income property term loan, principal payments of $0.1
million are required to be paid monthly until maturity. The income property term
loan and the revolving line of credit were scheduled to mature in March 1996 and
December 1995, respectively. The Partnership has been negotiating with its
lenders for a renewal of its revolving line of credit and income property term
loan. During March 1996, the Partnership's lenders reached an agreement in
principle with each other whereby one of the lenders would purchase the other's
participating interest in the Partnership's credit facilities. In addition,
during March 1996, the successor lender agreed to renew the Partnership's
revolving line of credit, income property term loan and letter of credit
facility through July 1997. The Partnership's letter of credit facility was
scheduled to mature in July 1995, but has been extended for one year and will
mature in July 1996. At December 31, 1995, all of the term and income property
term loan proceeds had been borrowed with remaining outstanding balances of
$32,531,048 and $12,766,746, respectively. The balances outstanding on the
revolving line of credit and the letter of credit facilities at December 31,
1995 are $0 and $9,236,746, respectively.

The credit agreement contains significant restrictions with respect to the
payment of distributions to partners, the maintenance of certain loan-to-value
ratios, the use of proceeds from the sale of the Partnership's assets and
advances to the Partnership's joint ventures.

Loan fees incurred in connection with the restructuring of the
Partnership's credit facility have been capitalized and are being amortized over
the lives of the loans included in the credit facility using the straight-line
method, which approximates the interest method.

(B) Other notes and mortgages payable are collateralized by certain real
estate inventories, property and equipment and certain investments with a net
book value of approximately $31.0 million at December 31, 1995. These notes and
mortgage notes have a weighted average annual effective interest rate of
approximately 7.0% and 8.6% at December 31, 1995 and 1994, respectively, and
mature in varying amounts through 2017. One such note, which is collateralized
by a retail shopping center within the Partnership's Weston Community, matures
during July 1996. The Partnership is currently in the process of negotiating for
a refinancing of such note. However, there is no assurance that such refinancing
will be obtained.

The Partnership has a $24.0 million revolving construction line of credit
for the buildings and certain amenities within the Partnership's condominium
project on Longboat Key, Florida known as Arvida's Grand Bay. This line of
credit currently bears interest at the lender's prime rate (8.50% at December
31, 1995) plus 1/2% per annum and matures in January 1997. At December 31, 1995,
approximately $11.7 million was outstanding under this line of credit. The
Partnership anticipates that this amount will be repaid from the proceeds from
the sale of condo-minium units.

II-4
<PAGE>

The Partnership owned an 80% general partnership interest in The Oaks
Community located near Sarasota, Florida. The Partnership's joint venture
partner was in default under the terms of the joint venture agreement due to its
failure to make capital contributions to fund ongoing operations. In August
1993, the Partnership's joint venture partner assigned its 20% interest in The
Oaks to the Partnership thereby vesting 100% control of the joint venture assets
in the Partnership.

The assets of The Oaks joint venture were encumbered by two mortgage loans.
A $12,492,200 loan was scheduled to mature in January 1997 and a $3,260,000 loan
was scheduled to mature in December 1993. The joint venture had guaranteed $2.7
million of the loans, and the guaranteed amount was with recourse to the
Partnership. The joint venture was in default under the terms of these loan
agreements as a result of its failure to make principal payments of
approximately $1.3 million in January 1993 to release the minimum number of
homesite lots as required under these agreements and its failure to pay interest
commencing with a payment due in April 1993. The Partnership was able to reach
an agreement with the lenders to pay off the existing mortgage loans at a
substantial discount from face value. On September 3, 1993, the Partnership paid
the joint venture's lenders $6.7 million in full satisfaction of the outstanding
mortgage loans, accrued interest and guaranty. This transaction was the cause of
the approximate $9.5 million extraordinary gain on the early extinguishment of
debt as of December 31, 1993.

Given the finite amount of available capital to the Partnership, the
Partnership determined that it was in its best long-term interest to utilize
that capital for the development of its other properties and sold its remaining
land holdings in The Oaks Community and its interest in The Oaks Club to an
unaffiliated third party purchaser for $5.8 million. This transaction occurred
simultaneously with the repayment of the loans and satisfaction of the mortgages
described above. In light of the Partnership's guarantee under the loan
agreement of $2.7 million of the outstanding mortgage loans, as well as other
factors, the above transactions were pursued as the least costly alternative
available to the Partnership. These transactions resulted in a minimal net gain
for Federal income tax purposes in 1993.

Following is a schedule of the maturities of notes and mortgages payable at
December 31, 1995.

1996 ......................................... $37,956,571
1997 ......................................... 29,097,793
1998 ......................................... --
1999 ......................................... --
2000 ......................................... --
Thereafter ................................... 3,284,000
-----------
Total notes and mortgages payable .......... $70,338,364
===========

(NOTE 11)--COMMITMENTS AND CONTINGENCIES

As security for performance of certain development obligations, the
Partnership is contingently liable under standby letters of credit and bonds for
approximately $9,236,700 and $4,284,000, respectively, at December 31, 1995. As
of December 31, 1994, the Partnership was contingently liable under standby
letters of credit and bonds for approximately $10,169,800 and $7,589,000,
respectively. In addition, certain joint ventures in which the Partnership holds
an interest are also contingently liable under bonds for approximately
$1,020,000 at December 31, 1995and 1994.

The Partnership leases certain building space for its management offices,
sales offices and other facilities, as well as certain equipment. The building
and equipment leases expire over the next two to nine years. Minimum future
rental commitments under non-cancelable operating leases having a remaining term
in excess of one year as of December 31, 1995 are as follows:

1996 .......................................... $1,474,506
1997 .......................................... 1,443,224
1998 .......................................... 1,151,134
1999 .......................................... 521,000
2000 .......................................... 389,197
Thereafter .................................... 254,005
----------
$5,233,066
==========

Rental expense of $2,095,932, $2,001,171 and $2,063,568 was incurred for
the years ended December 31, 1995, 1994 and 1993, respectively.

II-5
<PAGE>

The Partnership was named a defendant in a number of homeowner lawsuits,
certain of which purported to be class actions, that allegedly in part arose out
of or related to Hurricane Andrew, which on August 24, 1992 resulted in damage
to a former community development known as Country Walk. The homeowner lawsuits
alleged, among other things, that the damage suffered by the plaintiffs' homes
and/or condominiums within Country Walk was beyond what could have been
reasonably expected from the hurricane and/or was a result of the defendants'
alleged defective design, construction, inspection and/or other improper conduct
in connection with the development, construction and sales of such homes and
condominiums, including alleged building code violations. The various plaintiffs
sought varying and, in some cases, unspecified amounts of compensatory damages
and other relief. In certain of the lawsuits injunctive relief and/or punitive
damages were sought.

Several of these lawsuits allege that the Partnership was liable, among
other reasons, as a result of its own alleged acts of misconduct or as a result
of the Partnership's assumption of Arvida Corporation's liabilities in
connection with the Partnership's purchase of Arvida Corporation's assets from
Disney in 1987, which included certain assets related to the Country Walk
development. Pursuant to the agreement to purchase such assets, the Partnership
obtained indemnification by Disney for certain liabilities relating to facts or
circumstances arising or occurring prior to the closing of the Partnership's
purchase of the assets.

Over 80% of the Arvida-built homes in Country Walk were built prior to the
Partnership's ownership of the Community. Where appropriate, the Partnership has
tendered or will tender each of the above-described lawsuits to Disney for
defense and indemnification in whole or in part pursuant to the Partnership's
indemnification rights. Where appropriate, the Partnership has also tendered
these lawsuits to its various insurance carriers for defense and coverage. The
Partnership is unable to determine at this time to what extent damages in these
lawsuits, if any, against the Partnership, as well as the Partnership's cost of
investigating and defending the lawsuits, will ultimately be recoverable by the
Partnership either pursuant to its rights of indemnification by Disney or under
contractsof insurance.

The Partnership entered into a court-approved settlement which resolved
substantial portions of the pending homeowners' lawsuits that had been filed.
Homeowners of approximately 85% of the units in Country Walk accepted the
settlement which cost approximately $2.5 million. The settlement was funded by
one of the Partnership's insurers, subject to a reservation of rights.

In addition, the Partnership was a party to a number of claims brought by
condominium and patio homeowners, all of whom declined to accept the terms of
the class action settlement. These actions have been settled for approximately
$520,000. One of the Partnership's insurers has funded these settlements.

The Partnership has also resolved a claim brought by the Villages of
Country Walk Homeowners' Association, Inc., and related entities, for damages to
the common elements of the condominium units at Country Walk. A settlement in
the amount of $2,740,000 was paid by the Partnership's insurance carriers. A
reservation of rights was issued by one of the Partnership's insurance carriers
in connection with payment of approximately $740,000 ofthe settlement.

The Partnership was involved in subrogation lawsuits or threatened
subrogation actions with Prudential Property and Casualty Company, Travelers
Insurance Company ("Travelers"), Allstate Insurance Company ("Allstate") and
State Farm Insurance Company. These insurance companies sought to recover
damages, costs and interest in connection with amounts allegedly paid to their
insureds living in Country Walk at the time of Hurricane Andrew. The Partnership
settled these claims and all settlement proceeds were funded by one of the
Partnership's insurance carriers. The aggregate amount of these settlements is
approximately $4.5 million. The Allstate and Travelers settlements in the amount
of approximately $1.1 million were funded subject to a reservation of rights by
one of the Partnership's insurance carriers.

As noted above, one of the Partnership's insurance carriers has been
funding settlements of various litigation related to Hurricane Andrew. In some,
but not all, instances, the insurance carrier has provided the Partnership with
written reservation of rights letters. The aggregate amount of the settlements
funded to date by this carrier is approximately $8.0 million. The insurance
carrier that funded these settlements pursuant to certain reservations of rights
has stated its position that it has done so pursuant to various non-waiver
agreements. The carrier's position was that these non-waiver agreements
permitted the carrier to fund settlements without barring the carrier from
raising insurance coverage issues or waiving such coverage issues. On May 23,
1995, the insurance carrier rescinded the various non-waiver agreements
currently in effect regarding the remainder of the Hurricane Andrew litigation,

II-6
<PAGE>

allegedly without waiving any future coverage defenses, conditions, limitations,
or rights. For this and other reasons, the extent to which the insurance carrier
may recover any of these proceeds from the Partnership is uncertain. Therefore,
the accompanying consolidated financial statements do not reflect any accruals
related to this matter.

Currently, the Partnership is involved in two subrogation actions. On April
19, 1993, a subrogation claim entitled Village Homes at Country Walk Master
Maintenance Association, Inc. v. Arvida Corporation et al., was filed in the
11th Judicial Circuit for Dade County. Plaintiffs filed this suit for the use
and benefit of American Reliance Insurance Company ("American Reliance"). In
this suit, as amended, plaintiffs seek to recover damages and pre- and
post-judgment interest in connection with $10,873,000 American Reliance has
allegedly paid, plus amounts it may have to pay in the future, to the
condominium association at Country Walk in the wake of Hurricane Andrew. Disney
is also a defendant in this suit. The Partnership believes that the amount of
this claim that allegedly relates to units it sold is approximately $3,600,000.
Plaintiffs also seek a declaratory judgement seeking to hold the Partnership and
other defendants responsible for amounts American Reliance must pay in the
future to its insured as additional damages beyond the $10,873,000 previously
paid. The Partnership has filed motions directed to the complaint, as amended,
and the litigation is in the discovery stage. The Partnership intends to
vigorously defend itself. The Partnership is also involved in a subrogation
action brought by the Insurance Company of North America ("INA") arising out of
a claim that INA allegedly paid on a single home in Country Walk. The
Partnership intends to vigorously defend itself in this action, as well. The
Partnership could be named in other subrogation actions, and in such event, the
Partnership intends to vigorously defend itself in such actions.

In addition, the Partnership has been advised by Merrill Lynch that various
investors have sought to compel Merrill Lynch to arbitrate claims brought by
certain investors of the Partnership representing approximately 5% of the total
of approximately 404,000 Interests outstanding. Merrill Lynch has asked the
Partnership and its General Partner to confirm an obligation of the Partnership
and its General Partner to indemnify Merrill Lynch in these claims against all
loss, liability, claim, damage and expense, including without limitation
attorneys' fees and expenses, under the terms of a certain Agency Agreement
dated September 15, 1987 ("Agency Agreement") with the Partnership relating to
the sale of Interests through Merrill Lynch on behalf of the Partnership. These
claimants have sought and are seeking to arbitrate claims involving unspecified
damages against Merrill Lynch based on Merrill Lynch's alleged violation of
applicable state and/or federal securities laws and alleged violations of the
rules of the National Association of Securities Dealers, Inc., together with
pendent state law claims. The Partnership believes that Merrill Lynch has
resolved some of these claims through litigation and otherwise, and that Merrill
Lynch is defending other claims. The Agency Agreement generally provides that
the Partnership and its General Partner shall indemnify Merrill Lynch against
losses occasioned by any actual or alleged misstatements or omissions of
material facts in the Partnership's offering materials used in connection with
the sale of Interests and suffered by Merrill Lynch in performing its duties
under the Agency Agreement, under certain specified conditions. The Agency
Agreement also generally provides, under certain conditions, that Merrill Lynch
shall indemnify the Partnership and its General Partner for losses suffered by
the Partnership and occasioned by certain specified conduct by Merrill Lynch in
the course of Merrill Lynch's solicitation of subscriptions for, and sale of,
Interests. The Partnership is unable to determine at this time the ultimate
investment of investors who have filed arbitration claims as to which Merrill
Lynch might seek indemnification in the future. At this time, and based upon the
information presently available about the arbitration statements of claims filed
by some of these investors, the Partnership and its General Partner believe that
they have meritorious defenses to demands for indemnification made by Merrill
Lynch and intend to vigorously pursue such defenses. Although there can be no
assurance regarding the outcome of the claims for indemnification, at this time,
based on information presently available about such arbitration statements of
claims, the Partnership and its General Partner do not believe that the demands
for indemnification by Merrill Lynch will have a material adverse effect on the
financial condition of the Partnership.

