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, 1997.
Thank you.
Very truly yours,
CARLYLE INCOME PLUS, L.P-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, 1997 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 . . . . . . . . . . . . . . . . . 19
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, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
A s s e t s
--------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
<S> --------- ------------
Current assets: <C> <C>
Cash and cash equivalents . . . . . . $ 4,133,357 3,933,927
Interest, rents and other receivables. . 15,430 25,348
---------- ----------
Total current assets . . . . . . . . . 4,148,787 3,959,275
---------- ----------
Investment in unconsolidated affiliated
corporation, at equity. . . . . . . . . . 20,596,861 20,418,337
Investment in unconsolidated venture,
at equity . . . . . . . . . . . . . . . . 4,334,184 4,133,922
---------- ----------
$ 29,079,832 28,511,534
========== ==========
<PAGE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
--------------------------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . .$ 5,784 71,858
Amounts due to affiliates . . . . . . . 10,702 5,388
---------- ----------
Total current liabilities. . . . . . . 16,486 77,246
---------- ----------
Commitments and contingencies
Total liabilities. . . . . . . . . 16,486 77,246
---------- ----------
Venture partner's subordinated equity
in venture . . . . . . . . . . . . . . . 10,957 41,910
Partners' capital accounts
(deficits):<PAGE>
CARLYLE INCOME PLUS, L.P. - II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
General partners:
Capital contributions. . . . . . . . . 25,000 25,000
Cumulative net earnings (losses) . . . 497,228 443,106
Cumulative cash distributions. . . . . (960,458) (906,336)
--------- ---------
(438,230) (438,230)
--------- ---------
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) . . . 12,623,367 8,935,045
Cumulative cash distributions. . . . .(38,388,880) (35,360,568)
---------- ----------
29,490,618 28,830,608
---------- ----------
Total partners' capital accounts . 29,052,388 28,392,378
---------- ----------
$ 29,079,832 28,511,534
========== ==========
<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, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
-------- --------- ------- --------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . .$ -- 693,486 -- 2,356,796
Interest income . . . .45,215 158,546 142,893 281,444
------- ------- ------- -------
45,215 852,032 142,893 2,638,240
------- ------- ------- -------
Expenses:
Depreciation. . . . . . -- -- -- 145,870
Property operating
expenses . . . . . . . -- 296,595 -- 1,143,182
Professional services . 263 33,225 55,521 83,591
General and
administrative . . . .61,011 29,278 141,115 168,595
------- ------- ------- -------
61,274 359,098 196,636 1,541,238
------- ------- ------- -------
Operating earnings
(loss) . . . . . . . .(16,059) 492,934 (53,743) 1,097,002<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 . 542,758 339,584 1,593,564 951,264
Partnership's share of
operations of
unconsolidated venture . 61,111 42,492 200,262 151,434
Venture partner's
share of venture's
operations. . . . . . . . 4,292 (159,618) 2,362 (374,076)
-------- --------- -------- ---------
Net operating earnings
(loss) . . . . . . . . 592,102 715,392 1,742,445 1,825,624
Gain on sale of investment
property, net of venture
partner's share . . . . . -- 2,524,162 -- 2,524,162
-------- --------- -------- ---------
Net earnings (loss) . $ 592,102 3,239,554 1,742,445 4,349,786
======== ========= ======== =========
Net earnings (loss)
per limited partnership
interest:
Net operating earnings
(loss) . . . . . . $ 9.21 10.58 26.27 26.99
Net gain on sale of
investment property -- 38.88 -- 38.88
-------- -------- ---------- ---------
$ 9.21 49.46 26.27 65.87
======== ======== ======== =========<PAGE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
Cash distributions
per limited
partnership
interest . . . . . . .$ -- -- 16.00 16.00
======= ======== ======= ========
<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, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
-------- ------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . $ 1,742,445 4,349,786
Items not requiring (providing)
cash or cash equivalents:
Depreciation. . . . . . . . . . -- 145,870
Total gain on sale of investment
property . . . . . . . . . . . -- (3,658,205)
Partnership's share of earnings
of unconsolidated affiliated corporation,
net of dividends . . . . . . . (1,593,564) 724,835
Partnership's share of operations of
unconsolidated venture, net of
distributions. . . . . . . . . (200,262) (151,434)
Venture partner's share of
venture's operations and
gain on sale . . . . . . . . . (2,362) 1,508,119
Changes in:
Interest, rents and
other receivables. . . . . . . 9,918 (71,514)
Accounts payable. . . . . . . . (66,074) 28,440 <PAGE>
CARLYLE INCOME PLUS, L.P.-II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
------------ -------
Amounts due to affiliates . . . 5,314 5,804
Tenant security deposits. . . . -- (107,369)
---------- ----------
Net cash provided by (used in)
operating activities . . . . . (104,585) 2,774,332
---------- ----------
Cash flows from investing activities:
Additions to investment property. . -- (48,234)
Partnership's distributions from
unconsolidated corporation . . . . 1,415,040 --
Cash proceeds from sale of investment
property, net of selling expenses. -- 20,996,011
---------- ----------
Net cash provided by (used in) investing
activities . . . . . . . . . . . . 1,415,040 20,947,777
---------- ----------
Cash flows from financing activities:
Distributions to venture partners . (28,591) --
Distributions to limited partners . (1,028,312) (1,028,312)
Distributions to general partners . (54,122) (54,122)
---------- ----------
Net cash provided by (used in) financing
activities . . . . . . . . . . . . (1,111,025) (1,082,434)
---------- ---------- <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 . . . . . . . . . 199,430 22,639,675
Cash and cash equivalents,
beginning of year. . . . . . . . . 3,933,927 3,606,715
--------- ----------
Cash and cash equivalents,
end of period. . . . . . . . . . . $ 4,133,357 26,246,390
========= ==========
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 L.P. - II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997 and 1996
(Unaudited)
GENERAL
Readers of this quarterly report should refer to the
Partnership's audited financial statements for the fiscal year
ended December 31, 1996, which are included in the Partnership's
1996 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.
