Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: CARLYLE INCOME PLUS, LTD. - II
Commission File No. 0-17705
Form 10-Q
Gentlemen:
Transmitted, for the above-captioned registrant, is the
electronically filed executed copy of registrant's current
report on Form 10-Q for the 3rd quarter September 30, 1996.
Thank you.
Very truly yours,
CARLYLE INCOME PLUS, LTD. - II
By: JMB Realty Corporation
Corporate General Partner
By:
Gailen J. Hull, Senior Vice President
and Principal Accounting Officer
GJH/jt
Enclosures
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended September 30, 1996 Commission file
number 0-17705
CARLYLE INCOME PLUS, L.P.-II
(Exact name of registrant as specified in its charter)
Delaware 36-3555432
(State of organization) (I.R.S. Employer
Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office)(Zip Code)
Registrant's telephone number, including area code 312-915-1987
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
____ _____ <PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . 18
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . . 22
Item 6. Exhibits and Reports on Form 8-K. . . . . . . 23
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
A s s e t s
--------------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
<S> --------- ------------
Current assets: <C> <C>
Cash and cash equivalents . . . . . . .$ 26,246,390 3,606,715
Interest, rents and other receivables. . 117,217 54,610
Prepaid expenses . . . . . . . . . . . . 20,893 11,986
---------- ----------
Total current assets . . . . . . . . . 26,384,500 3,673,311
---------- ----------
Investment property, at cost:
Land . . . . . . . . . . . . . . . . . . -- 4,586,545
Buildings and improvements . . . . . . . -- 16,793,928
---------- ----------
-- 21,380,473
Less accumulated depreciation. . . . . . -- 3,945,031
---------- ----------
Total investment property, net of
accumulated depreciation. . . . . . . -- 17,435,442
---------- ----------
<PAGE>
CARLYLE INCOME PLUS, LP - II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
Investment in unconsolidated affiliated
corporation, at equity . . . . . . . 23,559,417 24,284,252
Investment in unconsolidated
venture, at equity . . . . . . . . . 4,131,853 3,980,419
---------- ----------
$ 54,075,770 49,373,424
========== ==========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
--------------------------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . $ 50,379 21,939
Amounts due to affiliates . . . . . . 32,491 26,687
---------- ----------
Total current liabilities. . . . . . 82,870 48,626
---------- ----------
Tenant security deposits . . . . . . . . -- 107,369
---------- ----------
Commitments and contingencies
Total liabilities. . . . . . . . 82,870 155,995
---------- ----------
Venture partner's subordinated equity
in venture . . . . . . . . . . . . . . 7,031,889 5,523,770
Partners' capital accounts
(deficits):<PAGE>
CARLYLE INCOME PLUS, LP - II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
General partners:
Capital contributions. . . . . . . . . 25,000 25,000
Cumulative net earnings (losses) . . . 567,323 450,800
Cumulative cash distributions. . . . . (825,154) (771,032)
--------- ---------
(232,831) (295,232)
--------- ---------
Limited partners (64,269.53 interests):
Capital contributions, net of
offering costs and
purchase discounts. . . . . . . . . . 55,256,131 55,256,131
Cumulative net earnings (losses) . . . 11,295,167 7,061,904
Cumulative cash distributions. . . . .(19,357,456) (18,329,144)
---------- ----------
47,193,842 43,988,891
---------- ----------
Total partners' capital accounts . 46,961,011 43,693,659
---------- ----------
$ 54,075,770 49,373,424
========== ==========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1996 1995 1996 1995
-------- --------- ------- --------
<S> <C> <C> <C> <C>
Income:
Rental income . . . .$ 693,486 826,742 2,356,796 2,448,050
Interest income . . . .158,546 66,178 281,444 180,064
------- ------- ------- -------
852,032 892,920 2,638,240 2,628,114
------- ------- ------- -------
Expenses:
Depreciation. . . . . . -- 148,781 145,870 435,097
Property operating
expenses . . . . . . .296,595 378,636 1,143,182 1,196,731
Professional services . 33,225 -- 83,591 58,500
General and
administrative . . . . 29,278 75,217 168,595 134,876
-------- ------- -------- -------
359,098 602,634 1,541,238 1,825,204
-------- ------- -------- -------
Operating earnings