On or about October 16, 1995, a lawsuit was filed against the Partnership
and others in the Circuit Court of the 15th Judicial Circuit, in and for Palm
Beach County, Florida, entitled Council of Villages, Inc. et al v. Arvida/JMB
Partners, Arvida/JMB Managers, Inc., Arvida/JMB Partners, Ltd., Broken Sound
Club, Inc., and Country Club Maintenance Association, Inc. The multi-count
complaint, as amended, is brought as a class action, and individually, on behalf
of various residents of the Broken Sound Community, and alleges that defendants
engaged in various acts of misconduct in, among other things, the establishment,
operation, management and marketing of the Broken Sound golf course and
recreational facilities, as well as the alleged improper failure to turn over
such facilities to the Broken Sound homeowners on a timely basis. Plaintiffs
seek, through various theories, including but not limited to breach of
ordinance, breach of fiduciary duty, fraud, unjust enrichment and civil theft,
damages in excess of $45 million, the

II-7
<PAGE>

appointment of a receiver for the Broken Sound Club, other unspecified
compensatory damages, the right to seek punitive damages, treble damages,
prejudgment interest, attorneys' fees and costs. The Partnership believes that
the lawsuit is without merit and intends to vigorously defend itself in this
matter.

The Partnership is also a defendant in several actions brought against it
arising in the normal course of business. It is the belief of the General
Partner, based on knowledge of facts and advice of counsel, that the claims made
against the Partnership in such actions will not result in any material adverse
effect on the Partnership's consolidated financial position or results of
operations.

The Partnership owns a 50% joint venture interest in 31
commercial/industrial acres in Pompano Beach, Florida, which is encumbered by a
mortgage loan in the principal amount of approximately $4 million at December
31, 1995. As a result of the Partnership's previous determination that the
development of the land was no longer economically profitable, during April
1992, the Partnership and its joint venture partner each tendered payment in the
amount of approximately $3.1 million to the lender for their respective shares
of the guarantee payment required under the loan agreement and certain other
holding costs, the majority of which reduced the outstanding mortgage loan to
its current balance. The venture also intended at that time to convey title to
the property to the lender; however, such conveyance is pending until resolution
of certain general development obligations of the venture as well as certain
environmental issues. The Partnership had been negotiating with the lender
regarding the scope of the development work required to be done. Negotiations
with the lender were unsuccessful, and the lender has filed a lawsuit with the
Broward County Circuit Court in which the lender asserts, among other things,
that the mortgage loan is with recourse to the joint venture partners as a
result of the partners' failure to perform in accordance with the terms of the
loan agreement. The lender is demanding payment of the outstanding loan balance
plus interest thereon. The Partnership believes this claim is without merit and
is vigorously defending the lawsuit. With respect to the environmental issues,
the previous owner remains obligated to undertake the clean up pursuant to,
among other things, a surviving obligation under the purchase and sale
agreement. The clean-up began in July 1994, and the first phase of the remedial
action plan was completed in October 1994. Further action plans are now
underway. If the previous owner is unable to fulfill all its obligations as they
relate to this environmental issue, the venture and ultimately the Partnership
may be obligated for such costs. Should this occur, the Partnership does not
anticipate the cost of this clean-up to be material toits operations.

The Partnership has been seeking a permit to develop 1,166 of the
approximate 2,475 gross acres contained in Increment III of the Weston
Community, portions of which are environmentally sensitive areas and are subject
to protection as wetlands. The Partnership's application for a wetlands permit
for Increment III, as modified on July 31, 1995, includes wetlands mitigation of
1,553 acres. This includes approximately 226 acres of land owned by the
Partnership outside of Increment III, and approximately 18 acres of land owned
by the Florida Department of Transportation (the "FDT") which is included in the
mitigation response. The land outside Increment III was acquired to augment the
Partnership's mitigation response to the United States Army Corps of Engineers
(the "Corps"), which is the governmental agency responsible for issuing permits
involving development of wetlands areas. The Partnership has reached an
agreement with the FDT whereby in exchange for the right to use the 18 acres of
land owned by the FDT, the Partnership has agreed to remove certain trees on the
land due to their negative impact on the wetlands. The mitigation plan calls for
the improvement of the function and value of the wetlands, including development
of refuge habitat areas, and ongoing maintenance and monitoring of the same.
After the mitigation response, the Partnership will have approximately 1,166
acres available for residential and commercial development, less requirements
for schools, parks, roads and related development infrastructure.

The Corps has concluded its processing of the Partnership's application, as
modified, and on February 29, 1996, issued its Section 404 Permit on the same
terms and conditions as set forth in the Partnership's amended application. The
U.S. Fish and Wildlife Service and the Environmental Protection Agency have
relinquished their rights to veto or elevate the permit decision to higher
governmental officials. Therefore, issuance of the Section 404 Permit is subject
only to collateral attacks by unrelated third parties, the risk of which is
remote.

Additionally, the Partnership has received analogous permits from both
Broward County and the State of Florida authorizing the development of Increment
III in accordance with the Partnership's current development plans, subject only
to a final modification to the Development of Regional Impact Development Order
for Increment III, which the Partnership believes can be acquired in the
ordinary course of business. However, if such modification is not obtained, the
Partnership would be required to revise its development plans for the remaining
portions of Increment I and II of the Weston Community, as well as its
development plans for Increment III. Such revisions would have a material

II-8
<PAGE>

adverse impact on the timing and amount of net income and net cash flow
ultimately realized by the Partnership from the development of the Weston
Community.

In connection with the development of the mitigation response required by
the Corps, State of Florida and Broward County wetland fill permits, the Indian
Trace Community Development District (the "District") and the Partnership have
entered into a cost sharing agreement whereby the Partnership contributes the
land and technical expertise necessary to obtain and implement the permit
conditions and the District pays all development costs and assumes the perpetual
maintenance obligation. The cost associated with the development and perpetual
maintenance of the land will be reimbursed through assessments charged by the
District to the owner of the property. Such assessments will be paid by the
Partnership until the land is sold through the Partnership's ordinary course of
business.

The Partnership may be responsible for funding certain other ancillary
activities for related entities in the ordinary course of business which the
Partnership does not currently believe will have any material adverse effect on
its consolidated financial position or results of operations.

(NOTE 12) TAX INCREMENT FINANCING ENTITIES

In connection with the development of the Partnership's Weston Community,
bond financing is utilized to construct certain on-site and off- site
infrastructure improvements, including major roadways, lakes, other waterways
and pump stations, which the Partnership would otherwise be obligated to finance
and construct as a condition to obtain certain approvals for the project. This
bond financing is obtained by The Indian Trace Community Development District
("District"), a local government district operating in accordance with Chapter
190 of the Florida Statutes. Under this program, the Partnership is not
obligated directly to repay the bonds. Rather, the bonds are expected to be
fully serviced by special assessment taxes levied on the property, which
effectively collateralizes the obligation to pay such assessments until land
parcels are sold. At such point, the liability for the assessments related to
parcels sold will be borne by the purchasers through a tax assessment on their
property. These special assessment taxes are designed to cover debt service on
the bonds, including principal and interest payments, as well as the operating
and maintenance budgets of the District. The use of this type of bond financing
is a common practice for major land developers in South Florida.

The District issued $64,660,000 of variable rate bonds in November 1989 and
$31,305,000 of variable rate bonds in July 1991. These bonds mature in various
years commencing in May 1991 through May 2011. In order to reduce the exposure
of variable rate debt, the District pursued a new bond issuance. During March
1995, the District issued approximately $99 million of bonds at fixed rates of
interest ranging from 4.0% to 8.25% per annum. These bonds mature in various
years commencing May 1999 through May 2011. The proceeds from this offering were
used to refund the outstanding 1989 and 1991 bonds described above, as well as
to fund the issuance costs incurred in connection with this offering and
deposits to certain reserve accounts for future bond debt service requirements.
At December 31, 1995, the amount of bonds issued and outstanding totalled
$91,385,000. For the twelve months ended December 31, 1995, the Partnership paid
special assessments related to these bonds of approximately $4.2 million.

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

LIQUIDITY AND CAPITAL RESOURCES

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

At December 31, 1995 and 1994, the Partnership had cash and cash
equivalents of approximately $20,171,000 and $22,024,000, respectively. Bank
overdrafts, which represent checks in transit, of approximately $3,973,000 at
December 31, 1995 were repaid from cash on hand during January 1996. Remaining
cash and cash equivalents were available for future debt service, working
capital requirements and distributions to partners, subject to certain
restrictions. The source of both short-term and long-term future liquidity is
expected to be derived primarily from the sale of housing units, homesites and
land parcels and through the Partnership's credit facility, which is discussed
below.

Due to the seasonal nature of its operations, a significant portion of the
Partnership's cash flow from operations (before debt service and distributions)
was generated from closings in the fourth quarter of 1995. However, many of the
expenditures related to such closings were incurred prior to the fourth quarter.
The increased closing activity in the latter part of 1995 is the primary cause
for the increase in cash and cash equivalents at December 31, 1995 as compared
to the cash balance reported in the Partnership's quarterly filing at September
30, 1995. In addition, each year numerous housing and homesite closings occur
during the last business days in December. Receipts generated from such closings
are sometimes not received by the Partnership until January of the following
fiscal year. The amount of pro-

II-9
<PAGE>

ceeds to be received from such closings are included in trade and other accounts
receivable on the accompanying consolidated balance sheets. The increase in the
amount of closings which occurred during the last business days in December 1995
as compared to the same period in 1994 is the primary cause for the increase in
trade and other accounts receivable at December 31, 1995 as compared to 1994 on
the accompanying consolidated balance sheets.

The Partnership was able to generate significant cash flow before debt
service during 1995 and 1994. The Partnership utilized this cash flow to make
scheduled and additional principal repayments on its outstanding debt, as
required under the terms of the credit facility agreement, and to increase its
cash reserves. In February 1995, the Partnership made a distribution for 1994 of
$5,421,680 to its Limited Partners ($13.42 per Interest) and $301,201 to the
General Partner and Associate Limited Partners, collectively. In addition,
during the first quarter of 1995, the Partnership remitted each Limited
Partner's share of North Carolina non- resident withholding tax. Such payment,
which totalled $26,784 ($.07 per Interest), was deemed a distribution to the
Limited Partners. A distribution of $1,488 was also paid at that time to the
General Partner and Associate Limited Partners, collectively, a portion of which
was also remitted to the North Carolina tax authorities on their behalf. During
February 1994, the Partnership made a distribution for 1993 of $2,565,433 to its
Limited Partners ($6.35 per Interest) and $142,523 to the General Partner and
Associate Limited Partners, collectively. As a result of certain restrictions on
distributions to partners contained in its credit facility agreement, the
Partnership made distributions to its partners in amounts substantially less
than the tax consequences attributable to the Federal taxable income allocable
to each partner multiplied by the maximum individual Federal income tax rate for
the years ended December 31, 1994 and 1993.

At December 31, 1995, the Partnership's credit facility consists of a term
loan in the original amount of $85,252,520, a revolving line of credit facility
up to $20 million, an income property term loan in the original amount of
$18,233,326 and a $15 million letter of credit facility. The term loan, the
revolving line of credit and the letter of credit facility are secured by
recorded mortgages on all otherwise unencumbered real property assets of the
Partnership as well as an assignment of all mortgages receivable, equity
memberships, certain joint venture interests or joint venture proceeds, and cash
balances (with the exception of deposits held in escrow). The income property
term loan is secured by the recorded first mortgage on a mixed-use center in
Boca Raton, Florida. Another office building also located in Boca Raton, known
as Mizner Place, which served as additional collateral for the income property
term loan was sold in May 1995. All of the notes under the facility are
cross-collateralized and cross-defaulted.

Under the term loan agreement, the Partnership made scheduled principal
payments of $10 million in March 1994, February 1995 and February 1996 and a $5
million principal payment in July 1995. In addition, the term loan agreement
provides for additional principal repayments to be made upon the sale of certain
assets as well as a specified percentage of annual cash flow, as defined. During
the year ended December 31, 1995, the Partnership made such additional term loan
payments totalling approximately $25.9 million. A principal repayment of $5
million on the term loan is due in July 1996. The remaining balance outstanding
is due in July 1997. Under the income property term loan, principal payments of
$0.1 million are required to be paid monthly until maturity. In addition to the
scheduled monthly payments, in May 1995 the Partnership used the net proceeds of
approximately $4 million from the sale of the Mizner Place office building to
pay down the income property term loan. The income property term loan and the
revolving line of credit were scheduled to mature in March 1996 and December
1995, respectively. The Partnership has been negotiating with its lenders for a
renewal of its revolving line of credit and income property term loan. During
March 1996, the Partnership's lenders reached an agreement in principle with
each other whereby one of the lenders would purchase the other's participating
interest in the Partnership's credit facilities. In addition, during March 1996,
the successor lender agreed to renew the Partnership's revolving line of credit,
income property term loan and letter of credit facility through July 1997. The
Partnership's letter of credit facility was scheduled to mature in July 1995,
but was extended for one year and will mature in July 1996. At December 31,
1995, all of the term and income property term loan proceeds had been borrowed
with remaining outstanding balances of $32,531,048 and $12,766,746,
respectively. The balances outstanding on the revolving line of credit and the
letter of credit facilities at December 31, 1995 were $0 and $9,236,746,
respectively.

During March 1996, the Partnership closed on the sale of its 20% joint
venture interest in Coto de Caza including the related promissory note for
advances previously made to the joint venture, to unaffiliated third parties for
a cash sales price of $12.0 million. The Partnership used $2.0 million of the
sale proceeds to paydown its term loan. The General Partner believes that this
sale was in the best interest of the Partnership given current market conditions
in Orange County, California. As a result of this transaction, the Partnership
has no future obligations with respect to

II-10
<PAGE>

Coto de Caza. This transaction will result in a gain to be recognized in 1996
for financial reporting and Federal income tax purposes.