The Partnership adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of" (SFAS 121")
as required in the first quarter of 1996. The Partnership's
policy is to consider a property to be held for sale when the
Partnership has committed to a plan to sell such property and
active marketing activity has commenced or is expected to
commence in the near term. The Partnership has committed to
such a plan for both of its remaining real estate investments.
In accordance with SFAS 121, any properties identified as "held
for sale or disposition" are no longer depreciated.
The accompanying consolidated financial statements include
$1,793,826, and $1,102,698, respectively, of the Partnership's
share of total operations of $4,060,526 and $2,487,672 for the
nine months ended September 30, 1997 and 1996 of unconsolidated
properties held for sale or disposition.
During the second quarter of 1997, Statements of Financial
Accounting Standards No. 128 ("Earnings per Share") and No. 129
("Disclosure of Information about Capital Structure") were
issued. As the Partnership's capital structure only has general
and limited partnership interests, the Partnership does not<PAGE>
CARLYLE INCOME PLUS L.P. - II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
expect any significant impact on its consolidated financial
statements upon adoption of these standards when required at the
end of 1997.
Certain amounts in 1996 consolidated financial statements have
been reclassified to conform with the 1997 presentation.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is
permitted to engage in various transactions involving the
Corporate General Partner and its affiliates including the
reimbursement for salaries and salary-related expenses of its
employees, certain of its officers, and other direct expenses
relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions
and other expenses required to be paid by the Partnership to the
General Partners and their affiliates as of September 30, 1997
and for the nine months ended September 30, 1997 and 1996 were
as follows:
Unpaid at
September 30,
1997 1996 1997
----- ----- ------------
Insurance commissions. . . . .$ 3,958 4,071 --
Reimbursement (at cost)
for salary and salary-
related expenses related
to the on-site and other
costs for the Partnership
and its investment
properties. . . . . . . . . . 20,514 16,418 10,702
------ ----- -----
$ 24,472 20,489 10,702
====== ====== ======
All such amounts payable to the General Partners and their
affiliates do not bear interest and are expected to be paid in
future periods.
<PAGE>
CARLYLE INCOME PLUS L.P. - II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ASHBY APARTMENTS
In July 1996, CIP/Ashby entered into a contract with a
potential purchaser for the sale of this property, and,
pursuant to such contract, the property was sold August 26,
1996.
In connection with the sale of this property, as is
customary in such transactions, CIP/Ashby agreed to certain
representations and warranties, which expired, with no liability
to CIP/Ashby, as scheduled in late August 1997. The CIP/Ashby
venture is expected to be liquidated in 1997 after the
distribution of the remaining funds to the venture partners.
1225 CONNECTICUT AVENUE
The property's occupancy declined to 95% at September 30,
1997. During the quarter ended September 30, 1997, a tenant,
which occupied approximately 9,900 square feet (5% of the
property's leasable space) and whose lease was scheduled to
expire in June 2002, vacated its space. The tenant paid
$115,000 in termination fees, which amount is equal to the
tenant's lease obligations through the end of 1997. 1225
Investment Corporation is currently negotiating a lease for this
space with Ernst & Young, the principal tenant which occupies
approximately 80% of the property's leasable space. There can
be no assurance, however, that such negotiations will result in
a lease agreement with Ernst & Young.