(loss) . . . . . . . .492,934 290,286 1,097,002 802,910<PAGE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
Partnership's share of
earnings of
unconsolidated
affiliated corporation . 339,584 299,347 951,264 856,867
Partnership's share of
operations of
unconsolidated venture . 42,492 (1,700,987) 151,434 (1,546,147)
Venture partner's
share of venture's
operations. . . . . . . . (159,618) (94,308) (374,076) (256,600)
------- -------- --------- --------
Net operating earnings
(loss) . . . . . . . . 715,392 (1,205,662) 1,825,624 (142,970)
Gain on sale of investment
property, net of venture
partner's share . . . . . 2,524,162 -- 2,524,162 --
-------- -------- ---------- ---------
Net earnings (loss) . $ 3,239,554 (1,205,662) 4,349,786 (142,970)
======= ======== ========= =========
Net earnings (loss)
per limited partnership
interest:
Net operating earnings
(loss) . . . . . . $ 10.58 (17.82) 26.99 (2.11)
Net gain on sale of
investment property 38.88 -- 38.88 --
-------- -------- ---------- ---------
$ 49.46 (17.82) 65.87 (2.11)
======= ======== ======== =========<PAGE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
Cash distributions
per limited
partnership
interest . . . . . . .$ -- 8.00 16.00 32.00
======= ======== ======= ========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
-------- ------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . $ 4,349,786 (142,970)
Items not requiring (providing)
cash or cash equivalents:
Depreciation. . . . . . . . . . 145,870 435,097
Total gain on sale of investment
property . . . . . . . . . . . (3,658,205) --
Partnership's share of earnings
of unconsolidated affiliated corporation,
net of dividends . . . . . . . 724,835 612,440
Partnership's share of operations of
unconsolidated venture, net of
distributions. . . . . . . . . (151,434) 1,546,147
Venture partner's share of
venture's operations and
gain on sale . . . . . . . . . 1,508,119 256,600
Changes in:
Interest, rents and
other receivables. . . . . . . (62,607) 20,915
Prepaid expenses. . . . . . . . (8,907) (7,103)
Accounts payable. . . . . . . . 28,440 43,634 <PAGE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1996 1995
------------ -------
Amounts due to affiliates . . . 5,804 (13,081)
Unearned rents. . . . . . . . . -- 56,538
Accrued real estate taxes . . . -- 84,949
Tenant security deposits. . . . (107,369) (2,854)
---------- ----------
Net cash provided by (used in)
operating activities . . . . . 2,774,332 2,890,312
---------- ----------
Cash flows from investing activities:
Net sales and maturities
(purchases) of short-term
investments. . . . . . . . . . . . -- 2,109,006
Additions to investment property. . (48,234) (93,142)
Partnership's distributions from
unconsolidated venture . . . . . . -- 250,000
Cash proceeds from sale of investment
property, net of selling expenses . 20,996,011 --
---------- ----------
Net cash provided by (used in) investing
activities . . . . . . . . . . . . 20,947,777 2,265,864
---------- ----------
Cash flows from financing activities:
Distributions to venture . . . . .
partner. . . . . . . . . . . . . . -- (325,500)
Distributions to limited partners . (1,028,312) (2,056,625)
Distributions to general partners . (54,122) (108,243)
---------- ----------
Net cash provided by (used in) financing
activities . . . . . . . . . . . . (1,082,434) (2,490,368)
---------- ---------- <PAGE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . 22,639,675 2,665,808
Cash and cash equivalents,
beginning of year. . . . . . . . . 3,606,715 2,024,097
--------- ----------
Cash and cash equivalents,
end of period. . . . . . . . . . . $ 26,246,390 4,689,905
============ ==========
Supplemental disclosure of
cash flow information:
Cash paid for mortgage and
other interest . . . . . . . . . . $ -- --
======== ==========
Non-cash investing and
financing activities . . . . . . . $ -- --
======== ==========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
CARLYLE INCOME PLUS LIMITED - II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996 and 1995
(Unaudited)
GENERAL
Readers of this quarterly report should refer to the
Partnership's audited financial statements for the fiscal year
ended December 31, 1995, which are included in the Partnership's
1995 Annual Report, as certain footnote disclosures which would
substantially duplicate those contained in such audited
financial statements have been omitted from this report.