The Partnership has a $24.0 million revolving construction line of credit
for construction of the buildings and certain amenities within the Partnership's
condominium project on Longboat Key, Florida known as Arvida's Grand Bay. This
line of credit currently bears interest at the lender's prime rate (8.50% at
December 31, 1995) plus 1/2% per annum and matures in January 1997. At December
31, 1995, approximately $11.7 million was outstanding under this line of credit.
The Partnership anticipates that this amount will be repaid from the proceeds
from the sale of condominium units.

The Partnership owned an 80% general partnership interest in The Oaks
Community located near Sarasota, Florida. During the fourth quarter of 1991, the
Partnership's joint venture partner failed to make capital contributions
required to fund ongoing operations and pursuant to the joint venture agreement,
was in default of the agreement. The Partnership executed an agreement in August
1993 with its joint venture partner, CIS Oaks, Ltd., ("CIS"), whereby CIS
assigned its 20% interest in The Oaks to the Partnership, thereby vesting 100%
control of the assets of the joint venture to the Partnership.

The assets of the Oaks joint venture were encumbered by two mortgage loans.
A $12,492,200 loan was scheduled to mature in January 1997 and a $3,260,000 loan
was scheduled to mature in December 1993. The joint venture had guaranteed $2.7
million of the loans, and the guaranteed amount was with recourse to the
Partnership. The joint venture was in default under the terms of these loan
agreements as a result of its failure to make principal payments of
approximately $1.3 million in January 1993 to release the minimum number of
homesite lots as required under these agreements and its failure to pay interest
commencing with a payment due in April 1993. The Partnership was able to reach
an agreement with the lenders to pay off the existing mortgage loans at a
substantial discount from face value. On September 3, 1993, the Partnership paid
the joint venture's lenders $6.7 million in full satisfaction of the outstanding
mortgage loans, accrued interest and guaranty. This transaction was the cause of
the approximate $9.5 million extraordinary gain on the early extinguishment of
debt for the year ended December 31, 1993.

Given the finite amount of available capital to the Partnership, the
Partnership determined that it was in its best long-term interest to utilize
that capital for the development of its other properties and sold its remaining
land holdings in The Oaks Community and its interest in The Oaks Club to an
unaffiliated third party purchaser for $5.8 million. This sale transaction
occurred simultaneously with the repayment of the loans and satisfaction of the
mortgages described above. In light of the Partnership's guarantee under the
loan agreement of $2.7 million of the outstanding mortgage loans, as well as
other factors, these transactions were pursued as the least costly alternative
available to the Partnership. These transactions resulted in a minimal net gain
for Federal income tax purposes.

II-11
<PAGE>

only to a final modification to the Development of Regional Impact Development
Order for Increment III, which the Partnership believes can be acquired in the
ordinary course of business. However, if such modification is not obtained, the
Partnership would be required to revise its development plans for the remaining
portions of Increment I and II of the Weston Community, as well as its
development plans for Increment III. Such revisions would have a material
adverse impact on the timing and amount of net income and net cash flow
ultimately realized by the Partnership from the development of the Weston
Community.

In June 1993, the Partnership executed an agreement with Equitable South
Florida Venture ("Equitable"), the successor in interest to Tishman
Speyer/Equitable South Florida Venture, the original purchaser of approximately
390 acres of land in Increment III of the Partnership's Weston Community,
whereby, in exchange for $5.0 million, the Partnership repurchased approximately
330 acres of the land and Equitable agreed to relieve the Partnership of its
obligations under certain provisions of the Sale and Purchase Agreement dated
December 15, 1983, which were assumed by the Partnership in connection with the
purchase of the assets of Arvida Corporation in September 1987. Of the agreed
upon price of $5 million, $2.5 million was paid at the execution of the
agreement in 1993 and the balance of $2.5 million was to be paid in equal annual
installments of $500,000 together with interest thereon at 8% per annum. The
Partnership made the first two of these scheduled payments in May 1994 and 1995.
During October 1995, the Partnership repaid the remaining outstanding principal
balance of $1.5 million. As part of its efforts to obtain the appropriate
development permits discussed in the preceding paragraphs, the Partnership has
included this land as part of its mitigation plan for the development of
Increment III of its Weston Community.

The Partnership has been advised by Merrill Lynch that various investors
have sought to compel Merrill Lynch to arbitrate claims brought by certain
investors of the Partnership representing approximately 5% of the total of
approximately 404,000 Interests outstanding. Merrill Lynch has asked the
Partnership and its General Partner to confirm an obligation of the Partnership
and its General Partner to indemnify Merrill Lynch in these claims against all
loss, liability, claim, damage and expense, including without limitation
attorneys' fees and expenses, under the terms of a certain Agency Agreement
dated September 15, 1987 ("Agency Agreement") with the Partnership relating to
the sale of Interests through Merrill Lynch on behalf of the Partnership. These
claimants have sought and are seeking to arbitrate claims involving unspecified
damages against Merrill Lynch based on Merrill Lynch's alleged violation of
applicable state and/or federal securities laws and alleged violations of the
rules of the National Association of Securities Dealers, Inc., together with
pendent state law claims. Reference is made to Note 11 for further information
concerning such claims. At this time, and based upon the information presently
available about the arbitration statements of claims filed by some of these
investors, the Partnership and its General Partner believe that they have
meritorious defenses to demands for indemnification made by Merrill Lynch and
intend to vigorously pursue such defenses. Although there can be no assurance
regarding the outcome of the claims for indemnification, at this time, based on
information presently available about such arbitration statements of claims, the
Partnership and its General Partner do not believe that the demands for
indemnification by Merrill Lynch will have a material adverse effect on the
financial condition of the Partnership.

Reference is made to Note 11 regarding the Partnership's financial
guarantees pursuant to the terms of a loan agreement for a commercial/industrial
joint venture in Pompano Beach, Florida in which the Partnership owns a 50%
interest. The Partnership also has certain continuing obligations relative to
this joint venture as referred to in such Note.

Reference is made to Item 3. Legal Proceedings of this annual report for a
discussion of several lawsuits, in which the Partnership is a defendant,
allegedly arising out of or relating to Hurricane Andrew and certain property
damage allegedly suffered by the plaintiffs at a previously developed community
known as Country Walk.

II-12
<PAGE>

RESULTS OF OPERATIONS

The results of operations for the years ended December 31, 1995, 1994 and
1993 are primarily attributable to the development and sale or operation of the
Partnership's assets. See Note 1 for a discussion regarding the recognition of
profit from sales of real estate.

For the year ended December 31, 1995, the Partnership (including its
consolidated ventures and its unconsolidated ventures accounted for under the
equity method) closed on the sale of 1,283 housing units, 554 homesite lots,
approximately 177 acres of developed and undeveloped residential or
commercial/industrial land tracts as well as an office building located in
downtown Boca Raton known as Mizner Place, and the Partnership's cable
operations in the Broken Sound Community. This compares to closings in 1994 of
899 housing units, 608 homesite lots, approximately 12 acres of developed and
undeveloped residential or commercial/industrial land tracts.

Closings in 1993 were for 626 housing units, 752 homesite lots,
approximately 91 acres of developed and undeveloped land tracts as well as the
sales of the Oak Bridge Club and the remaining real estate and equity
memberships at The Oaks Community. Outstanding contracts ("backlog") as of
December 31, 1995 were for 875 housing units, 22 homesites and approximately 18
acres of developed and undeveloped land tracts. This compares to a backlog as of
December 31, 1994 of 897 housing units, 67 homesites, approximately 36 acres of
developed and undeveloped land tracts as well as the Mizner Place office
building. The backlog as of December 31, 1993 was for 527 housing units, 127
homesites and approximately 47 acres of developed and undeveloped land tracts.

The Partnership's Communities are in various stages of development, with
estimated remaining build-outs ranging from one to nine years. The Weston
Community, located in Broward County, Florida, is the Partnership's largest
Community and is in its mid stage of development. Also in their mid stages of
development are the River Hills Country Club in Tampa, Florida; Jacksonville
Golf and Country Club in Jacksonville, Florida; the Water's Edge Community in
Atlanta, Georgia; The Cullasaja Club, near Highlands, North Carolina and the
Partnership's condominium project on Longboat Key, Florida known as Arvida's
Grand Bay. The Partnership's remaining Communities known as Sawgrass Country
Club, in Jacksonville, Florida and Dockside in Atlanta, Georgia are in their
final stages of development with anticipated close-outs in 1996. In addition,
the Broken Sound Community, located in Boca Raton, Florida, is complete and had
its final closings in 1995. Future revenues will be impacted to the extent that
there are lower levels of inventories available for sale as these Communities
approach or undertake their final phases. In addition, due to the close-out of
the Partnership's higher profit margin products within Broken Sound in 1995,
future gross operating profit margins from housing activities are not expected
to be as high as recent years' margins.

Revenues from housing and homesite activities are recognized upon the
closing of homes built by the Partnership and developed lots, respectively,
within the Partnership's Communities. Land and property revenues are generated
from the closing of developed and undeveloped residential and/or commercial land
tracts, the sale of operating properties as well as gross revenues earned from
the sale of equity memberships in the clubs within the Partnership's Boca Raton
and Jacksonville, Florida Communities, and its Community near Highlands, North
Carolina.

Cost of revenues pertaining to the Partnership's housing sales reflect the
cost of the acquired assets as well as development and construction
expenditures, certain capitalized overhead costs, capitalized interest, real
estate taxes and marketing, as well as disposition costs. The costs related to
the Partnership's homesite sales reflect the cost of the acquired assets,
related development expenditures, certain capitalized overhead costs,
capitalized interest and real estate taxes, as well as disposition costs. Land
and property costs reflect the cost of the acquired assets, certain development
costs and related disposition costs, as well as the cost associated with the
sale of equity memberships.

Historically, a substantial portion of the Partnership's housing revenues
during the first six months of a given year are generated from the closing of
units contracted in the prior year. For the year ended December 31, 1995, the
Partnership experienced a 43% net increase in the number of housing units closed
as compared to 1994. Closings during 1995 exceeded those for 1994 at all of the
Partnership's Communities, with the exception of the Broken Sound Community
which is complete and had its final closings in May 1995. This increase in
closing activity is the primary cause for the increase in housing revenues for
1995 as compared to 1994. Closings in the Partnership's Weston Community alone
accounted for approximately 93% of the overall net increase in unit closings.
This increase is primarily attributable to the substantial increase in the
backlog of unclosed housing units at Weston at December 31, 1994 as compared to
December 31, 1993. The increase in the number of closings in the Partnership's
Jacksonville Communi-

II-13
<PAGE>

ties is also due primarily to an increase in the backlog of unclosed units in
those Communities at the end of 1994 as compared to 1993. Also contributing to
the favorable revenue variance is an increase in the amount of revenues
recognized under the percentage of completion method in 1995 at Arvida's Grand
Bay on Longboat Key, Florida. During 1995, the Partnership recognized revenues
from two buildings at Arvida's Grand Bay as compared to one building in 1994.

Housing closings increased significantly in Weston during 1994 as compared
to 1993 due to the Partnership building more product lines within this
Community, as well as the introduction of several value-oriented products in
late 1992 and early 1993 which had their initial closings in the third quarter
of 1993. The continued success of these products, as well as the success of
several new product lines offered in late 1993 and 1994 contributed
significantly to the overall increase in housing revenues. Housing closings and
revenues for 1994 also exceeded those for 1993 at the Partnership's Communities
in Tampa and Jacksonville, Florida due to the introduction of products which had
their initial closings in the fourth quarter of 1993, as well as at the
Partnership's Broken Sound Community. Revenues increased at Broken Sound due to
the continued sale of products which had their initial closings in the second
quarter of 1993, as well as the introduction of a new product in 1993 which had
its initial closings in 1994. Also contributing to the overall increase in
housing revenues for 1994 as compared to 1993 is the initial recognition of
revenues for the first building at Arvida's Grand Bay during 1994.

The gross operating profit margin from housing activity decreased for the
year ended December 31, 1995 as compared to 1994 primarily as a result of the
substantial decline in the number of units closed at the Partnership's Broken
Sound Community. Due to the close-out of this Community's higher priced, higher
profit margin product built by the Partnership, future gross operating margins
from housing activities are not expected to be as high as recent years' margins.
In addition, South Florida building code changes, which have been in effect
since September 1, 1994, have impacted construction requirements in Broward
County. These building code changes have resulted in increased construction
costs, not all of which have been passed through to the home purchasers at this
time. As a result, the Partnership experienced some erosion in its gross
operating profit margins from housing sales during 1995 as compared to 1994.

The decrease in homesite revenues for the year ended December 31, 1995 as
compared to 1994 is due primarily to the close-out of lots in the Partnership's
Sawgrass Country Club Community in 1995. Homesite revenues also decreased at
Weston due to lower sales prices generated on the higher priced product sold in
that Community. Revenues from homesite activities decreased for the year ended
December 31, 1994 as compared to 1993 due to the implementation of the
Partnership's decision to place more emphasis on its home building operations.
The decrease in homesite revenues in 1994 as compared to 1993 was also due to
reduced closings from the Partnership's product offered on Longboat Key,
Florida, due to the close out of these lots in 1993. Slow sales at Waters Edge
and Dockside due to weak market demand for the products offered in this
particular sub-market in Atlanta, also contributed to the unfavorable revenue
variance for 1994 as compared to 1993.

The decrease in the gross operating profit margin from homesite activities
for the year ended December 31, 1995 as compared to 1994 is due to the decreased
closing activity within Sawgrass Country Club due to the close-out of this
Community in 1995, as well as reduced margins from closings of the higher priced
product in Weston resulting from decreased sales prices, as discussed above.
Also contributing to the decrease in the gross operating profit margin are
certain non-recurring adjustments made to cost of sales in 1994 to reflect
reductions in development cost estimates for certain of the Partnership's
products, primarily in the Weston Community. Development estimates at that time
indicated lower costs to be incurred than were previously anticipated, therefore
contributing to this variance. The increase in the gross operating profit margin
from homesite activities for the year ended December 31, 1994 as compared to
1993 was due primarily to the non-recurring adjustments to cost of sales
recorded in 1994.