As the 1225 Investment Corporation has committed to a plan
to sell the property, the property was classified by the 1225
Investment Corporation as held for sale as of December 31, 1996
and, therefore, is not subject to continued depreciation.
In response to the uncertainty relating to 1225 Investment
Corporation's ability to recover the net carrying value of the
1225 Connecticut Avenue, N.W. office building through future
operations or sale, 1225 Investment Corporation, as a matter of
prudent accounting practice and for financial reporting
purposes, recorded a provision for value impairment in 1996 in
the amount of $6,548,956 (of which the Partnership's share was
<PAGE>
CARLYLE INCOME PLUS LIMITED - II
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
$2,851,415). Such provision reduced the net carrying value of
the investment property to its then estimated fair value based
upon an independent appraisal received for the property as of
December 31, 1996.
LANDINGS SHOPPING CENTER
Occupancy at the property increased to 81% at September
30, 1997, from 55% at June 30, 1997, as a result of the move-in
in the third quarter of 1997 of two tenants which occupy a total
of 24,420 square feet (approximately 26% of JMB/Landings' owned
net rentable area at the property). Although there have been
delays in the lease-up of vacant space, the JMB/Landings joint
venture ("JMB/Landings") continues to actively pursue
replacement tenants for the remaining vacant space.
JMB/Landings is currently pursuing its legal remedies
concerning arrearages of approximately $9,000 from tenants that
have vacated or ceased operations at the center. In addition,
tenant leases representing approximately 5%, 16% and 10% of the
leasable space at the property are scheduled to expire during
the remainder of 1997, and in 1998 and 1999, respectively, not
all of which are expected to be renewed. JMB/Landings is
conserving its working capital in order to fund currently
budgeted 1997 capital and tenant costs of approximately $235,000
and for potential future costs in connection with the lease-up
of the remaining vacant space at the property, of which
approximately $190,000 has been incurred as of the date of this
report. An affiliate of the General Partners of the
Partnership manages the property for a fee equal to 4% of the
property's gross receipts. Such property management fees
aggregated $29,815 and $32,367 for the nine months ended
September 30, 1997 and 1996, respectively.
As of December 31, 1996, JMB/Landings has committed to a
plan to sell the property and, therefore, the property was
classified as held for sale and is not subject to continued
depreciation. In such regard, subsequent to the end of the
third quarter, JMB/Landings reached an agreement in principle
to sell the property to an independent third party. The sale is
subject to the various contingencies including final
documentation and therefore there can be no assurance that a
sale will be completed in the near term with this or any other
purchaser. If the sale was completed on the proposed terms,
JMB/Landings would recognize a gain in 1997 for financial<PAGE>
reporting proposes (primarily as a result of a $3,500,000
provision for value impairment recorded by JMB/Landings in 1995)
and a loss in 1997 for Federal income tax reporting purposes. <PAGE>
<TABLE>
CARLYLE INCOME PLUS L.P. - II
( A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
UNCONSOLIDATED INVESTMENTS - SUMMARY INFORMATION
JMB/LANDINGS
Summary income statement information for JMB/Landings Associates for the nine
months ended September 30, 1997 and 1996 is as follows:
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Total income. . . . . . .$ 667,040 856,057
========= =========
Operating
earnings (loss). . . . $ 400,526 302,867
========= =========
Partnership's share
of earnings (loss). . . .$ 200,262 151,434
========= =========
<PAGE>
CARLYLE INCOME PLUS L.P. - 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 30, 1997 and 1996 is as follows:
1997 1996
--------- ---------
Total income. . . . . .$ 5,951,000 5,491,621
========= =========
Operating earnings. . .$ 3,660,000 2,184,805
========= =========
Partnership's share of
earnings . . . . . . .$ 1,593,564 951,264
========= =========
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, 1997 and for the three and nine months ended September 30, 1997 and
1996.
<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 1996, some of the Holders of Interests in the
Partnership received from unaffiliated third parties unsolicited
tender offers to purchase up to 4.9% of the Interests in the
Partnership at amounts between $350 and $400 per Interest. The
Partnership recommended against acceptance of these offers on
the basis that, among other things, the offer prices were
inadequate. Such offers have expired. The Partnership had also
received requests from other unaffiliated third parties for the
list of Holders of Interests. It is possible that other offers
for Interests may be made by unaffiliated third parties in the
future although there is no assurance that any 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 offers for
Interests.
The Partnership had been made aware that in March, April
and September of 1997, other unaffiliated third parties made
unsolicited tender offers to some of the Holders of Interests.