The preparation of financial statements in accordance with
GAAP requires the Partnership to make estimates and assumptions
that affect the reported or disclosed amount of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from these estimates.
Statement of Financial Accounting Standards No. 121 was
adopted by the Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is
permitted to engage in various transactions involving the
Corporate General Partner and its affiliates including the
reimbursement for salaries and salary-related expenses of its
employees, certain of its officers, and other direct expenses
relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions <PAGE>
CARLYLE INCOME PLUS LIMITED - II
( A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
and other expenses required to be paid by the Partnership to the
General Partners and their affiliates as of September 30, 1996
and for the nine months ended September 30, 1996 and 1995 were
as follows:
Unpaid at
September 30,
1996 1995 1996
------ ----- ----------
Insurance commissions. . .$ 588 2,984 --
Reimbursement (at cost)
for salary and salary-
related expenses related
to the on-site and other
costs for the Partnership
and its investment
properties. . . . . . . . 40,642 85,771 32,491
------ ------ ------
$ 41,230 88,755 32,491
====== ====== ======
All amounts payable to the General Partners and their
affiliates do not bear interest and are expected to be paid in
future periods.
ASHBY APARTMENTS
The property was classified as held for sale as of April 1,
1996 and therefore has not been subject to continued
depreciation as of that date. The accompanying consolidated
financial statements include $2,495,749 and $2,459,571 of
revenues for the nine months ended September 30, 1996 and 1995
and $1,289,052 and $1,631,928 of operating expenses for the nine
months ended September 30, 1996 and 1995, respectively. The
property had a net carrying value of $17,435,442 at December 31,
1995.
In July 1996,the CIP/Ashby joint venture ( the "venture")
entered into a contract with a potential purchaser for the sale
of this property for a sale price of $21,400,000 (before selling
costs), payable in cash at closing. Pursuant to such contract,<PAGE>
CARLYLE INCOME PLUS LIMITED - II
( A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
the property was sold August 26, 1996. The venture has
recognized a gain on sale of $3,658,205 for financial reporting
purposes (of which the Partnership's share is $2,524,162),
primarily as a result of a $7,572,479 value impairment recorded
by the venture in 1994 (of which the Partnership's share was
$5,225,011), and expects to recognize a loss of approximately
$3,565,000 for Federal income tax reporting purposes in 1996 (of
which the Partnership's share will be approximately $2,460,000).
1225 CONNECTICUT AVENUE
1225 Investment Corporation incurred approximately
$5,300,000 of anticipated tenant improvement costs, lobby
renovation and sprinkler system costs related to the lease
extension for Ernst & Young, as well as tenant improvement costs
for other tenants in 1994 and 1995. Such costs were paid during
1994 and 1995 from the net proceeds of approximately $5,300,000
from the January 1994 refinancing of the existing mortgage loan
secured by the property. The property remains 100% occupied at
September 30, 1996.
LANDINGS SHOPPING CENTER
Occupancy at the property increased to 67% at September
30, 1996, from 65% at June 30, 1996, but down from 82% at March
31, 1996 primarily as a result of the vacating of four tenants
which occupied approximately 16,700 square feet. The
JMB/Landings joint venture (the "venture") is pursuing its legal
remedies concerning the approximately $148,000 in aggregate
arrearages due from various tenants, including approximately
$45,000 in delinquent rents due from a tenant occupying 11,200
square feet whose parent company filed for bankruptcy
protection earlier in 1996. In addition, tenant leases
representing approximately 22% and 26% of the leasable space at
<PAGE>
CARLYLE INCOME PLUS LIMITED - II
( A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
the property are scheduled to expire in 1997 and 1998,
respectively, not all of which are expected to be renewed. The
venture is conserving its working capital in order to fund
budgeted 1996 capital and tenant costs of approximately $130,000
(most of which has not been expended at September 30, 1996) and
for potential future costs in connection with the lease-up of
the vacant space, for which the venture is actively pursuing
replacement tenants. <PAGE>
<TABLE>
CARLYLE INCOME PLUS LIMITED - II
( A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
UNCONSOLIDATED INVESTMENTS - SUMMARY INFORMATION
JMB/LANDINGS
Summary income statement information for JMB/Landings Associates for the nine
months ended September 30, 1996 and 1995 is as follows:
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Total income. . . . . . . $856,057 975,791
========= =========
Operating
earnings (loss). . . . . $302,867 (3,092,294)
========= =========
Partnership's share
of earnings (loss). . . . $151,434 (1,546,147)
========= =========
<PAGE>
CARLYLE INCOME PLUS LIMITED - II
( A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)
(Unaudited)