The increase in land and property revenues for 1995 is due primarily to the
increase in the volume of land and property sales closed in 1995 as compared to
1994. Significant revenues were generated in 1995 from the closings of
approximately 86 acres of commercial land parcels throughout Palm Beach and
Broward Counties in Florida. In addition to these commercial land parcels, the
Partnership also closed on the sale of the cable operation in its Broken Sound
Community and the Mizner Place office building located in downtown Boca Raton,
Florida. Also contributing to the increase in revenues is the sale of
approximately 82 acres of undeveloped land located near Sarasota, Florida, which
was distributed to the Partnership by one of its unconsolidated joint ventures.
These closings compare to approximately 12 acres of commercial and residential
land parcels closed during 1994.

II-14
<PAGE>

The increase in the gross operating profit margin from land and property
sales for 1995 as compared to 1994 is due primarily to the low cost basis of the
land sales generated during 1995.

Land and property revenues for the year ended December 31, 1993 include
approximately $5.8 million and $3.3 million in revenues generated from the sale
of the remaining real estate and equity memberships at the Partnership's Oaks
Community (see further discussion in Liquidity and Capital Resources above) and
the sale of the Oakbridge Club near Jacksonville, Florida, respectively. The
inclusion of revenues from these closings in 1993 is the primary cause for the
decrease in land and property revenues for the year ended December 31, 1994 as
compared to 1993. The remaining unfavorable revenue variance for 1994 as
compared to 1993 is due to a decrease in the amount of revenues recognized for
those land sales closed in previous years which had been deferred for financial
reporting purposes, as well as a lower volume of other land sales in the Boca
Raton and Jacksonville, Florida and Atlanta, Georgia areas.

Despite the decrease in revenues, the gross operating profit margin
generated from land and property activities increased for 1994 due primarily to
1993's margins being negatively impacted by the loss incurred on the sale of the
remaining real estate and equity memberships at the Partnership's Oaks Community
in 1993.

Operating properties represents activity from the Partnership's club and
hotel operations, commercial properties and certain other operating assets. The
increase in revenues from operating properties in 1995 as compared to 1994 is
due primarily to increased membership dues and fees generated at the
Partnership's club operations in Weston. This favorable variance resulted from
an increase in the number of club members as well as an increase in rates
charged in 1995 as compared to 1994. The favorable revenue variance from the
club operations was partially offset by decreased revenues from the
Partnership's cable operation in Broken Sound as well as decreased revenues from
Mizner Place due to the sale of these properties in 1995.

Revenues generated by the Partnership's operating properties increased for
the year ended December 31, 1994 as compared to 1993 primarily due to increased
revenues from the Partnership's club operations in Weston and River Hills due to
an increase in membership activity. Revenues for 1994 also exceeded those for
1993 at the Partnership's cable operations in Weston. This increase resulted
primarily from an increase in the number of cable subscribers within that
Community. These favorable revenue variances were partially offset, however, as
1994 revenues do not include any activity from the Oakbridge Club which was sold
to an unaffiliated third party in October 1993.

Brokerage and other operations represents activity from the sale of
unaffiliated third-party builders' homes within the Partnership's Communities,
activity from resale of real estate inside and outside the Partnership's
Communities, proceeds from the Partnership's property management activities as
well as fees earned from various management agreements with joint ventures. The
decrease in revenues from brokerage and other operations for the year ended
December 31, 1995 as compared to 1994 is due primarily to a decrease in the
number of builder unit closings in the Partnership's Weston Community resulting
from a slow down in sales of the higher priced product in that Community.
Closings and revenues also decreased due to the late stage of development of the
Partnership's Sawgrass Country Club Community and the sellout of its Broken
Sound Community.

The gross operating profit margin from brokerage and other operations
declined for the year ended December 31, 1995 as compared to 1994 due primarily
to an adjustment recorded to cost of revenues in the first quarter of 1995 to
properly reflect commissions paid in connection with the sales of builders'
homes within the Partnership's Communities which had closed prior to December
31, 1994.

Selling, general and administrative expenses include all marketing costs,
with the exception of those costs capitalized in conjunction with the
construction of housing units, and project and general administrative costs.
These expenses are net of the marketing fees received from third party builders.
The increase in selling, general and administrative expenses for the year ended
December 31, 1995 as compared to 1994 is primarily attributable to a decrease in
marketing fees earned from builder unit closings within the Partnership's
Communities, due to the lower volume of such closings as discussed above. The
unfavorable variance also resulted from an increase in project administrative
costs, primarily at the Partnership's Weston Community, related to the increased
housing volume discussed above. Selling, general and administrative expenses
increased for 1994 as compared to 1993 also due to increased project
administrative costs at the Partnership's Weston Community and at Arvida's Grand
Bay. These increased costs resulted from increased activity related to these
projects in 1994 as compared to 1993.

Writedowns to the carrying value of real estate inventories and other
assets represent adjustments to the book values of the Partnership's projects
based upon the analysis of each projects' estimated selling price in the
ordinary

II-15
<PAGE>

course of business less estimated costs of completion, holding and disposal as
compared to its recorded carrying value, or the estimated fair value of the
asset held for disposition. Writedowns to the carrying value of real estate
inventories and other assets for the year ended December 31, 1995 represents a
writedown of approximately $8.5 million, recorded in September 1995, to the
carrying value of the Partnership's investment in the Coto de Caza Joint
Venture. The Partnership had been evaluating its plans for its interest in this
joint venture and was considering a shorter holding period than originally
anticipated. Therefore, the Partnership recorded this writedown to reflect the
fair value of this investment held for disposition under market conditions at
that time. This writedown is the primary cause for the decrease in Investments
in and Advances to Joint Ventures on the accompanying consolidated balance
sheets at December 31, 1995 as compared to December 31, 1994. Reference is made
to Liquidity and Capital Resources for a discussion of the sale of the
Partnership's interest in Coto de Caza during March 1996.

The Partnership recorded writedowns to the carrying value of real estate
inventories and other assets for the year ended December 31, 1993 totalling
approximately $4.9 million resulting from the adverse impact of reductions in
housing prices on future anticipated lot values at the Partnership's Water's
Edge and Dockside Communities.

The increase in interest income since 1993 is due primarily to an increase
in the average amounts invested in short-term financial instruments.

The increase in equity in earnings of unconsolidated ventures for the year
ended December 31, 1995 as compared to 1994 resulted primarily from the
recording of the Partnership's share of income generated from a land sale by its
commercial joint venture located in Ocala, Florida. Equity in earnings of
unconsolidated ventures decreased for the year ended December 31, 1994 as
compared to 1993 due primarily to the reduction in earnings from the two joint
ventures in Weston which had been formed during the second half of 1992 to
construct homes within that Community. Those homes had been completed and were
virtually closed out by December 31, 1993.

Interest and real estate taxes decreased for the year ended December 31,
1995 as compared to 1994 due primarily to a decrease in the average amount of
borrowings outstanding during the period. Also contributing to the favorable
variance is a decrease in real estate taxes incurred, due primarily to the high
volume of closings during 1995. Interest and real estate taxes decreased for the
year ended December 31, 1994 as compared to 1993 due primarily to an overall
decrease in the Partnership's average debt balance outstanding, as well as the
maturity of both of the Partnership's interest rate swap arrangements during
1994.

In March 1995, the Financial Accounting Standards Board Issued Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of". This Statement requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. Statement 121 also addresses
the accounting for long-lived assets that are expected to be disposed of, and
requires that assets to be disposed of be reported in the balance sheet at the
lower of their carrying amount or fair value less cost to sell. The Partnership
adopted Statement 121 effective January 1, 1995 and, as a result, recorded an
impairment loss of $2.2 million to the carrying value of its Cullasaja Community
located near Highlands, North Carolina. This loss was recorded based upon an
analysis of estimated discounted cash flows used to determine the Community's
fair value. The fair value analysis estimates sell out of the remaining houses,
homesites and equity memberships in the Community by the year 2000. As a result
of this adjustment, Cullasaja's carrying value is recorded at approximately $7.1
million at December 31, 1995.

INFLATION

Although the relatively low rates of inflation in recent years generally
have not had a material effect on the Community development business, inflation
in future periods can adversely affect the development of Communities generally
because of its impact on interest rates. High interest rates not only increase
the cost of borrowed funds to developers, but also have a significant effect on
the affordability of permanent mortgage financing to prospective purchasers. Any
increased costs of materials and labor resulting from high rates of inflation
may, in certain circumstances, be passed through to purchasers of real
properties through increases in sales prices, although such increases may reduce
sales volume.

To the extent such cost increases are not passed through to purchasers,
there would be a negative impact on the ultimate margins realized by the
Partnership.

II-16

<PAGE>

Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to the
Information Agent at its telephone number and address listed below. You may also
contact your broker, dealer, bank, trust company or other nominee for assistance
concerning the Offer.

The Information Agent for the Offer is:

BEACON HILL PARTNERS, INC.

90 Broad Street
New York, New York 10004
(212) 843-8500 (COLLECT)
or
(800) 253-3814 (TOLL FREE)

The Letter of Transmittal and any other required documents should be sent
or delivered by each Unitholder or such Unitholder's broker, dealer, bank, trust
company or other nominee to the Depositary as set forth below. Facsimile copies
of the Letter of Transmittal will be accepted but must be followed by the signal
original.

The Depositary for the Offer is:

IBJ SCHRODER BANK & TRUST COMPANY

By Mail:

P.O. Box 84
Bowling Green Station
New York, New York 10274-0084
Attn: Reorganization Operations Department

By Hand/Overnight Delivery:

One State Street
New York, New York 10004
Attn: Securities Processing
Window, Subcellar One,
(SC-1)

By Facsimile:
(212) 858-2611

Confirm by Telephone:
(212) 858-2103 (Collect)

EXHIBIT (a)(2)

LETTER OF TRANSMITTAL

for the Tender of Limited Partnership and Assignee Interests of

ARVIDA/JMB PARTNERS, L.P.

Pursuant to the Offer to Purchase dated July 18, 1996
of

BOREAS PARTNERS, L.P.

- --------------------------------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, AUGUST 14, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------

The Depositary for the Offer is:

IBJ SCHRODER BANK & TRUST COMPANY

<TABLE>
<CAPTION>
<S> <C> <C> <C>
By Mail: By Facsimile: To Confirm: By Hand/Overnight Delivery:

P.O. Box 84 (212) 858-2611 (212) 858-2103 One State Street
Bowling Green Station (Collect) New York, New York 10004
New York, New York 10274-0084 Attn: Securities Processing
Attn: Reorganization Operations Window, Subcellar One,
Department (SC-1)
</TABLE>

If you have any questions or need assistance in completing the Letter of
Transmittal, please call our Information Agent, Beacon Hill Partners, Inc. at
(800) 253-3814 (toll free) or (212) 843-8500 (collect).

Delivery of this Letter of Transmittal or any other required documents to
an address other than the one set forth above or via facsimile transmission
other than as set forth above does not constitute valid delivery.

If a Holder of Units who has tendered Units pursuant to the Raleigh Offer
or the Walton Offer wishes to tender some or all of such Units to Boreas
Partners, L.P. pursuant to this Offer, such Holder must first withdraw such
tendered Units by following the procedures set forth below.

For the convenience of Unitholders desiring to withdraw from the Raleigh
Offer or the Walton Offer and accept the $460 net per Unit offered hereby, a
form of "Notice of Withdrawal" is enclosed which, if properly delivered to the
Herman

<PAGE>

Group, Inc., depositary for the Raleigh Offer, will enable Holders of Units to
withdraw Units tendered pursuant to the Raleigh Offer. Similarly, a form of
"Notice of Withdrawal" is enclosed which, if properly delivered to Trust Company
of America, depositary/information agent for the Walton Offer, will enable
Holders of Units to withdraw Units tendered pursuant to the Walton Offer. A copy
of each Notice of Withdrawal delivered to the Herman Group, Inc. or Trust
Company of America should be delivered to IBJ Schroder Bank & Trust Company, the
Depositary for this Offer, along with this Letter of Transmittal.

Units tendered to the Herman Group, Inc., depositary for the Raleigh Offer,
or to Trust Company of America, depositary/information agent for the Walton
Offer, must be withdrawn if the Unitholder desires to tender them into this
Offer. Holders of Units seeking assistance in withdrawing Units tendered
pursuant to the Raleigh Offer or the Walton Offer may call the Information Agent
at (212) 843-8500 (Collect) or at (800) 253-3814 (Toll Free).

PLEASE CAREFULLY READ THE ACCOMPANYING INSTRUCTIONS

Capitalized terms used herein and not otherwise defined shall have the
meanings given to them in the Boreas Partners, L.P. Offer to Purchase Limited
Partnership and Assignee Interests of Arvida/JMB Partners, L.P. (as amended or
supplemented from time to time, the "Offer to Purchase").

The undersigned hereby tenders to Boreas Partners, L.P., a Delaware limited
partnership (the "Purchaser"), the number of the undersigned's Units specified
below in Arvida/JMB Partners, L.P., a Delaware limited partnership (the
"Partnership"), at a price of $460 per Unit (the "Purchase Price"), net to the
seller and its assigns in cash, without interest, upon the terms and subject to
the conditions set forth in the Purchaser's Offer to Purchase dated July 18,
1996, receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, together with any supplements or amendments, collectively constitute the
"Offer"). The Purchase Price will automatically be reduced by the aggregate
amount of distributions per Unit, if any, made or declared by the Partnership
after June 19, 1996 and on or prior to the day of payment of the Purchase Price
by the Purchaser. The Purchaser reserves the right to transfer or assign, in
whole or from time to time in part, to one or more persons, the right to
purchase Units tendered pursuant to the Offer, but any such transfer or
assignment will not relieve the Purchaser of its obligations under the Offer or
prejudice the rights of tendering Unitholders to receive payment for Units
validly tendered and accepted for payment pursuant to the Offer.