These offers each sought to purchase up to 4.9% of the Interests
in the Partnership at amounts between $250 and $320 per
Interest. These offers expired in April, July and October 1997,
respectively. The Special Committee recommended against
acceptance of these offers on the basis that, among other
things, the offer prices were inadequate. As of the date of
this report, the Partnership is aware that 4.03% of the
outstanding Interests have been purchased in 1996 and 1997 by
all such unaffiliated third parties either pursuant to such
tender offers or through negotiated purchases.
After reviewing the Partnership's properties and
marketplaces in which they operate, the General Partners of the<PAGE>
Partnership expect to be able to conduct an orderly liquidation
of the remaining two investment properties as quickly as
practicable. Therefore, the affairs of the Partnership are
expected to be wound up no later than the end of 1999 and
perhaps in the 1998 time frame, barring any unforeseen economic
developments.
Although the Partnership expects to distribute sale
proceeds from the disposition of the Partnership's remaining
investment properties, aggregate distributions from sale
proceeds received by the Limited Partners over the entire term
of the Partnership are expected to approximate one-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 be less than the
Limited Partners' original investment. Accordingly, as the
subordination requirements of the Partnership Agreement for the
retention of sales proceeds by the General Partners are not
expected to be met, the General Partners are currently deferring
their share of distributable sales proceeds.
RESULTS OF OPERATIONS
Cash and cash equivalents at September 30, 1997 was
approximately $4,133,000. Such funds, which are available for
distributions to the partners, for leasing costs and for working
capital requirements, represent an increase from December 31,
1996 which is attributable primarily to the Partnership's
receipt of approximately $1,415,000 of dividends from 1225
Investment Corporation in 1997. This increase was substantially
offset by the Partnership's operating cash flow distribution of
approximately $1,082,000 in May 1997 ($54,122 of which was the
General Partners' share).
The decrease in accounts payable at September 30, 1997 as
compared to December 31, 1996 is attributable primarily to the
payment in 1997 of fees for professional services which were
accrued and unpaid at December 31, 1996.
The decreases in rental income, property operating expenses
and venture partner's share of venture's operations for the
three and nine months ended September 30, 1997 as compared to
the three and nine months ended September 30,1996, and the
decrease in depreciation expense for the nine months ended
September 30, 1997 as compared to the nine months ended
September 30, 1996 (the property was classified as held for sale
as of April 1, 1996) is attributable to the sale of the Ashby
at McLean Apartments in August 1996, as more fully described in
the notes.
<PAGE>
The decreases in interest income for three and nine months
ended September 30, 1997 as compared to the year-ago periods are
primarily attributable to CIP/Ashby's temporary investment in
1996 of the proceeds of the August 1996 sale of the Ashby at
McLean Apartments.
The increase in Partnership's share of operations of
unconsolidated affiliated corporation for the three and nine
months ended September 30, 1997 as compared to the three and
nine months ended September 30, 1996 is attributable primarily
to the suspension of depreciation, effective January 1, 1997, on
the 1225 Connecticut Avenue, N.W. office building, as the
property was classified as held for sale as of December 31,
1996. An additional increase in Partnership's share of
operations of unconsolidated affiliated corporation in 1997 is
attributable primarily to the recognition of higher effective
rents at the property in 1997.
The increase in Partnership's share of operations of
unconsolidated venture for the three and nine months ended
September 30, 1997 as compared to the three and nine months
ended September 30, 1996 is attributable primarily to the
suspension of depreciation, effective January 1, 1997, on the
Landings Shopping Center, as the property was classified as held
for sale as of December 31, 1996. <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:
1996 1997
--------------------------------------------------
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. 82% 65% 67% 60% 60% 55% 81%
2. 1225 Connecticut Avenue
Washington, D.C. . 100% 100% 100% 100% 100% 100% 95%
<FN>
</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.
4.1 Assignment Agreement is hereby incorporated by
reference to Exhibit B to the Partnership's Prospectus
which is hereby incorporated herein by reference to
Exhibit 4.1 of the Partnership's report for December
31, 1993 on Form 10-K (File No. 0-17705) dated March
25, 1994.
10.1 Closing statement dated January 28, 1994 relating to
the refinancing by 1225 Investment Corporation which
owns 1225 Connecticut Avenue in Washington, D.C., is
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.
10.2 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., is 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.
10.3 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., is 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.
<PAGE>
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.
<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 7, 1997
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 7, 1997
<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, 1997 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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,133,357
<SECURITIES> 0
<RECEIVABLES> 15,430
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,148,787
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 29,079,832
<CURRENT-LIABILITIES> 16,486
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 29,052,388
<TOTAL-LIABILITY-AND-EQUITY> 29,079,832
<SALES> 0
<TOTAL-REVENUES> 142,893
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 196,636
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (53,743)
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,742,445
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,742,445
<EPS-PRIMARY> 26.27
<EPS-DILUTED> 26.27
<PAGE>
</TABLE>