1225 CONNECTICUT AVENUE, N.W.
Summary income statement information for 1225 Investment Corporation for the nine months ended
September 1996 and 1995 is as follows:
1996 1995
--------- ---------
Total income. . . . . .$ 5,491,621 5,108,000
========= =========
Operating earnings. . .$ 2,184,805 1,968,000
========= =========
Partnership's share of
earnings . . . . . . .$ 951,264 856,867
========= =========
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments (consisting solely of normal
recurring adjustments) necessary for a fair presentation have been made to the accompanying
figures as of September 30, 1996 and for the three and nine months ended September 30, 1996 and
1995.
<FN>
/TABLE
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying
consolidated financial statements for additional information
concerning the Partnership's investments.
During the second quarter of 1996 some of the Limited Partners
in the Partnership received from an unaffiliated third party an
unsolicited tender offer to purchase up to 2,997 Interests in
the Partnership at $350 per Interest. The Partnership
recommended against acceptance of this offer on the basis that,
among other things, the offer price was inadequate. In June such
offer expired with approximately 564 Interests being purchased
by such unaffiliated third party pursuant to such offer. In
addition, the Partnership has, from time to time, received
inquiries from other third parties that may consider making
offers for Interests, including requests for the list of Limited
Partners in the Partnership. These inquiries are generally
preliminary in nature. There is no assurance that any other
third party will commence an offer for Interests, the terms of
any such offer or whether any such offer, if made, will be
consummated, amended or withdrawn. The board of directors of JMB
Realty Corporation ("JMB") the corporate general partner of the
Partnership, has established a special committee (the "Special
Committee") consisting of certain directors of JMB to deal with
all matters relating to tender offers for Interests in the
Partnership, including any and all responses to such tender
offers. The Special Committee has retained independent counsel
to advise it in connection with any potential tender offers for
Interests and has retained Lehman Brothers Inc. as financial
advisor to assist the Special Committee in evaluating and
responding to any additional potential tender offer for
Interests.
In an effort to reduce Partnership operating expenses, the
Partnership has elected to make semiannual rather than quarterly
distributions of available operating cash flow beginning in
November 1995. After reviewing the Partnership's properties and
marketplaces in which they operate, the General Partners of the
Partnership expect to be able to conduct an orderly liquidation
of its investment portfolio as quickly as practicable.
Therefore, the affairs of the Partnership are expected to be
wound up no later than December 31, 1999 (sooner if the
properties are sold in the nearer term), barring any unforeseen
economic developments.
<PAGE>
Although the Partnership expects to distribute sale proceeds
from the disposition of the Partnership's remaining investment
properties, without a dramatic improvement in market conditions,
aggregate distributions from sale proceeds received by the
Limited Partners over the entire term of the Partnership are
expected to approximate slightly more than half of their
original investment. These aggregate sale proceeds when
combined with aggregate distributions of net cash flow over the
entire term of the Partnership are expected to approximate
slightly less then the Limited Partners' original investment.