By executing and delivering this Letter of Transmittal, a tendering
Unitholder irrevocably appoints the Purchaser and designees of the Purchaser and
each of them as such Unitholder's proxies, each with full power of substitution,
to the full extent of such Unitholder's rights with respect to the Units
tendered by such Unitholder and accepted for payment by the Purchaser (and with
respect to any and all other Units or other securities issued or issuable in
respect of such Units on or after the date, collectively "distributed
securities"). All such proxies shall be considered irrevocable and coupled with
an interest in the tendered Units. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts such Units for payment. Upon such
acceptance for payment, all prior proxies given by such Unitholder with respect
to such Units (and such distributed securities) will be revoked without further
action, and no subsequent proxies may be given nor any subsequent written
consent executed (and, if given or executed, will not be effective). The
Purchaser and its designees will, with respect to the Units (and such other
Units and securities) for which such appointment is effective, be empowered to
exercise all voting and other rights of such Unitholder as they in their sole
discretion may deem proper at any meeting of Unitholders or any adjournment or
postponement thereof, by written consent in lieu of any such meeting or
otherwise. The Purchaser reserves the right to require that, in order for the
Units to be deemed validly tendered, immediately upon the Purchaser's acceptance
for payment for such Units, the Purchaser must be able to exercise full voting
rights with respect to such Units and other distributed securities, including
voting at any meeting of Unitholders. By executing the Letter of Transmittal, a
tendering Unitholder agrees to execute all such documents and take such other
actions as shall be reasonably required to enable the Units tendered to be voted
in accordance with the directions of the Purchaser.

By executing and delivering this Letter of Transmittal, a tendering
Unitholder also irrevocably constitutes and appoints the Purchaser, and any
designees of the Purchaser as the Unitholder's attorneys-in-fact, each with full
power of substitution, to the full extent of the Unitholder's rights with
respect to the Units tendered by the Unitholder and accepted for payment by the
Purchaser. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts the tendered Units for payment. Upon such acceptance for
payment, all prior powers of attorney granted by the Unitholder with respect to
such Units will, without further action, be revoked, and no subsequent powers of
attorney may be granted (and if

2
<PAGE>

granted will not be effective). Pursuant to such appointment as
attorneys-in-fact, the Purchaser and its designees each will have the power,
among other things, (i) to seek to transfer ownership of such Units on the
Partnership books maintained by the transfer agent and registrar for the
Partnership (and execute and deliver any accompanying evidences of transfer and
authenticity any of them may deem necessary or appropriate in connection
therewith, including, without limitation, a "Transferor's (Seller's) Application
for Transfer" created by the NASD, if required, (ii) upon receipt by the
Depositary (as the tendering Unitholder's agent) of the Purchase Price, to
become a Substitute Owner, to receive any and all distributions to which the
Purchaser is entitled, and to receive all benefits and otherwise exercise all
rights of beneficial ownership of such Units, in accordance with the terms of
the Offer, (iii) to execute and deliver to the General Partner a change of
address form instructing the General Partner to send any and all future
distributions to which the Purchaser is entitled pursuant to the terms of the
Offer in respect of tendered Units to the address specified in such form, and
(iv) to endorse any check payable to or upon the order of such Unitholder
representing a distribution to which the Purchaser is entitled pursuant to the
terms of the Offer, in each case on behalf of the tendering Unitholder.

By executing and delivering this Letter of Transmittal, a tendering
Unitholder irrevocably assigns to the Purchaser and its assigns all of the
right, title and interest of such Unitholder in the Partnership with respect to
the Units tendered and purchased pursuant to the Offer, including, without
limitation, such Unitholder's right, title and interest in and to any and all
distributions made by the Partnership in respect of such Units, other than
distributions declared or made between June 19, 1996 and the date of payment of
the Purchase Price by the Purchaser.

The undersigned recognizes that, if proration is required pursuant to the
terms of the Offer, the Purchaser will accept for payment from among those Units
validly tendered on or prior to the Expiration Date and not properly withdrawn,
the maximum number of Units permitted pursuant to the Offer on a pro rata basis
from each of the tendering Unitholders, based upon the number of Units validly
tendered prior to the Expiration Date and not properly withdrawn, with
adjustments to avoid purchases of certain fractional Units or purchases that
would violate Article 7 of the Partnership Agreement.

The undersigned understands that a tender of Units to the Purchaser
constitutes a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in the Offer, the Purchaser may not
be required to accept for payment any of the Units tendered hereby. In such
event, the undersigned understands that any Letter of Transmittal not accepted
for payment will be destroyed by the Purchaser.

The undersigned hereby represents and warrants that the undersigned owns
the Units tendered hereby and has full power and authority to validly tender,
sell, assign and transfer the Units tendered hereby and that when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer thereof, and such Units will not be
subject to any adverse claims. The undersigned will, upon request, execute and
deliver any additional document deemed by the Purchaser to be necessary or
desirable to complete the sale, assignment and transfer of the Units tendered
hereby.

All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned,
and any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated in the Offer, this tender is irrevocable.

3
<PAGE>

BOX A
PLEASE COMPLETE ALL SHADED AREAS TO TENDER YOUR UNITS.
*(See Instructions 1 and 6)

================================================================================

The undersigned Unitholder (or authorized person signing on behalf of the
registered Unitholder) hereby tenders the number of Units specified below
pursuant to the terms of the Offer. The undersigned hereby certifies, under
penalties of perjury, that the information and presentations provided in Boxes
A, B and C of this Letter of Transmittal, which have been duly completed by the
undersigned, are true and correct as of the date hereof.

X_________________________________ Address:________________________________

X_________________________________ ________________________________________
Signature(s) of Unitholder(s) (Include Zip Code)

Date:_____________________________

(Must be signed by registered (The address provided above must be the
Unitholder(s) exactly as name(s) in registered address of the Unitholder, or
the Partnership's records. If else a signature guarantee is required
signature is by an officer of a below.)
corporation, attorney-in-fact, agent,
executor, administrator, trustee, ---------------- -------------------
custodian, guardian or other Area Code and Social Security No.
person(s) acting in fiduciary or Telephone Number or Taxpayer
representative capacity, please Identification
complete the line captioned
"Capacity (Full Title)." SEE Number of Number of
INSTRUCTION 5.) Units Tendered:____ Units Owned:_______

(If no indication is given, all units
Print Name(s):_____________________ owned of record by the Unitholder will
be deemed tendered. If you wish to
_____________________ tender less than all of your Units, you
must continue to own at least 5 Units.)
Capacity (Full Title):_____________

SIGNATURE OF WITNESS
*(If Required-See Instructions 1 and 6)

Signature:_________________________

Print Name:________________________ Date:___________________________________

GUARANTEE OF SIGNATURE(S)
*(If Required-See Instructions 1 and 6)

Authorized
Signature:_________________________ Name of Firm:___________________________

Print Name:________________________ Address:________________________________

Date:______________________________ Area Code and Tel. No.:_________________

================================================================================

4
<PAGE>

IMPORTANT!

Unitholders must also complete both BOX B and BOX C below.

BOX B
<TABLE>
<CAPTION>

=============================================================================================
<S> <C> <C>
SUBSTITUTE Part 1--(a) Name (If joint Part 2--PLEASE PROVIDE YOUR
Form W-9 names, list first and circle TIN ON THE APPROPRIATE LINE
the name of the person or BELOW AND CERTIFY BY SIGNING
Department of the Treasury entity whose number you AND DATING BELOW.
Internal Revenue Service enter in Part 2 below). (See
Guidelines if your name has
Payer's request for Taxpayer changed.) -----------------------------
Identification Number (TIN) Social Security Number

(b) Business name (Sole OR
Proprietors see
Guidelines.)
-----------------------------
(c) Please check appropriate Employer Identification
box: Number

|_| Individual/Sole For Payees Exempt From
Proprietor Backup Withholding (See Part
II of Guidelines)
|_| Corporation

|_| Partnership |_| Other
-----------------------------
(d) Address (Number, Street,
Apt. or Suite No.,
City, State and Zip
Code).
--------------------------------------------------------------
Part 3

Part 3--Certification-Under Awaiting TIN |_|
penalties of perjury, I
certify that:

(a) The number shown on this
form is my correct Taxpayer
Identification Number (or I
am waiting for a number to
be issued to me) and

(b) I am not subject to
backup withholding because
(i) I am exempt from backup
withholding, (ii) I have not
been notified by the
Internal Revenue Service
(the "IRS") that I am
subject to backup
withholding as a result of a
failure to report all
interest or dividends, or
(iii) the IRS has notified
me that I am no longer
subject to backup
withholding.
--------------------------------------------------------------

Certification Instructions--You must cross out item (b) in
Part 3 above if you have been notified by the IRS that you are
currently subject to backup withholding because of
underreporting interest or dividends on your tax return.

SIGNATURE:_________________________ DATE:_____________________

==============================================================================================
</TABLE>

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

5
<PAGE>

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART3
OF SUBSTITUTE FORM W-9.

================================================================================
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
(To be completed only if the box in Part 3 above is checked)

I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (b)
I intend to mail or deliver an application in the near future. I understand that
(i) if I do not provide a taxpayer identification number within seven days after
the Depositary receives my Awaiting TIN Certification, backup withholding, if
applicable, will begin and continue until I furnish my taxpayer identification
number, and (ii) if within sixty days the Depositary receives my taxpayer
identification number on a new IRS Form W-9 or Substitute Form W-9, the
Depositary will return amounts withheld through the date such IRS Form W-9 or
Substitute Form W-9 is received.

______________________________________________ ___________________________
Signature Date
================================================================================

BOX C

================================================================================
FIRPTA AFFIDAVIT--CERTIFICATE OF NON-FOREIGN STATUS

Section 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform the transferee that withholding of tax is not required upon
this disposition of a U.S. real property interest, the undersigned hereby
certifies the following on behalf of the tendering Unitholder named below:

1. The Unitholder, if an individual, is not a nonresident alien for purposes
of U.S. income taxation, and if not an individual, is not a foreign
corporation, foreign partnership, foreign trust, or foreign estate (as
those terms are defined in the Internal Revenue Code and Income Tax
Regulations);

2. The name of the Unitholder is ____________________________________________;

3. The Unitholder's Social Security Number (for individuals) or Employer
Identification Number (for non-individuals) is ____________________; and

4. The Unitholder's home address (in the case of an individual) or office
address (in the case of an entity) is _______________________________.

I understand that this certification may be disclosed to the Internal
Revenue Service by the transferee and that any false statement I have made here
could be punished by fine, imprisonment, or both.

Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and if the Unitholder is not an individual, I further declare that I
have authority to sign this document on behalf of the Unitholder.

______________________________________________ ___________________________
Signature Date

Title:_________________________________________

================================================================================

<PAGE>

INSTRUCTIONS
to
LETTER OF TRANSMITTAL
for
ARVIDA/JMB PARTNERS, L.P.

Forming Part of Terms and Conditions of the Offer

1. Witness or Guarantee of Signatures. If the Letter of Transmittal is
signed by the registered holder(s) of the Units and payment is to be made
directly to that holder at that holder's registered address, then the
signature(s) must be witnessed, and therefore the section of Box A entitled
"Signature of Witness" must be completed in addition to the shaded areas.
Similarly, if the Units are tendered for the account of a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc. or a commercial bank, savings bank, credit union,
savings and loan association or trust company having an office, branch or agency
in the United States (each an "Eligible Institution"), the section of Box A
entitled "Signature of Witness" must be completed in addition to the shaded
areas. However, in all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution, and therefore the section of Box
A entitled "Guarantee of Signature(s)" must be completed in addition to the
shaded areas.

2. Delivery of Letter of Transmittal. The Letter of Transmittal is to be
completed by all Unitholders who wish to tender Units in response to the Offer.
For a Unitholder validly to tender Units, a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof if followed by the signed
original), along with any required signature guarantees and any other required
documents, must be received by the Depositary at one of its addresses set forth
herein on or prior to the Expiration Date.

THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING UNITHOLDER AND DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.

No alternative, conditional or contingent tenders will be accepted, and no
fractional Units will be purchased (except from a Unitholder who is tendering
all of the Units owned by that Unitholder). All tendering Unitholders, by
execution of the Letter of Transmittal (or facsimile thereof), waive any right
to receive any notice of the acceptance of their Units for payment.

3. Inadequate Space. If the space provided herein is inadequate, additional
information may be provided on a separate signed schedule attached hereto.

4. Minimum Tenders. A Unitholder may tender any or all of his or her Units;
provided, however, that in order for a partial tender to be valid, after the
sale of Units pursuant to the Offer the Unitholder must continue to hold at
least five Units. Accordingly, a Unitholder who owns five or fewer Units must
tender all or none of that Unitholder's Units.

5. Signatures on Letter of Transmittal. If the Letter of Transmittal is
signed by the registered holder(s) of the Units tendered hereby, the
signature(s) must correspond exactly with the name(s) as shown on the records of
the Partnership without alteration, enlargement or any change whatsoever.

If any of the Units tendered hereby are held of record by two or more joint
holders, all such holders must sign the Letter of Transmittal.

For Individual Retirement Accounts (IRAs), the beneficial owner should
execute the Letter of Transmittal and then forward to the custodian or trustee
for additional execution. The beneficial owner should instruct the custodian or
trustee to execute such Letter of Transmittal and then forward to the Depositary
as specified in Instruction 2 herein. The Letter of Transmittal will not be
considered duly completed until after it has been executed by both the
beneficial owner and the custodian or trustee.

For qualified retirement plans (other than IRAs), the trustee should
execute the Letter of Transmittal and then forward it to the Depositary as
specified in Instruction 2 herein.

7
<PAGE>

If the Letter of Transmittal is signed by trustees, custodians, executors,
administrators, guardians, attorneys-in-fact, agents, officers of corporations
or others acting in a fiduciary or representative capacity, such persons should
so indicate when signing, and proper evidence satisfactory to the Depositary of
their authority so to act must be submitted.

6. Special Payment and Delivery Instructions. If a check is to be issued in
the name(s) of a person(s) other than the signer(s) of the Letter of Transmittal
or if a check is to be sent to someone other than the signer(s) of the Letter of
Transmittal or to an address other than that shown on the Letter of Transmittal,
signature guarantees are required. See Instruction 1.

Please note that a tendering beneficial owner of Units whose Units are
owned of record by an IRA or other qualified retirement plan will not receive
direct payment of the Purchase Price; rather, payment will be made to the
custodian or trustee of such account or plan.

7. Waiver of Conditions. The Purchaser expressly reserves the absolute
right, in its sole discretion, to waive any of the specified conditions of the
Offer, in whole or in part, in the case of any Units tendered.

8. Request for Assistance and Additional Copies. Questions or requests for
assistance may be directed to the Information Agent at its address and telephone
number set forth below. Copies of the Offer and the Letter of Transmittal may be
obtained from the Information Agent.

9. Substitute Form W-9. Each tendering Unitholder is required to provide
the Depositary with a correct taxpayer identification number ("TIN"), generally
the Unitholder's social security or federal employer identification number, on
Substitute Form W-9, which is provided above. You must cross out item (b) in the
Certification box in Part 3 of Substitute Form W-9 if you are subject to backup
withholding. Failure to provide the information on the form may subject the
tendering Unitholder to 31 percent federal income tax withholding on the
payments made to the Unitholder or other payee with respect to Units purchased
pursuant to the Offer. The box in Part 3 of Substitute Form W-9 may be checked
if the tendering Unitholder has not been issued a TIN and has applied for a TIN
or intends to apply for a TIN in the near future. If the box in Part 3 is
checked, backup withholding, if applicable, will begin 7 days after the
Depositary receives an Awaiting TIN Certification and will continue until you
furnish your TIN. If within 60 days the Depositary receives your TIN on a new
IRS Form W-9 or copy of the Substitute Form W-9 provided above, the Depositary
will return amounts withheld through the date such IRS Form W-9 or Substitute
Form W-9 is received.

10. FIRPTA Affidavit. To avoid potential withholding of tax pursuant to
Section 1445 of the Internal Revenue Code in an amount equal to 10% of the
purchase price for Units purchased pursuant to the Offer, plus the amount of any
liabilities of the Partnership allocable to such Units, each Unitholder who or
which is a United States person must complete the FIRPTA Affidavit contained in
the Letter of Transmittal stating, under penalties of perjury, such Unitholder's
TIN and address, and that such Unitholder is not a foreign person. Tax withheld
under Section 1445 of the Internal Revenue Code is not an additional tax. If
withholding results in an overpayment of tax, a refund may be obtained from the
IRS.

IMPORTANT: THE LETTER OF TRANSMITTAL OR FACSIMILE COPY THEREOF (TOGETHER
WITH ALL OF THE REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE DEPOSITARY ON OR
PRIOR TO THE EXPIRATION DATE. IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE
COMPLETING THE LETTER OF TRANSMITTAL, PLEASE CALL THE INFORMATION AGENT, BEACON
HILL PARTNERS, INC., TOLL FREE AT (800) 253-3814 OR AT (212) 843-8500 (COLLECT).

IMPORTANT TAX INFORMATION

Under federal income tax law, in order to prevent backup withholding on
amounts payable to a Unitholder whose tendered Units are accepted for payment,
such Unitholder is required to provide the Depositary with such Unitholder's
correct TIN on Substitute Form W-9 above or otherwise establish a basis for
exemption from backup withholding. If such Unitholder is an individual, the TIN
is his or her social security number. If the Depositary is not provided with the
correct TIN, the Unitholder or other payee may be subject to penalties imposed
by the Internal Revenue Service. In addition, payments that are made to such
Unitholder or other payee with respect to Units purchased pursuant to the Offer
may be subject to backup withholding.

Certain Unitholders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt Unitholders should indicate their exempt status on
Substitute

8
<PAGE>

Form W-9. In order for a foreign person to qualify as an exempt recipient, that
Unitholder must submit to the Depositary a properly completed Internal Revenue
Service Form W-8, signed under penalties of perjury, attesting to that
Unitholder's exempt status. A Form W-8 can be obtained from the Depositary. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional instructions.

If backup withholding applies, the Depositary is required to withhold 31
percent of any reportable payments made to the Unitholder or other payee. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.

Purpose of Substitute Form W-9

To prevent backup withholding on payments made to a Unitholder or other
payee with respect to Units purchased pursuant to the Offer, the Unitholder is
required to notify the Depositary of the Unitholder's correct TIN by completing
the Substitute Form W-9 provided above, and to certify (i) that the TIN provided
on Substitute Form W-9 is correct (or that such Unitholder is awaiting a TIN)
and (ii) that the Unitholder either (A) is exempt from backup withholding, (B)
has not been notified by the Internal Revenue Service that the Unitholder is
subject to backup withholding as a result of a failure to report all interest or
dividends or (C) has been notified by the Internal Revenue Service that the
Unitholder is no longer subject to backup withholding. Failure to provide the
information requested on such Form or to make the certification requested may
subject the tendering Unitholder to 31% federal income tax withholding on
payments received by such Unitholder (or other payee) with respect to Units that
are accepted for payment pursuant to the Offer.

What Number to Give the Depositary

The Unitholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Units. If the Units are held in more than one name or are not held in the name
of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.

<PAGE>

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

PURPOSE OF SUBSTITUTE FORM W-9

The Purchaser is required to file an information return with the IRS and,
consequently, must get your correct TIN to report income paid to you. Use
Substitute Form W-9 to give your correct TIN to the Depositary and, when
applicable, (1) to certify the TIN you are giving is correct (or you are waiting
for a number to be issued), (2) to certify you are not subject to backup
withholding, or (3) to claim exemption from backup withholding if you are an
exempt payee. Giving your correct TIN and making the appropriate certifications
will prevent certain payments from being subject to backup withholding.

WHAT IS BACKUP WITHHOLDING?

Under certain conditions, the Purchaser or the Depositary must withhold and pay
to the IRS 31% of payments made to you pursuant to the Offer. This is called
"backup withholding." Payments that could be subject to backup withholding
include interest, dividends, broker and barter exchange transactions, rents,
royalties, nonemployee pay, and certain payments from fishing boat operators.
Real estate transactions are not subject to backup withholding.

If you give the Depositary your correct TIN, make the proper certifications, and
report all your taxable interest and dividends on your tax return, your payments
will not be subject to backup withholding. Payments you receive will be subject
to backup withholding if:

1. You do not furnish your TIN to the Depositary, or

2. The IRS tells the Purchaser that you furnished an incorrect TIN, or

3. The IRS tells you that you are subject to backup withholding because
you did not report all your interest and dividends on your tax return
(for reportable interest and dividends only), or

4. You do not certify to the Depositary that you are not subject to
backup withholding under 3 above (for reportable interest and dividend
accounts opened after 1983 only), or

5. You do not certify your TIN. See the Part III instructions below for
exceptions.

Certain payees and payments are exempt from backup withholding and information
reporting. See the Part II instructions below.

HOW TO GET A TIN

If you do not have a TIN, apply for one immediately. To apply, get Form SS-5,
Application for a Social Security Number Card (for individuals), from your local
office of the Social Security Administration, or Form SS-4, Application for
Employer Identification Number (for businesses and all other entities), from
your local IRS office.

If you do not have a TIN, write "Applied For" in the space for the TIN in Part 2
of Substitute Form W-9, complete the certification, sign and date the form (an
"Awaiting TIN Certification"), and give it to the Depositary. Backup
withholding, if applicable, will begin 7 days after the Depositary receives an
Awaiting TIN Certification and will continue until you furnish your TIN. If
within 60 days the Depositary receives your TIN on a new IRS Form W-9 or copy of
the Substitute Form W-9 provided herewith, the Depositary will return amounts
withheld through the date such IRS Form W-9 or Substitute Form W-9 is received.

NOTE: Writing "Applied For" on the form means that you have already applied for
a TIN OR that you intend to apply for one soon.

As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form and give it to the Depositary.

PENALTIES

FAILURE TO FURNISH TIN.--If you fail to furnish your correct TIN to the
Depositary, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not due to willful neglect

CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a
false statement with no reasonable basis that results in no backup withholding,
you are subject to a $500 penalty.

CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

MISUSE OF TINS.--If either the Depositary or the Purchaser discloses or uses
TINs in violation of Federal law, the Depositary or the Purchaser, as the case
may be, may be subject to civil and criminal penalties.

SPECIFIC INSTRUCTIONS

NAME.--If you are an individual, you must generally enter the name shown on your
social security card. However, if you have changed your last name, for instance,
due to marriage, without informing the Social Security Administration of the
name change, please enter your first name, the last name shown on your social
security card, and your new last name.

SOLE PROPRIETOR.--You must enter your individual name. (Enter either your SSN or
EIN in Part 2.) You may also enter your business name or "doing business as"
name on the business name line. Enter your name as shown on your social security
card and business name as it was used to apply for your EIN on Form SS-4

PART I--TAXPAYER IDENTIFICATION NUMBER (TIN)

If you are a sole proprietor, you may enter your SSN or EIN. Also see the chart
below for further clarification of name and TIN combinations. If you do not have
a TIN, follow the instructions under HOW TO GET A TIN above.

PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING

If you are exempt from backup withholding, you should still complete this form
to avoid possible erroneous backup withholding. Enter your correct TIN and write
"Exempt" in Part 2, and sign and date the form.

<PAGE>

The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, listed payees (1)
through (13), and a person registered under the Investment Advisors Act of 1940
who regularly acts as a broker are exempt. Payments subject to reporting under
sections 6041 and 6041A are generally exempt from backup withholding only if
made to payees described in items (1) through (7), except that a corporation
that provides medical and health care services or bills and collects payments
for such services is not exempt from backup withholding or information
reporting.

Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and payments
by certain fishing boat operators.

(1) A corporation.

(2) An organization exempt from tax under section 501(a), or an individual
retirement plan (IRA), or a custodial account under section 403(b)(7).

(3) The United States or any of its agencies or instrumentalities.

(4) A State, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities.

(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.

(6) An international organization or any of its agencies or
instrumentalities.

(7) A foreign central bank of issue.

(8) A dealer in securities or commodities required to register in the U.S.
or a possession of the U.S.

(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.

(10) A real estate investment trust.

(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.

(12) A common trust fund operated by a bank under section 584(a).

(13) A financial institution.

(14) A middleman known in the investment community as a nominee or listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.

(15) A trust exempt from tax under section 664 or described in section
4947.

Payments of dividends and patronage dividends generally not subject to backup
withholding also include the following:

o Payments to nonresident aliens subject to withholding under section
1441.

o Payments to partnerships not engaged in a trade or business in the
U.S. and that have at least one nonresident partner.

If you are a nonresident alien or a foreign entity not subject to backup
withholding, give the Depositary a completed Form W-8 Certificate of Foreign
Status.

PART III--CERTIFICATION

For a joint account, only the person whose TIN is shown in Part 2 should sign.

PRIVACY ACT NOTICE

Section 6109 requires you to give your correct TIN to persons who must file
information returns with the IRS to report interest, dividends, and certain
other income, paid to you, mortgage interest you paid, the acquisition or
abandonment of secured property, cancellation of debt, or contributions you made
to an IRA. The IRS uses the numbers for identification purposes and to help
verify the accuracy of your tax return. You must provide your TIN whether or not
you are required to file a tax return. Payers must generally withhold 31% of
taxable interest, dividend, and certain other payments to a payee who does not
give a TIN to a payer. Certain penalties may also apply.

<PAGE>

WHAT NAME AND NUMBER TO GIVE THE DEPOSITARY

FOR THIS TYPE OF ACCOUNT GIVE NAME AND SSN OF: FOR THIS TYPE OF ACCOUNT GIVE NAME AND EIN OF:
- ------------------------ --------------------- ------------------------ ---------------------
<S> <C> <C> <C>

1. Individual The individual 5. Sole proprietorship The owner(3)

2. Two or more individuals The actual owner of the 6. A valid trust, estate, or Legal entity(4)
(joint account) account or, if combined pension trust
funds, the first individual
on the account(1)

3. Custodian account of a minor The minor(2) 7. Corporate The corporation
(Uniform Gift to Minors Act)

4. a. The usual revocable savings The grantor-trustee(1) 8. Association, club, religious, The organization
trust (grantor is also trustee) charitable, educational, or
other tax-exempt organization

b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under state law

9. Partnership The partnership

10. A broker or registered nominee The broker or
nominee

11. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
state or local government,
school district, or prison)
that receives agricultural
program payments

</TABLE>
- --------------------------------------------------------------------------------

1. List first and circle the name of the person whose number you furnish.

2. Circle the minor's name and furnish the minor's SSN.

3. You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN.

4. List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN of the personal representative or trustee
unless the legal entity itself is not designated in the account title.)

NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.

EXHIBIT (a)(3)

PROCEDURES FOR WITHDRAWAL
OF
PREVIOUSLY TENDERED UNITS
OF
ARVIDA/JMB PARTNERS, L.P.

To Holders of Units of
Arvida/JMB Partners, L.P.
Who Have Tendered Units
Pursuant to the Offer of
Raleigh Capital Associates L.P.

Dear Unitholder:

In order for unitholders ("Unitholders") of Arvida/JMB Partners, L.P., a
Delaware limited partnership (the "Partnership"), to tender to Boreas Partners,
L.P. ("the Purchaser") units (the "Units") of the Partnership that have already
been tendered pursuant to the offer by Raleigh Capital Associates, L.P.
("Raleigh") for up to 185,000 Units, such Units must be withdrawn in accordance
with the applicable procedures set forth in Section 4 of the Raleigh Offer to
Purchase and the related Letter of Transmittal (which together constitute the
"Raleigh Offer").