RESULTS OF OPERATIONS
The increase in cash and cash equivalents at September 30,
1996 as compared to December 31, 1995 is attributable primarily
to the Partnership's consolidated venture's, (CIP/Ashby) receipt
of approximately $20,996,000 (of which the Partnership's share
is approximately $14,487,000) of sale proceeds from the August
1996 sale of the Ashby at McLean Apartments. Such proceeds are
expected to be distributed to the Partnership and the affiliated
venture partner in the fourth quarter of 1996. Additional
increases in cash and cash equivalents are due primarily to the
Partnership's receipt of approximately $1,676,000 of dividends
from 1225 Investment Corporation in 1996 and to the operations
of CIP/Ashby during the nine months ended September 30, 1996.
These increases were partly offset by the Partnership's
semiannual distribution in May 1996 of approximately $1,082,000
($16 per Interest to the Limited Partners and $54,122 to the
General Partners).
The increase in interest, rents and other receivables at
September 30, 1996 as compared to December 31, 1995 is
attributable primarily to CIP/Ashby's temporary investment of
the Ashby at McLean Apartments sale proceeds in interest bearing
cash equivalents at September 30, 1996.
The decreases in investment property and tenant security
deposits at September 30, 1996 as compared to December 31, 1995
are due to the August 1996 sale of the Ashby at McLean
Apartments.
The increase in accounts payable at September 30, 1996 as
compared to December 31, 1995 is attributable primarily to fees
due by the Partnership in connection with tender offer matters,
as discussed above, and for sale-related fees due by CIP/Ashby
at September 30, 1996.
The decreases in rental income and property operating expenses
for the three and nine months ended September 30, 1996 as
compared to the three and nine months ended September 30, 1995
are attributable primarily to CIP/Ashby's August 1996 sale of
the Ashby at McLean Apartments.<PAGE>
The decreases in depreciation expense for the three and nine
months ended September 30, 1996 as compared to the three and
nine months ended September 30, 1995 are attributable to the
suspension of depreciation as of April 1, 1996 on the Ashby at
McLean Apartments, as such property was classified as held for
sale as of April 1, 1996.
Fees for professional services increased for the three and
nine months ended September 30, 1996 as compared to the three
and nine months ended September 30, 1995 primarily as a result
of expenses incurred in connection with tender offer matters, as
discussed above.
The increase in general and administrative expenses for the
nine months ended September 30, 1996 as compared to the nine
months ended September 30, 1995 is attributable primarily to the
timing of the recognition of costs for certain outsourcing
services and the timing of the recognition of certain printing
costs in 1996. The decrease in general and administrative
expenses for the three months ended September 30, 1996 as
compared to the three months ended September 30, 1995 is
attributable primarily to the recognition of certain prior year
reimbursable costs to affiliates of the General Partners during
the three months ended September 30, 1995.
The increases in Partnership's share of earnings of
unconsolidated affiliated corporation for the three and nine
months ended September 30, 1996 as compared to the three and
nine months ended September 30, 1995 are due primarily to
higher effective rents and a corresponding increase in rental
income at the 1225 Connecticut Avenue, N.W. office building in
1996.
Partnership's share of operations of unconsolidated venture
for the three and nine months ended September 30, 1995 contain
the Partnership's share ($1,750,000) of the provision for value
impairment record by the JMB/Landings joint venture. Such
increases were partly offset by a decrease in the operations of
JMB/Landings which resulted primarily from a decrease in
occupancy and a corresponding decrease in rental income at The
Landings Shopping Center in 1996.
The increases in venture partner's share of venture's
operations for the three and nine months ended September 30,
1996 as compared to the three and nine months ended September
30, 1995 are attributable primarily to an increase in the
operations of the CIP/Ashby venture primarily as a result of the
suspension of depreciation at the Ashby at McLean investment
property, as such property was classified as held for sale as of
April 1, 1996. The related change in venture partner's
subordinated equity in venture at September 30, 1996 as compared
to December 31, 1995 is attributable primarily to the venture
partner's share ($1,134,043) of the gain on sale of the Ashby at
McLean Apartments and to the aforementioned suspension of
depreciation at the property.