UNITHOLDERS WHO DESIRE ASSISTANCE IN WITHDRAWING UNITS TENDERED PURSUANT TO
THE RALEIGH OFFER MAY CALL BEACON HILL PARTNERS, INC., THE PURCHASER'S
INFORMATION AGENT, AT (212) 843-8500 (COLLECT) or (800) 253-3814 (TOLL FREE).

With respect to withdrawals of Units, Section 4 of the Raleigh Offer
provides, in relevant part:

"For withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at the
address set forth on the back cover of [Raleigh] Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who
tendered the Units to be withdrawn and must be signed by the person(s)
who signed the Letter of Transmittal in the same manner as the Letter of
Transmittal was signed."

<PAGE>

will enable a holder to withdraw Units tendered pursuant to the Raleigh Offer.
This form, or any other proper notice of withdrawal which complies with the
withdrawal requirements of Section 4 of the Raleigh Offer, should be sent as
follows:

The Herman Group, Inc.
2121 San Jacinto Street, 26th Floor
Dallas, Texas 75221-9602
Facsimile No. (214) 999-9348 or 999-9323
For information call 1-800-992-6146

Upon proper withdrawal of Units from the Raleigh Offer, Units may be
tendered into the Boreas Offer, which will expire at 12:00 midnight, New York
City time, on August 14, 1996, unless further extended.

<PAGE>

INSTRUCTIONS

1. DELIVERY OF NOTICE OF WITHDRAWAL. If you are withdrawing Units
previously tendered pursuant to the Raleigh Offer to Purchase, please complete,
execute, detach and send the attached "Notice of Withdrawal of Previously
Tendered Units" of Arvida/JMB Partners, L.P. ("Notice of Withdrawal"), to The
Herman Group. The Herman Group must receive the Notice of Withdrawal prior to
12:00 midnight, New York City time, on July 26, 1996, unless further extended.
Receipt of the facsimile transmission of the Notice of Withdrawal should be
confirmed by telephone at the number set forth on the Notice of Withdrawal.

2. INADEQUATE SPACE. If any space provided in the Notice of Withdrawal is
inadequate, all such additional information should be listed on a separate
schedule and attached as part of the Notice of Withdrawal.

3. SIGNATURE ON NOTICE OF WITHDRAWAL. The Notice of Withdrawal must be
signed, as applicable, by the person(s) who signed the Letter of Transmittal
related to the Raleigh Offer, in the same manner as such Letter of Transmittal
was signed. The signatures must correspond exactly with the name(s) as they
appear on the Partnership records. If any Units tendered pursuant to the Raleigh
Offer are registered in the names of two or more joint holders, all such holders
must sign, as applicable, the Notice of Withdrawal. If the Notice of Withdrawal
is signed by any trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or others acting in a fiduciary capacity, such persons
should so indicate when signing and must submit proper evidence of their
authority to act.

4. GUARANTEE OF SIGNATURES. If the signature was guaranteed on the Letter
of Transmittal, then it must be guaranteed on the Notice of Withdrawal.

<PAGE>

NOTICE OF WITHDRAWAL
of
Previously Tendered
UNITS
of
ARVIDA/JMB PARTNERS L.P.

TO: THE HERMAN GROUP, INC.

By Hand/Overnight Delivery
THE HERMAN GROUP, INC.
26th Floor
2121 San Jacinto Street
Dallas, Texas 75221-9602
By Facsimile 1-212-999-9348
Confirm by telephone 1-800-992-6146

Gentlemen:

The following units (the "Units") of Arvida/JMB Partners, L.P. (the
"Partnership") previously tendered to Raleigh Capital Associates, L.P. are
hereby withdrawn. A failure to complete the Section "Number of Units Tendered"
shall be deemed to indicate the intent of the undersigned that all Units
tendered to Raleigh Capital Associates, L.P. are hereby withdrawn.

All registered Unitholder(s) must sign exactly as name(s) appear(s) on the
Partnership records. See Instruction 3.

_____________________________________________________
(Print Name(s))
_____________________________________________________

_____________________________________________________ Number of
(Signature(s)) Units Tendered:________

_____________________________________________________ Dated:_________________

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

If signing as a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please provide the following information and see
Instruction 3.

Name(s) and
Capacity:_________________________________________________

Address:__________________________________________________

City, State:______________________________________________ Zip Code___________

Area Code and Tel. No._________________________________________________________

===============================================================================

(See Instructions on second page)

<PAGE>

================================================================================

SIGNATURE GUARANTEE

(To be completed only if Signatures were guaranteed on original Letter of
Transmittal)

Name and Address of Eligible Institution______________________________________

______________________________________________________________________________

Authorized Signature_____________________________

Title____________________________________________

Name_____________________________________________ Date______________, 1996

===============================================================================

EXHIBIT (a)(4)

PROCEDURES FOR WITHDRAWAL
OF
PREVIOUSLY TENDERED UNITS
OF
ARVIDA/JMB PARTNERS, L.P.

To Holders of Units of
Arvida/JMB Partners, L.P.
Who Have Tendered Units
Pursuant to the Offer of
Walton Street Capital
Acquisition Co. III, L.L.C.

Dear Unitholder:

In order for unitholders ("Unitholders") of Arvida/JMB Partners, L.P., a
Delaware limited partnership (the "Partnership"), to tender to Boreas Partners,
L.P. ("the Purchaser") units (the "Units") of the Partnership that have already
been tendered pursuant to the offer by Walton Street Capital Acquisition Co.
III, L.L.C. ("Walton") for up to 185,000 Units, such Units must be withdrawn in
accordance with the applicable procedures set forth in Section 4 of the Walton
Offer to Purchase and the related Letter of Acceptance (which together
constitute the "Walton Offer").

UNITHOLDERS WHO DESIRE ASSISTANCE IN WITHDRAWING UNITS TENDERED PURSUANT TO
THE WALTON OFFER MAY CALL BEACON HILL PARTNERS, INC., THE PURCHASER'S
INFORMATION AGENT, AT (212) 843-8500 (COLLECT) OR AT (800) 253-3814 (TOLL FREE).

With respect to withdrawals of Units, Section 4 of the Walton Offer
provides, in relevant part:

"For withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary/Information Agent
at its address set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name(s) of the person(s) who
tendered the Interests to be withdrawn, the number of Interests to be
withdrawn and the name(s) of the registered holder(s) of the Interests, if
different from that of the person(s) who tendered such Interests. Such
notice of withdrawal must also be signed by the person(s) who signed the
Letter of Acceptance in the same manner as the Letter of Acceptance was
signed (including any signature guarantees, if applicable)."

<PAGE>

In connection with the offer to purchase Units by the Purchaser described
in the Offer to Purchase of the Purchaser, dated July 18, 1996 (the "Purchaser
Offer to Purchase"), and the related Letter of Transmittal (which together
constitute the "Boreas Offer"), the Purchaser, for the convenience of the
Unitholders, has enclosed a form of "Notice of Withdrawal" which, if properly
completed and timely delivered to Trust Company of America,
Depositary/Information Agent for the Walton Offer, will enable a holder to
withdraw Units tendered pursuant to the Walton Offer. This form, or any other
proper notice of withdrawal which complies with the withdrawal requirements of
Section 4 of the Walton Offer, should be sent as follows:

Trust Company of America
P.O. Box 3287

Englewood, CO 80155-9758
Facsimile No. (303) 705-6171
For information call (800) 797-6812

Upon proper withdrawal of Units from the Walton Offer, Units may be
tendered into the Boreas Offer, which will expire at 12:00 midnight, New York
City time, on July 26, 1996, unless further extended.

<PAGE>

INSTRUCTIONS

1. DELIVERY OF NOTICE OF WITHDRAWAL. If withdrawing Units previously
tendered pursuant to the Walton Offer to Purchase, please complete, execute,
detach and send the attached "Notice of Withdrawal" of Previously Tendered Units
of Arvida/JMB Partners, L.P. ("Notice of Withdrawal"), to Trust Company of
America, which must be received prior to 12:00 midnight, New York City time, on
July 26, 1996, unless further extended. Receipt of the facsimile transmission of
the Notice of Withdrawal should be confirmed by telephone at the number set
forth on the Notice of Withdrawal.

2. INADEQUATE SPACE. If the space provided in the Notice of Withdrawal is
inadequate, all such additional information should be listed on a separate
schedule and attached as part of the Notice of Withdrawal.

3. SIGNATURE ON NOTICE OF WITHDRAWAL. The Notice of Withdrawal must be
signed, as applicable, by the person(s) who signed the Letter of Acceptance
related to the Walton Offer, in the same manner as such Letter of Acceptance was
signed. The signatures must correspond exactly with the name(s) as they appear
on the Partnership records. If any Units tendered pursuant to the Walton Offer
are registered in the names of two or more joint holders, all such holders must
sign, as applicable, the Notice of Withdrawal. If the Notice of Withdrawal is
signed by any trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or others acting in a fiduciary capacity, such persons
should so indicate when signing and must submit proper evidence of their
authority to act.

4. GUARANTEE OF SIGNATURES. If the signature was guaranteed on the Letter
of Transmittal, then it must be guaranteed on the Notice of Withdrawal.

<PAGE>

NOTICE OF WITHDRAWAL
of
PREVIOUSLY TENDERED
UNITS
of
ARVIDA/JMB PARTNERS L.P.

TO: TRUST COMPANY OF AMERICA

By Hand/Overnight Delivery
TRUST COMPANY OF AMERICA
7103 South Revere Parkway
Englewood, CO 80112
By Facsimile (303) 705-6171
Confirm by telephone (800) 797-6812

Gentlemen:

The following units (the "Units") of Arvida/JMB Partners, L.P. (the
"Partnership") previously tendered to Walton Street Capital Acquisition Co. III,
L.L.C. are hereby withdrawn. A failure to complete the Section "Number of Units
Tendered" shall be deemed to indicate the intent of the undersigned that all
Units tendered to Walton Street Capital Acquisition Co. III, L.L.C. are hereby
withdrawn.

===============================================================================
DESCRIPTION OF UNIT(S) WITHDRAWN
AND
SIGNATURES OF UNITHOLDERS
- -------------------------------------------------------------------------------
All registered Unitholder(s) must sign exactly as name(s) appear(s) on the
Partnership records. See Instruction 3.

_____________________________________________________
(Print Name(s))

_____________________________________________________ Number of
(Signature(s)) Units Tendered:________

_____________________________________________________ Dated:_________________

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

Name(s) and
Capacity:________________________________________________

Address:_________________________________________________

City, State:_____________________________________________ Zip Code__________

Area Code and Tel. No._______________________________________________________

===============================================================================
(See Instructions on second page)

<PAGE>

===============================================================================

SIGNATURE GUARANTEE

(To be completed only if Signatures were guaranteed on original Letter of
Transmittal)

Name and Address of Eligible Institution_______________________________________

Authorized Signature_______________________________

Title______________________________________________

Name_______________________________________________ Date__________, 1996

===============================================================================

EXHIBIT (a)(5)

FOR IMMEDIATE RELEASE

Contact: Marc Weitzen
(212) 626-0888

ICAHN UNIT INITIATES TENDER OFFER

July 16, 1996 -- Boreas Partners, L.P., a Delaware limited partnership
affiliated with Carl C. Icahn, announced today that it is initiating a tender
offer (the "Offer") for up to 185,000 of the outstanding limited partnership
interests (the "Units") of ARVIDA/JMB PARTNERS, L.P., a Delaware limited
partnership, at a purchase price per Unit, net to the seller in cash, of $460.

Boreas stated that its Offer will compete with already outstanding offers
by Raleigh Capital Associates L.P., a Delaware limited partnership, offering a
purchase price of $435 per Unit and Walton Street Capital Acquisition Co. III,
L.L.C., a Delaware limited liability company, offering a purchase price of $420
per Unit.

EXHIBIT (a)(6)

This announcement is neither an offer nor a solicitation of an offer to sell
Units. The Offer is being made solely by the Offer to Purchase of Boreas
Partners, L.P., dated July 18, 1996, and the related Letter of Transmittal
and is not being made to, nor will tenders be accepted from or on behalf
of, Unitholders residing in any jurisdiction in which making or accepting
the Offer would violate that jurisdiction's laws. In those jurisdictions
where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be made
on behalf of Boreas Partners, L.P., if at all, only by one or
more registered brokers or dealers licensed under the laws
of such jurisdiction.

NOTICE OF OFFER TO PURCHASE FOR CASH
UP TO 185,000 UNITS OF LIMITED PARTNERSHIP OR
ASSIGNEE INTEREST
OF

ARVIDA/JMB PARTNERS, L.P.

AT
$460 NET PER UNIT
BY

BOREAS PARTNERS, L.P.

Boreas Partners, L.P. (the "Purchaser"), a Delaware limited partnership
affiliated with Carl C. Icahn, is offering to purchase up to 185,000 of the
outstanding units of limited partnership interest or assignee interest of
Arvida/JMB Partners, L.P., a Delaware limited partnership (the "Partnership"),
at a purchase price (the "Purchase Price") of $460 net per unit, less the amount
of distributions per unit, if any, by the Partnership from June 19, 1996 until
the date of payment of the Purchase Price, net to the Unitholder in cash,
without interest, upon the terms and subject to the conditions set forth in the
Purchaser's Offer to Purchase dated July 18, 1996 (the "Offer to Purchase"), and
in the related Letter of Transmittal (which, together with any supplements or
amendments, constitute the "Offer"). Outstanding units of limited partnership
interests or interests held by an assignee of limited partnership interests of
the Partnership are referred to herein as "Units" and the holders of such Units
are referred to herein as "Unitholders."

THE OFFER, AND THE WITHDRAWAL RIGHTS AND PRORATION PERIOD WITH RESPECT
THERETO, WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY,
AUGUST 14, 1996, UNLESS THE OFFER IS EXTENDED.

The Purchaser is making the Offer for the purpose of obtaining an equity
interest in the Partnership. The Purchaser may, if successful in acquiring a
substantial number of Units pursuant to the Offer, seek to acquire or influence
control of the business of the Partnership.

The Offer will expire at 12:00 midnight, New York City time, on Wednesday,
August 14, 1996, unless and until the Purchaser, in its sole discretion, shall
have extended the period of time for which the Offer is open (such date and
time, as extended, the "Expiration Date").

If the Purchaser makes a material change in the terms of the Offer, or if
it waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c) and 14d-6(d) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The minimum period during which the Offer must
remain open following any material change in the terms of the Offer, other than
a change in price or a change in percentage of securities sought or a change in
any dealer's soliciting fee, will depend upon the facts and circumstances,
including the materiality of the change. With respect to a change in price or,
subject to certain limitations, a change in the percentage of securities sought
or a change in any dealer's soliciting fee, a minimum of ten business days from
the date of such change is generally required to allow for adequate
dissemination to Unitholders. Accordingly, if prior to the Expiration Date, the
Purchaser increases (other than increases of not more than two percent of the
outstanding Units) or decreases the number of Units being sought, or increases
or decreases the consideration offered pursuant to the Offer, and if the Offer
is scheduled to expire at any time earlier than the tenth business day from the
date that notice of such increase or decrease is first published, sent or given
to Unitholders, the Offer will be extended at least until the expiration of such
ten business days. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time. The period of
time during which the Offer is open may be extended by the Purchaser, at any
time and from time to time, by giving notice of such extension to the Depositary
(as defined in the Offer to Purchase) prior to the Expiration Date (followed by
written notice) and by making a public announcement thereof.

For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment pursuant to the Offer, and thereby purchased, validly tendered Units
if, as and when the Purchaser gives oral or written notice to the Depositary (as
defined in the Offer to Purchase) of the Purchaser's acceptance of those Units
for payment pursuant to the Offer.

Tenders of Units made pursuant to the Offer are irrevocable, except that
Unitholders who tender their Units in response to the Offer will have the right
to withdraw their tendered Units at any time prior to the Expiration Date by
sending a written or facsimile transmission notice of withdrawal to the
Purchaser specifying the name of the person who tendered the Units to be
withdrawn, which notice must be signed by the person(s) who signed the Letter of
Transmittal in the same manner as the Letter of Transmittal was signed. In
addition, tendered Units may be withdrawn at any time after September 16, 1996,
unless the tender has theretofore been accepted for payment as provided above.

If tendering Unitholders tender more than the number of Units that the
Purchaser seeks to purchase pursuant to an Offer, the Purchaser will take into
account the number of Units so tendered and take up and pay for as nearly as may
be pro rata, disregarding fractions, according to the number of Units tendered
by each tendering Unitholder during the period during which the Offer remains
open with appropriate adjustments to avoid purchases that would violate the
Partnership Agreement (as defined in the Offer to Purchase).

The Tender Offer Documents (as defined below) and, if required, other
relevant materials will be mailed to record holders of Units and will be
furnished to brokers, banks and similar persons whose names, or whose nominees,
appear on the list of Unitholders, or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Units.

THE TENDER OFFER DOCUMENTS CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE
READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.

The terms of the Offer are more fully set forth in the Offer to Purchase
with respect to the Offer and the related Letter of Transmittal (the "Tender
Offer Documents"). Questions and requests for assistance or requests for copies
of the Tender Offer Documents may be directed to the Information Agent, as set
forth below, and copies will be furnished promptly at the Purchaser's expense.
No fees or commissions will be payable to brokers, dealers or other persons for
soliciting tenders of Units pursuant to the Offer. The Tender Offer Documents
contain terms and conditions, and the information required by Rule
14d-6(e)(1)(vii) under the Exchange Act, which are incorporated herein by
reference.

The Information Agent for the Offer is:

BEACON HILL PARTNERS, INC.

90 Broad Street
New York, New York 10004
(212) 843-8500 (Collect)
or
(800) 253-3814 (Toll Free)

July 18, 1996

EXHIBIT (a)(7)

ARVIDA/JMB PARTNERS, L.P.
900 No. Michigan Avenue
Chicago, IL 60611

June 27, 1996

Longacre Corp.
One Wall Street Court
Suite 980
New York, NY 10005

Attention: Ed Mattner, President

Dear Sirs:

You have requested that Arvida/JMB Managers, Inc. ("Manager"), as
the general partner of Arvida/JMB Partners, L.P. ("Partners"), provide you with
a copy of the list of the names and addresses of, and the number of interests
owned by each of, the limited partners of Partners (herein the "List").

Based on your agreement to use the List only in connection with a
tender offer made by you or any of your affiliates to all of the limited
partners of Partners in compliance with the requirements of Regulations 14D and
14E under the Securities Exchange Act of 1934 (the "Specified Purpose") and not
for any other purchase, and your agreement not to furnish the List to any person
other than to your affiliates and your respective directors, officers,
employees, agents and representatives for use solely for the Specified Purpose,
the undersigned on behalf of Partners hereby agrees to furnish the List to you
for the Specified Purpose.

As a condition to receipt of the List, you agree to dismiss (without
prejudice) any legal action which you may have brought against Manager or
Partners in Delaware or elsewhere seeking to compel Manager or Partners, or any
director, officer, employee, agent or representative thereof, to deliver the
List to you or any of your affiliates. You agree to promptly deliver to the
undersigned a court order evidencing such dismissal.

It is understood and agreed that this agreement shall not in any
manner prejudice your right at any future time to seek delivery of the List for
any other proper purpose.

If this meets with your agreement, please so indicate by signing a
counterpart of this letter in the space provided below. We have instructed the
transfer agent for Partners, Gemisys (attention Mr. Tom Young at 312/915-1383),
to deliver the List to you upon advice from us that we have received a signed
counterpart of this letter. You may contact him to make arrangements regarding
the format for delivery of the List.

<PAGE>

Very truly yours,

ARVIDA/JMB Partners, L.P.

By ARVIDA/JMB Managers, Inc.,
general partner

By: /s/ Gary Nickele
--------------------------

Its: Vice President
--------------------------

Agreed to and Accepted

LONGACRE CORP.

By: /s/ Marc Weitzen
--------------------------

Its:_________________________

Dated:_______________________

EXHIBIT (c)(1)

July 12, 1996

Mr. Carl C. Icahn
114 W. 47th Street, 19th Floor
New York, New York 10036

High River Limited Partnership
100 S. Bedford Road
Mt. Kisco, New York 10549

Gentlemen:

Raleigh Capital Associates L.P. ("Raleigh") is a Delaware limited
partnership, the general partner of which is Raleigh GP Corp. ("Raleigh GP"), a
Delaware corporation wholly-owned by Apollo Real Estate Advisors II, L.P.
("Apollo"). On June 19, 1996, Raleigh commenced a tender offer (the "Raleigh
Offer") for up to 185,000 of the outstanding limited partnership interests and
assignee interests (the "Units") in Arvida/JMB Partners, L.P., a Delaware
limited partnership (the "Partnership"), at a purchase price of $411 per Unit.
Raleigh increased the purchase price to $421 per Unit and further increased the
purchase price to $435 per Unit on July 10, 1996 ($435 per Unit, as such price
may be further increased by Raleigh from time to time subsequent to the date
hereof, being hereinafter referred to as the "Purchase Price") of the Raleigh
Offer is July 23, 1996. Raleigh filed a Tender Offer Statement on Schedule 14d-1
relating to the Raleigh Offer with the Securities and Exchange Commission (the
"Commission") on June 19, 1996 and such Schedule 14d-1 was subsequently amended
by Amendments No. 1, 2 and 3 thereto (such Schedule 14d-1, as so amended, being
hereinafter referred to as the "Raleigh Schedule 14d-1").

High River Limited Partnership ("High River"), a Delaware limited
partnership controlled by Carl C. Icahn ("Icahn"), has advised Raleigh that it
is prepared to commence a tender offer (the "High River Offer") for up to
185,000 Units at a purchase price in excess of $435 per Unit.

In order to permit each of the parties hereto to negotiate various
agreements, each of the parties agreed that:

1. If Raleigh gives notice ("Notice") to Icahn and High River that
negotiations have terminated or Icahn gives notice ("Notice") to Raleigh that
negotiations have terminated then, Raleigh shall immediately take all action
required to extend the tender offer such that the tender offer shall not expire
prior to the expiration of ten business days (computed in accordance with Rule
14e-1) from the date on which the Notice is given. Any Notice given prior to
noon on a business day shall be deemed to have been given on that business day
and any notice otherwise given shall be deemed given on the next business day.

<PAGE>

2. REMEDIES. It is understood and agreed that monetary damages would be an
inadequate remedy for violation of this letter, and in the case of an actual or
threatened breach by a party or any of its representatives, any one or more of
the other parties shall be entitled to relief by way of injunction, specific
performance or other equitable remedy, without proof of irrevocable harm and
without the need for posting of a bond.

3. MISCELLANEOUS. The validity, interpretation, enforceability and
performance of this letter shall be governed by and construed in accordance with
the laws of the State of New York, without reference to its conflicts of law
principles. The parties agree that any litigation relating to this letter shall
be brought in a federal or state court located in the Southern District of New
York and waive any objection to venue in any such court or to any claim that any
such court is an inconvenient forum. The provisions of this letter cannot be
amended, waived or modified unless such amendment, waiver or modification is in
writing and signed by the parties hereto. This letter supersedes any and all
prior or contemporaneous communications or agreements among the parties hereto
concerning the subject matter hereof, whether written or oral.

4. NOTICES. Any and all notices or any other communications shall be in
writing and shall be deemed given when received by the recipient including by
fax. Notices shall be directed to the respective addresses set fort below (or
such other address as the party to be notified may have requested in writing):

If to Icahn:

Mr. Carl C. Icahn
114 W. 47th Street, 19th Floor
New York, New York 10036
Tel. No. (212) 921-3355
Fax No. (212) 921-3359

If to High River:

High River Limited Partnership
100 S. Bedford Road
Mt. Kisco, New York 10549
Tel. No. (914) 242-7704
Fax No. (914) 242-9282

<PAGE>

In each case, with a copy to:

Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 W. 47th Street
New York, New York 10036
Tel. No. (212) 626-0888
Fax No. (212) 626-0799

If to Raleigh or Raleigh GP:

Mr. Michael Ashner
Raleigh GP Corp.
100 Jericho Quadrangle
Jericho, New York 11753
Tel. No. (516) 822-0022
Fax No. (516) 433-2777

With a copy to:

Mark Fisher, Esq.
Rosenman & Colin
575 Madison Avenue
New York, New York 10022
Tel. No. (212) 940-8877
Fax No. (212) 940-8776

<PAGE>

If the foregoing correctly sets forth our understanding, please so indicate
by signing the enclosed copy of this letter and returning it to the undersigned,
whereupon it will constitute a binding agreement among us.

Very truly yours,

RALEIGH CAPITAL ASSOCIATES L.P.
RALEIGH GP CORP.

------------------------------
By: Raleigh GP Corp.,
General Partner

/s/ PETER BRAVERMAN
------------------------------
By: Peter Braverman,
Vice President

Accepted and agreed to as
of the date first above written:

HIGH RIVER LIMITED PARTNERSHIP

By: Riverdale Investors Corp.

By: /s/ EDWARD E. MATTNER
-------------------------

EXHIBIT (c)(2)

RALEIGH CAPITAL ASSOCIATES L.P.

July 15, 1996

BY FACSIMILE
- ------------

Mr. Carl C. Icahn
114 W. 47th Street, 19th Floor
New York, New York 10036
Facsimile No. (212) 921-3359

High River Limited Partnership
100 S. Bedford Road
Mt. Kisco, New York 10549
Facsimile No. (914) 242-9292

Gentlemen:

Reference is made to that certain letter agreement from us to you dated
July 12, 1996 (the "Letter Agreement"). You and we each agree that,
notwithstanding anything to the contrary set forth in the Letter Agreement, any
Notice (as defined in the Letter Agreement) given prior to 6:00 p.m. on July 15,
1996 shall be deemed to have been given on that business day and any notice
given after 6:00 p.m. shall be deemed given on the next business day.

Very truly yours,

RALEIGH CAPITAL ASSOCIATES L.P.

By: Raleigh GP Corp., its
general partner

By: /S/ PETER BRAVERMAN
---------------------------

RALEIGH GP. CORP

By: /S/ PETER BRAVERMAN
---------------------------
Peter Braverman
Vice President

<PAGE>

Mr. Carl C. Icahn
July 15, 1996
Page 2

Accepted and Agreed to as of
the date first above written:

HIGH RIVER LIMITED PARTNERSHIP
By: Riverdale Investors Corp.

By: /s/ EDWARD E. MATTNER
--------------------------

--------------------------
Carl C. Icahn

cc: Marc Weitzen, Esq.

Gordon Altman Butowsky Weitzen Shalov & Wein
114 W. 47th Street
New York, New York 10036
Facsimile No. (212) 626-0799

EXHIBIT (c)(3)

RALEIGH CAPITAL ASSOCIATES L.P.

July 15, 1996

BY FACSIMILE
- ------------

Mr. Carl C. Icahn
114 W. 47th Street, 19th Floor
New York, New York 10036
Facsimile No. (212) 921-3359

High River Limited Partnership
100 S. Bedford Road
Mt. Kisco, New York 10549
Facsimile No. (914) 242-9292

Gentlemen:

Reference is made to that certain letter agreement from us to you dated
July 12, 1996 (the "Letter Agreement"). Raleigh Capital Associates L.P. and
Raleigh GP Corp. hereby give notice under Section 1 of the Letter Agreement
that, effective immediately, the Negotiation (as defined in the Letter
Agreement) has terminated.

Very truly yours,

RALEIGH CAPITAL ASSOCIATES L.P.

By: Raleigh GP Corp., its
general partner

By: /s/ PETER BRAVERMAN
----------------------------

RALEIGH GP. CORP

By: /s/ PETER BRAVERMAN
----------------------------
Peter Braverman
Vice President

cc: Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 W. 47th Street
New York, New York 10036
Facsimile No. (212) 626-0799