The gain on sale of investment property is attributable to the
August 1996 sale of the Ashby at McLean Apartments.<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
<CAPTION>
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's
investment properties:
1995 1996
--------------------------------------------------
At At At At At At At At
3/31 6/30 9/3012/31 3/31 6/30 9/30 12/31
---- ---- --------- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. The Landings Shopping
Center
Sarasota, Florida. 93% 91% 88% 95% 82% 65% 67%
2. The Ashby at McLean
Apartments
McLean, Virginia . 97% 97% 98% 96% 97% 96% N/A
3. 1225 Connecticut Avenue
Washington, D.C. . 100% 100% 100% 100% 100% 100% 100%
<FN>
- --------------
An N/A indicates that the property was not owned by the Partnership at the end of the quarter.
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3. The Prospectus of the Partnership dated May 24, 1988,
as supplemented August 1988, April 28, 1989, December
22, 1989, February 28, 1990 and June 5 1990 as filed
with the Commission pursuant to Rules 424 (b) and 424
(c), is hereby incorporated herein by reference to the
Partnership's report for December 31, 1993 on Form 10-K
(File No. 0-17705) dated March 25, 1994.
3.1 Agreement of Limited Partnership is set forth as
Exhibit A of the Partnership's Prospectus, which is
incorporated herein by reference to the Partnership's
Registration Statement on Form S-11 (File No. 33-19463
dated May 24, 1988.
10.1- *Material Contracts
10.10
10.11 Closing statement dated January 28, 1994 relating to
the refinancing by 1225 Investment Corporation which
owns 1225 Connecticut Avenue in Washington, D.C., are
hereby incorporated by reference to the Partnership's
report for March 31, 1994 on Form 10-Q (File No. 0-
17705) dated May 11, 1994.
10.12 Secured promissory note dated January 28, 1994 in the
amount of $6,500,000 relating to the refinancing by
1225 Investment Corporation which owns 1225 Connecticut
Avenue in Washington, D.C., are hereby incorporated by
reference to the Partnership's report for March 31,
1994 on Form 10-Q (File No. 0-17705) dated May 11,
1994.
10.13 Secured promissory note dated January 28, 1994 in the
amount of $500,000 relating to the refinancing by 1225
Investment Corporation which owns 1225 Connecticut
Avenue in Washington, D.C., are hereby incorporated by
reference to the Partnership's report for March 31,
1994 on Form 10-Q (File No. 0-17705) dated May 11,
1994.
10.14 Real Property Purchase Agreement between CIP/Ashby
Partners and WRIT Limited Partnership dated July 19,
1996 relating to the sale by the Partnership (through
the CIP/Ashby joint venture) of the Ashby at Mclean
Apartments is hereby incorporated herein by reference
to the Partnership's report for August 26, 1996 on Form
8-K (File No. 0-17705) dated September 6, 1996.
27. Financial Data Schedule
(b) The following report on Form 8-K has been filed for the
quarter covered by this report.
(i) The Partnership report on Form 8-K (File No. 0-
17705) for August 26, 1996 describing the sale of the
Ashby at Mclean Apartments was filed. The report was
dated September 6, 1996.
_____________
*Previously filed as exhibits to the Partnership's
Registration Statement (as amended) on Form S-11 (File
No. 33- 194463) to the Securities Act of 1933.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CARLYLE INCOME PLUS, L.P.-II
BY: JMB Realty Corporation
(Corporate General Partner)
By: Gailen J. Hull,
Senior Vice President
Date: November 8, 1996
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following person
in the capacity and on the date indicated.
Gailen J. Hull,
Principal Accounting Officer
Date: November 8, 1996<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH
REPORT.
</LEGEND>
<CIK> 0000827086
<NAME> CARLYLE INCOME PLUS, L.P. - II
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 26,246,390
<SECURITIES> 0
<RECEIVABLES> 138,110
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 26,384,500
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 54,075,770
<CURRENT-LIABILITIES> 82,870
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 46,961,011
<TOTAL-LIABILITY-AND-EQUITY> 54,075,770
<SALES> 2,356,796
<TOTAL-REVENUES> 2,638,240
<CGS> 0
<TOTAL-COSTS> 1,289,052
<OTHER-EXPENSES> 252,186
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,097,002
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,825,624
<DISCONTINUED> 2,524,162
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,349,786
<EPS-PRIMARY> 65.87
<EPS-DILUTED> 65.87
<PAGE>
</TABLE>
